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714200.0
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2023-12-07 00:00:00 UTC
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Can Pricing, Demand Shield Church & Dwight (CHD) From Cost Woes?
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DCOMP
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https://www.nasdaq.com/articles/can-pricing-demand-shield-church-dwight-chd-from-cost-woes
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nan
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Church & Dwight Co., Inc. CHD has displayed an overall decent performance year to date, comfortably outpacing the industry and the Zacks Consumer Staples sector. The developer, manufacturer and marketer of household, personal care and specialty products has seen its shares rally 17.4% year to date compared with the industry’s breakeven performance. Meanwhile, the Zacks Consumer Staples sector has declined 6.9% in the same period.
The company's success is attributed to robust consumer demand, bolstered by consistent innovation, new product launches and strategic acquisitions. These upsides, along with efficient pricing and productivity gains, have been working well for this Zacks Rank #3 (Hold) company amid manufacturing cost inflation and escalated SG&A expenses and marketing costs.
Factors Narrating CHD’s Growth Tale
Church & Dwight has prioritized product innovation as a key driver of its growth strategy. On its third-quarterearnings call Church & Dwight announced the online launch of ARM & HAMMER Power Sheets laundry detergent. Additionally, the company unveiled ARM & HAMMER Hardball, strategically targeting a larger share of the lightweight litter category. Similarly, the TROJAN brand is capitalizing on the success of the Raw franchise with the introduction of the new TROJAN Raw Non-Latex condom.
Management further highlighted that the THERABREATH brand has extended operations to the kids’ category with the launch of three new fluoride types of mouthwashes. The NAIR brand has introduced Prep & Smooth, a one-step solution that preps the face for makeup application in a No-Touch, No-Mess format. The company’s HERO brand remains focused on undertaking innovation in the acne treatment arena.
Church & Dwight has expanded its portfolio through the acquisition of various high-margin brands, playing a pivotal role in its top-line growth. The company recently completed the buyout of the Hero Mighty Patch brand (or Hero) and other acne treatment products. In December 2021, CHD concluded the buyout of TheraBreath, which marks the company's 14th power brand. THERABREATH mouthwash and the HERO brand delivered impressive consumption growth and grew market share in the third quarter of 2023.
Image Source: Zacks Investment Research
Leveraging Pricing Strategies Amid Elevated Costs
Church & Dwight has been witnessing increasing marketing and SG&A expenses for the past few quarters. The company has been undertaking increased marketing to fuel brand awareness, especially for new products and acquired brands. Management continues to expect increased SG&A expenses in 2023, both on a dollar basis and as a percentage of sales. The expected increase in SG&A can be attributed to additional R&D investments and elevated incentive compensation, among other factors.
Management expects marketing as a percentage of net sales to be 11% in 2023, reflecting an increase from 10% in 2022. Church & Dwight expects SG&A expenses and marketing costs to increase considerably year over year in the fourth quarter of 2023. Though the company expects gross profit expansion in the fourth quarter and full year 2023, high SG&A expenses and elevated marketing spend are likely to affect the EPS. Apart from this, CHD expects elevated manufacturing costs to the tune of nearly $120 million in 2023.
In response to escalating costs, Church & Dwight has implemented incremental pricing strategies across its product portfolio. Pricing remained a positive contributor to the company's organic sales performance in the third quarter of 2023. Organic sales increased 4.8% due to gains from volumes to the tune of 2.7% and a favorable product mix and pricing of 2.1%. Another factor working for CHD is the online channel. The company’s global online sales continued to grow in the third quarter. Global online sales, as a percentage of total consumer sales, stood at 17%.
For 2023, the company anticipates organic sales growth of nearly 5%. For the fourth quarter, Church & Dwight estimates organic sales growth of roughly 4%.
3 Appetizing Picks
The Kraft Heinz Company KHC, a food and beverage product company, currently carries a Zacks Rank #2 (Buy). KHC has a trailing four-quarter earnings surprise of 9.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, Inc. CELH, which develops, processes, markets, distributes and sells functional drinks and liquid supplements, holds a Zacks Rank #2. CELH has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 184.1%, respectively, from the year-ago reported numbers.
Vital Farms Inc. VITL offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
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Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
Kraft Heinz Company (KHC) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
Vital Farms, Inc. (VITL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The developer, manufacturer and marketer of household, personal care and specialty products has seen its shares rally 17.4% year to date compared with the industry’s breakeven performance. Image Source: Zacks Investment Research Leveraging Pricing Strategies Amid Elevated Costs Church & Dwight has been witnessing increasing marketing and SG&A expenses for the past few quarters. Though the company expects gross profit expansion in the fourth quarter and full year 2023, high SG&A expenses and elevated marketing spend are likely to affect the EPS.
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These upsides, along with efficient pricing and productivity gains, have been working well for this Zacks Rank #3 (Hold) company amid manufacturing cost inflation and escalated SG&A expenses and marketing costs. Image Source: Zacks Investment Research Leveraging Pricing Strategies Amid Elevated Costs Church & Dwight has been witnessing increasing marketing and SG&A expenses for the past few quarters. Click to get this free report Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report Kraft Heinz Company (KHC) : Free Stock Analysis Report Celsius Holdings Inc. (CELH) : Free Stock Analysis Report Vital Farms, Inc. (VITL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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These upsides, along with efficient pricing and productivity gains, have been working well for this Zacks Rank #3 (Hold) company amid manufacturing cost inflation and escalated SG&A expenses and marketing costs. Image Source: Zacks Investment Research Leveraging Pricing Strategies Amid Elevated Costs Church & Dwight has been witnessing increasing marketing and SG&A expenses for the past few quarters. Click to get this free report Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report Kraft Heinz Company (KHC) : Free Stock Analysis Report Celsius Holdings Inc. (CELH) : Free Stock Analysis Report Vital Farms, Inc. (VITL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Image Source: Zacks Investment Research Leveraging Pricing Strategies Amid Elevated Costs Church & Dwight has been witnessing increasing marketing and SG&A expenses for the past few quarters. Church & Dwight expects SG&A expenses and marketing costs to increase considerably year over year in the fourth quarter of 2023. For the fourth quarter, Church & Dwight estimates organic sales growth of roughly 4%.
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c54bc3a5-3821-4156-98d9-37ff2b6e81a8
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714201.0
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2023-12-07 00:00:00 UTC
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Vanda Pharmaceuticals Acquires U.S., Canadian Rights To PONVORY From Janssen
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DCOMP
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https://www.nasdaq.com/articles/vanda-pharmaceuticals-acquires-u.s.-canadian-rights-to-ponvory-from-janssen
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(RTTNews) - Vanda Pharmaceuticals Inc. (VNDA) has acquired U.S. and Canadian rights to PONVORY from Actelion Pharmaceuticals Ltd., a Johnson & Johnson Company. PONVORY is approved by the FDA and Health Canada to treat adults with relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease.
Vanda paid $100 million to acquire the U.S. and Canadian rights to PONVORY. Janssen will continue to operate the business pursuant to a Transitional Business License Agreement, during which time, Vanda and Janssen will transition regulatory and supply responsibility for PONVORY to Vanda.
For More Such Health News, visit rttnews.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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PONVORY is approved by the FDA and Health Canada to treat adults with relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. Vanda paid $100 million to acquire the U.S. and Canadian rights to PONVORY. Janssen will continue to operate the business pursuant to a Transitional Business License Agreement, during which time, Vanda and Janssen will transition regulatory and supply responsibility for PONVORY to Vanda.
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(RTTNews) - Vanda Pharmaceuticals Inc. (VNDA) has acquired U.S. and Canadian rights to PONVORY from Actelion Pharmaceuticals Ltd., a Johnson & Johnson Company. Vanda paid $100 million to acquire the U.S. and Canadian rights to PONVORY. Janssen will continue to operate the business pursuant to a Transitional Business License Agreement, during which time, Vanda and Janssen will transition regulatory and supply responsibility for PONVORY to Vanda.
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(RTTNews) - Vanda Pharmaceuticals Inc. (VNDA) has acquired U.S. and Canadian rights to PONVORY from Actelion Pharmaceuticals Ltd., a Johnson & Johnson Company. PONVORY is approved by the FDA and Health Canada to treat adults with relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. Janssen will continue to operate the business pursuant to a Transitional Business License Agreement, during which time, Vanda and Janssen will transition regulatory and supply responsibility for PONVORY to Vanda.
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(RTTNews) - Vanda Pharmaceuticals Inc. (VNDA) has acquired U.S. and Canadian rights to PONVORY from Actelion Pharmaceuticals Ltd., a Johnson & Johnson Company. PONVORY is approved by the FDA and Health Canada to treat adults with relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. Vanda paid $100 million to acquire the U.S. and Canadian rights to PONVORY.
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8ec92671-5175-49d7-8715-e9a4b608472b
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714202.0
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2023-12-07 00:00:00 UTC
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Is Tilray Stock a Buy Now?
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DCOMP
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https://www.nasdaq.com/articles/is-tilray-stock-a-buy-now-3
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nan
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One by one, the leaders of the Canadian pot market are falling completely out of favor with investors. Tilray (NASDAQ: TLRY), one of the most prominent of the bunch, hasn't been very different. Over the past three years, the company's shares have plunged by 80% and are exchanging hands for just $1.71 apiece, making it a penny stock (those with a price under $5). Can Tilray stage a comeback?
If it does, those who get in on the stock now could see massive returns down the road. On the other hand, Tilray's stock could continue to fall and end up practically worthless. Let's try to decide which of these scenarios is more likely.
TLRY data by YCharts.
The challenging Canadian cannabis market
Recreational uses of cannabis remain illegal at the federal level in the U.S. Tilray, like other top players in this industry in North America, hopes that will change soon. However, the Canadian experience has taught us that legalizing marijuana wouldn't automatically transform Tilray or any of its peers into a great business. It has been roughly five years since Canada legalized adult use of pot, but the market has encountered serious issues.
First, companies needed to obtain appropriate licensing to grow and sell weed legally. This system was complex and convoluted, slowing the market's growth. Second, the market seemed so promising that many, perhaps too many, companies dipped their toes into this space. Third, illegal channels competed with legal ones and took away a fair share of the market.
These challenges made it hard for Tilray to generate consistent financial results and partly explain the abysmal performance it has experienced in the past three years.
Could Tilray's exciting new strategy work?
Tilray is well aware of the challenges in the Canadian cannabis market. That's why the company has substantially diversified its revenue stream. In the first quarter of its fiscal year 2024, which ended on Aug. 31, Tilray's cannabis business accounted for just 39% of its total revenue of $176.9 million. It was tied with distribution -- the sale of pharmaceutical products -- for the largest segment by revenue.
Tilray's other business units, its beverage and alcohol business and its wellness segment (which sells hemp-based products) accounted for 14% and 8% of total revenue, respectively. Tilray's top line in the quarter increased by 15% year over year, although it wasn't all organic growth. It also had acquisitions to thank for that performance. And the company is doubling down.
In October, it announced it would buy out eight beer and beverage brands from Anheuser-Busch InBev, a leader in this field. The transaction makes Tilray one of the most prominent players in the U.S. craft beer market. But to what end? Tilray also recently announced that several of its beverage brands in Canada would be launching several cannabis-infused drinks in the country.
The company is eventually looking to do the same in the U.S. However, that will prove difficult as long as the substance remains illegal at the federal level. But if things change, CEO Irwin Simon has made it clear that Tilray's existing footprints in the beverages market in the U.S. will allow it to get a leg up on its competitors and dominate the cannabis-infused drinks space.
Further, the company's alcohol and beverages segment typically carries much juicier margins than the rest of its business. Still, Tilray's strategy here partly relies on something impossible to predict. No one knows when the U.S. government will legalize cannabis. It could take one or 10 years and anything in between or beyond. In the meantime, Tilray's revenue will struggle to grow organically at a good pace while it will almost certainly remain unprofitable for a while.
It did improve on that front in its first quarter of 2024, turning in a net loss per share of $0.10 compared to $0.13 in the parallel period of the previous fiscal year. Still, given the company's track record, it is hard to bet on it permanently becoming profitable anytime soon.
It's too early to press the "buy" button
Tilray's stock isn't anywhere close to a slam dunk, even at its current levels. While its attempts to diversify away from the Canadian cannabis business are commendable -- and its chasing a high-margin business in alcohol and beverages could be interesting --there remain too many unknowns to make it a solid buy. Tilray may be one of the best stocks in the cannabis industry, but that alone doesn't make it a good stock. Investors should watch from the sidelines for now.
10 stocks we like better than Tilray Brands
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Tilray Brands wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of November 29, 2023
Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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These challenges made it hard for Tilray to generate consistent financial results and partly explain the abysmal performance it has experienced in the past three years. But if things change, CEO Irwin Simon has made it clear that Tilray's existing footprints in the beverages market in the U.S. will allow it to get a leg up on its competitors and dominate the cannabis-infused drinks space. It did improve on that front in its first quarter of 2024, turning in a net loss per share of $0.10 compared to $0.13 in the parallel period of the previous fiscal year.
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The challenging Canadian cannabis market Recreational uses of cannabis remain illegal at the federal level in the U.S. Tilray, like other top players in this industry in North America, hopes that will change soon. In the first quarter of its fiscal year 2024, which ended on Aug. 31, Tilray's cannabis business accounted for just 39% of its total revenue of $176.9 million. Tilray's other business units, its beverage and alcohol business and its wellness segment (which sells hemp-based products) accounted for 14% and 8% of total revenue, respectively.
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The challenging Canadian cannabis market Recreational uses of cannabis remain illegal at the federal level in the U.S. Tilray, like other top players in this industry in North America, hopes that will change soon. In the first quarter of its fiscal year 2024, which ended on Aug. 31, Tilray's cannabis business accounted for just 39% of its total revenue of $176.9 million. Tilray may be one of the best stocks in the cannabis industry, but that alone doesn't make it a good stock.
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In the first quarter of its fiscal year 2024, which ended on Aug. 31, Tilray's cannabis business accounted for just 39% of its total revenue of $176.9 million. Tilray may be one of the best stocks in the cannabis industry, but that alone doesn't make it a good stock. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Tilray Brands wasn't one of them!
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5eaafaa2-3656-464c-aed8-ea522648d351
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714203.0
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2023-12-07 00:00:00 UTC
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Here's 1 Stock to Buy Going Into 2024 That Can Sweeten Your Portfolio a Little
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DCOMP
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https://www.nasdaq.com/articles/heres-1-stock-to-buy-going-into-2024-that-can-sweeten-your-portfolio-a-little
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nan
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As 2023 draws to a close, many investors are probably reviewing their portfolios and weighing the pros and cons of holding on to certain positions or taking some gains off the table. Given the tech sector's generous returns this year, fueled by hype around artificial intelligence, some investors may be tempted to double down on these winners.
But it's important to remember that a well-diversified portfolio should include a broad range of stocks -- and one industry that has lagged the markets this year is food and beverage. With weight-loss drugs such as Ozempic, Wegovy, and Mounjaro rising in popularity, investor sentiment around food and beverage stocks has waned.
One company in particular looks appetizing despite its negative 7% return so far this year: PepsiCo (NASDAQ: PEP). Given its depressed pricing action, now looks like a great buying opportunity. Let's dig into what is fueling PepsiCo, what risk factors the company faces, and where the shares could be headed.
What's fueling PepsiCo?
Most people probably think of soda when it comes to PepsiCo. However, the company has a portfolio that reaches well beyond the beverage market. PepsiCo also owns a number of snacking brands, including Frito-Lay and Quaker Foods. But as health and wellness trends increase in popularity, coupled with the surging demand for weight-loss drugs, some investors may shy away from PepsiCo due to its core business of soda and snack foods.
While these are valid concerns on the surface, I am not worried about PepsiCo. The company has been around for a long time and is no stranger to shifts in consumer preferences. Moreover, for much of 2023, PepsiCo's snacking division has actually been the big winner -- possibly giving less credence to the argument revolving around the threat from obesity and diabetes medications.
For PepsiCo's Q3, ended Sept. 9, the company reported revenue growth of 7% and 5% in Frito-Lay and Quaker Foods, respectively. Moreover, the company's Latin America division grew 21% during Q3, which management attributed to "mostly our snack business."
Image source: Getty Images.
One thing worth pointing out is that part of the reason PepsiCo has witnessed this growth is inflation. While inflation cooled from 3.7% in September to 3.2% in October, food is one area in particular that continues to buck the trend. According to a November report from the Bureau of Labor Statistics, the food index increased 0.3% in October.
PepsiCo's management commented on this trend during theearnings call stating that "there will be still a higher inflation in our businesses and therefore there will be higher price mix" compared to historical periods. Moreover, the company's CEO, Ramon Laguarta, suggested that 2024 "will have a bit more elevated price mix in the equation than in the previous years."
Given this dynamic, a contrarian investor may think that PepsiCo represents an undervalued and overlooked opportunity. In other words, given the company's superior brand equity and diverse portfolio of food and beverage products, PepsiCo can command pricing power and actually benefit from inflation.
Is PepsiCo stock a buy?
PEP PE Ratio (Forward) data by YCharts
PepsiCo currently trades at a forward price-to-earnings (P/E) multiple of 22. For reference, the estimate for the S&P 500 is 21.
PEP Total Return Level data by YCharts
Moreover, the chart above illustrates that the total return for PepsiCo stock over the last year has underperformed Coca-Cola and Mondelez International, and only narrowly outperformed Kraft Heinz. It's becoming more obvious that investors have fled PepsiCo stock and are looking for growth elsewhere. However, by zooming out, I'd say this position is a bit shortsighted.
First off, PepsiCo has earned the title of Dividend King given the long history of increasing its dividend. If anything, investors may want to give more thought to generating some passive income for their portfolios going into 2024. While some economists are calling for a bull market, the stats referenced above clearly show that inflation lingers well above the Federal Reserve's long-term target of 2% -- and food is one of the consistently higher categories. This theme underscores PepsiCo's strong snacking business and all signs are pointing to another solid performance next year.
PepsiCo appears to be in a rare position. It's actually a business that can benefit from inflation, and yet the stock has dropped like a rock. Moreover, investors clearly are not placing much of a premium on PepsiCo given its forward P/E level.
Investors looking to supplement their portfolio with some dividend income may be interested in shares of PepsiCo at this valuation. The company is outmaneuvering concerns about weight-loss drugs, the business is performing well, and yet the stock is lagging the broader market. Patient investors with a long-term mindset could use this as an opportunity to start dollar-cost averaging into a new position or lower their cost basis for existing shares.
10 stocks we like better than PepsiCo
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and PepsiCo wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool recommends Kraft Heinz and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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But as health and wellness trends increase in popularity, coupled with the surging demand for weight-loss drugs, some investors may shy away from PepsiCo due to its core business of soda and snack foods. In other words, given the company's superior brand equity and diverse portfolio of food and beverage products, PepsiCo can command pricing power and actually benefit from inflation. While some economists are calling for a bull market, the stats referenced above clearly show that inflation lingers well above the Federal Reserve's long-term target of 2% -- and food is one of the consistently higher categories.
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PepsiCo also owns a number of snacking brands, including Frito-Lay and Quaker Foods. PEP Total Return Level data by YCharts Moreover, the chart above illustrates that the total return for PepsiCo stock over the last year has underperformed Coca-Cola and Mondelez International, and only narrowly outperformed Kraft Heinz. The Motley Fool recommends Kraft Heinz and recommends the following options: long January 2024 $47.50 calls on Coca-Cola.
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But as health and wellness trends increase in popularity, coupled with the surging demand for weight-loss drugs, some investors may shy away from PepsiCo due to its core business of soda and snack foods. In other words, given the company's superior brand equity and diverse portfolio of food and beverage products, PepsiCo can command pricing power and actually benefit from inflation. PEP Total Return Level data by YCharts Moreover, the chart above illustrates that the total return for PepsiCo stock over the last year has underperformed Coca-Cola and Mondelez International, and only narrowly outperformed Kraft Heinz.
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PepsiCo's management commented on this trend during theearnings call stating that "there will be still a higher inflation in our businesses and therefore there will be higher price mix" compared to historical periods. The company is outmaneuvering concerns about weight-loss drugs, the business is performing well, and yet the stock is lagging the broader market. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Adam Spatacco has no position in any of the stocks mentioned.
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8633c337-5e56-48a5-a289-b0e9be21ba58
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714204.0
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2023-12-07 00:00:00 UTC
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Dr. Reddy's (RDY), COYA Ink Deal to Develop COYA 302 for ALS
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DCOMP
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https://www.nasdaq.com/articles/dr.-reddys-rdy-coya-ink-deal-to-develop-coya-302-for-als
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nan
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Dr. Reddy's Laboratories RDY announced entering into a licensing agreement with Coya Therapeutics, Inc. COYA for the development and commercialization of the latter’s investigational combination therapy, COYA 302, for the treatment of Amyotrophic Lateral Sclerosis (ALS).
ALS is a neurodegenerative disease that causes progressive muscle weakness and paralysis due to the death of nerve cells in the brain and spinal cord. ALS seriously affects the quality of life of patients suffering from it as it leads to progressive loss of voluntary muscle movement required for speaking, walking, swallowing and breathing.
Coya Therapeutics’ COYA 302 is a proprietary combination product of low-dose IL-2 and CTLA-4 Ig (abatacept), being developed for subcutaneous administration for the treatment of ALS patients.
This novel investigational candidate has a dual immunomodulatory mechanism of action intended to enhance the anti-inflammatory function of regulatory T cells and suppress the inflammation produced by activated monocytes and macrophages.
COYA 302 is yet to be approved by the FDA or any other regulatory agency.
Year to date, shares of Dr. Reddy’s have rallied 34.2% compared with the industry’s 30.5% growth.
Image Source: Zacks Investment Research
The collaboration grants Dr. Reddy’s an exclusive license to commercialize COYA 302 in the United States, Canada, EU and UK for ALS. However, Coya retains the commercialization rights for COYA 302 in Japan, Mexico, and each country in South America in the ALS indication.
Per the terms of this agreement, Coya is responsible for clinical development of COYA 302 and for seeking U.S. regulatory approval for this drug in the treatment of ALS. On the other hand, RDY is liable to make an upfront payment of $7.5 million for the licensing agreement and several other milestone payments to Coya during the development process of COYA 302.
Dr. Reddy’s will make the first milestone payment of $4.2 million to Coya upon the first FDA acceptance of an investigational new drug application (IND) for COYA 302 in ALS. Once Coya has completed dosing the first patient in the first mid-stage study of COYA 302 for ALS treatment in the United States, the company will make an additional payment of $4.2 million.
Coya Therapeutics expects the IND filing for COYA 302 in ALS to be made in the first half of 2024.
In totality, Dr. Reddy’s is liable to pay up to $40 million to Coya in milestone payments, subject to the achievement of all development and regulatory milestones.
If COYA 302 is successfully commercialized, the company will be further liable to pay Coya sales-based milestone payments of up to $677.25 million linked to tiers of cumulative net sales being achieved over several years. Additionally, RDY will also have to pay Coya royalties based on a percentage of net sales of COYA 302 ranging from low to middle teens.
The press release states that this current agreement signed for COYA 302 is in addition to the in-licensing agreement with Dr. Reddy’s signed in early 2023. The March 2023 agreement granted Coya the license to RDY’s proposed biosimilar for Orencia (abatacept) for the development and commercialization of COYA 302 for neurodegenerative diseases.
Dr. Reddy's Laboratories Ltd Price and Consensus
Dr. Reddy's Laboratories Ltd price-consensus-chart | Dr. Reddy's Laboratories Ltd Quote
Zacks Rank and Stocks to Consider
RDY currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks worth mentioning are Puma Biotechnology, Inc. PBYI and Agenus AGEN. While PBYI sports a Zacks Rank #1 (Strong Buy), AGEN carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share has remained constant at 72 cents. During the same time frame, the consensus estimate for Puma Biotech’s 2024 earnings per share has increased from 62 cents to 64 cents. Year to date, shares of PBYI have lost 7.8%.
PBYI’s earnings beat estimates in three of the last four quarters while missing on one occasion, delivering a four-quarter average earnings surprise of 76.55%.
In the past 30 days, the Zacks Consensus Estimate for Agenus’ 2023 loss per share has narrowed from 77 cents to 63 cents. During the same time frame, the consensus estimate for Agenus’ 2024 loss per share has narrowed from 70 cents to 45 cents. Year to date, shares of AGEN have plunged 67.4%.
AGEN beat estimates in one of the trailing four quarters, matching in one and missing the mark on the other two occasions, delivering an average earnings surprise of 0.49%.
Only $1 to See All Zacks' Buys and Sells
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Dr. Reddy's Laboratories Ltd (RDY) : Free Stock Analysis Report
Agenus Inc. (AGEN) : Free Stock Analysis Report
Puma Biotechnology, Inc. (PBYI) : Free Stock Analysis Report
Coya Therapeutics, Inc. (COYA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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ALS seriously affects the quality of life of patients suffering from it as it leads to progressive loss of voluntary muscle movement required for speaking, walking, swallowing and breathing. This novel investigational candidate has a dual immunomodulatory mechanism of action intended to enhance the anti-inflammatory function of regulatory T cells and suppress the inflammation produced by activated monocytes and macrophages. Image Source: Zacks Investment Research The collaboration grants Dr. Reddy’s an exclusive license to commercialize COYA 302 in the United States, Canada, EU and UK for ALS.
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Dr. Reddy's Laboratories Ltd Price and Consensus Dr. Reddy's Laboratories Ltd price-consensus-chart | Dr. Reddy's Laboratories Ltd Quote Zacks Rank and Stocks to Consider RDY currently carries a Zacks Rank #3 (Hold). In the past 30 days, the Zacks Consensus Estimate for Agenus’ 2023 loss per share has narrowed from 77 cents to 63 cents. Click to get this free report Dr. Reddy's Laboratories Ltd (RDY) : Free Stock Analysis Report Agenus Inc. (AGEN) : Free Stock Analysis Report Puma Biotechnology, Inc. (PBYI) : Free Stock Analysis Report Coya Therapeutics, Inc. (COYA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Dr. Reddy's Laboratories RDY announced entering into a licensing agreement with Coya Therapeutics, Inc. COYA for the development and commercialization of the latter’s investigational combination therapy, COYA 302, for the treatment of Amyotrophic Lateral Sclerosis (ALS). Dr. Reddy's Laboratories Ltd Price and Consensus Dr. Reddy's Laboratories Ltd price-consensus-chart | Dr. Reddy's Laboratories Ltd Quote Zacks Rank and Stocks to Consider RDY currently carries a Zacks Rank #3 (Hold). Click to get this free report Dr. Reddy's Laboratories Ltd (RDY) : Free Stock Analysis Report Agenus Inc. (AGEN) : Free Stock Analysis Report Puma Biotechnology, Inc. (PBYI) : Free Stock Analysis Report Coya Therapeutics, Inc. (COYA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Dr. Reddy's Laboratories RDY announced entering into a licensing agreement with Coya Therapeutics, Inc. COYA for the development and commercialization of the latter’s investigational combination therapy, COYA 302, for the treatment of Amyotrophic Lateral Sclerosis (ALS). Once Coya has completed dosing the first patient in the first mid-stage study of COYA 302 for ALS treatment in the United States, the company will make an additional payment of $4.2 million. In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share has remained constant at 72 cents.
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246e832a-42dc-4508-beda-f6e86722be77
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714205.0
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2023-12-07 00:00:00 UTC
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Why JetBlue Stock Is Flying High Today
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https://www.nasdaq.com/articles/why-jetblue-stock-is-flying-high-today-1
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JetBlue Airways (NASDAQ: JBLU) narrowed its loss forecast thanks to strong holiday travel demand trends. Investors are breathing a sigh of relief, sending the beaten-down shares up 10% as of 10 a.m. ET Thursday.
Americans are still packing into planes
JetBlue shares have lost about half of their value in the second half of 2023 due to investor fears that higher rates and a slowing economy will eat into travel demand. Airlines including JetBlue have enjoyed strong post-pandemic demand in recent years, but the focus of late has been on whether this historically cyclical industry is beginning to take a turn for the worse.
JetBlue in a regulatory filing said travel demand is holding up well. "Since late October, close-in bookings have outperformed expectations for both holiday peak and non-holiday travel periods," the company wrote. The weather has also cooperated, helping the airline post a 99.9% flight completion rate in November and 100% over the Thanksgiving peak period.
As a result, JetBlue said it now expects to report a full-year 2023 loss in the range of $0.50 to $0.40 per share, compared to a previous forecast for a loss of between $0.65 and $0.45 per share.
Is JetBlue stock a buy ahead of a busy holiday travel season?
The question for investors is whether this outperformance is a sign of a resilient consumer, or just the natural demand spike triggered by the holidays. Americans apparently are not cancelling holiday travel plans, but that does not mean they intend to spend big on vacations next summer.
The demand question is thornier for JetBlue than it is for most airlines because JetBlue is also in the process of trying to acquire Spirit Airlines.
The deal, which is currently tied up in court over antitrust concerns, was signed at a time of robust industry growth and designed to help JetBlue address a pilot and airplane shortage. If demand does fall heading into 2024 and the Spirit deal is allowed to close, JetBlue risks having to execute a complex integration during a time of deteriorating market conditions.
JetBlue is a survivor, and patient investors can afford to ride out whatever storms might be coming the industry's way. But given the continued uncertainty on both the demand and merger and acquisition fronts, there is no rush to buy in right now.
10 stocks we like better than JetBlue Airways
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and JetBlue Airways wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Airlines including JetBlue have enjoyed strong post-pandemic demand in recent years, but the focus of late has been on whether this historically cyclical industry is beginning to take a turn for the worse. The deal, which is currently tied up in court over antitrust concerns, was signed at a time of robust industry growth and designed to help JetBlue address a pilot and airplane shortage. If demand does fall heading into 2024 and the Spirit deal is allowed to close, JetBlue risks having to execute a complex integration during a time of deteriorating market conditions.
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JetBlue Airways (NASDAQ: JBLU) narrowed its loss forecast thanks to strong holiday travel demand trends. "Since late October, close-in bookings have outperformed expectations for both holiday peak and non-holiday travel periods," the company wrote. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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JetBlue Airways (NASDAQ: JBLU) narrowed its loss forecast thanks to strong holiday travel demand trends. Americans are still packing into planes JetBlue shares have lost about half of their value in the second half of 2023 due to investor fears that higher rates and a slowing economy will eat into travel demand. The demand question is thornier for JetBlue than it is for most airlines because JetBlue is also in the process of trying to acquire Spirit Airlines.
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The demand question is thornier for JetBlue than it is for most airlines because JetBlue is also in the process of trying to acquire Spirit Airlines. That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Lou Whiteman has no position in any of the stocks mentioned.
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c018ca6a-0cfb-4da6-a3f1-2fb09ca73f5b
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714206.0
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2023-12-07 00:00:00 UTC
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CANADA STOCKS-TSX futures hold steady; U.S. jobs data on tap
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https://www.nasdaq.com/articles/canada-stocks-tsx-futures-hold-steady-u.s.-jobs-data-on-tap
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Dec 7 (Reuters) - Futures tied to Canada's main stock were largely flat on Thursday, a day after the Bank of Canada (BoC) held its interest rate steady, and investor focus shifted to more U.S. employment data due during the week.
December futures on the S&P/TSX index SXFc1 were flat at 7:02 a.m. ET (1202 GMT), while their U.S. counterparts were mixed. .N
Eyes will be on the U.S. weekly jobless claims data, due later in the day, ahead of the more comprehensive November non-farm payroll report, expected on Friday.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Wednesday lower for the third straight session, as dropping oil prices offset optimism that interest rates have peaked after the BoC's latest move to stay sidelined.
The market will also be watching BoC Deputy Governor Toni Gravelle speak later in the day at the Windsor-Essex Regional Chamber of Commerce.
On the commodities front, gold prices climbed on a softer dollar, while copper prices also edged higher, helped by strong Chinese export data. GOL/MET/L
Oil prices reclaimed some ground after tumbling to a six-month-low the previous day, but investors remained concerned about sluggish demand in the United States and China. O/R
Among individual stocks, Laurentian Bank of CanadaLB.TO reported a drop in fourth-quarter profit versus a year ago.
At least two brokerages upgraded their rating on Athabasca Oil ATH.TO.
COMMODITIES AT 7:02 a.m. ET
Gold futures GCc2: $2,039.9; +0.1% GOL/
US crude CLc1: $69.79; +0.6% O/R
Brent crude LCOc1: $74.83; +0.7% O/R
($1= C$1.3595)
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Tasim Zahid)
((Shashwat.Chauhan@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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.N Eyes will be on the U.S. weekly jobless claims data, due later in the day, ahead of the more comprehensive November non-farm payroll report, expected on Friday. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Wednesday lower for the third straight session, as dropping oil prices offset optimism that interest rates have peaked after the BoC's latest move to stay sidelined. GOL/MET/L Oil prices reclaimed some ground after tumbling to a six-month-low the previous day, but investors remained concerned about sluggish demand in the United States and China.
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Dec 7 (Reuters) - Futures tied to Canada's main stock were largely flat on Thursday, a day after the Bank of Canada (BoC) held its interest rate steady, and investor focus shifted to more U.S. employment data due during the week. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Wednesday lower for the third straight session, as dropping oil prices offset optimism that interest rates have peaked after the BoC's latest move to stay sidelined. ET Gold futures GCc2: $2,039.9; +0.1% GOL/ US crude CLc1: $69.79; +0.6% O/R Brent crude LCOc1: $74.83; +0.7% O/R
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Dec 7 (Reuters) - Futures tied to Canada's main stock were largely flat on Thursday, a day after the Bank of Canada (BoC) held its interest rate steady, and investor focus shifted to more U.S. employment data due during the week. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Wednesday lower for the third straight session, as dropping oil prices offset optimism that interest rates have peaked after the BoC's latest move to stay sidelined. On the commodities front, gold prices climbed on a softer dollar, while copper prices also edged higher, helped by strong Chinese export data.
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Dec 7 (Reuters) - Futures tied to Canada's main stock were largely flat on Thursday, a day after the Bank of Canada (BoC) held its interest rate steady, and investor focus shifted to more U.S. employment data due during the week. ET (1202 GMT), while their U.S. counterparts were mixed. The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended Wednesday lower for the third straight session, as dropping oil prices offset optimism that interest rates have peaked after the BoC's latest move to stay sidelined.
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e0d82fe9-fb06-4211-a6ae-ec5e2cd86a10
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714207.0
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2023-12-07 00:00:00 UTC
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Sherwin-Williams (SHW) Up 18% in 6 Months: What's Driving it?
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https://www.nasdaq.com/articles/sherwin-williams-shw-up-18-in-6-months%3A-whats-driving-it-0
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The Sherwin-Williams Company's SHW shares have rallied 17.9% in the past six months, modestly outperforming its industry’s growth of 17.6% over the same period. The company has topped the S&P 500’s roughly 6.6% rise over the same period.
Let’s take a look at the factors that are driving this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
Sherwin-Williams is benefiting from strong momentum in its Paint Stores Group segment, as well as pricing and cost-cutting actions and operational expansion. In response to strong domestic demand, the company is expanding its retail operations. The demand for auto refinishing is stable, with sales increasing by a mid-single-digit percentage in the third quarter of 2023.
Sherwin-Williams is increasing its retail presence in order to gain market share. Due to consistent effective pricing, Paint Stores Group sales increased 3.6% in the third quarter. The segment’s margin increased by 420 basis points to 25.9%. In the first nine months of 2023, Paint Stores Group added 36 net new stores, including 16 in the third quarter.
The company aims to increase profits by lowering costs, increasing productivity and improving supply chain efficiency. In 2022, cost-cutting strategies will generate significant net cash flows of approximately $1.9 billion. In the first nine months of 2023, the company returned $1.41 billion to shareholders in dividends and share repurchases, leveraging strong cash generation.
SHW's restructuring efforts are focused on the Performance Coatings Group, the Consumer Brands Group and corporate operations. These activities are expected to save between $50 million and $70 million per year, with 75% of the benefits expected by 2023-end and a total run rate by the end of 2024.
SHW’s earnings estimates have risen in the last two months, indicating analyst optimism. The consensus estimate for 2023 earnings has risen 17.1%. During the same period, the consensus estimate for 2024 increased by 9.3%.
The Sherwin-Williams Company Price and Consensus
The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote
Key Picks
Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
Denison Mines has projected an earnings growth rate of 100% for 2023. It currently sports a Zacks Rank #1 (Strong Buy). DNN delivered a trailing four-quarter earnings surprise of 225%, on average. The stock increased by 63.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently sports a Zacks Rank #1. AXTA delivered a trailing four-quarter earnings surprise of 6.7%, on average. The stock is up around 23.1% in a year.
Andersons currently carries a Zacks Rank #2 (Buy). The stock gained 45% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
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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
The Andersons, Inc. (ANDE) : Free Stock Analysis Report
The Sherwin-Williams Company (SHW) : Free Stock Analysis Report
Denison Mine Corp (DNN) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The Sherwin-Williams Company's SHW shares have rallied 17.9% in the past six months, modestly outperforming its industry’s growth of 17.6% over the same period. Due to consistent effective pricing, Paint Stores Group sales increased 3.6% in the third quarter. In the first nine months of 2023, the company returned $1.41 billion to shareholders in dividends and share repurchases, leveraging strong cash generation.
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Image Source: Zacks Investment Research Sherwin-Williams is benefiting from strong momentum in its Paint Stores Group segment, as well as pricing and cost-cutting actions and operational expansion. The Sherwin-Williams Company Price and Consensus The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote Key Picks Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE. Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report The Sherwin-Williams Company (SHW) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Image Source: Zacks Investment Research Sherwin-Williams is benefiting from strong momentum in its Paint Stores Group segment, as well as pricing and cost-cutting actions and operational expansion. The Sherwin-Williams Company Price and Consensus The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote Key Picks Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE. Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report The Sherwin-Williams Company (SHW) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Image Source: Zacks Investment Research Sherwin-Williams is benefiting from strong momentum in its Paint Stores Group segment, as well as pricing and cost-cutting actions and operational expansion. The stock increased by 63.7% in a year. The stock is up around 23.1% in a year.
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a1d0f23b-adb6-4c02-a317-5e13a80c89d4
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714208.0
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2023-12-07 00:00:00 UTC
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New Strong Sell Stocks for December 7th
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https://www.nasdaq.com/articles/new-strong-sell-stocks-for-december-7th-1
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Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:
Albemarle ALB is a premier specialty chemicals company with leading positions in attractive end markets globally. The Zacks Consensus Estimate for its current year earnings has been revised almost 13.9% downward over the last 60 days.
Crescent Energy Company CRGY is an independent oil and natural gas company, acquires, explores, develops, exploits and produces crude oil and natural gas properties principally in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma, Louisiana and Wyoming in the United States. The Zacks Consensus Estimate for its current year earnings has been revised 10.3% downward over the last 60 days.
Lovesac LOVE offers alternative furniture store, sectionals, bean bags, bean bag chairs as well as other accessories such as blankets, footsacs and throw pillows. The Zacks Consensus Estimate for its current year earnings has been revised 21.3% downward over the last 60 days.
View the entire Zacks Rank #5 List.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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
Albemarle Corporation (ALB) : Free Stock Analysis Report
The Lovesac Company (LOVE) : Free Stock Analysis Report
Crescent Energy Company (CRGY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today: Albemarle ALB is a premier specialty chemicals company with leading positions in attractive end markets globally. Crescent Energy Company CRGY is an independent oil and natural gas company, acquires, explores, develops, exploits and produces crude oil and natural gas properties principally in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma, Louisiana and Wyoming in the United States. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1.
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Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today: Albemarle ALB is a premier specialty chemicals company with leading positions in attractive end markets globally. Crescent Energy Company CRGY is an independent oil and natural gas company, acquires, explores, develops, exploits and produces crude oil and natural gas properties principally in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma, Louisiana and Wyoming in the United States. Click to get this free report Albemarle Corporation (ALB) : Free Stock Analysis Report The Lovesac Company (LOVE) : Free Stock Analysis Report Crescent Energy Company (CRGY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today: Albemarle ALB is a premier specialty chemicals company with leading positions in attractive end markets globally. The Zacks Consensus Estimate for its current year earnings has been revised almost 13.9% downward over the last 60 days. Click to get this free report Albemarle Corporation (ALB) : Free Stock Analysis Report The Lovesac Company (LOVE) : Free Stock Analysis Report Crescent Energy Company (CRGY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today: Albemarle ALB is a premier specialty chemicals company with leading positions in attractive end markets globally. Today, you can download 7 Best Stocks for the Next 30 Days. Zacks Investment Research The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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40338d4d-f9d2-4f74-9e4f-ff82716a8bdd
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714209.0
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2023-12-07 00:00:00 UTC
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Will Palantir Be the Top Artificial Intelligence (AI) Stock in 2024?
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DCOMP
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https://www.nasdaq.com/articles/will-palantir-be-the-top-artificial-intelligence-ai-stock-in-2024
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Claiming the title of the top artificial intelligence (AI) stock for an entire year is no easy feat. In 2023, I think the best AI stock was Nvidia, but i think it will be hard-pressed to defend its title in 2024.
That leads me to look at other top AI stocks, like Palantir (NYSE: PLTR). Palantir is a popular AI stock, but could it be the best to own in 2024?
Palantir has multiple AI products for a diverse customer base
Palantir also had a strong 2023, as its stock has nearly tripled. But Palantir is just getting started as it slowly expands its product reach.
Palantir started as a company primarily focused on government contracts. Its AI platform excels at taking data in and then providing actionable insights to ensure users have the best information possible at a moment's notice. This is incredibly useful for combat commanders or tracking down cybercriminals. But it also has a strong use case in the civilian world, such as analyzing supply chains or preventing money laundering in banks.
Its product line also received many accolades, including being named a leader by Forrester Research for artificial intelligence and machine learning platforms, claiming the title for the strongest current offering.
Palantir's primary focus is on promoting its generative AI offering, AIP. AIP allows users to create large language models with their own data in a secure environment. This is crucial, as securing the data used to feed these models is critical for many of Palantir's customers.
Palantir has a phenomenal product line and plenty of room for growth within its existing offerings. But with how strong of a year 2023 has been, can Palantir have an even better 2024?
Palantir is much more expensive than it used to be
Despite Palantir's strong stock price appreciation, its business hasn't grown nearly as much. In the third quarter, Palantir's revenue increased by 17% to $558 million, a far cry from the greater than 200% movement. That's because investors are willing to pay more for the stock than they were used to.
This is known as multiple expansion, which can be seen in Palantir's drastic price-to-sales ratio increase.
PLTR P/S Ratio data by YCharts.
At the start of the year, investors were only willing to pay about 6.8 times sales; now, they're willing to pay more than 21 times. That's a massive increase, making Palantir transition from a dirt-cheap stock to a very expensive one.
However, if Palantir's business rapidly expands, the hefty premium may be worth it. However, an average of 15 Wall Street analysts expect Palantir to grow its revenue by 20% in 2024, which isn't much faster than it's growing now.
So, could Palantir be 2024's top AI stock? I'd say no. While the company may make massive leaps in its AI technology, sign new customers, and expand its revenue, if it occurs at the pace Wall Street expects, its premium will be too much to overcome.
Many other AI stocks in the market are far cheaper than Palantir, and investors should take a look at them before considering Palantir.
10 stocks we like better than Palantir Technologies
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Palantir Technologies wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of November 29, 2023
Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Its AI platform excels at taking data in and then providing actionable insights to ensure users have the best information possible at a moment's notice. Its product line also received many accolades, including being named a leader by Forrester Research for artificial intelligence and machine learning platforms, claiming the title for the strongest current offering. While the company may make massive leaps in its AI technology, sign new customers, and expand its revenue, if it occurs at the pace Wall Street expects, its premium will be too much to overcome.
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Claiming the title of the top artificial intelligence (AI) stock for an entire year is no easy feat. However, an average of 15 Wall Street analysts expect Palantir to grow its revenue by 20% in 2024, which isn't much faster than it's growing now. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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Palantir has multiple AI products for a diverse customer base Palantir also had a strong 2023, as its stock has nearly tripled. Palantir is much more expensive than it used to be Despite Palantir's strong stock price appreciation, its business hasn't grown nearly as much. Many other AI stocks in the market are far cheaper than Palantir, and investors should take a look at them before considering Palantir.
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Palantir has multiple AI products for a diverse customer base Palantir also had a strong 2023, as its stock has nearly tripled. AIP allows users to create large language models with their own data in a secure environment. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies.
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62373a19-0463-4c48-9783-5668a7e6426f
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714210.0
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2023-12-07 00:00:00 UTC
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Best Stock to Buy: Apple vs. Amazon
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https://www.nasdaq.com/articles/best-stock-to-buy%3A-apple-vs.-amazon
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Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) are two of the most recognizable brands in the consumer market. One dominates in tech devices, holding leading market shares in most of its product categories. Meanwhile, the other is the world's biggest e-commerce firm, with a lucrative cloud business to boot.
These tech companies have revolutionized their respective industries and are continuing to innovate, making their stocks attractive long-term options. However, before filling up on shares in Apple and Amazon, make the most of your investment by determining which is the better buy. Just because a company leads its industry doesn't necessarily mean its stock trades at the right price.
So, let's assess whether Apple or Amazon is the better stock to buy right now.
Apple: The cash to go the distance
As the world's most valuable company with a market cap of nearly $3 trillion, Apple has a long history of offering investors consistent gains. The tech giant has faced challenges over the last year as macroeconomic headwinds curbed consumer spending and led to repeated declines in product sales. However, its balance sheet remains an attractive reason to invest, with the company on solid financial footing despite difficult market conditions.
Data by YCharts.
Apple ended its fiscal 2023 with nearly $100 billion in free cash flow and $162 billion in cash and marketable securities. In fact, as seen in the table above, Apple has significantly more free cash flow than some of its biggest competitors.
Market declines may have sent revenue tumbling 3% year over year in 2023, but the iPhone maker is a reliable buy with the funds to overcome current hurdles and continue investing in high-growth markets.
For instance, Apple's research and development spending rose by $3.6 billion this year, with much of that going to its expansion in generative artificial intelligence (AI). The company isn't as far into its AI journey as other tech giants, but it has the brand loyalty and cash to go far in the sector.
Amazon: Growth prospects in multiple markets
Wall Street has grown particularly bullish about Amazon this year, with its stock up 72% since Jan. 1. The company has rallied investors with a return to profitability in its e-commerce business and an expanding role in AI.
Amazon may have started out as an online book retailer in 1994, but it has expanded to so much more. The company became a behemoth in tech, profiting from the development of several markets.
According to Statista, e-commerce sales made up about 19% of all retail purchases globally in 2022. That figure is expected to hit 23% by 2027, with Amazon well positioned to see major gains from that growth.
Moreover, the company has achieved a lucrative position in the cloud market with Amazon Web Services (AWS). The cloud platform is responsible for a 32% market share, significantly ahead of competitors Microsoft's Azure and Alphabet's Google Cloud. Meanwhile, AWS delivers attractive profit margins of about 30%, allowing the company to lean less on its retail business amid economic challenges.
Amazon's dominance in cloud computing could play to its advantage in the AI market as businesses increasingly seek AI tools to boost efficiency, and the company continues adding such services to AWS.
Is Apple or Amazon the better stock to buy?
Apple and Amazon likely have bright futures, and it's hard to go wrong with either over the long term. These companies are favorites among consumers, having built up immense brand loyalty with their users.
However, when comparing both companies' price-to-earnings ratios (P/E) and price-to-free cash flow ratios, it looks like shares in Apple currently offer more value. See the chart below.
Data by YCharts.
P/E and price-to-free cash flow are useful metrics to determine a stock's value. For both, the lower the figure, the cheaper the share price.
Apple's P/E of 31 and price-to-free cash flow of 30 aren't exactly major bargains. However, they are significantly lower than the same metrics for Amazon. Apple's solid financials and wealth of cash mean its stock is trading at a more attractive price point, with its shares the better buy right now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The tech giant has faced challenges over the last year as macroeconomic headwinds curbed consumer spending and led to repeated declines in product sales. However, its balance sheet remains an attractive reason to invest, with the company on solid financial footing despite difficult market conditions. For instance, Apple's research and development spending rose by $3.6 billion this year, with much of that going to its expansion in generative artificial intelligence (AI).
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However, when comparing both companies' price-to-earnings ratios (P/E) and price-to-free cash flow ratios, it looks like shares in Apple currently offer more value. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft.
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Apple: The cash to go the distance As the world's most valuable company with a market cap of nearly $3 trillion, Apple has a long history of offering investors consistent gains. Amazon: Growth prospects in multiple markets Wall Street has grown particularly bullish about Amazon this year, with its stock up 72% since Jan. 1. Is Apple or Amazon the better stock to buy?
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Just because a company leads its industry doesn't necessarily mean its stock trades at the right price. Is Apple or Amazon the better stock to buy? The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, and Microsoft.
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15db20f5-96be-4418-8dae-af545ddc22a3
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714211.0
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2023-12-07 00:00:00 UTC
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McDonald's tests CosMc's stores as burger chain boosts beverages focus
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DCOMP
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https://www.nasdaq.com/articles/mcdonalds-tests-cosmcs-stores-as-burger-chain-boosts-beverages-focus
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nan
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Dec 7 (Reuters) - McDonald's MCD.N is set to test a smaller-format concept store called "CosMc's", which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan.
The first CosMc's location will open in Bolingbrook, Illinois, this week as part of a limited test run, the company said on Wednesday during its investor day.
McDonald's aims to open about 10 pilot stores by the end of 2024, with the rest set to come up in Texas, CEO Chris Kempczinski said. The company will study the results from the test locations for at least one year, he added.
"While the number of locations is not particularly concerning to the industry, it will likely put somewhat of a valuation cap on Starbucks and Dutch Bros," Guggenheim analyst Gregory Francfort wrote in a note.
Based on McDonald's alien character CosMc, which appeared in a series of advertisements in the 1980s and 90s, the CosMc's stores will also test Drive-Thru pickup lanes and cashless payment devices to boost service speed.
With drinks such as "Sour Cherry Energy Burst" and "Blueberry Ginger Boost", CosMc's could allow McDonald's to tap into the growing popularity of mixed cold beverages in the U.S., a trend that has boosted sales at coffee giant Starbucks SBUX.O.
CosMc's will also offer some popular McDonald's menu items such as the McMuffin, as well as new sandwiches and snacks.
McDonald's on Wednesday outlined plans to double down on its expansion, eyeing about 10,000 new store openings worldwide by 2027, and accelerate the digitizing of its business.
(Reporting by Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila)
((DeborahMary.Sophia@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Dec 7 (Reuters) - McDonald's MCD.N is set to test a smaller-format concept store called "CosMc's", which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan. The first CosMc's location will open in Bolingbrook, Illinois, this week as part of a limited test run, the company said on Wednesday during its investor day. "While the number of locations is not particularly concerning to the industry, it will likely put somewhat of a valuation cap on Starbucks and Dutch Bros," Guggenheim analyst Gregory Francfort wrote in a note.
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Dec 7 (Reuters) - McDonald's MCD.N is set to test a smaller-format concept store called "CosMc's", which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan. The first CosMc's location will open in Bolingbrook, Illinois, this week as part of a limited test run, the company said on Wednesday during its investor day. The company will study the results from the test locations for at least one year, he added.
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Dec 7 (Reuters) - McDonald's MCD.N is set to test a smaller-format concept store called "CosMc's", which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan. Based on McDonald's alien character CosMc, which appeared in a series of advertisements in the 1980s and 90s, the CosMc's stores will also test Drive-Thru pickup lanes and cashless payment devices to boost service speed. With drinks such as "Sour Cherry Energy Burst" and "Blueberry Ginger Boost", CosMc's could allow McDonald's to tap into the growing popularity of mixed cold beverages in the U.S., a trend that has boosted sales at coffee giant Starbucks SBUX.O.
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Dec 7 (Reuters) - McDonald's MCD.N is set to test a smaller-format concept store called "CosMc's", which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan. The first CosMc's location will open in Bolingbrook, Illinois, this week as part of a limited test run, the company said on Wednesday during its investor day. McDonald's aims to open about 10 pilot stores by the end of 2024, with the rest set to come up in Texas, CEO Chris Kempczinski said.
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d7cdc383-6a88-47ad-9406-b09e539e636a
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714212.0
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2023-12-07 00:00:00 UTC
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4 Things Investors Need to Know Before Betting Big Amid Sportsbook Rivalry
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DCOMP
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https://www.nasdaq.com/articles/4-things-investors-need-to-know-before-betting-big-amid-sportsbook-rivalry
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nan
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Penn Entertainment (NASDAQ: PENN) and DraftKings (NASDAQ: DKNG) are major players in the lucrative world of sports betting, each carving out their niche in this evolving market. These companies garner a growing part of their revenue through online sportsbooks and gaming apps.
As Penn Entertainment unveiled ESPN Bet in mid-November, the industry braced for a shake-up, presenting both opportunities and challenges for investors and established leaders in the space, such as DraftKings. Let's look at what investors need to know before betting on one of these strong sportsbook contenders.
1. ESPN Bet could well be a game changer in sports betting
The entry of ESPN Bet into the sports betting arena marks a likely turning point in the industry, following its initial rollout to 17 states. This fusion presents a unique opportunity to capitalize on the widespread appeal of the ESPN brand (owned by Walt Disney) and Penn's industry experience.
The strategic collaboration between a major sports network and a betting platform may significantly amplify user engagement and betting volumes, ultimately boosting revenue. Investors should monitor early results from the launch. If ESPN Bet can quickly take market share, it'll likely reshape the competitive landscape for sports betting. Despite those advantages, ESPN Bet will still have to distinguish itself in a market dense with established competitors.
2. DraftKings' resilience amid rising competition
One of those established players is DraftKings, which has also held its own in this competitive industry. The company's third-quarter revenue surged to $790 million, up 57% year over year. DraftKings' strategic expansion into new jurisdictions and diversification of its offerings have resonated well with its customer base. The company now hosts mobile sports betting in 22 states and iGaming in five, and DraftKings is pursuing a move into Puerto Rico in the near future.
Since the launch of ESPN Bet by Penn Entertainment introduces a significant rival, investors should consider how this new player might affect DraftKings' market share and growth trajectory. While DraftKings has a strong foothold, the enhanced competition could pressure its customer acquisition and retention strategies.
3. The influence of market trends and consumer behavior
Market reports indicate the shift toward mobile and app-based platforms is exceptionally strong. This trend aligns perfectly with DraftKings' strengths, given its position in the mobile sports betting sector. With the global online gambling market projected to grow at an 11.7% compound annual growth rate over the next seven years, according to Grand View Research, adapting to these consumer preferences is key for companies like DraftKings and Penn Entertainment.
DraftKings, already a leader with 57% of sports bettors preferring its platform according to Drive Research, must continue to innovate and adapt to retain its top position. The company's proficiency in mobile betting is a significant advantage in an industry where 70% of sportsbook wagers are placed on mobile devices. For Penn Entertainment and its ESPN Bet launch, replicating this success in mobile engagement remains crucial in capturing market share.
However, this industry shift also poses challenges. Both companies must continuously innovate to meet evolving consumer demands, especially as Drive Research notes that convenience and ease of deposits are essential to the allure of online betting. The future growth of DraftKings and Penn Entertainment in the sports betting arena will depend heavily on their ability to align with these market trends and consumer behaviors.
4. The regulatory environment and its implications are a wild card
The regulatory landscape shapes much of the future of the sports betting industry. Sports betting is legal in 37 states and Washington D.C., with other states drafting legislation. This expanding legality opens significant market opportunities for the industry leaders.
However, navigating this regulatory maze is a complex affair -- each state presents its own set of rules and challenges and requires compliance with distinct legal frameworks, impacting operational costs and strategies. DraftKings and Penn Entertainment must adapt to these varying regulatory environments to maximize their growth potential.
Moreover, the legal shifts also present risks; changes in regulations or delays in legalization can impact market access and profitability. Last year, the Maryland Lottery and Gaming Control Commission fined BetMGM for improperly timing the acceptance of bets permitted through its mobile app. The fine to that app, jointly owned by MGM Resorts International and Entain Holdings, is just one example of compliance risk for industry operators.
Investors should consider how well sportsbook companies are positioned to leverage new markets while managing the intricacies of compliance. As the landscape continues to evolve, the ability of companies like DraftKings and Penn Entertainment to effectively navigate these legal waters could significantly influence their long-term growth and market dominance.
Is the smart bet to hold, call, or fold?
My recommendation to hold on DraftKings recognizes its proven track record, evidenced by its significant revenue growth and leadership in mobile sports betting. DraftKings' ability to maintain a dominant position despite rising competition points to its potential for continued success, but the potential shake-up ESPN Bet presents means now may not be the best time to buy.
On the other hand, any recommendation to buy Penn Entertainment hinges on ESPN Bet living up to the market's expectations. There's no doubt the synergy between one of the biggest sports brands in the world and an established betting platform offers promising upside.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Penn Entertainment wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Nicholas Robbins has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends the following options: long January 2025 $25 calls on Penn Entertainment and short January 2025 $30 calls on Penn Entertainment. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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With the global online gambling market projected to grow at an 11.7% compound annual growth rate over the next seven years, according to Grand View Research, adapting to these consumer preferences is key for companies like DraftKings and Penn Entertainment. However, navigating this regulatory maze is a complex affair -- each state presents its own set of rules and challenges and requires compliance with distinct legal frameworks, impacting operational costs and strategies. As the landscape continues to evolve, the ability of companies like DraftKings and Penn Entertainment to effectively navigate these legal waters could significantly influence their long-term growth and market dominance.
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Penn Entertainment (NASDAQ: PENN) and DraftKings (NASDAQ: DKNG) are major players in the lucrative world of sports betting, each carving out their niche in this evolving market. As the landscape continues to evolve, the ability of companies like DraftKings and Penn Entertainment to effectively navigate these legal waters could significantly influence their long-term growth and market dominance. DraftKings' ability to maintain a dominant position despite rising competition points to its potential for continued success, but the potential shake-up ESPN Bet presents means now may not be the best time to buy.
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Penn Entertainment (NASDAQ: PENN) and DraftKings (NASDAQ: DKNG) are major players in the lucrative world of sports betting, each carving out their niche in this evolving market. ESPN Bet could well be a game changer in sports betting The entry of ESPN Bet into the sports betting arena marks a likely turning point in the industry, following its initial rollout to 17 states. Since the launch of ESPN Bet by Penn Entertainment introduces a significant rival, investors should consider how this new player might affect DraftKings' market share and growth trajectory.
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As Penn Entertainment unveiled ESPN Bet in mid-November, the industry braced for a shake-up, presenting both opportunities and challenges for investors and established leaders in the space, such as DraftKings. Since the launch of ESPN Bet by Penn Entertainment introduces a significant rival, investors should consider how this new player might affect DraftKings' market share and growth trajectory. The company's proficiency in mobile betting is a significant advantage in an industry where 70% of sportsbook wagers are placed on mobile devices.
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34974d45-b767-454a-ac1f-3d53c12bb178
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714213.0
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2023-12-07 00:00:00 UTC
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Here's Why You Should Retain National Vision (EYE) Stock Now
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DCOMP
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https://www.nasdaq.com/articles/heres-why-you-should-retain-national-vision-eye-stock-now-3
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National Vision Holdings, Inc. EYE is well-poised to grow in the coming quarters, backed by comparable store sales growth and new store sales. The ongoing execution of strategic initiatives bodes well for the company. Further, the strong liquidity supports its robust and disciplined capital allocation plan, which is highly encouraging.
Meanwhile, the company’s substantial reliance on vendors and other macroeconomic pressures could pose a challenge.
In the past year, this Zacks Rank #3 (Hold) stock has declined 51.2% compared with the 6% fall of the industry and a 15.7% rise of the S&P 500 composite.
The leading optical retailer has a market capitalization of $1.49 billion. The company projects long-term estimated earnings growth of 14.5% compared with the industry’s 11.7%. National Vision surpassed estimates in three of the trailing four quarters and missed in one, delivering an earnings surprise of 48.3%, on average.
Let’s delve deeper.
Upsides
Owned & Host Gains Market Share: All four subsegments within Owned and Host are consistently gaining market share, banking on several growth drivers. These include diminishing eyesight with increasing age, causing new customers to buy corrective eyewear, and a steady and consistent replacement cycle as customers replace or purchase new eyewear for a variety of reasons, including changes in prescriptions, fashion trends and necessity. America's Best and Eyeglass World are particularly driving revenues.
National Vision is deploying remote medicine technology in tandem with electronic health record technology to drive expanded capacity, enhance in-store efficiencies and improve the patient experience. The combination of these initiatives is resulting in added exam capacity in sales that the company would not have had otherwise. Per the company’s third-quarter 2023 update, National Vision opened 70 new America’s Best and Eyeglass World stores.
Image Source: Zacks Investment Research
Future Strategies Look Promising: National Vision plans to continue executing core growth initiatives and further investing in strengthening competitive advantages. In terms of store expansion, the company continues to see a sizable new opportunity with growth for many years to come.
Marketing continues to be a key factor in driving traffic to National Vision’s stores, given the infrequent purchase cycle for eyeglasses. Year to date, EYE has invested $82 million in capital expenditures, primarily focused on new store openings and investment in labs, distribution centers and customer-facing technology. The company’s merchandising and distribution teams continue to execute well and are confident that the current inventory levels are sufficient to support continued growth in 2023.
Solvency and Capital Structure: National Vision exited the third quarter of 2023 with cash and cash equivalents of $266 million and a corresponding short-term debt of $11 million. This is good news in terms of the company’s solvency position. Long-term debt came up to $552 million in the third quarter compared with $555 million at the end of the second quarter.
Downsides
Rising Inflation Leads to Mounting Expenses: The company anticipates that pressures from increases in raw material prices could have an impact on its costs applicable to revenues in 2023. Throughout 2023, targeted wage investments, including increases in compensation for optometrists and associates, as well as flexibility initiatives, impacted costs and SG&A expenses. Wage pressures in certain markets are likely to continue for the rest of the year.
Management also apprehended that wage investment pressure and increases in raw material prices in 2023 may not be able to be fully offset by leverage from revenue growth, productivity efficiency and various pricing actions.
High Dependence on Vendors: National Vision procures almost all of its merchandise from domestic and international vendors. Moreover, the company has ties with a very limited number of suppliers for the majority of its eyeglass frames, eyeglass lenses and contact lenses. Thus, high dependence on a limited number of suppliers exposes it to concentration of supplier risk. In tough times, EYE may find it difficult to look for an alternative source of procurements in a timely or cost-effective manner.
Estimate Trend
The Zacks Consensus Estimate for National Vision’s 2023 earnings per share (EPS) has moved up from 54 cents to 55 cents in the past 30 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $2.12 billion. This suggests a 5.6% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics HAE, Insulet PODD and DexCom DXCM.
Haemonetics has an estimated earnings growth rate of 28.4% for fiscal 2024 compared with the industry’s 15.8%. HAE’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 16.1%. Its shares have decreased 1.9% compared with the industry’s 6% fall in the past year.
HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Insulet, sporting a Zacks Rank #1 at present, has a long-term estimated earnings growth rate of 39.2% compared with the industry’s 11.7%. Shares of the company have decreased 37.6% compared with the industry’s 6% decline over the past year.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.5%.
DexCom, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 33.6% compared with the industry’s 13.8%. Shares of DXCM have decreased 4% compared with the industry’s 6.5% decline over the past year.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Haemonetics Corporation (HAE) : Free Stock Analysis Report
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National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Marketing continues to be a key factor in driving traffic to National Vision’s stores, given the infrequent purchase cycle for eyeglasses. Downsides Rising Inflation Leads to Mounting Expenses: The company anticipates that pressures from increases in raw material prices could have an impact on its costs applicable to revenues in 2023. Throughout 2023, targeted wage investments, including increases in compensation for optometrists and associates, as well as flexibility initiatives, impacted costs and SG&A expenses.
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In the past year, this Zacks Rank #3 (Hold) stock has declined 51.2% compared with the 6% fall of the industry and a 15.7% rise of the S&P 500 composite. DexCom, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 33.6% compared with the industry’s 13.8%. Click to get this free report Haemonetics Corporation (HAE) : Free Stock Analysis Report DexCom, Inc. (DXCM) : Free Stock Analysis Report Insulet Corporation (PODD) : Free Stock Analysis Report National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Image Source: Zacks Investment Research Future Strategies Look Promising: National Vision plans to continue executing core growth initiatives and further investing in strengthening competitive advantages. Estimate Trend The Zacks Consensus Estimate for National Vision’s 2023 earnings per share (EPS) has moved up from 54 cents to 55 cents in the past 30 days. Click to get this free report Haemonetics Corporation (HAE) : Free Stock Analysis Report DexCom, Inc. (DXCM) : Free Stock Analysis Report Insulet Corporation (PODD) : Free Stock Analysis Report National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report To read this article on Zacks.com click here.
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National Vision Holdings, Inc. Image Source: Zacks Investment Research Future Strategies Look Promising: National Vision plans to continue executing core growth initiatives and further investing in strengthening competitive advantages. Estimate Trend The Zacks Consensus Estimate for National Vision’s 2023 earnings per share (EPS) has moved up from 54 cents to 55 cents in the past 30 days.
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714214.0
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2023-12-07 00:00:00 UTC
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Tandem Diabetes (TNDM) Launches Dexcom G7 Integrated t:slim X2
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DCOMP
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https://www.nasdaq.com/articles/tandem-diabetes-tndm-launches-dexcom-g7-integrated-t%3Aslim-x2
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Tandem Diabetes Care, Inc. TNDM recently launched the updated t:slim X2 insulin pump software with Dexcom G7 Continuous Glucose Monitoring (“CGM”) integration in the United States. This marks the company’s flagship pump platform, t:slim X2, with the Control-IQ technology, to be the only automated insulin delivery (AID) system in the world to feature Dexcom’s most advanced CGM technology.
Tandem Diabetes’ product innovations are helping expand its reach into different customer segments of the market beyond where it operates, providing additional choices to new and existing customers to manage their diabetes. The launch of the Tandem t:slim X2 insulin pump integrated with Dexcom G7 further demonstrates the company’s commitment to continued leadership in advancing AID systems.
News in Detail
With the integration of Dexcom G7, t:slim X2 insulin pump, users can now spend more time in a closed loop with little to no wait time between Dexcom G7 CGM sensor sessions. The users are allowed even more choices in their diabetes management, with the option of using either a Dexcom G6 or a Dexcom G7 CGM sensor.
Image Source: Zacks Investment Research
The Dexcom G7 sensor is 60 percent smaller than its predecessor, Dexcom G6, and offers a range of new features. Apart from being the most accurate, the new, discreet sensor is also the fastest CGM connected to the t:slim X2 pump, with a 30-minute sensor warmup time compared to two hours previously. Dexcom G7 also features a 12-hour grace period to replace the finished sensors for a more seamless transition between sessions and flexibility when changing sensors.
Tandem Diabetes will email instructions to all in-warranty t:slim X2 users in the United States to offer the option to add the new feature free of charge via remote software update. Pre-loaded with the updated software, t:slim X2 pumps are now being shipped to new customers.
Significance of the Launch
The Tandem Diabetes-Dexcom collaboration has entered its 10th year, and the company is focused on sustaining the rapid pace of innovation to further its mission of helping improve the lives of people with diabetes. With the latest offering, Tandem Diabetes now provides more than 300,000 current t:slim X2 users the ability to integrate with Dexcom’s most advanced CGM technology.
Outside the United States, the t:slim X2 pump with Dexcom G7 integration is expected to be launched in additional countries in early 2024.
Industry Prospects
Per a Research report, the AID system market was valued at $749.2 million in 2022 and is expected to witness a CAGR of 9.8% by 2030.
Bright Prospects of Product Innovations
It has been a transitional time for Tandem Diabetes as it prepares for its next phase of growth through the expansion of its technology offerings. The company is executing several near-term product launches while implementing scalable systems and processes to support its global operations and leverage the infrastructure.
Apart from G7, Tandem Mobi is also preparing for the launch of the t:slim X2 integration with the Abbott FreeStyle Libre 2 sensor. This new integrated offering is an incredible accomplishment, bringing the benefits of AID technology to Abbott's customers in the United States for the first time.
In addition, Tandem Mobi is leading the way in creating a whole new category of devices for insulin therapy. The anticipation around the novel miniaturized durable pump has started to build and is already generating incredible interest among healthcare providers, people using multiple daily injections and current pumpers. Management is set to begin Mobi’s scaled launch with a limited release in the fourth quarter, followed by broad availability in early 2024.
Price Performance
In the past six months, TNDM shares have declined 8% compared with the industry’s fall of 6.2%.
Zacks Rank and Key Picks
Tandem Diabetes Care currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Haemonetics HAE, Insulet PODD and DexCom DXCM. Haemonetics and DexCom each presently carry a Zacks Rank #2 (Buy), and Insulet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ stock has decreased 1.9% in the past year. Earnings estimates for Haemonetics have increased from $3.86 to $3.89 in 2023 and $4.11 to $4.15 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.85 to $1.91 in the past 30 days. Shares of the company have dropped 37.6% in the past year compared with the industry’s decline of 6%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.5%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.41 to $1.43 in the past seven days and to $1.44 in the past 30 days. Shares of the company have decreased 4% in the past year compared with the industry’s decline of 6.5%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Haemonetics Corporation (HAE) : Free Stock Analysis Report
DexCom, Inc. (DXCM) : Free Stock Analysis Report
Insulet Corporation (PODD) : Free Stock Analysis Report
Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Tandem Diabetes Care, Inc. TNDM recently launched the updated t:slim X2 insulin pump software with Dexcom G7 Continuous Glucose Monitoring (“CGM”) integration in the United States. Tandem Diabetes will email instructions to all in-warranty t:slim X2 users in the United States to offer the option to add the new feature free of charge via remote software update. Significance of the Launch The Tandem Diabetes-Dexcom collaboration has entered its 10th year, and the company is focused on sustaining the rapid pace of innovation to further its mission of helping improve the lives of people with diabetes.
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Tandem Diabetes Care, Inc. TNDM recently launched the updated t:slim X2 insulin pump software with Dexcom G7 Continuous Glucose Monitoring (“CGM”) integration in the United States. Zacks Rank and Key Picks Tandem Diabetes Care currently carries a Zacks Rank #3 (Hold). Click to get this free report Haemonetics Corporation (HAE) : Free Stock Analysis Report DexCom, Inc. (DXCM) : Free Stock Analysis Report Insulet Corporation (PODD) : Free Stock Analysis Report Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Tandem Diabetes Care, Inc. TNDM recently launched the updated t:slim X2 insulin pump software with Dexcom G7 Continuous Glucose Monitoring (“CGM”) integration in the United States. News in Detail With the integration of Dexcom G7, t:slim X2 insulin pump, users can now spend more time in a closed loop with little to no wait time between Dexcom G7 CGM sensor sessions. Click to get this free report Haemonetics Corporation (HAE) : Free Stock Analysis Report DexCom, Inc. (DXCM) : Free Stock Analysis Report Insulet Corporation (PODD) : Free Stock Analysis Report Tandem Diabetes Care, Inc. (TNDM) : Free Stock Analysis Report To read this article on Zacks.com click here.
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News in Detail With the integration of Dexcom G7, t:slim X2 insulin pump, users can now spend more time in a closed loop with little to no wait time between Dexcom G7 CGM sensor sessions. Outside the United States, the t:slim X2 pump with Dexcom G7 integration is expected to be launched in additional countries in early 2024. Haemonetics’ stock has decreased 1.9% in the past year.
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2023-12-07 00:00:00 UTC
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Should You Buy Albemarle Stock While It's Still Down?
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https://www.nasdaq.com/articles/should-you-buy-albemarle-stock-while-its-still-down
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Integrated mining and refining operation Albemarle (NYSE: ALB) was early to pick up on the impending demand for lithium -- a key ingredient in lithium-ion batteries used in smartphones and electric vehicles (EVs). The company got new supply up and running ahead of spiking demand for EVs over the last few years. But as an EV battery needs orders of magnitude more lithium than a small smartphone, global supply was inadequate, causing lithium prices to spike. Albemarle stock performed in much the same way through the end of 2022: It soared.
As is the case with cyclical businesses tied to manufacturing, though, lots of new competing lithium supply has come online in 2023, just in time for EV sales growth to slow dramatically. Booming lithium prices have fallen, dragging Albemarle stock with it. Shares are down more than 60% from all-time highs late in 2022 and are now up a meager 30% over the last five-year stretch.
With Albemarle down on its luck, is now the time to buy?
Are EVs really the problem?
In recent months, some legacy automakers like GM (NYSE: GM) and Ford (NYSE: F) have tapped the brakes on the electrification of their vehicle lineup. With the economy slowing and interest rates at multidecade highs, financing a new and higher-priced car is out of the question for many consumers, so some of these companies have shifted their focus a bit back to their old tried-and-true combustion engine models.
Additionally, China -- the world's largest auto market, and thus EV market -- continues to struggle to reignite economic growth in the wake of the pandemic. China recently ended some subsidies on consumer EV purchases. That has also slowed sales for EVs a bit.
But make no mistake, though the rate of expansion has slowed, global EV purchases remain on the rise. This is a point Albemarle management wanted to make crystal clear on its third-quarter 2023 earnings call.
Chart source: Albemarle.
Clearly, the long-term trend propelling vehicle electrification isn't the primary issue for Albemarle and the lithium mining market. Rather, Albemarle has pointed out two issues, at least two affecting itself.
First, perhaps in dealing with slowing economic growth and the effects of higher interest rates, Albemarle points out that many lithium battery manufacturers have been lowering their inventory by buying less new refined material. Sparse inventory can't last forever, though, and eventually, some of these manufacturers -- particularly those in China, where much lithium battery manufacturing takes place -- will need to rebuild inventories.
The second is an effect of Albemarle being an integrated mining and refining operation. Albemarle earns a profit at each stage of the lithium mine-and-refine process it's involved in. But there's currently a six-month lag from a large initial raw material sale from its Greenbushes Talison project (a joint venture majority-owned by Chinese giant Tianqi Lithium) in Western Australia and the eventual refined product sale that should be finalized through the next couple of quarters (through the first half of 2024).
In the meantime, Albemarle carries this product on its balance sheet as inventory and also records it as a cost of goods sold. This has temporarily reduced the company's earnings before interest, tax, depreciation, and amortization (EBITDA) and profit margins.
Data by YCharts.
A top mining stock buy for 2024
Is Albemarle's dip into red ink a permanent situation, though? Management doesn't think so. As the aforementioned inventory at the Talison mine is sold, Albemarle expects its lithium sales EBITDA profit margins to rebound back into the 30% to 40% range next year.
And though the picture looks ugly right now for this vertically integrated operation, Albemarle thinks it holds strategic business advantages over competition. It was able to get multiple sources of affordable raw lithium online before the EV boom really started to take hold, giving the company the ability to turn a healthy profit even in tough times. Management also has established long-term supply agreements with customers that set a price floor on its product, preventing it from having to sell lithium at a loss for extended periods of time.
Of course, all of this is theoretical, and Albemarle's lithium empire will continue to be tested in 2024. At this juncture, the stock appears to be highly speculative, and the market is pricing it as such. Shares trade for 4.3 times trailing-12-month earnings per share and just 5.5 times next year's expected earnings (which is subject to change, given the extreme volatility ongoing in the lithium market right now).
For me, Albemarle is a top lithium stock to buy on the dip. But owning this company isn't for the faint of heart. Share prices will be wild, and an eventual recovery isn't a given either. Nevertheless, given the long-term growth in demand for lithium from the EV and other energy storage markets, Albemarle looks well positioned to benefit, so I'm willing to bite after an ugly 2023.
10 stocks we like better than Albemarle
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
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*Stock Advisor returns as of December 4, 2023
Nicholas Rossolillo and his clients have positions in Albemarle. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Integrated mining and refining operation Albemarle (NYSE: ALB) was early to pick up on the impending demand for lithium -- a key ingredient in lithium-ion batteries used in smartphones and electric vehicles (EVs). With the economy slowing and interest rates at multidecade highs, financing a new and higher-priced car is out of the question for many consumers, so some of these companies have shifted their focus a bit back to their old tried-and-true combustion engine models. It was able to get multiple sources of affordable raw lithium online before the EV boom really started to take hold, giving the company the ability to turn a healthy profit even in tough times.
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Integrated mining and refining operation Albemarle (NYSE: ALB) was early to pick up on the impending demand for lithium -- a key ingredient in lithium-ion batteries used in smartphones and electric vehicles (EVs). First, perhaps in dealing with slowing economic growth and the effects of higher interest rates, Albemarle points out that many lithium battery manufacturers have been lowering their inventory by buying less new refined material. As the aforementioned inventory at the Talison mine is sold, Albemarle expects its lithium sales EBITDA profit margins to rebound back into the 30% to 40% range next year.
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Integrated mining and refining operation Albemarle (NYSE: ALB) was early to pick up on the impending demand for lithium -- a key ingredient in lithium-ion batteries used in smartphones and electric vehicles (EVs). First, perhaps in dealing with slowing economic growth and the effects of higher interest rates, Albemarle points out that many lithium battery manufacturers have been lowering their inventory by buying less new refined material. Nevertheless, given the long-term growth in demand for lithium from the EV and other energy storage markets, Albemarle looks well positioned to benefit, so I'm willing to bite after an ugly 2023.
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That has also slowed sales for EVs a bit. First, perhaps in dealing with slowing economic growth and the effects of higher interest rates, Albemarle points out that many lithium battery manufacturers have been lowering their inventory by buying less new refined material. Management doesn't think so.
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473b92f1-4034-4303-b547-fb3d636ab703
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714216.0
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2023-12-07 00:00:00 UTC
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Eastman Chemical (EMN) Raises Dividend for 14th Straight Year
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https://www.nasdaq.com/articles/eastman-chemical-emn-raises-dividend-for-14th-straight-year
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Eastman Chemical Company's EMN board of directors increased the quarterly cash dividend on its common stock from 79 cents to 81 cents per share. The dividend will be paid out on Jan 5, 2024 to stockholders of record as of Dec 18, 2023.
Eastman Chemical is committed to continuing its long history of returning cash to stockholders. This action reflects the board's confidence in the company's ability to deliver solid earnings and maintain its track record of strong cash flow generation, EMN noted.
Eastman Chemical ended the third quarter with $439 million in cash and cash equivalents. Operating cash flow was $514 million in the third quarter, up from $256 million in the year-ago quarter. In the third quarter of 2023, the company returned $94 million to shareholders through dividends and share repurchases.
Shares of Eastman Chemical have dropped 1.9% over the past year compared with a 14.6% decline of its industry.
Image Source: Zacks Investment Research
On its third-quarter call, EMN stated that it is seeing muted demand heading into the fourth quarter as customers are cautious in the prevailing challenging environment. In addition, it anticipates regular seasonality in key end markets, including building and construction, consumer durables and performance films for automotive applications.
Eastman Chemical expects EPS for 2023 between $6.30 and $6.50. Furthermore, EMN expects to deliver $1.4 billion in operating cash flow in 2023.
Eastman Chemical Company Price and Consensus
Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote
Zacks Rank & Key Picks
Eastman Chemical currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the basic material space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
Denison Mines has a projected earnings growth rate of 100% for the current year. It currently sports a Zacks Rank #1 (Strong Buy). DNN delivered a trailing four-quarter earnings surprise of roughly 225%, on average. The stock has surged around 63.7% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently sports a Zacks Rank #1. AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock has risen around 23.1% in a year.
Andersons currently carries a Zacks Rank #2 (Buy). The stock has rallied roughly 45% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
Only $1 to See All Zacks' Buys and Sells
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The Andersons, Inc. (ANDE) : Free Stock Analysis Report
Eastman Chemical Company (EMN) : Free Stock Analysis Report
Denison Mine Corp (DNN) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Eastman Chemical is committed to continuing its long history of returning cash to stockholders. This action reflects the board's confidence in the company's ability to deliver solid earnings and maintain its track record of strong cash flow generation, EMN noted. Image Source: Zacks Investment Research On its third-quarter call, EMN stated that it is seeing muted demand heading into the fourth quarter as customers are cautious in the prevailing challenging environment.
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Eastman Chemical Company Price and Consensus Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote Zacks Rank & Key Picks Eastman Chemical currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the basic material space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE. Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report Eastman Chemical Company (EMN) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Eastman Chemical Company's EMN board of directors increased the quarterly cash dividend on its common stock from 79 cents to 81 cents per share. Eastman Chemical Company Price and Consensus Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote Zacks Rank & Key Picks Eastman Chemical currently carries a Zacks Rank #3 (Hold). Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report Eastman Chemical Company (EMN) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Eastman Chemical Company's EMN board of directors increased the quarterly cash dividend on its common stock from 79 cents to 81 cents per share. Eastman Chemical Company Price and Consensus Eastman Chemical Company price-consensus-chart | Eastman Chemical Company Quote Zacks Rank & Key Picks Eastman Chemical currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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2023-12-07 00:00:00 UTC
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Should You Invest in Ford in 2024?
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https://www.nasdaq.com/articles/should-you-invest-in-ford-in-2024
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Ford Motor Company (NYSE: F) is having a bumpy 2023. The automaker's stock is down more than 20% over the past year due to challenges from both inside and outside the company.
Temporary problems can create long-term investment opportunities, so it's worth digging deeper to see whether Ford's current issues should keep you away from owning the stock.
As it heads into a new year, the company faces three primary problems.
1. Internal and external margin problems
The automotive industry is notoriously competitive, yet companies must spend billions of dollars to build and operate their huge factories. Ford, which built its business on internal combustion engine vehicles, must now balance its investments into building and growing an electric vehicle segment to remain competitive.
Ford has battled internally to keep its costs down. It's no secret that inflation spiked in late 2021 and 2022, which jacked up the costs of components and materials. Ford also recently came to an agreement with its unionized factory workers. The new contract will, between now and 2028, raise its employee starting wage by around 68% to more than $28 an hour, boost its top autoworker wage by 30% to above $40 an hour, and improve employee benefits, including the restoration of some that the company cut during the Great Recession. Ford expects those new labor expenses will add between $800 to $900 in costs to each vehicle it produces.
Passing increased costs to customers has helped it grow its revenues and profits. The company's unit sales were flat year over year in Q3, but its revenue was up 11%. Can that last? Through the first nine months of 2023, unit sales were up 6% year over year, so Q3 unit sales being flat is a reflection of sales slowing.
2. Scaling back EV investments
Ford's EV business might grow slower than management previously predicted. Unit volume did grow 44% year over year in Q3, driven by rising production of the Mustang Mach-e. But it appears demand growth is softening. The company announced it was deferring $12 billion worth of investments to slow down its expansion.
Management emphasized balancing growth with profitability, but it is a potential lose-lose situation. Ford's EV segment's losses grew along with volume. Its $1.3 billion in EV losses in Q3 nearly offset its $1.7 billion profit from Ford Blue, its non-commercial gas-powered vehicle segment.
Ford must grow its unit sales enough to build electric models profitably, and slowing down its production expansion rate could make that more difficult.
3. Is Ford all-in on the future?
Management faces a difficult road ahead as it grows its EV business in a hyper-competitive industry. It's not doing itself any favors by insisting on maintaining its dividend. The problem with a dividend is that it's cash leaving the company -- cash that can't be used to help the business generate more returns.
The dividend has become a burden. While Ford's free cash flow covers its current payouts of about $5 billion annually, it does so with almost nothing left over. Now, free cash flow is calculated after capital expenditures like new factories are taken out, so Ford can afford its dividend.
F Free Cash Flow data by YCharts.
That said, wouldn't a more deep-pocketed Ford be able to invest for growth more aggressively? EV rival Tesla doesn't pay dividends because it wants to retain all its profits to reinvest them. Ford opting to pay a dividend means it must squeeze more value out of fewer investible dollars to compete.
Should you invest in Ford in 2024?
Add all three of these observations together, and Ford comes across as a company that wants to do several things simultaneously. It wants to grow its EV business, but only so fast, while dedicating a large portion of company capital to pay billions of dollars of dividends annually.
It's unclear whether that's a winning strategy. Even as the stock trades at a forward price-to-earnings ratio of just under 6, analysts expect zero earnings growth over the long term, which makes it hard to get excited about the low valuation. The stock could be cheap for valid reasons.
F EPS LT Growth Estimates data by YCharts.
It feels like a lot of work to justify buying the stock at this point, so it's safe to say that investors would be better off waiting for Ford to show some tangible results before buying shares.
10 stocks we like better than Ford Motor Company
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Ford Motor Company wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Temporary problems can create long-term investment opportunities, so it's worth digging deeper to see whether Ford's current issues should keep you away from owning the stock. Internal and external margin problems The automotive industry is notoriously competitive, yet companies must spend billions of dollars to build and operate their huge factories. Even as the stock trades at a forward price-to-earnings ratio of just under 6, analysts expect zero earnings growth over the long term, which makes it hard to get excited about the low valuation.
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Ford, which built its business on internal combustion engine vehicles, must now balance its investments into building and growing an electric vehicle segment to remain competitive. Through the first nine months of 2023, unit sales were up 6% year over year, so Q3 unit sales being flat is a reflection of sales slowing. Ford must grow its unit sales enough to build electric models profitably, and slowing down its production expansion rate could make that more difficult.
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Scaling back EV investments Ford's EV business might grow slower than management previously predicted. 10 stocks we like better than Ford Motor Company When our analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Ford Motor Company wasn't one of them!
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Ford, which built its business on internal combustion engine vehicles, must now balance its investments into building and growing an electric vehicle segment to remain competitive. It wants to grow its EV business, but only so fast, while dedicating a large portion of company capital to pay billions of dollars of dividends annually. 10 stocks we like better than Ford Motor Company When our analyst team has a stock tip, it can pay to listen.
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714218.0
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2023-12-07 00:00:00 UTC
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4 Stocks in the U.S. Upstream Industry Worth a Closer Look
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https://www.nasdaq.com/articles/4-stocks-in-the-u.s.-upstream-industry-worth-a-closer-look
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While the commodity benchmarks have retreated from their earlier highs, they are strong enough for the Zacks Oil and Gas - Exploration and Production - United States industry to notch substantial gains. The recent increases in crude and fuel inventories, coupled with an uninspiring production cut announcement from OPEC, have overshadowed the energy demand prospects. The situation is further complicated by China's economic downturn. Natural gas is also not immune to the broader market decline, trading notably lower year to date. Despite macro challenges causing uncertainties in demand, the sector exhibits resilience, particularly for companies prioritizing growth and operational efficiency. EOG Resources EOG, Matador Resources Company MTDR, Northern Oil and Gas NOG, and Evolution Petroleum EPM are noteworthy options for investors navigating this intricate landscape, offering potential amidst prevailing economic headwinds.
About the Industry
The Zacks Oil and Gas - US E&P industry consists of companies primarily based in the domestic market, focused on the exploration and production (E&P) of oil and natural gas. These firms find hydrocarbon reservoirs, drill oil and gas wells, and produce and sell these materials to be refined later into products such as gasoline, fuel oil, distillate, etc. The economics of oil and gas supply and demand is the fundamental driver of this industry. In particular, a producer’s cash flow is primarily determined by the realized commodity prices. In fact, all E&P companies' results are vulnerable to historically volatile prices in the energy markets. A change in realizations affects their returns and causes them to alter their production growth rates. The E&P operators are also exposed to exploration risks where drilling results are comparatively uncertain.
4 Key Trends to Watch in the Oil and Gas - US E&P Industry
Sustainable Cost-Cutting Efforts: The energy companies have changed their approach to spending capital. Over the past few years, producers have worked tirelessly to cut costs to a bare minimum and look for innovative ways to churn out more oil and gas. And they managed to do just that by improving drilling techniques and extracting favorable terms from the beleaguered service providers. Moreover, driven by operational efficiencies, most E&P operators have been able to reduce unit costs, while the coronavirus-induced collapse in crude forced them to adopt a more disciplined approach to spending capital. These actions are expected to preserve cash flow and support balance sheet strength.
Signs of Softening Consumption: WTI crude, the U.S. benchmark, recently closed under $70 per barrel for the first time in over five months due to a substantial build in gasoline inventories and near-record domestic production. Despite OPEC+'s announcement of nearly 2 million additional barrels per day in production cuts, oil prices remained weak as the market sought more robust commitments. China's economic challenges added to the gloom, affecting global demand forecasts. Shifting focus to natural gas, the commodity, which had slumped to a 25-year low in June 2020 but reached $10 per MMBtu in August 2022, is now trading below $3. This decline is attributed to heightened production levels and predictions of lackluster weather-related demand.
Inflationary Pressure: Many U.S. energy upstream firms are grappling with escalating costs, predominantly tied to increased expenditures on maintenance and inventory. The current inflationary backdrop, coupled with tightness in the supply chain, not only elevates expenses but also adversely impacts capital programs. The substantial rise in costs, hard to overlook, is overshadowing any advantages derived from an increase in commodity prices. We expect that the challenges posed by inflation-related headwinds will persist, posing obstacles to growth and margin figures without a swift resolution in sight. This could result in a challenging path ahead for oil and gas equities, particularly amid concerns of weakened energy demand amid recessionary threats, potentially jeopardizing the commodity's upward trajectory.
Substantial Shareholder Returns: The triple-digit crude prices achieved post-pandemic in the previous year enabled upstream operators to exhibit robust financial performance. Notably, cash from operations has maintained a sustainable trajectory, with improved revenues and companies reducing capital expenditures from pre-pandemic levels amid stable commodity realizations. In essence, the favorable pricing environment in 2022 facilitated E&P firms in generating substantial "excess cash," which they plan to deploy to enhance returns for investors. Indeed, an increasing number of energy companies are channeling their growing cash reserves through dividends and buybacks, aiming to appease long-suffering shareholders.
Zacks Industry Rank Indicates Positive Outlook
The Zacks Oil and Gas - US E&P industry is a 38-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #90, which places it in the top 36% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates upbeat near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of an encouraging earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming optimistic about this group’s earnings growth potential. While the industry’s earnings estimates for 2023 have gone up 10.7% in the past four months, the same for 2024 has risen 7%.
Considering the encouraging dynamics of the industry, we will present a few stocks that you may want to consider for your portfolio. But it’s worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Underperforms S&P 500 & Sector
The Zacks Oil and Gas - US E&P industry has fared worse than the Zacks S&P 500 composite as well as the broader Zacks Oil – Energy sector over the past year.
The industry has gone down 7.4% over this period compared with the broader sector’s decrease of 2.2%. Meanwhile, the S&P 500 has gained 16.5%.
One-Year Price Performance
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio. This is because the valuation metric takes into account not just equity but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of noncash expenses.
On the basis of the trailing 12-month enterprise value-to-EBITDA (EV/EBITDA), the industry is currently trading at 6.99X, significantly lower than the S&P 500’s 13.21X. It is, however, above the sector’s trailing-12-month EV/EBITDA of 3.61X.
Over the past five years, the industry has traded as high as 12.20X, as low as 2.86X, with a median of 5.68X.
Trailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio (Past Five Years)
4 Stocks to Watch
Matador Resources Company: Matador’s upstream operations are mainly concentrated in the Delaware Basin, which is among the country’s most prolific oil and gas shale plays. Over the years, the company has boosted its Delaware holdings manifold and currently controls around 150,800 net acres. Matador plans to turn to sales a net of 100 wells this year — including operated and non-operated wells, signifying a solid production outlook. The implementation of dual-fuel and simul-frac techniques demonstrates its commitment to cost-effectiveness, saving $250,000 to $350,000 per well.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) upstream firm’s 2023 earnings has been revised 10% upward over the past 60 days. MTDR shares have lost 6.1% in a year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: MTDR
EOG Resources: EOG Resources is an energy explorer with an attractive growth profile, upper-quartile returns and a disciplined management team. With highly productive acreages in premier oil shale plays like the Permian and Eagle Ford, EOG has numerous untapped high-quality drilling sites. This not only bolsters the company’s production outlook but also lowers its risk profile. Additionally, EOG Resources maintains a strong balance sheet.
EOG beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. The company delivered a trailing four-quarter earnings surprise of roughly 9.2%, on average. EOG currently carries a Zacks Rank #2 (Buy). The energy explorer’s shares have lost 3.8% in a year.
Price and Consensus: EOG
Northern Oil and Gas: Northern Oil and Gas’ core operations are focused on three leading basins of the United States — the Williston, Permian and the Appalachian. The upstream operator employs a unique nonoperating business model, which helps it to keep costs down and increase free cash flow. Prioritizing returns to investors, NOG pays a 40 cents per share quarterly base dividend following a recent 5.3% hike.
Carrying a Zacks Rank #3 (Hold), the 2023 Zacks Consensus Estimate for Northern Oil and Gas indicates 6.6% earnings per share growth over 2022. NOG shares have gained 11.3% in a year.
Price and Consensus: NOG
Evolution Petroleum: Founded in 2003, Evolution Petroleum is an independent upstream operator engaged in the exploration, development and production of onshore oil and natural gas properties in the United States. Headquartered in Houston, TX, EPM is focused on the non-operated working interests in high-quality, long-life reserves in several properties across the nation. Evolution Petroleum is known for prioritizing the maximization of shareholder returns through buybacks and dividends.
EPM beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. The Zacks Rank #3 company delivered a trailing four-quarter earnings surprise of roughly 3.3%, on average. Evolution Petroleum’s shares have lost 11.3% in a year.
Price and Consensus: EPM
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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Signs of Softening Consumption: WTI crude, the U.S. benchmark, recently closed under $70 per barrel for the first time in over five months due to a substantial build in gasoline inventories and near-record domestic production. Notably, cash from operations has maintained a sustainable trajectory, with improved revenues and companies reducing capital expenditures from pre-pandemic levels amid stable commodity realizations. One-Year Price Performance Industry's Current Valuation Since oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio.
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EOG Resources EOG, Matador Resources Company MTDR, Northern Oil and Gas NOG, and Evolution Petroleum EPM are noteworthy options for investors navigating this intricate landscape, offering potential amidst prevailing economic headwinds. Trailing 12-Month Enterprise Value-to EBITDA (EV/EBITDA) Ratio (Past Five Years) 4 Stocks to Watch Matador Resources Company: Matador’s upstream operations are mainly concentrated in the Delaware Basin, which is among the country’s most prolific oil and gas shale plays. Click to get this free report EOG Resources, Inc. (EOG) : Free Stock Analysis Report Matador Resources Company (MTDR) : Free Stock Analysis Report Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Zacks Industry Rank Indicates Positive Outlook The Zacks Oil and Gas - US E&P industry is a 38-stock group within the broader Zacks Oil - Energy sector. Industry Underperforms S&P 500 & Sector The Zacks Oil and Gas - US E&P industry has fared worse than the Zacks S&P 500 composite as well as the broader Zacks Oil – Energy sector over the past year. Click to get this free report EOG Resources, Inc. (EOG) : Free Stock Analysis Report Matador Resources Company (MTDR) : Free Stock Analysis Report Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report To read this article on Zacks.com click here.
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About the Industry The Zacks Oil and Gas - US E&P industry consists of companies primarily based in the domestic market, focused on the exploration and production (E&P) of oil and natural gas. Zacks Industry Rank Indicates Positive Outlook The Zacks Oil and Gas - US E&P industry is a 38-stock group within the broader Zacks Oil - Energy sector. Carrying a Zacks Rank #3 (Hold), the 2023 Zacks Consensus Estimate for Northern Oil and Gas indicates 6.6% earnings per share growth over 2022.
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714219.0
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2023-12-07 00:00:00 UTC
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New Strong Buy Stocks for December 7th
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https://www.nasdaq.com/articles/new-strong-buy-stocks-for-december-7th-1
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Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today:
Travelzoo TZOO: This internet media company which, is engaged in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies, has seen the Zacks Consensus Estimate for its current year earnings increasing 11.1% over the last 60 days.
Travelzoo Price and Consensus
Travelzoo price-consensus-chart | Travelzoo Quote
Ryerson RYI: This services company which, processes and distributes metals, has seen the Zacks Consensus Estimate for its current year earnings increasing 9.1% over the last 60 days.
Ryerson Holding Corporation Price and Consensus
Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote
FinWise Bancorp FINW: This bank holding company which, is a lender to and takes deposits from consumers and small businesses, has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days.
FinWise Bancorp Price and Consensus
FinWise Bancorp price-consensus-chart | FinWise Bancorp Quote
AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has seen the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 day.
AudioCodes Ltd. Price and Consensus
AudioCodes Ltd. price-consensus-chart | AudioCodes Ltd. Quote
Griffon GFF: This diversified management and holding company which, is conducting business through wholly-owned subsidiaries, has seen the Zacks Consensus Estimate for its current year earnings increasing 3.4% over the last 60 days.
Griffon Corporation Price and Consensus
Griffon Corporation price-consensus-chart | Griffon Corporation Quote
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Only $1 to See All Zacks' Buys and Sells
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Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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AudioCodes Ltd. (AUDC) : Free Stock Analysis Report
Ryerson Holding Corporation (RYI) : Free Stock Analysis Report
Travelzoo (TZOO) : Free Stock Analysis Report
Griffon Corporation (GFF) : Free Stock Analysis Report
FinWise Bancorp (FINW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today: Travelzoo TZOO: This internet media company which, is engaged in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies, has seen the Zacks Consensus Estimate for its current year earnings increasing 11.1% over the last 60 days. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more.
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Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote FinWise Bancorp FINW: This bank holding company which, is a lender to and takes deposits from consumers and small businesses, has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days. FinWise Bancorp Price and Consensus FinWise Bancorp price-consensus-chart | FinWise Bancorp Quote AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has seen the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 day. Click to get this free report AudioCodes Ltd. (AUDC) : Free Stock Analysis Report Ryerson Holding Corporation (RYI) : Free Stock Analysis Report Travelzoo (TZOO) : Free Stock Analysis Report Griffon Corporation (GFF) : Free Stock Analysis Report FinWise Bancorp (FINW) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote FinWise Bancorp FINW: This bank holding company which, is a lender to and takes deposits from consumers and small businesses, has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days. FinWise Bancorp Price and Consensus FinWise Bancorp price-consensus-chart | FinWise Bancorp Quote AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has seen the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 day. Click to get this free report AudioCodes Ltd. (AUDC) : Free Stock Analysis Report Ryerson Holding Corporation (RYI) : Free Stock Analysis Report Travelzoo (TZOO) : Free Stock Analysis Report Griffon Corporation (GFF) : Free Stock Analysis Report FinWise Bancorp (FINW) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today: Travelzoo TZOO: This internet media company which, is engaged in the provision of information to subscribers and website users about travel, entertainment and local deals available from companies, has seen the Zacks Consensus Estimate for its current year earnings increasing 11.1% over the last 60 days. Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote FinWise Bancorp FINW: This bank holding company which, is a lender to and takes deposits from consumers and small businesses, has seen the Zacks Consensus Estimate for its current year earnings increasing 8.1% over the last 60 days. Griffon Corporation Price and Consensus Griffon Corporation price-consensus-chart | Griffon Corporation Quote You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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2023-12-07 00:00:00 UTC
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6 A-Rated Utilities Stocks You Won’t Regret
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https://www.nasdaq.com/articles/6-a-rated-utilities-stocks-you-wont-regret
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I appreciate any investor who’s wise enough to hedge their bets. While jumping into the fray with tech stocks, artificial intelligence and the latest fad can be a smart way to make money, it’s also important to diversify your portfolio with some safer, income-generating plays like utilities stocks.
Utilities stocks may not give you the massive returns of tech stocks in 2023, but they’re much safer investments. Utility companies provide electricity, water and gas that are necessary for people’s daily lives. That makes them recession-proof, particularly when the market takes a turn for the worse.
And more often than not, utilities stocks can provide the added benefit of a solid dividend yield. Many utility stocks have a long history of paying dividends thanks to the consistent profits that the companies make.
Dividends are great for both retired investors who need that money for regular expenses, and for younger investors who will reinvest their payouts back into their portfolios.
Today we’re using the Portfolio Grader to identify A-rated utilities stocks. The Portfolio Grader ranks all stocks based on earnings performance, revenue growth, dividend yield, momentum, analyst sentiment and more.
If you’re looking for safe utilities stocks, it makes perfect sense to choose those that have an “A” rating like these names.
Enel Chile (ENIC)
Source: Pand P Studio / Shutterstock.com
Enel Chile (NYSE:ENIC) is the major power company in Chile. It has over 2 million customers spread over 33 municipalities. Roughly 77% of the power it generates comes from renewable sources, and the company plans to reach a goal of zero emissions by 2040.
The company has solar, wind, geothermal, hydroelectric and thermoelectric plants.
It’s also broadly diversified. Enel Chie owns 93.5% of the Generacion Chile company, 99% of the Enil Distribucion Chile company, and all the Enil Green Power Chile and Enel X Chile companies.
Net income for the third quarter was up 84% from a year ago, although operating revenues in the Generation business were down 1.1% because of lower gas sales and revenues in the Commercialization segment were down 20% from a year ago.
Despite those headwinds, ENIC stock is up 48% this year and pays a dividend yield of 0f 10.5%. And performance should improve as gas prices rise. ENIC gets an “A” rating in the Portfolio Grader.
Consolidated Water Co. (CWCO)
Source: Sambulov Yevgeniy/ShutterStock.com
Consolidated Water (NASDAQ:CWCO) operates water supply and treatment facilities in the U.S. and the Caribbean. It designs, engineers and manufactures equipment for commercial and municipal water production, supply and treatment.
Its holdings include water plants and solar projects in the Cayman Islands, the Bahamas and the British Virgin Islands.
Its Perc Water subsidiary designs, builds, operates and manages water infrastructure projects throughout the United States. Projects include a contract to build a desalination plant in Hawaii, as water treatment plant in Arizona, and a wastewater treatment plant at Edwards Air Force Base in California.
Revenue in the third quarter was $49.9 million, up 99% from a year ago. Services revenue was $29.4 million, an increase of 237% from the same quarter a year ago.
CWCO stock is up 150% this year and also provides a dividend yield of 1%. It gets an “A” rating in the Portfolio Grader.
Genie Energy (GNE)
Source: Shutterstock
Genie Energy (NYSE:GNE) is a New Jersey-based utility company that provides natural gas and electricity, focusing on deregulated markets in the U.S.
The company works with commercial companies and community solar developers to plan, finance and build solar projects.
The company operates in 18 states and the District of Columbia, providing roughly 5% of total U.S. electric generation with 155 gigawatts of installed capacity.
Earnings in the third quarter were up 53.8% to $125 million, although profits were down 4.8% and margins dropped from 53.1% to 32.9% thanks to lower energy costs in 2023.
However, that didn’t hurt the stock price, which is up 129% in 2023. GNE also provides a dividend yield of 1.3%. It gets an “A” rating in the Portfolio Grader.
Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (EDN)
Source: ESB Professional / Shutterstock.com
Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (NYSE:EDN), also known as Edenor, is Argentina’s largest electricity distribution company. The company has over 3.26 million customers and distributes about 20% of the company’s energy.
It also has an exclusive contract to supply power to the northwestern zone of the greater Buenos Aires metropolitan area.
The political situation in Argentina is worth watching. The country has increasing poverty and triple-digit inflation, a combination that prompted an angry electorate to select a right-wing libertarian candidate, Javier Milei, as its new president.
Milei has promised to shut down the country’s central bank, shift the economy from the peso to the U.S. dollar, and cut spending dramatically.
It’s unclear what that will mean for EDN stock, but Edenor is up 115% in 2023, including a jump of 63% since election day.
EDN doesn’t pay out a dividend, but it still gets an “A” rating in the Portfolio Grader.
Star Group (SGU)
Source: zhengzaishuru / Shutterstock.com
Connecticut-based Star Group (NYSE:SGU) provides oil, propane and HVAC services to residential customers. Its customers get home heating oil and propane deliveries rather than being hooked up to a municipal utility.
Star Group operates in the District of Columbia and Connecticut, Delaware, Rhode Island, Maryland, West Virginia, Pennsylvania, Virginia, New Jersey, New York and Michigan.
As a limited partnership, investors are unitholders and must report gains or losses on their federal tax returns. Star Group also pays a quarterly dividend with a more-than 4% yield.
Earnings in the third quarter were depressed as oil prices were lower than in 2022. Revenue of $300.1 million was down 31.7% from a year ago, and the volume of home heating oil and propane dropped 26.2% from a year ago because of warmer weather and customer attrition.
That resulted in a net loss in the quarter of $22.9 million, an increase of $11.8 million in losses from last year.
All that may sound rough, as energy prices in 2022 were very high and any comparison to 2023 would be a tough matchup. But SGU stock is still up 6% this year. That’s what I call a good defensive stock.
Vistra Corp (VST)
Source: Konektus Photo / Shutterstock.com
Vistra (NYSE:VST) is a Texas energy company with a broad portfolio of brands including Luminant, U.S. Gas & Electric, Ambit Energy, Homefield Energy, TXU Energy and Dynegy.
It has a large footprint in Texas, with operations also in California, Michigan, Kentucky, Illinois, Indiana, Ohio, West Virginia, Virginia and the Northeast. The company has over 4 million retail customers and generates enough electricity to power 20 million homes through solar, energy storage and nuclear projects.
The company recorded net income in the third quarter of $502 million, down from $678 million in the same quarter a year ago. But Vistra could still increase its full-year 2023 guidance to a range of $3.95 million and $4.1 million. Guidance for 2024 calls for a range of $3.7 million and $4.1 million for the full year.
But VST stock continues to be a solid winner, up 61% this year and with a dividend yield of more than 2%. Vistra gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had long positions in ENIC and CWCO. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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The post 6 A-Rated Utilities Stocks You Won’t Regret appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The Portfolio Grader ranks all stocks based on earnings performance, revenue growth, dividend yield, momentum, analyst sentiment and more. The country has increasing poverty and triple-digit inflation, a combination that prompted an angry electorate to select a right-wing libertarian candidate, Javier Milei, as its new president. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post 6 A-Rated Utilities Stocks You Won’t Regret appeared first on InvestorPlace.
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Consolidated Water Co. (CWCO) Source: Sambulov Yevgeniy/ShutterStock.com Consolidated Water (NASDAQ:CWCO) operates water supply and treatment facilities in the U.S. and the Caribbean. Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (EDN) Source: ESB Professional / Shutterstock.com Empresa Distribuidora y Comercializadora Norte Sociedad Anónima (NYSE:EDN), also known as Edenor, is Argentina’s largest electricity distribution company. Vistra Corp (VST) Source: Konektus Photo / Shutterstock.com Vistra (NYSE:VST) is a Texas energy company with a broad portfolio of brands including Luminant, U.S. Gas & Electric, Ambit Energy, Homefield Energy, TXU Energy and Dynegy.
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Vistra Corp (VST) Source: Konektus Photo / Shutterstock.com Vistra (NYSE:VST) is a Texas energy company with a broad portfolio of brands including Luminant, U.S. Gas & Electric, Ambit Energy, Homefield Energy, TXU Energy and Dynegy. The company has over 4 million retail customers and generates enough electricity to power 20 million homes through solar, energy storage and nuclear projects. The company recorded net income in the third quarter of $502 million, down from $678 million in the same quarter a year ago.
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The company has over 3.26 million customers and distributes about 20% of the company’s energy. EDN doesn’t pay out a dividend, but it still gets an “A” rating in the Portfolio Grader. The company has over 4 million retail customers and generates enough electricity to power 20 million homes through solar, energy storage and nuclear projects.
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2023-12-07 00:00:00 UTC
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MGIC Investment (MTG) Up 33.2% in a Year: Will the Rally Last?
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https://www.nasdaq.com/articles/mgic-investment-mtg-up-33.2-in-a-year%3A-will-the-rally-last
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MGIC Investment Corporation’s MTG shares have risen 33.2% in the past year compared with the industry's growth of 0.04%. The Finance sector has grown 7.9% and the Zacks S&P 500 Index has gained 15.7% in the said time frame. With a market capitalization of $4.84 billion, the average volume of shares traded in the last three months was 1.7 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment.
This multi-line insurer carries a Zacks Rank #3 (Hold) at present. The company’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 12.57%.
Will the Bull Run Continue?
The Zacks Consensus Estimate for 2023 and 2024 revenues is pegged at $1.19 billion and $1.28 billion, respectively, indicating a year-over-year increase of 0.5% and 7.4%.
MTG’s return on equity for the trailing 12 months is 15.2%, better than the industry’s average of 13.1%. This reflects efficiency in utilizing shareholders’ funds.
MGIC Investment has been witnessing an increase in new business written. The insurer expects new business, combined with increasing annual persistency, to result in the continued growth of the insurance-in-force portfolio.
MTG has been witnessing a declining pattern of claim filings. Thus, paid claims are likely to decrease further. A decline in loss and claims will strengthen the balance sheet and hence improve the company’s financial profile.
This largest private mortgage insurer in the United States has been improving its capital position by banking on capital contribution, reinsurance transaction and cash position. Both leverage and times interest earned ratio have been improving.
The multi-line insurer has been seeing improving housing market fundamentals, such as household formations, home sales and the current capital status. As a result, the company will also be well-positioned to offer credit enhancement and low-down payment solutions to lenders, borrowers and government-sponsored enterprises. MTG remains optimistic about the opportunities in the housing market, which will enable the insurer to serve much more efficiently in the future.
Riding on a solid capital position, MGIC Investment repurchased shares for $217.8 million in the nine months ended Sep 30, 2023. As of the same date, the company had $396 million remaining under a $500 million share repurchase program approved by the board in 2023 that expires on Jul 1, 2025.
The Zacks Consensus Estimate for 2023 earnings has moved north 0.8% in the past 30 days, reflecting analysts’ optimism.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance GSHD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Assurant’s earnings surpassed estimates in each of the last four quarters, delivering an average surprise of 42.38%.
The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, year over year. In the past year, the insurer has gained 32.8%.
Everest Group’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average earnings of 24.50%.
The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 105.32% and 10.98% growth, respectively, year over year. In the past year, the insurer has gained 19.3%.
Goosehead Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, delivering an average surprise of 100.43%.
The Zacks Consensus Estimate for GSHD’s 2023 and 2024 earnings implies 150.9% and 28.2% growth, respectively, on a year-over-year basis. In the past year, the insurer has gained 83.7%.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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
MGIC Investment Corporation (MTG) : Free Stock Analysis Report
Assurant, Inc. (AIZ) : Free Stock Analysis Report
Goosehead Insurance (GSHD) : Free Stock Analysis Report
Everest Group, Ltd. (EG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Image Source: Zacks Investment Research The rally was largely driven by higher insurance in force, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment. The multi-line insurer has been seeing improving housing market fundamentals, such as household formations, home sales and the current capital status. As a result, the company will also be well-positioned to offer credit enhancement and low-down payment solutions to lenders, borrowers and government-sponsored enterprises.
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Stocks to Consider Some better-ranked stocks from the multi-line insurance industry are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance GSHD, each sporting a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, year over year. Click to get this free report MGIC Investment Corporation (MTG) : Free Stock Analysis Report Assurant, Inc. (AIZ) : Free Stock Analysis Report Goosehead Insurance (GSHD) : Free Stock Analysis Report Everest Group, Ltd. (EG) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks to Consider Some better-ranked stocks from the multi-line insurance industry are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance GSHD, each sporting a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, year over year. Click to get this free report MGIC Investment Corporation (MTG) : Free Stock Analysis Report Assurant, Inc. (AIZ) : Free Stock Analysis Report Goosehead Insurance (GSHD) : Free Stock Analysis Report Everest Group, Ltd. (EG) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks to Consider Some better-ranked stocks from the multi-line insurance industry are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance GSHD, each sporting a Zacks Rank #1 (Strong Buy) at present. The Zacks Consensus Estimate for AIZ’s 2023 and 2024 earnings implies 30.8% and 3.6% growth, respectively, year over year. The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 105.32% and 10.98% growth, respectively, year over year.
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2023-12-07 00:00:00 UTC
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Intel's Meteor Lake Is Almost Here: What Investors Need to Know
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https://www.nasdaq.com/articles/intels-meteor-lake-is-almost-here%3A-what-investors-need-to-know
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Semiconductor giant Intel (NASDAQ: INTC) is set to launch its most important PC chip family in years on Dec. 14. Codenamed Meteor Lake, these mobile-only computer processing units (CPUs) will bring a lot of changes all at once. That's an unusual and risky move for Intel but one that makes sense as the company races to advance its manufacturing technology and pull ahead of rival Advanced Micro Devices.
Moving to Intel 4
Meteor Lake will be the first set of PC chips from Intel which use a tile-based architecture. In the past, when Intel only manufactured its own chips and didn't make much use of other foundries, this type of architecture wouldn't have made a ton of sense. But the situation has changed. Intel is working on building a foundry business that makes chips for third parties, which means its various manufacturing processes will have much longer lifespans. The company has also embraced using rival Taiwan Semiconductor Manufacturing Company (TSMC) for some manufacturing.
A tile-based architecture allows Intel to mix and match manufacturing processes, using the optimal process for each tile instead of using a cutting-edge process for the whole chip. Meteor Lake will use the new Intel 4 process for the compute tile, which houses the CPU cores as well as the mature Intel 16 node for the base die that underlies all the tiles. For everything else, including the graphics processing unit (GPU) tile, Intel will turn to TSMC's 5nm and 6nm processes.
The Intel 4 process brings some big changes of its own over the Intel 7 process used for the company's current-generation products. On top of a die shrink, Intel 4 is the first process from Intel to use extreme ultraviolet lithography, or EUV, technology. TSMC has been using EUV technology for years. N7+, its first high-volume process using EUV, delivered double-digit percentage improvements in density over the previous N7 process.
Intel will tie the tiles together using its 3D Foveros packaging technology, which allows tiles to be stacked on top of a base die. Meteor Lake isn't the first use of Foveros for Intel, but it is the first time the company has used the technology for a high-volume product. Advanced packaging is also critical to Intel's foundry efforts, with the company reportedly planning to greatly expand its capacity over the next few years.
New architecture and AI built-in
In the past, Intel generally wouldn't move to a new manufacturing process and a new architecture simultaneously. With Meteor Lake, the company is throwing that playbook out the window. In addition to the manufacturing changes, Intel will introduce new CPU core architectures and include dedicated AI hardware.
Like the last two generations of Intel PC chips, Meteor Lake will have two types of CPU cores. The P-cores will focus on raw power, while the E-cores will focus on efficiency. Meteor Lake's new Redwood Cove P-cores will bring efficiency improvements, and its new Crestmont E-cores should deliver a 4% to 6% improvement in instructions per clock. Meteor Lake will also house additional low-power E-cores on the system-on-a-chip (SoC) tile, which is separate from the compute tile containing the rest of the cores. This could improve battery life by keeping the power-hungry compute tile dormant for certain tasks.
The SoC tile will also contain a neural processing unit, which is capable of accelerating AI tasks. Software will need to explicitly support this new AI hardware, but the potential impact for users is significant. Being able to use AI-powered features without waiting for a cloud service to respond or bogging down the CPU and GPU can greatly improve the user experience.
Image source: Getty Images.
Timed for the PC comeback
The PC market has been in a slump for the past two years. Shipment growth is finally expected to return in the fourth quarter, which is good news for Intel as it launches its most important PC CPU product in years.
We don't know much yet about the performance, efficiency, or battery life of Meteor Lake-powered systems or for that matter any solid details about specific models. Samsung is reportedly planning to launch its Galaxy Book 4 on Dec. 15, one day after Meteor Lake's official launch date. The Galaxy Book 4 is expected to make use of Meteor Lake's AI hardware to power Samsung's Gauss large language model.
One area where Intel has lagged AMD recently has been power efficiency, a consequence of falling behind TSMC in manufacturing. Meteor Lake should help close that gap, although Intel will still be at a manufacturing disadvantage. Arrow Lake, Meteor Lake's successor scheduled to launch in 2024, should move the company closer to manufacturing parity with TSMC.
Intel has remained the leader in the PC chip market, although it's been losing market share to AMD over the past few years. A successful Meteor Lake launch could help reverse that trend and push Intel's market share back up.
10 stocks we like better than Intel
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Intel wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Advanced packaging is also critical to Intel's foundry efforts, with the company reportedly planning to greatly expand its capacity over the next few years. Shipment growth is finally expected to return in the fourth quarter, which is good news for Intel as it launches its most important PC CPU product in years. The Galaxy Book 4 is expected to make use of Meteor Lake's AI hardware to power Samsung's Gauss large language model.
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The Galaxy Book 4 is expected to make use of Meteor Lake's AI hardware to power Samsung's Gauss large language model. The Motley Fool has positions in and recommends Advanced Micro Devices and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel.
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Moving to Intel 4 Meteor Lake will be the first set of PC chips from Intel which use a tile-based architecture. Meteor Lake will use the new Intel 4 process for the compute tile, which houses the CPU cores as well as the mature Intel 16 node for the base die that underlies all the tiles. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel.
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Moving to Intel 4 Meteor Lake will be the first set of PC chips from Intel which use a tile-based architecture. Meteor Lake isn't the first use of Foveros for Intel, but it is the first time the company has used the technology for a high-volume product. Arrow Lake, Meteor Lake's successor scheduled to launch in 2024, should move the company closer to manufacturing parity with TSMC.
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2023-12-07 00:00:00 UTC
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The 7 Best S&P 500 Stocks to Buy in December
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https://www.nasdaq.com/articles/the-7-best-sp-500-stocks-to-buy-in-december
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
When it comes to the best S&P 500 stocks, the largest components of this market-cap weighed stock index may come to mind. For example, “Magnificent Seven” tech stocks, like Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOG), and Tesla (NASDAQ:TSLA).
Or, mega cap blue-chip stocks, like Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B), ExxonMobil (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ).
Yet while there may be merit in including these names, or other names making up the largest S&P 500 stocks, some of the top components to buy right now may be some of the relatively smaller names that are part of this leading market benchmark.
Scroll down the list of S&P 500 stocks by weight, and towards the end of the list, you’ll stumble upon many great opportunities. This is the case, whether you are a growth investor, a value investor, an investor focused on dividends, or anything in between.
Among these names, however, seven stand out as S&P 500 stocks that could deliver a powerful performance in 2024. This could make buying them now a move worth making.
Hasbro (HAS)
Source: Shutterstock
Hasbro (NASDAQ:HAS), is one of the world’s leading toy and game companies. HAS shares have underperformed in recent years, but now may be an opportune time to enter a position in this S&P 500 component.
Why? Yes, Hasbro’s latest quarterly results/updates to guidance disappointed investors. Per one analyst (Citi’s James Hardiman), there’s great uncertainty over how the company will perform this holiday season. Even so, other factors point to better times ahead for HAS stock investors.
As InvestorPlace’s Jeremy Flint discussed last month, the company’s sale of its non-core entertainment business provides Hasbro with $500 million in proceeds. They slated much of this cash to be used to de-lever its balance sheet.
Further turnaround efforts, including a shift in focus toward its tabletop/digital games business, could enable the company to make progress in its goal to increase operating profit by 50% by 2025.
L3Harris Technologies (LHX)
Source: JennLShoots / Shutterstock.com
What makes L3Harris Technologies (NYSE:LHX) one of the best S&P 500 stocks? Chalk it up to the attributes I discussed in November, when I called this defense contractor one of the best large-cap stocks to buy and hold for the long haul.
LHX stock is well-positioned to deliver strong long-term total returns to investors. Just a few years away from reaching “dividend aristocrat” status, LHX currently has a forward dividend yield of 2.43%, and a track record of double-digit annual dividend growth.
Additionally, L3Harris, with a forward earnings multiple of 16, is trading at a lower price compared to its peers. This discount may have to do with the high level of debt the company took on when it acquired Aerojet Rocketdyne.
However, divesting non-core businesses to pay down this debt, and likely to continue making synergistic “bolt on” acquisitions, this valuation gap could narrow over time.
Match Group (MTCH)
Source: Shutterstock
As the parent company of Match.com, OkCupid, Tinder, Hinge, and PlentyofFish, Match Group (NASDAQ:MTCH) dominates the online dating market. However, with revenue growth plateauing, and profitability declining, the market has “swiped left” on shares in droves.
Yet after tumbling by over 81% since October 2021, “swiping right” on MTCH stock (a component of the S&P 500 index) could prove to be a profitable move. Following its massive decline, Match Group now sports a value stock forward multiple of 11.7 times earnings.
This comes despite the prospect of improved results in the coming year, thanks to a variety of factors detailed in the company’s latest shareholder letter. With expectations set low, you may want to get to know MTCH stock before making a hard yes/no decision. Otherwise, if Match’s operating performance ends up improving, this stock could become the “one that got away.”
Realty Income (O)
Source: Shutterstock
If you are bullish that interest rates are coming down sooner rather than later, Realty Income (NYSE:O) is one of the best S&P 500 stocks to buy. Like other real estate investment trusts (or REITs), spiking interest rates have pushed the stock considerably lower since 2022.
But following this sell-off, O stock (which literally holds the trademark on the phrase “The Monthly Dividend Company”) now sports a juicy 5.53% forward annual dividend yield. Funds from operations (the REIT equivalent to earnings) may be only rise by a modest clip next year.
However, as I previously discussed, Realty Income has a REIT merger in the works that’s expected to be accretive to earnings. If interest rates start to come down in 2024, there’s a strong chance O stock will receive a generous re-rating to the upside by the market.
Paramount Global (PARA)
Source: Tada Images / Shutterstock.com
Paramount Global (NASDAQ:PARA), like other media conglomerate stocks, has fallen severely out of favor with the market.
The unfortunate combination of cord cutting, a weak advertising market, and heavy growth spending with its budding streaming business have all resulted in declining earnings for the company, formerly known as ViacomCBS.
Even so, PARA stock may be on the verge of turning a corner. Analysts still expected Paramount Global to report a big rebound in profitability during both 2024 and 2025. Recent talk of Apple bundling its streaming service with this company’s namesake streaming platform could mean an increased chance that better results arrive in the coming years.
While very far from certain, a bundling partnership with Apple could also serve as the prelude to an acquisition by the tech giant. In short, much points to this S&P 500 component performing far better going forward than in the recent past.
Sysco (SYY)
Source: Shutterstock
Sysco (NYSE:SYY) is one of the best S&P 500 stocks that fits within the “boring is beautiful” category.
Sysco has long been successful at producing steady results and dividend growth, through its leading position in the admittedly prosaic food distribution industry.
Back in October, I called SYY stock one of the dividend aristocrats built to last. Shares were in a slump, but more recently, investors have become more appreciative of the company’s future prospects, such as the synergies that may result from its acquisition of food service equipment/supplies distributor Edward Don.
Yet while Sysco shares have zoomed from the mid-$60s to the low-$70s, don’t assume the ship has sailed. Still sporting a reasonable forward valuation (17 times earnings), as well as a solid 2.73% forward dividend yield, buying SYY still offers the potential for strong long-term total returns.
Western Digital (WDC)
Source: Valeriya Zankovych / Shutterstock.com
Compared to the previously mentioned S&P 500 stocks, Western Digital (NASDAQ:WDC) has performed extremely well in 2023. Year-to-date, shares in this maker of hard disk and solid state drives have zoomed 48.9% higher.
But even after this stunning performance, WDC stock could keep climbing for two reasons.
First, as a Seeking Alpha commentator argued a few months back, the company stands to benefit from growing AI-related demand for hard disk drives.
Second, the company is moving forward with plans to spin off its struggling flash memory business. This divestiture could unlock underlying value, fueling further gains.
Analysts have become more bullish on WDC in recent months, with the high end of price targets coming in at $68 per share. That’s around 46.8% above current price levels, suggesting shares could deliver a similar level of performance next year as they have this year.
On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
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The post The 7 Best S&P 500 Stocks to Buy in December appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Further turnaround efforts, including a shift in focus toward its tabletop/digital games business, could enable the company to make progress in its goal to increase operating profit by 50% by 2025. The unfortunate combination of cord cutting, a weak advertising market, and heavy growth spending with its budding streaming business have all resulted in declining earnings for the company, formerly known as ViacomCBS. Shares were in a slump, but more recently, investors have become more appreciative of the company’s future prospects, such as the synergies that may result from its acquisition of food service equipment/supplies distributor Edward Don.
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Paramount Global (PARA) Source: Tada Images / Shutterstock.com Paramount Global (NASDAQ:PARA), like other media conglomerate stocks, has fallen severely out of favor with the market. Sysco (SYY) Source: Shutterstock Sysco (NYSE:SYY) is one of the best S&P 500 stocks that fits within the “boring is beautiful” category. Western Digital (WDC) Source: Valeriya Zankovych / Shutterstock.com Compared to the previously mentioned S&P 500 stocks, Western Digital (NASDAQ:WDC) has performed extremely well in 2023.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips When it comes to the best S&P 500 stocks, the largest components of this market-cap weighed stock index may come to mind. Otherwise, if Match’s operating performance ends up improving, this stock could become the “one that got away.” Realty Income (O) Source: Shutterstock If you are bullish that interest rates are coming down sooner rather than later, Realty Income (NYSE:O) is one of the best S&P 500 stocks to buy. But following this sell-off, O stock (which literally holds the trademark on the phrase “The Monthly Dividend Company”) now sports a juicy 5.53% forward annual dividend yield.
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This could make buying them now a move worth making. Otherwise, if Match’s operating performance ends up improving, this stock could become the “one that got away.” Realty Income (O) Source: Shutterstock If you are bullish that interest rates are coming down sooner rather than later, Realty Income (NYSE:O) is one of the best S&P 500 stocks to buy. Still sporting a reasonable forward valuation (17 times earnings), as well as a solid 2.73% forward dividend yield, buying SYY still offers the potential for strong long-term total returns.
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2023-12-07 00:00:00 UTC
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42% of Berkshire Hathaway's Entire Value Comes From Just 2 Investment Holdings
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https://www.nasdaq.com/articles/42-of-berkshire-hathaways-entire-value-comes-from-just-2-investment-holdings
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Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is a sprawling conglomerate worth over $770 billion.
While its main business is insurance, much of Berkshire's value comes from its investment portfolio. Chairman and CEO Warren Buffett has generated incredible market-beating returns for shareholders through prudent long-term buy-and-hold investing. Today, Berkshire's portfolio is worth about $361 billion.
But just two holdings account for over 42% of Berkshire Hathaway's entire market capitalization. Here they are.
Image source: The Motley Fool.
Apple (22%)
At Berkshire Hathaway's annual meeting in May, Buffett called Apple (NASDAQ: AAPL) "a better business than any we own." He said he'd love to own more of the company, and he continually claims a greater share of the business thanks to Apple's generous share repurchase program.
Today, Berkshire's 915 million-plus shares of Apple account for over 48% of its equity portfolio. They're worth about $173 billion, or 22.5% of Berkshire's market cap.
There's good reason for investors to like Apple so much. It's positioned itself as the platform owner when it comes to smartphones, taking a more than 50% market share in the United States. Around the world, it counts over 2 billion active devices.
Its combination of hardware, software, and services makes its products extremely sticky and allows it to integrate its products to work closely together. iPhone users are more likely to buy another Apple product than a non-Apple alternative, creating a virtuous cycle of growing product sales.
But the services segment is where Apple's seeing most of its growth lately. That's bolstered by its growing active device user base. As the platform owner, it's able to exercise a lot of leverage to monetize its users through services, including its App Store, where third-party developers can sell their software to iOS and Mac users.
That all results in tremendous amounts of cash flow every year. Last year, the company generated $110.5 billion worth of cash from operations. It uses all that cash to return money to shareholders through a robust stock repurchase program, with $77.5 billion repurchased in 2023, and a modest dividend, with $15 billion in dividend payments in 2023.
While the shares trade at around 29 times 2024 earnings estimates, Apple deserves a premium valuation -- but not because it has outsize growth opportunities, although the Vision Pro and its AI bets could turn out to be big opportunities. The reason it deserves that valuation is that Apple's strong net cash position of $57 billion ($158 billion in cash and securities) and its massive buybacks distort the multiple that long-term investors pay for future earnings.
With Apple as Buffett's largest stock position by far, investors should consider the stock themselves. And there's no need to be concerned about how heavily concentrated Berkshire's position is in the stock.
Cash and U.S. Treasury bills (20%+)
Berkshire Hathaway ended the third quarter with $157.2 billion worth of cash and cash equivalents. A growing portion of those funds are parked in U.S. Treasury bills, with maturities between three months and one year. In fact, Buffett moved $29 billion into those longer-dated Treasury bills last quarter, shifting funds from cash and shorter-duration bonds.
The move worked well. The subsequent drop in interest rates has surely pushed the value of those Treasury securities higher. Even if Berkshire holds those investments until maturity, it'll earn the equivalent annual yield of more than 5% on the investment.
As a result, Berkshire's cash and equivalents probably account for more than 20% of its market cap as long as Buffett hasn't made any huge shifts in strategy this quarter.
Make no mistake, though: Buffett isn't chasing yield in Treasuries. Quite the opposite. As he writes in every quarterly report, "We insist on safety over yield with respect to short-term investments."
The reason Buffett is stockpiling money in Treasury Bills is that he doesn't see very much on the stock market worth investing in. Indeed, he and the other investment managers at Berkshire have sold more stocks than they bought in each of the past four quarters.
That doesn't mean investors should be piling into Treasuries or stockpiling cash. There are a lot of great opportunities for individual investors. But the fact that Buffett's taking more chips off the table for now is an indication that those opportunities are becoming harder to find in the current environment.
The strong cash position could turn into an advantage for Berkshire Hathaway down the line if we see a big pullback in the stock market. Buffett and his team have a record amount of cash ready to deploy when a big opportunity strikes. In the meantime, Berkshire investors can't be too upset with the higher yields Buffett locked in last quarter.
10 stocks we like better than Berkshire Hathaway
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*Stock Advisor returns as of December 4, 2023
Adam Levy has positions in Apple. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chairman and CEO Warren Buffett has generated incredible market-beating returns for shareholders through prudent long-term buy-and-hold investing. In fact, Buffett moved $29 billion into those longer-dated Treasury bills last quarter, shifting funds from cash and shorter-duration bonds. As a result, Berkshire's cash and equivalents probably account for more than 20% of its market cap as long as Buffett hasn't made any huge shifts in strategy this quarter.
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The reason it deserves that valuation is that Apple's strong net cash position of $57 billion ($158 billion in cash and securities) and its massive buybacks distort the multiple that long-term investors pay for future earnings. Cash and U.S. Treasury bills (20%+) Berkshire Hathaway ended the third quarter with $157.2 billion worth of cash and cash equivalents. In fact, Buffett moved $29 billion into those longer-dated Treasury bills last quarter, shifting funds from cash and shorter-duration bonds.
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The reason it deserves that valuation is that Apple's strong net cash position of $57 billion ($158 billion in cash and securities) and its massive buybacks distort the multiple that long-term investors pay for future earnings. With Apple as Buffett's largest stock position by far, investors should consider the stock themselves. Cash and U.S. Treasury bills (20%+) Berkshire Hathaway ended the third quarter with $157.2 billion worth of cash and cash equivalents.
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With Apple as Buffett's largest stock position by far, investors should consider the stock themselves. Cash and U.S. Treasury bills (20%+) Berkshire Hathaway ended the third quarter with $157.2 billion worth of cash and cash equivalents. The reason Buffett is stockpiling money in Treasury Bills is that he doesn't see very much on the stock market worth investing in.
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2023-12-07 00:00:00 UTC
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Merck's lung cancer drug combo fails to meet trial goal
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https://www.nasdaq.com/articles/mercks-lung-cancer-drug-combo-fails-to-meet-trial-goal
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Adds details in paragraph 2, background in paragraph 3-5
Dec 7 (Reuters) - Merck MRK.N said on Thursday its experimental therapy in combination with Keytruda to treat a type of lung cancer in previously treated patients did not meet the main goal in a mid-stage study.
Merck's experimental drug, vibostolimab, in combination with its blockbuster drug Keytruda, failed to meaningfully slow disease progression and improve overall survival in patients with metastatic non-small-cell lung cancer.
Vibostolimab belongs to an emerging class of so-called anti-TIGIT therapies that have triggered a flurry of research and deal activity.
Gilead Sciences GILD.O, Roche ROG.S and GSK GSK.Lare among the drugmakers looking to grab a share of the lucrative cancer market focused on a protein believed to help cancer cells thwart immune system detection.
Merck's setback marks the second major blow to more than half a dozen companies exploring anti-TIGITtreatments, after Roche's therapy failed to slow progression of a type of lung cancer in a second trial last year.
(Reporting by Khushi Mandowara in Bengaluru; Editing by Devika Syamnath)
((Khushi.Mandowara@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Adds details in paragraph 2, background in paragraph 3-5 Dec 7 (Reuters) - Merck MRK.N said on Thursday its experimental therapy in combination with Keytruda to treat a type of lung cancer in previously treated patients did not meet the main goal in a mid-stage study. Vibostolimab belongs to an emerging class of so-called anti-TIGIT therapies that have triggered a flurry of research and deal activity. Merck's setback marks the second major blow to more than half a dozen companies exploring anti-TIGITtreatments, after Roche's therapy failed to slow progression of a type of lung cancer in a second trial last year.
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Adds details in paragraph 2, background in paragraph 3-5 Dec 7 (Reuters) - Merck MRK.N said on Thursday its experimental therapy in combination with Keytruda to treat a type of lung cancer in previously treated patients did not meet the main goal in a mid-stage study. Merck's experimental drug, vibostolimab, in combination with its blockbuster drug Keytruda, failed to meaningfully slow disease progression and improve overall survival in patients with metastatic non-small-cell lung cancer. Merck's setback marks the second major blow to more than half a dozen companies exploring anti-TIGITtreatments, after Roche's therapy failed to slow progression of a type of lung cancer in a second trial last year.
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Adds details in paragraph 2, background in paragraph 3-5 Dec 7 (Reuters) - Merck MRK.N said on Thursday its experimental therapy in combination with Keytruda to treat a type of lung cancer in previously treated patients did not meet the main goal in a mid-stage study. Merck's experimental drug, vibostolimab, in combination with its blockbuster drug Keytruda, failed to meaningfully slow disease progression and improve overall survival in patients with metastatic non-small-cell lung cancer. Merck's setback marks the second major blow to more than half a dozen companies exploring anti-TIGITtreatments, after Roche's therapy failed to slow progression of a type of lung cancer in a second trial last year.
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Merck's experimental drug, vibostolimab, in combination with its blockbuster drug Keytruda, failed to meaningfully slow disease progression and improve overall survival in patients with metastatic non-small-cell lung cancer. Vibostolimab belongs to an emerging class of so-called anti-TIGIT therapies that have triggered a flurry of research and deal activity. Gilead Sciences GILD.O, Roche ROG.S and GSK GSK.Lare among the drugmakers looking to grab a share of the lucrative cancer market focused on a protein believed to help cancer cells thwart immune system detection.
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714226.0
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2023-12-07 00:00:00 UTC
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Best Income Stocks to Buy for December 7th
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https://www.nasdaq.com/articles/best-income-stocks-to-buy-for-december-7th-1
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Here are three stocks with buy rank and strong income characteristics for investors to consider today, December 7th:
AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 days.
AudioCodes Ltd. Price and Consensus
AudioCodes Ltd. price-consensus-chart | AudioCodes Ltd. Quote
This Zacks Rank #1 (Strong Buy) company has a dividend yield of 3.1%, compared with the industry average of 0.0%.
AudioCodes Ltd. Dividend Yield (TTM)
AudioCodes Ltd. dividend-yield-ttm | AudioCodes Ltd. Quote
Ryerson RYI: This services company that processes and distributes metals, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 9.1% over the last 60 days.
Ryerson Holding Corporation Price and Consensus
Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote
This Zacks Rank #1 company has a dividend yield of 2.5%, compared with the industry average of 1.5%.
Ryerson Holding Corporation Dividend Yield (TTM)
Ryerson Holding Corporation dividend-yield-ttm | Ryerson Holding Corporation Quote
Griffon GFF: This diversified management and holding company conducting business through wholly-owned subsidiaries, has witnessed the Zacks Consensus Estimate for its current year earnings increasing nearly 3.4% over the last 60 days.
Griffon Corporation Price and Consensus
Griffon Corporation price-consensus-chart | Griffon Corporation Quote
This Zacks Rank #1 company has a dividend yield of 1.2%, compared with the industry average of 0.0%.
Griffon Corporation Dividend Yield (TTM)
Griffon Corporation dividend-yield-ttm | Griffon Corporation Quote
See the full list of top ranked stocks here.
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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.
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Here are three stocks with buy rank and strong income characteristics for investors to consider today, December 7th: AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 days. Find more top income stocks with some of our great premium screens Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1.
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Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote This Zacks Rank #1 company has a dividend yield of 2.5%, compared with the industry average of 1.5%. Ryerson Holding Corporation Dividend Yield (TTM) Ryerson Holding Corporation dividend-yield-ttm | Ryerson Holding Corporation Quote Griffon GFF: This diversified management and holding company conducting business through wholly-owned subsidiaries, has witnessed the Zacks Consensus Estimate for its current year earnings increasing nearly 3.4% over the last 60 days. Click to get this free report AudioCodes Ltd. (AUDC) : Free Stock Analysis Report Ryerson Holding Corporation (RYI) : Free Stock Analysis Report Griffon Corporation (GFF) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote This Zacks Rank #1 company has a dividend yield of 2.5%, compared with the industry average of 1.5%. Ryerson Holding Corporation Dividend Yield (TTM) Ryerson Holding Corporation dividend-yield-ttm | Ryerson Holding Corporation Quote Griffon GFF: This diversified management and holding company conducting business through wholly-owned subsidiaries, has witnessed the Zacks Consensus Estimate for its current year earnings increasing nearly 3.4% over the last 60 days. Click to get this free report AudioCodes Ltd. (AUDC) : Free Stock Analysis Report Ryerson Holding Corporation (RYI) : Free Stock Analysis Report Griffon Corporation (GFF) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are three stocks with buy rank and strong income characteristics for investors to consider today, December 7th: AudioCodes AUDC: This company which, is a vendor of advanced voice networking and media processing solutions for the digital workplace, has witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.9% over the last 60 days. Ryerson Holding Corporation Price and Consensus Ryerson Holding Corporation price-consensus-chart | Ryerson Holding Corporation Quote This Zacks Rank #1 company has a dividend yield of 2.5%, compared with the industry average of 1.5%. Ryerson Holding Corporation Dividend Yield (TTM) Ryerson Holding Corporation dividend-yield-ttm | Ryerson Holding Corporation Quote Griffon GFF: This diversified management and holding company conducting business through wholly-owned subsidiaries, has witnessed the Zacks Consensus Estimate for its current year earnings increasing nearly 3.4% over the last 60 days.
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714227.0
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2023-12-07 00:00:00 UTC
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ANALYSIS-Nuclear sector must overcome decades of stagnation to meet COP28 tripling goal
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DCOMP
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https://www.nasdaq.com/articles/analysis-nuclear-sector-must-overcome-decades-of-stagnation-to-meet-cop28-tripling-goal
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By David Stanway and Timothy Gardner
DUBAI, Dec 7 (Reuters) - The global nuclear industry got a morale boost at the COP28 climate summit in Dubai after more than 20 nations vowed to triple capacity by 2050.
But reaching that goal will require the industry to overcome regulatory hurdles, financing obstacles, fuel bottlenecks, and public safety concerns that have contributed to a long history of project delays and decades of stagnation.
It took 70 years to bring global nuclear capacity to the current level of 370 gigawatts (GW), and the industry must now select technologies, raise finance and develop the rules to build another 740 GW in half that time.
"Judging by the international nuclear industry's performance over the past two decades, it is impossible," said Mycle Schneider, lead author of the World Nuclear Industry Status Report.
The declaration, signed by the U.S., France, Britain, South Korea, and others commits countries to mobilise investment and encourage financial institutions like the World Bank to back nuclear power.
It also promises efforts to extend the life of existing plants - with about 200 of 420 reactors around the world scheduled to be decommisioned before 2050 - and support for new technologies like small modular reactors (SMRs).
Nuclear executives at COP28 endorsed the pledge, but acknowledged the industry's struggles.
"Nuclear is the safest source of energy," said Patrick Fragman, chief executive of Westinghouse. "Of course, for the first of their kind reactors there were problems and cost overruns. We know: we have the scars."
In a sign of challenges to come, some environmental groups criticised the pledge, citing public safety concerns, while academics questioned whether plants could be brought online in time to help avert a climate catastrophe.
"Why would anyone spend a single dollar on a technology that, if planned today, won't even be available to help until 2035-2045?" said Mark Jacobson, an energy specialist at Stanford University.
PLUGGED INTO THE GRID
There are currently 60 commercial reactors under construction in 17 countries across the world, with China accounting for 25, according to the World Nuclear Association.
Though China is one of the few countries to remain steadfast in its commitment to nuclear development over the years, its 2020 capacity target was one of the only ones it missed.
In much of the West, meanwhile, nuclear power capacity has stagnated, with huge reactor construction costs, permitting issues, and public opposition after the Fukushima nuclear accident in Japan in 2011 blocking new construction.
At COP28, nuclear firms were talking up the prospects of SMRs as a better bet. Backers say they have shorter construction times than traditional plants and could in theory be brought online more quickly.
Korea Hydro and Nuclear Power (KHNP) presented a simulator of its "iSMR" reactor, designed to be plugged into existing power grids and used to run desalination plants or provide urban heating.
KHNP will be able to build a plant in two years once permits are in place, chief executive Jooho Whang said, compared to 10 to 20 years for large reactors.
"Historically it is true that nuclear power plants are subject to the approval of the government and I don't think that will change," said Whang.
"But if SMR makes a good demonstration project, there will be exponential growth in demand across the world."
KHNP's iSMR is one of around 80 such models in development, but most are unlikely to get going before 2030, experts say.
NuScale SMR.N, which has the only SMR design approved by the U.S. Nuclear Regulatory Commission, last month had to axe its project at a national lab, on worries about low subscription for the plant's power. NuScale says its other projects are on track.
Rafael Grossi, executive director of the International Atomic Energy Agency (IAEA), told Reuters that the body was now working on harmonising approval rules worldwide to make it easier for countries to share technologies.
"The IAEA has launched a process so that regulators around the world can move faster, always by applying very strict safety measures," he said. The current system might not work in a globalised market where SMRs made in the United States are sold in Africa, he said.
FUEL SUPPLY
The switch to SMRs could raise another issue: many would run on advanced fuels now dominated by Russia.
Russia is currently the only significant producer of HALEU - a highly enriched form of uranium that will be crucial for new reactor technologies.
A U.S. company called Centrus LEU.A has begun to produce HALEU. The European Union is also working on production, the IAEA said.
Fragman of Westinghouse said uranium supply was "completely manageable", and the major issue was ramping up enrichment and recreating conversion capacity in the West, which he said was "underway".
Jonathan Cobb of the World Nuclear Association acknowledged that tripling capacity by 2050 would not be easy.
"That is exactly why the pledge was necessary," he said. "The governments are looking at the role they need to play in achieving that. It won't just happen by business as usual."
(Reporting by David Stanway and Timothy Gardner; Editing by Richard Valdmanis and David Evans)
((david.stanway@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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But reaching that goal will require the industry to overcome regulatory hurdles, financing obstacles, fuel bottlenecks, and public safety concerns that have contributed to a long history of project delays and decades of stagnation. In a sign of challenges to come, some environmental groups criticised the pledge, citing public safety concerns, while academics questioned whether plants could be brought online in time to help avert a climate catastrophe. Rafael Grossi, executive director of the International Atomic Energy Agency (IAEA), told Reuters that the body was now working on harmonising approval rules worldwide to make it easier for countries to share technologies.
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By David Stanway and Timothy Gardner DUBAI, Dec 7 (Reuters) - The global nuclear industry got a morale boost at the COP28 climate summit in Dubai after more than 20 nations vowed to triple capacity by 2050. It took 70 years to bring global nuclear capacity to the current level of 370 gigawatts (GW), and the industry must now select technologies, raise finance and develop the rules to build another 740 GW in half that time. In much of the West, meanwhile, nuclear power capacity has stagnated, with huge reactor construction costs, permitting issues, and public opposition after the Fukushima nuclear accident in Japan in 2011 blocking new construction.
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"Judging by the international nuclear industry's performance over the past two decades, it is impossible," said Mycle Schneider, lead author of the World Nuclear Industry Status Report. In much of the West, meanwhile, nuclear power capacity has stagnated, with huge reactor construction costs, permitting issues, and public opposition after the Fukushima nuclear accident in Japan in 2011 blocking new construction. Korea Hydro and Nuclear Power (KHNP) presented a simulator of its "iSMR" reactor, designed to be plugged into existing power grids and used to run desalination plants or provide urban heating.
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Though China is one of the few countries to remain steadfast in its commitment to nuclear development over the years, its 2020 capacity target was one of the only ones it missed. In much of the West, meanwhile, nuclear power capacity has stagnated, with huge reactor construction costs, permitting issues, and public opposition after the Fukushima nuclear accident in Japan in 2011 blocking new construction. "Historically it is true that nuclear power plants are subject to the approval of the government and I don't think that will change," said Whang.
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c7884e68-8e9f-4ef0-b432-c5c6ded240e3
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714228.0
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2023-12-07 00:00:00 UTC
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Key Takeaways From Executive Conference About Capital Markets
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DCOMP
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https://www.nasdaq.com/articles/key-takeaways-from-executive-conference-about-capital-markets
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Many bank CEOs and other top executives took the stage separately over the last two days at Goldman Sachs’ U.S. Financial Services Conference. They provided colors as to how capital markets businesses (trading and investment banking) are performing in the ongoing quarter and what’s in store in the near future.
Before we start discussing individual bank outlooks – JPMorgan JPM, Goldman Sachs GS, Citigroup C and Bank of America BAC – for the fourth quarter of 2023, let’s understand how the operating backdrop has been for the capital markets businesses so far.
Starting with investment banking (IB), both global M&A activity and initial public offerings (IPOs) have declined since last year following the Russia-Ukraine conflict and the Federal Reserve's ultra-aggressive rate hikes to control “sticky” inflation. This had a severe adverse impact on banks’ non-interest income.
On the other hand, trading (though down from the record levels of 2020-2021), driven by heightened volatility and client activity, continued to perform decently.
The situation seems to be turning around for IB business in the current quarter. Bank executives at the conference noted that global deal-making conditions have started to improve, with some anticipating a better outlook for strategic M&As in 2024. The major factor driving a better picture is the stabilizing interest rate environment.
There have been quite a few IPOs during the ongoing quarter, including the listing of Arm Holdings, and this seems to have opened the doors for more IPOs next year. On the deal-making front, green shoots are visible across many industries, and there have been several strategic merger/acquisition announcements of late. All bank executives acknowledged that there is an increased appetite for strategic M&As, and ongoing dialogs indicate a stronger pipeline going forward.
Q4 Trends & Updates
Now, coming to fourth-quarter 2023 IB and trading outlook, let’s begin with the largest bank in the United States – JPMorgan. Marianne Lake, Co-CEO of the company’s Consumer and Community Banking business, said that markets revenues are expected to be “flattish” on a year-over-year basis. IB fees are projected to witness “pretty healthy” year-over-year growth and a sequential single-digit rise.
Bank of America CEO Brian Moynihan noted “The M&A deals are coming a little faster.” The company will outperform the industry on IB fees in the quarter. The bank expects to earn approximately $1 billion in IB fees, reflecting a low single-digit decline on a year-over-year basis. Moynihan added that the industry-wide IB fee pool is expected to decline 10-15%. Additionally, trading revenues are projected to be up in the low single-digit range year over year.
Another major global bank, Citigroup, expects IB revenues to rise in the high single-digit range sequentially. Mark Mason, Chief Financial Officer, said “We have seen continued momentum, which is good, particularly in areas like debt capital markets and issuance activity there.” Further, while discussing markets business, he noted that client activity has been somewhat subdued “across a broad set of asset classes.” Thus, markets revenues are anticipated to be down 15-20% from the third quarter 2023 level.
Global investment bank, Goldman’s Chief Financial Officer Denis Coleman echoed similar views. He said, “In investment banking, no surprise, it's sort of trending below trend at the moment. I think the franchise is very healthy. Our market share has remained very strong, number one, and M&A number one in Equity, Number 2 high yield, but the level activity more muted.” He stated a lot of clients had an appetite and interest in "doing something strategic" but are holding themselves back because of macroeconomic ambiguity. Trading revenues in the current quarter are expected to be almost flat year over year at GS.
Conclusion
The outlook for capital markets businesses seems to be optimistic. But challenges persist. While global M&A activities are gaining traction, high rates for longer periods and a tougher regulatory environment are expected to make a fast rebound challenging. Likewise, trading income depends on the level of volatility and client activity.
Currently, JPM sports a Zacks Rank #1 (Strong Buy), while BAC, C and GS carry a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Citigroup Inc. (C) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Starting with investment banking (IB), both global M&A activity and initial public offerings (IPOs) have declined since last year following the Russia-Ukraine conflict and the Federal Reserve's ultra-aggressive rate hikes to control “sticky” inflation. Bank of America CEO Brian Moynihan noted “The M&A deals are coming a little faster.” The company will outperform the industry on IB fees in the quarter. While global M&A activities are gaining traction, high rates for longer periods and a tougher regulatory environment are expected to make a fast rebound challenging.
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Before we start discussing individual bank outlooks – JPMorgan JPM, Goldman Sachs GS, Citigroup C and Bank of America BAC – for the fourth quarter of 2023, let’s understand how the operating backdrop has been for the capital markets businesses so far. Another major global bank, Citigroup, expects IB revenues to rise in the high single-digit range sequentially. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Before we start discussing individual bank outlooks – JPMorgan JPM, Goldman Sachs GS, Citigroup C and Bank of America BAC – for the fourth quarter of 2023, let’s understand how the operating backdrop has been for the capital markets businesses so far. Mark Mason, Chief Financial Officer, said “We have seen continued momentum, which is good, particularly in areas like debt capital markets and issuance activity there.” Further, while discussing markets business, he noted that client activity has been somewhat subdued “across a broad set of asset classes.” Thus, markets revenues are anticipated to be down 15-20% from the third quarter 2023 level. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Before we start discussing individual bank outlooks – JPMorgan JPM, Goldman Sachs GS, Citigroup C and Bank of America BAC – for the fourth quarter of 2023, let’s understand how the operating backdrop has been for the capital markets businesses so far. Bank executives at the conference noted that global deal-making conditions have started to improve, with some anticipating a better outlook for strategic M&As in 2024. Mark Mason, Chief Financial Officer, said “We have seen continued momentum, which is good, particularly in areas like debt capital markets and issuance activity there.” Further, while discussing markets business, he noted that client activity has been somewhat subdued “across a broad set of asset classes.” Thus, markets revenues are anticipated to be down 15-20% from the third quarter 2023 level.
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5ace8772-4b3c-4c0c-b33a-36cd6f7852c2
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714229.0
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2023-12-07 00:00:00 UTC
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3 Top Utility Stocks to Buy in December
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https://www.nasdaq.com/articles/3-top-utility-stocks-to-buy-in-december
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Utilities are generally considered income stocks, so rising interest rates have been a headwind as they make other income options (like CDs) more attractive. If you are a long-term investor, however, this could be an opportunity to add some well-positioned utilities to your portfolio. Three that are worth considering this December are Duke Energy (NYSE: DUK), NextEra Energy (NYSE: NEE), and Black Hills (NYSE: BKH). Here's why.
Duke Energy is getting back to basics
Duke Energy is one of the largest regulated electric and natural gas utilities in the U.S., with a market cap of around $70 billion. It recently sold a contract renewable power business, which has left it with only regulated operations. This is a case of a utility getting even more boring, since regulated utilities have monopolies in the regions they serve but have to get capital investment plans and rates approved by the government. That generally results in slow but steady growth over time.
Today, Duke Energy has a capital investment budget of roughly $65 billion dollars. That money will be spent on things like new capacity and asset improvements (storm hardening, for example) over the next five years. This backs management's belief that it can provide earnings growth of between 5% and 7% a year through at least 2027. That, in turn, should support annual dividend increases that will extend the current 19-year annual dividend increase streak well into the future. With a dividend yield of 4.3%, even conservative dividend investors will probably want to dig into this story.
NextEra Energy is like two businesses in one
NextEra Energy is a dividend growth machine, with annual increases in each of the past 29 years and an annualized dividend growth rate of more than 10% a year over the past decade. That's incredibly fast dividend growth for a utility. The question for income-focused investors is how the company is managing to grow the dividend so quickly. The answer is by being two companies in one.
The core of NextEra Energy is Florida Power & Light, one of the largest regulated utilities in the U.S. Notably, it operates in a state that has seen a steady inflow of residents (and thus new customers) for years. That's the foundation on which NextEra Energy has built a clean energy business that is now one of the largest producers of solar and wind power on Earth.
The regulated utility (about 70% of the business) should continue to be a slow and steady performer, while the clean energy business (about 30%) should drive long-term growth. Notably, management expects this combination to support 6% to 8% earnings growth through 2026 with 10% dividend growth through at least 2024.
The current dividend yield of around 3.1% is near the high end of the range over the past decade, suggesting that now could be a great time to add this dividend growth stock to your portfolio.
Tiny Black Hills has a big streak
Duke has increased its dividend for 19 years. NextEra's dividend has grown annually for 29 years. And Black Hills is a Dividend King, with over 50 consecutive annual dividend increases. While NextEra is an industry giant with a $120 billion market cap, its dividend record is easily bested by Black Hills, which has a $3.6 billion market cap.
That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be.
However, for investors interested in a reliable dividend, 5% annual dividend growth should be more than enough to keep them happy. Right now Black Hills' yield is 4.6%, which is toward the high end of the yield range over the past 10 years. That could make now a good time to add this reliable dividend payer to your income portfolio.
But investors should go in knowing that leverage is a bit high today, leading management to pull back on capital investment plans in 2023 in favor of debt reduction. That could limit growth for a bit, though the company has plans to increase spending again in the coming years.
Boring, but attractively priced
Duke Energy is 12% below its 52-week high. Black Hills is off its 12-month high by 27%. And NextEra is lower by 32%. If you are looking for an opportunity to add reliable dividend stocks to your portfolio, now is the time to consider these utilities. Duke is the most boring, NextEra the most exciting (particularly for dividend growth investors), and Black Hills is the under-the-radar pick. But if you can stomach buying while others are selling, all three appear attractively priced today.
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Reuben Gregg Brewer has positions in Black Hills. The Motley Fool has positions in and recommends NextEra Energy. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be. But investors should go in knowing that leverage is a bit high today, leading management to pull back on capital investment plans in 2023 in favor of debt reduction. Duke is the most boring, NextEra the most exciting (particularly for dividend growth investors), and Black Hills is the under-the-radar pick.
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Three that are worth considering this December are Duke Energy (NYSE: DUK), NextEra Energy (NYSE: NEE), and Black Hills (NYSE: BKH). That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be. However, for investors interested in a reliable dividend, 5% annual dividend growth should be more than enough to keep them happy.
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NextEra Energy is like two businesses in one NextEra Energy is a dividend growth machine, with annual increases in each of the past 29 years and an annualized dividend growth rate of more than 10% a year over the past decade. The current dividend yield of around 3.1% is near the high end of the range over the past decade, suggesting that now could be a great time to add this dividend growth stock to your portfolio. That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be.
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NextEra Energy is like two businesses in one NextEra Energy is a dividend growth machine, with annual increases in each of the past 29 years and an annualized dividend growth rate of more than 10% a year over the past decade. That said, Black Hills, like Duke, is essentially just a boring regulated utility, so dividend growth (roughly 5% a year over the trailing one-, three-, five-, and 10-year periods) isn't as robust as industry giant NextEra and probably never will be. However, for investors interested in a reliable dividend, 5% annual dividend growth should be more than enough to keep them happy.
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aec233ea-4705-42d6-b8ec-5bc7dc11aeb2
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714230.0
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2023-12-07 00:00:00 UTC
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Is SPDR S&P Homebuilders ETF (XHB) a Strong ETF Right Now?
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https://www.nasdaq.com/articles/is-spdr-sp-homebuilders-etf-xhb-a-strong-etf-right-now-10
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Making its debut on 01/31/2006, smart beta exchange traded fund SPDR S&P Homebuilders ETF (XHB) provides investors broad exposure to the Industrials ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is managed by State Street Global Advisors, and has been able to amass over $1.48 billion, which makes it one of the larger ETFs in the Industrials ETFs. Before fees and expenses, this particular fund seeks to match the performance of the S&P Homebuilders Select Industry Index.
The S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders Index is a modified equal weight index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.86%.
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.
XHB's heaviest allocation is in the Consumer Discretionary sector, which is about 53.80% of the portfolio. Its Industrials and Energy round out the top three.
When you look at individual holdings, Williams Sonoma Inc (WSM) accounts for about 4.66% of the fund's total assets, followed by Carlisle Cos Inc (CSL) and Trane Technologies Plc (TT).
Its top 10 holdings account for approximately 39.94% of XHB's total assets under management.
Performance and Risk
So far this year, XHB has added roughly 44.61%, and is up about 44.86% in the last one year (as of 12/07/2023). During this past 52-week period, the fund has traded between $59.46 and $86.68.
XHB has a beta of 1.38 and standard deviation of 27.50% for the trailing three-year period, which makes the fund a high risk choice in the space. With about 37 holdings, it has more concentrated exposure than peers.
Alternatives
SPDR S&P Homebuilders ETF is a reasonable option for investors seeking to outperform the Industrials ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Invesco Building & Construction ETF (PKB) tracks Dynamic Building & Construction Intellidex Index and the iShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Select Home Construction Index. Invesco Building & Construction ETF has $227.14 million in assets, iShares U.S. Home Construction ETF has $2.14 billion. PKB has an expense ratio of 0.62% and ITB charges 0.40%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Industrials ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
Trane Technologies plc (TT) : Free Stock Analysis Report
Invesco Building & Construction ETF (PKB): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal. When you look at individual holdings, Williams Sonoma Inc (WSM) accounts for about 4.66% of the fund's total assets, followed by Carlisle Cos Inc (CSL) and Trane Technologies Plc (TT). XHB has a beta of 1.38 and standard deviation of 27.50% for the trailing three-year period, which makes the fund a high risk choice in the space.
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Making its debut on 01/31/2006, smart beta exchange traded fund SPDR S&P Homebuilders ETF (XHB) provides investors broad exposure to the Industrials ETFs category of the market. Invesco Building & Construction ETF (PKB) tracks Dynamic Building & Construction Intellidex Index and the iShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Click to get this free report SPDR S&P Homebuilders ETF (XHB): ETF Research Reports Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report iShares U.S. Home Construction ETF (ITB): ETF Research Reports Trane Technologies plc (TT) : Free Stock Analysis Report Invesco Building & Construction ETF (PKB): ETF Research Reports To read this article on Zacks.com click here.
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Making its debut on 01/31/2006, smart beta exchange traded fund SPDR S&P Homebuilders ETF (XHB) provides investors broad exposure to the Industrials ETFs category of the market. 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. Click to get this free report SPDR S&P Homebuilders ETF (XHB): ETF Research Reports Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report Williams-Sonoma, Inc. (WSM) : Free Stock Analysis Report iShares U.S. Home Construction ETF (ITB): ETF Research Reports Trane Technologies plc (TT) : Free Stock Analysis Report Invesco Building & Construction ETF (PKB): ETF Research Reports To read this article on Zacks.com click here.
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Making its debut on 01/31/2006, smart beta exchange traded fund SPDR S&P Homebuilders ETF (XHB) provides investors broad exposure to the Industrials ETFs category of the market. Before fees and expenses, this particular fund seeks to match the performance of the S&P Homebuilders Select Industry Index. XHB has a beta of 1.38 and standard deviation of 27.50% for the trailing three-year period, which makes the fund a high risk choice in the space.
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2023-12-07 00:00:00 UTC
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2 Spectacular Growth Stocks to Invest $1,000 in That Could Make You Richer in 2024 and Beyond
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https://www.nasdaq.com/articles/2-spectacular-growth-stocks-to-invest-%241000-in-that-could-make-you-richer-in-2024-and
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The stock market is unpredictable in the short term, but there is a long-term cyclicality that investors can count on. Bear markets come and go, and the market has proven its ability many times over to hit new highs as time goes by.
If you're in a position to put cash into stocks right now, there is no shortage of compelling companies with superior long-term growth advantages to put on your buy list. No single company is likely to make you rich overnight. On the other hand, maintaining a steady pattern of investing in great companies across a range of industries in all types of markets can help you construct a portfolio that faithfully compounds your returns through the years.
If you have $1,000 available to invest, here are two companies to consider putting those funds toward to aid your journey to building wealth through the stock market.
1. Upstart
Upstart (NASDAQ: UPST) share prices shot up around 166% so far in 2023. While the stock has been a favorite with short sellers, some positive headway amid the backdrop of continued volatility in the broader lending market has renewed some interest among other investors as well.
If it wants to keep that upward momentum, Upstart has to prove to investors that it can deliver on its promise to disrupt the lending world with its artificial intelligence (AI)- and machine-learning-powered model for approving loans. The quick rise in interest rates over the past 18 months resulted in the company not being profitable for a series of quarters as lending and funding volume dropped. Revenue growth decelerated dramatically as a result.
Fortunately, Upstart's business model is designed to calibrate to the current high-interest-rate environment. That model is also becoming more accurate with time. In fact, in the third quarter of 2023, Upstart reported a 15% improvement in the accuracy of its personal loans model, marking the most significant upgrade to that segment in five years.
Interest rates are still relatively higher and the risk is somewhat elevated for lending capital in an economy that some consider shakey. That means Upstart is approving fewer loans: Just 10% of applicants are getting approved right now. Applicants who do get approved through its platform are going to pay more on the whole than they would have a few years ago. For Upstart's institutional partners, the cost and risk of providing capital are also still elevated.
On the loans that Upstart approved over the past two years, more are staying on Upstart's balance sheet longer than normal as Upstart is having a harder time lining up lending partners to take over the loans. The good news is, lending partners are still jumping aboard and the company is seeing progress on key fronts that can favorably impact its business over the long run. The company reported positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the second quarter in a row in the third quarter of 2023.
Upstart's contribution margins are close to record highs and its platform automation continues to improve to the point that 88% of approvals are now processed without any human involvement. Its network of bank and credit union partners has jumped by about 100% over the last three years. In the third quarter, a leading original equipment manufacturer (OEM) adopted the company's auto retail software at 99% of its dealerships, while its Upstart Lending product is now used by so many car dealerships nationwide that it covers 70% of the U.S. population.
Time will reveal Upstart's resilience as interest rates improve and the macro situation rights itself. Given its network of partners across its personal and auto lending programs, its expansion into new areas like mortgage lending, and its rapidly learning platform, a better economic scenario could signal a strong reversal of its recent struggles. There is still a valuable use case for this business within the broader lending industry on the whole. These facets may induce some investors to gain exposure to Upstart's potential with a modest investment of cash.
2. Fiverr International
Fiverr International (NYSE: FVRR) may not be generating the buzz it was a few years ago. Still, the company's continued expansion within the lucrative gig economy and improving financials persuaded some investors to take a second look, with the stock price popping by about 25% over the last month.
Of course, you shouldn't invest in a company because of what its stock does over a short period. Instead, you need to make sure you're putting your cash into a resilient business that possesses a wide moat within a growing industry that can continue to generate steady returns over the long run.
Fiverr is a fixture in the global gig economy, a space that has exploded to a valuation of about $453 billion. In a time where economic conditions are uncertain across the world as the pandemic pains ease, and where many companies globally are still hesitant to hire full-time workers, the need for remote, flexible talent remains on both sides of the freelance relationship.
Even though online freelance services are hardly new to the scene, most freelancing still happens offline: close to 97%. This leaves a tremendous opportunity for Fiverr to win in this space, and even with other contenders, there's still plenty of room for multiple winners.
Fiverr is actively building a platform designed to serve the full spectrum of needs that not just individual customers -- but increasingly enterprise clients -- need to make their businesses run efficiently.
Among its growing collection of products, the company is seeing steady adoption of Fiverr Neo, its AI talent matching service; Fiverr Pro, a marketplace that connects top-tier freelancers with larger companies and brands; and Fiverr Certified, a marketplace that allows tech companies (including well-known names like Stripe and Monday.com) to create their own ecosystems of freelancers to serve their business clients.
The recent quarter saw Fiverr grow revenue 12% year over year to $93 million, while the company pulled in profits of $3 million. Bear in mind that one year ago the company reported a negative generally accepted accounting principles (GAAP) net income of over $11 million. Fiverr's take rate of transactions continues to rise and is now at 31.3%. The company also had cash and cash equivalents of about $130 million on hand at the end of the third quarter. The tepid performance of this stock doesn't yet correlate well with the performance of the business, which could make it a ripe opportunity for shrewd investors.
10 stocks we like better than Upstart
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See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fiverr International, Monday.com, and Upstart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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On the other hand, maintaining a steady pattern of investing in great companies across a range of industries in all types of markets can help you construct a portfolio that faithfully compounds your returns through the years. If it wants to keep that upward momentum, Upstart has to prove to investors that it can deliver on its promise to disrupt the lending world with its artificial intelligence (AI)- and machine-learning-powered model for approving loans. In a time where economic conditions are uncertain across the world as the pandemic pains ease, and where many companies globally are still hesitant to hire full-time workers, the need for remote, flexible talent remains on both sides of the freelance relationship.
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Time will reveal Upstart's resilience as interest rates improve and the macro situation rights itself. Among its growing collection of products, the company is seeing steady adoption of Fiverr Neo, its AI talent matching service; Fiverr Pro, a marketplace that connects top-tier freelancers with larger companies and brands; and Fiverr Certified, a marketplace that allows tech companies (including well-known names like Stripe and Monday.com) to create their own ecosystems of freelancers to serve their business clients. The recent quarter saw Fiverr grow revenue 12% year over year to $93 million, while the company pulled in profits of $3 million.
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On the loans that Upstart approved over the past two years, more are staying on Upstart's balance sheet longer than normal as Upstart is having a harder time lining up lending partners to take over the loans. Among its growing collection of products, the company is seeing steady adoption of Fiverr Neo, its AI talent matching service; Fiverr Pro, a marketplace that connects top-tier freelancers with larger companies and brands; and Fiverr Certified, a marketplace that allows tech companies (including well-known names like Stripe and Monday.com) to create their own ecosystems of freelancers to serve their business clients. The recent quarter saw Fiverr grow revenue 12% year over year to $93 million, while the company pulled in profits of $3 million.
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Applicants who do get approved through its platform are going to pay more on the whole than they would have a few years ago. Of course, you shouldn't invest in a company because of what its stock does over a short period. The recent quarter saw Fiverr grow revenue 12% year over year to $93 million, while the company pulled in profits of $3 million.
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2023-12-07 00:00:00 UTC
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Global Giants: 3 Stocks to Buy in Emerging Economies
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https://www.nasdaq.com/articles/global-giants%3A-3-stocks-to-buy-in-emerging-economies
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Emerging economies are undoubtedly a good alternative to consider when making investments. By investing in emerging markets stocks, we can obtain exponential returns due to the great capacity for growth that these companies can have within these developing economies. Here are three emerging economies stocks to consider adding to your portfolio.
Petroleo Brasileiro S.A. (PBR)
Source: rafastockbr / Shutterstock.com
Petroleo Brasileiro S.A. (NYSE:PBR), or Petrobras, is a Brazilian energy company that is an attractive investment option to strengthen your portfolio.
In Q3 2023, Petrobras has demonstrated impressive financial performance, maintaining a solid EBITDA of $13.7 billion and controlling its debt by $61 billion, even with the start of FPSO Anita Garibaldi.
It has also achieved a record production of 3.98 million barrels of oil, and has returned to society with tax and dividend payments of R$65.5 billion.
Looking to the future, Petrobras has signed an agreement with the Government of Rio de Janeiro to explore CO2 capture and storage (CCUS) pilot projects in the region.
This step reflects its commitment to innovative solutions, including the evaluation of low-carbon hydrogen options. The company had already announced in May its plans for a CCUS pilot project in northern Rio de Janeiro, with the capacity to store 100,000 tons of CO2 annually.
In addition, Petrobras has secured new natural gas contracts with CEG and CEG RIO, with an estimated total value of R$51.6 billion and valid until December 2034. These contracts seek to regulate the supply of natural gas in the Rio de Janeiro market, with the approval of the State.
Sociedad Química Minera de Chile (SQM)
Source: madamF / Shutterstock.com
Sociedad Quimica Y Minera de Chile (NYSE:SQM), a leading Chilean mining and chemical company, has emerged as a compelling option for investors in developing economies. In the third quarter of 2023, SQM reported solid results, excelling in its key divisions.
Despite a slight decline in revenues from the lithium business, the company celebrated record sales, surpassing 43,000 metric tons. Although prices declined, the company is confident of sustained growth driven by demand for electric vehicles and the global emissions reduction target.
In the lucrative iodine business, Sociedad Quimica Y Minera de Chile reported robust revenues of around $210 million in the third quarter of 2023, supported by a strong pricing environment. Demand increased, especially in the X-ray contrast media sector, despite a slight decline in more price-sensitive applications. SQM stood out as the only iodine producer to significantly increase its supply this year.
In the fertilizer sector, the company recorded revenues of close to $300 million in the third quarter, thanks to positive demand growth, projected to continue into 2024.
In addition to its commercial wins, it is engaged in strategic negotiations. The board of directors approved a plan in November 2023 related to properties in the Salar de Atacama, showing its commitment to Chilean market regulations.
It was also announced that SQM is in negotiations with Codelco to lease and operate Corfo’s properties in the Salar de Atacama.
Taiwan Semiconductor (TSM)
Source: Ascannio / Shutterstock.com
Taiwan Semiconductor Manufacturing (NYSE:TSM), is a leading chipmaker. Said chips contribute to the technological heart of devices we use every day, from smartphones to networks.
Why consider it for your investment portfolio? The company’s financial performance is impressive, with significant revenues and profits, highlighting its ability to adapt and grow in the market.
What makes Taiwan Semiconductor even more attractive is its focus on sustainability. The company has shown its commitment to use 100% renewable energy in all its global operations by 2040. In addition, the chipmaker is leading the charge in Taiwan to develop a diversified renewable energy industry.
On the technology front, TSMC is at the forefront, collaborating with MediaTek (OTCMKTS:MDTKF) on the development of three-nanometer chips. This highlights its innovation and ability to strategically partner and stay ahead in advanced technologies.
As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines (no position)
Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.
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The post Global Giants: 3 Stocks to Buy in Emerging Economies appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the lucrative iodine business, Sociedad Quimica Y Minera de Chile reported robust revenues of around $210 million in the third quarter of 2023, supported by a strong pricing environment. The board of directors approved a plan in November 2023 related to properties in the Salar de Atacama, showing its commitment to Chilean market regulations. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post Global Giants: 3 Stocks to Buy in Emerging Economies appeared first on InvestorPlace.
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Petroleo Brasileiro S.A. (PBR) Source: rafastockbr / Shutterstock.com Petroleo Brasileiro S.A. (NYSE:PBR), or Petrobras, is a Brazilian energy company that is an attractive investment option to strengthen your portfolio. Sociedad Química Minera de Chile (SQM) Source: madamF / Shutterstock.com Sociedad Quimica Y Minera de Chile (NYSE:SQM), a leading Chilean mining and chemical company, has emerged as a compelling option for investors in developing economies. Taiwan Semiconductor (TSM) Source: Ascannio / Shutterstock.com Taiwan Semiconductor Manufacturing (NYSE:TSM), is a leading chipmaker.
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By investing in emerging markets stocks, we can obtain exponential returns due to the great capacity for growth that these companies can have within these developing economies. Petroleo Brasileiro S.A. (PBR) Source: rafastockbr / Shutterstock.com Petroleo Brasileiro S.A. (NYSE:PBR), or Petrobras, is a Brazilian energy company that is an attractive investment option to strengthen your portfolio. Sociedad Química Minera de Chile (SQM) Source: madamF / Shutterstock.com Sociedad Quimica Y Minera de Chile (NYSE:SQM), a leading Chilean mining and chemical company, has emerged as a compelling option for investors in developing economies.
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These contracts seek to regulate the supply of natural gas in the Rio de Janeiro market, with the approval of the State. In the fertilizer sector, the company recorded revenues of close to $300 million in the third quarter, thanks to positive demand growth, projected to continue into 2024. Why consider it for your investment portfolio?
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2023-12-07 00:00:00 UTC
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US bitcoin ETF issuer talks with SEC have advanced to key details -sources
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https://www.nasdaq.com/articles/us-bitcoin-etf-issuer-talks-with-sec-have-advanced-to-key-details-sources
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By Suzanne McGee and Hannah Lang
Dec 7 (Reuters) - Discussions between the U.S. securities regulator and asset managers hoping to listbitcoin exchangetraded funds (ETFs) have advanced to key technical details, in a sign the agency may soon approve the products, industry executives said.
Thirteen firms including Grayscale Investments, BlackRock BLK.N, Invesco, and ARK Investments, have pending applications with the Securities and Exchange Commission (SEC) for ETFs that track the price of bitcoin.
Proponents argue that a regulated product, like an ETF, tied to the spot price of the cryptocurrency BTC=BTSP, offers investors the best way to invest in bitcoin. But the agency has long rejected such products, arguing they fail to meet its bar for investor protections.
But after a court in August ruled the SEC was wrong to reject Grayscale's application to convert its bitcoin trust into an ETF, the SEC has been engaging with issuers on substantive details, some of which are usually discussed near the end of an ETF application process, according to half a dozen industry executives and SEC public memos.
They include custody arrangements; creation and redemption mechanisms; and investor risk disclosures, said the people, who asked not to be identified because the discussions are private.
A spot bitcoin ETF would mark a watershed for the industry, allowing previously wary investors access to the world's largest cryptocurrency via the tightly regulated stock market. Demand is expected to be as much as $3 billion on the first few days.
The SEC has long worried, however, that bitcoin is vulnerable to manipulation. Previously, discussions focused on that concern and were mostly educational, the people said.
The SEC has until Jan. 10 to make a final decision on ARK's filing, which is first in line. The advanced nature of the discussions signals the SEC may approve ARK's application and likely some of the other 12 applications, in the New Year, the people said. The advanced talks help explain a recent rally in bitcoin, the price of which reached a 20-month high this month.
ARK CEO Cathie Wood told Yahoo Finance last month that the nature of the SEC discussions had changed and the odds of several applications being approved had gone up.
"My guess is that we'll have several ETFs approved at once, which will give investors the best opportunity to compare them," said Bryan Armour, ETF analyst at Morningstar.
Memos made public by the SEC show that executives from BlackRock, Grayscale, Invesco and 21 Shares, which is working with ARK, have met with SEC staff since September, together with their lawyers and executives from the exchanges where they hope to list the ETF. Other managers also told Reuters they met with SEC staff in that time. The BlackRock meeting memo includes a detailed description of the asset manager's revised redemptions mechanism.
BlackRock did not return requests for comment. Invesco declined to comment. "Grayscale continues to engage constructively with the SEC," a spokesperson said.
While past meetings have mostly been with staff from the SEC's trading and markets and corporate finance divisions, some recent meetings have been with staff in Chair Gary Gensler's office, according to the memos and sources. The pace of SEC information requests has also accelerated from every few months to every week or so, the people said.
As discussions have advanced, issuers have had to update their filings to reflect the new details, one person said. This week, for example, BlackRock amended its filing to provide more insight into measures it plans to take to protect investors.
CRYPTO SKEPTIC
To be sure, the SEC has not said publicly - or indicated to people interviewed by Reuters - whether it will approve the products. There also remain sticking points, chiefly whether issuers will create a cash or an "in-kind" settlement mechanism, the people said.
An SEC spokesperson said the agency would not comment on individual filings. Gensler, a crypto skeptic who has accused the industry of flouting SEC rules, said in October the agency's commissioners will potentially consider the ETF filings, but he did not indicate when.
The SEC began engaging meaningfully with issuers soon after a federal appeals court ruled that the agency failed to justify why it rejected Grayscale's ETF application. The SEC did not appeal and must now review Grayscale's filing.
Some sources believe the wording of the Grayscale ruling limits the grounds on which the SEC could again reject the filings. And many issuers feel they have addressed the SEC's market manipulation concerns with a surveillance arrangement between the listing exchanges and CoinbaseCOIN.O, the largest U.S. cryptocurrency exchange.
If the SEC wants to buy more time, it could ask ARK to withdraw its application and refile, but market participants said that could be legally risky in light of the Grayscale decision.
"I don't think much will stop it from moving forward," said Roxanna Islam, head of sector and industry research at data firm VettaFi.
(Reporting by Suzanne McGee in Providence, Rhode Island, and Hannah Lang in Washington Editing by Michelle Price and Matthew Lewis)
((Suzanne.McGee@thomsonreuters.com; 917-285-4385;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Suzanne McGee and Hannah Lang Dec 7 (Reuters) - Discussions between the U.S. securities regulator and asset managers hoping to listbitcoin exchangetraded funds (ETFs) have advanced to key technical details, in a sign the agency may soon approve the products, industry executives said. A spot bitcoin ETF would mark a watershed for the industry, allowing previously wary investors access to the world's largest cryptocurrency via the tightly regulated stock market. The SEC began engaging meaningfully with issuers soon after a federal appeals court ruled that the agency failed to justify why it rejected Grayscale's ETF application.
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By Suzanne McGee and Hannah Lang Dec 7 (Reuters) - Discussions between the U.S. securities regulator and asset managers hoping to listbitcoin exchangetraded funds (ETFs) have advanced to key technical details, in a sign the agency may soon approve the products, industry executives said. Thirteen firms including Grayscale Investments, BlackRock BLK.N, Invesco, and ARK Investments, have pending applications with the Securities and Exchange Commission (SEC) for ETFs that track the price of bitcoin. And many issuers feel they have addressed the SEC's market manipulation concerns with a surveillance arrangement between the listing exchanges and CoinbaseCOIN.O, the largest U.S. cryptocurrency exchange.
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Thirteen firms including Grayscale Investments, BlackRock BLK.N, Invesco, and ARK Investments, have pending applications with the Securities and Exchange Commission (SEC) for ETFs that track the price of bitcoin. But after a court in August ruled the SEC was wrong to reject Grayscale's application to convert its bitcoin trust into an ETF, the SEC has been engaging with issuers on substantive details, some of which are usually discussed near the end of an ETF application process, according to half a dozen industry executives and SEC public memos. Memos made public by the SEC show that executives from BlackRock, Grayscale, Invesco and 21 Shares, which is working with ARK, have met with SEC staff since September, together with their lawyers and executives from the exchanges where they hope to list the ETF.
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By Suzanne McGee and Hannah Lang Dec 7 (Reuters) - Discussions between the U.S. securities regulator and asset managers hoping to listbitcoin exchangetraded funds (ETFs) have advanced to key technical details, in a sign the agency may soon approve the products, industry executives said. But after a court in August ruled the SEC was wrong to reject Grayscale's application to convert its bitcoin trust into an ETF, the SEC has been engaging with issuers on substantive details, some of which are usually discussed near the end of an ETF application process, according to half a dozen industry executives and SEC public memos. The advanced nature of the discussions signals the SEC may approve ARK's application and likely some of the other 12 applications, in the New Year, the people said.
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2023-12-07 00:00:00 UTC
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3 Undervalued Dividend Aristocrat Giants To Buy Before Its Too Late
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https://www.nasdaq.com/articles/3-undervalued-dividend-aristocrat-giants-to-buy-before-its-too-late
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Are you still struggling with building your retirement portfolio? Well, you are not alone. Almost every American has heard of the concept of investing for retirement. Yet, one of the most difficult parts is finding where to start. It can be hard to figure things out if you don’t have a background in finance. The great thing is that the stock market has some tried-and-true routes that anyone can take at any time, regardless of prior knowledge. For example, let’s look at Dividend Aristocrats.
Dividend Aristocrats are stocks listed on the S&P 500 that have consistently increased their dividends for the past 25 years. They are often trusted household names, beloved by income investors for the strength of the business, resilience during economic downturns, and predictable dividends. They can easily fit into any portfolio and provide reliable income streams.
This article will look at three undervalued dividend Aristocrats you can check out.
International Business Machines Corporation (IBM)
International Business Machines Corporation is a tech company making IT-related products and services. Actually, it's one of the biggest players in the current tech race. The company is known for its resiliency and ability to reinvent itself in different technology eras. These days, IBM is focused on mainstream development and application of AI, quantum computing, and cloud computing. One of its latest announcements detailed the release of “Quantum Heron,” which offers a five-fold error reduction improvement from its predecessor. Today, the company is currently offering a 4.11% dividend yield.
IBM’s financial performance is also on a roll, with its earnings continuously beating analyst estimates for the third consecutive quarter. Reported revenue also showed a 4.6% YoY increase due to the performance of its consulting and software segments, which grew 6% and 8%, respectively. The company has been increasing its foothold on AI and hybrid cloud capabilities through acquisitions and strategic investments in research and development. Its participation in AI and cloud computing makes IBM an excellent prospect for long-term investors looking to invest in their later years.
Analyst Ratings
Analysts rate IBM as a “Hold” based on 2 Strong Buy, 1 Moderate Buy, 6 Holds, and 1 Strong Sell. Its mean target price is $144.22, and its high target price is $179.00, an upside of 11.68%.
Realty Income Corporation (O)
The second stock in our list is Realty Income Corporation, a real estate investment trust. The company specializes in acquiring and managing commercial properties for long-term net lease agreements. Realty Income Corp leases properties spanning 84 industries in the U.S., U.K., Italy, and Puerto Rico. O has a long history of providing shareholder value, and it's dividends currently pay a 5.56% yield. The company’s recent increase marks its 104th consecutive quarterly dividend increase.
O’s 3rd quarter gave us a glimpse of its strong financials. The company reported a rent recapture rate of 106.9% for its re-leased properties, $4.5 billion in liquidity, and an occupancy rate of 98.8%. Reported EPS also beat analyst earnings estimates by 2%. Furthermore, the pending merger agreement with Spirit Realty Capital Inc., expected to close in the first quarter of 2024, will help boost the company’s growth. Its strong focus on investing in high-quality real estate, ample liquidity, and growth plans make O an excellent choice for long-term investors.
Analyst Ratings
O is currently rated as a “Moderate Buy” by analysts based on 4 Strong Buys, 1 Moderate Buy, and 8 Hold recommendations. The mean target for O is $60.73, and the high target price is $74.00, an upside of 35.26%.
3M Company (MMM)
3M Company is a consumer goods conglomerate that manufactures various products for industries like health care, consumer services, transportation, electronics, safety, and industrials. Americans would know it for its post-it notes, adhesives, stationeries, bandages, and respirators. The company has been in a strong down-trend this year due to the and has been slowly regaining its lost price performance following the news about its earplug settlement. Today, 3M currently offers investors a very attractive 5.9% dividend yield.
MMM’s latest quarterly results showed how big names are resilient even in uncertain market conditions. The company beat analyst earnings estimates by 14.53% despite the impact of the settlement. 3M is firmly focused on driving its operational performance with strategic initiatives and the strength of its operational segments. Based on its year-to-date performance, the company has raised its outlook for full-year adjusted EPS, cash flow, and free cash flow. Its strong management and predictable income make it one of the must-have stocks in a long-term portfolio.
Analyst Ratings
The last Dividend Aristocrat on our list is also rated as a “Hold” by analysts based on 1 Strong Buy, 11 Holds, and 2 Strong Sell recommendations. Its mean target price is $109.00, and the high target price is $159.00, an upside of 54.68%.
Final Thoughts
Investing long-term is one of the best strategies for investors looking for a secure retirement. While there are no fool-proof ways to get rich, the strategy helps to mitigate long-term risk by looking at companies with a proven track record of predictable income streams and resiliency during economic downturns.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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They are often trusted household names, beloved by income investors for the strength of the business, resilience during economic downturns, and predictable dividends. Its strong focus on investing in high-quality real estate, ample liquidity, and growth plans make O an excellent choice for long-term investors. While there are no fool-proof ways to get rich, the strategy helps to mitigate long-term risk by looking at companies with a proven track record of predictable income streams and resiliency during economic downturns.
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International Business Machines Corporation (IBM) International Business Machines Corporation is a tech company making IT-related products and services. Analyst Ratings Analysts rate IBM as a “Hold” based on 2 Strong Buy, 1 Moderate Buy, 6 Holds, and 1 Strong Sell. Analyst Ratings The last Dividend Aristocrat on our list is also rated as a “Hold” by analysts based on 1 Strong Buy, 11 Holds, and 2 Strong Sell recommendations.
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Analyst Ratings Analysts rate IBM as a “Hold” based on 2 Strong Buy, 1 Moderate Buy, 6 Holds, and 1 Strong Sell. Analyst Ratings O is currently rated as a “Moderate Buy” by analysts based on 4 Strong Buys, 1 Moderate Buy, and 8 Hold recommendations. Analyst Ratings The last Dividend Aristocrat on our list is also rated as a “Hold” by analysts based on 1 Strong Buy, 11 Holds, and 2 Strong Sell recommendations.
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Reported EPS also beat analyst earnings estimates by 2%. Its strong management and predictable income make it one of the must-have stocks in a long-term portfolio. Analyst Ratings The last Dividend Aristocrat on our list is also rated as a “Hold” by analysts based on 1 Strong Buy, 11 Holds, and 2 Strong Sell recommendations.
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714235.0
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2023-12-07 00:00:00 UTC
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Where Will Take-Two Interactive Stock Be in 10 Years?
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https://www.nasdaq.com/articles/where-will-take-two-interactive-stock-be-in-10-years
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Take-Two Interactive (NASDAQ: TTWO) didn't have an impressive 2023. Sales were essentially flat over the last 6 months, and operating losses ballooned. Analysts expect revenue to rise by just 4% this year, which would hardly qualify the video game publisher as a growth stock.
The future is much brighter, though. That's because Take-Two Interactive is preparing to release a flood of new video games over the next 18 months. These games promise to catapult it into the top ranks of its industry in terms of annual revenue.
The stock's rally in 2023 reflects optimism about these new properties and their ability to boost cash flow and earnings for many years to come. But is Wall Street getting ahead of itself? Let's take a closer look.
The pressure is on for Take-Two
Net bookings, a measure of sales to consumers, are on track to reach $5.5 billion in fiscal 2024, which runs through March. That would translate to growth of about 4%, marking a sharp slowdown compared to the prior year's 55% spike.
Pressures on the business include a broader pullback in the video game industry following huge gains during the pandemic. Gamers are becoming cautious in their spending and are focusing demand on established franchises. These shifts make it harder to win bigger audiences and monetize these users. That's partly why management decided to delay a few launches and cut several titles completely from the release plan.
The pipeline
Investors have some tantalizing details about Take-Two's multiyear growth strategy, which is ambitious to say the least. Management is planning more than 50 launches over the next two fiscal years, including 17 of the type of large, immersive games that can attract huge audiences for years. These will feature fresh titles in franchises like NBA 2K, Bioshock, and Grand Theft Auto, along with several entirely new intellectual properties. Executives in May described this portfolio as "the strongest, most diverse development pipeline" in Take-Two's history.
They've backed up this talk with some hard numbers, too, predicting that sales will rise to nearly $8 billion in fiscal 2025, up about 45% over the current year's haul. For context, Electronic Arts hasn't yet hit that revenue milestone and is on track for roughly $7.7 billion this year.
The cloudy outlook for Take-Two
The long-term outlook is much cloudier. Not only does Take-Two have to successfully develop, market, and support its biggest pipeline to date, but it must follow that up by fully capitalizing on these properties in the coming years. The video game business is shifting toward a software-as-a-service model, which is increasing the useful life and value of these properties. Yet there's still lots of risk around anticipating gamers' preferences and standing out in a competitive industry.
Investors are right to feel optimistic about Take-Two's growth prospects. Even if a few launches are duds over the next 18 months, the company is likely to enter fiscal 2026 with a much larger, more diverse portfolio that won't be as susceptible to sharp swings in annual revenue. That's a valuable shift, but investors don't have much concrete data to rely on as they judge the business' path from here.
Given that Take-Two's stock valuation has jumped to EA's level in 2023, it makes sense to watch the stock until there's more clarity on its fiscal 2025 operating momentum. The video game giant should be setting new annual earnings records in a few years, but it first has to navigate an unusually busy 18 months for title launches.
10 stocks we like better than Take-Two Interactive Software
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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Take-Two Interactive Software. The Motley Fool recommends Electronic Arts. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Not only does Take-Two have to successfully develop, market, and support its biggest pipeline to date, but it must follow that up by fully capitalizing on these properties in the coming years. Even if a few launches are duds over the next 18 months, the company is likely to enter fiscal 2026 with a much larger, more diverse portfolio that won't be as susceptible to sharp swings in annual revenue. The video game giant should be setting new annual earnings records in a few years, but it first has to navigate an unusually busy 18 months for title launches.
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* They just revealed what they believe are the ten best stocks for investors to buy right now... and Take-Two Interactive Software wasn't one of them! The Motley Fool has positions in and recommends Take-Two Interactive Software. The Motley Fool recommends Electronic Arts.
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Given that Take-Two's stock valuation has jumped to EA's level in 2023, it makes sense to watch the stock until there's more clarity on its fiscal 2025 operating momentum. 10 stocks we like better than Take-Two Interactive Software When our analyst team has a stock tip, it can pay to listen. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Take-Two Interactive Software wasn't one of them!
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Analysts expect revenue to rise by just 4% this year, which would hardly qualify the video game publisher as a growth stock. The video game giant should be setting new annual earnings records in a few years, but it first has to navigate an unusually busy 18 months for title launches. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Take-Two Interactive Software wasn't one of them!
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714236.0
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2023-12-07 00:00:00 UTC
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SoFi Steps Back From Crypto. What It Means for SOFI Stock Investors.
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https://www.nasdaq.com/articles/sofi-steps-back-from-crypto.-what-it-means-for-sofi-stock-investors.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
SoFi Technologies (NASDAQ:SOFI) is a legitimate, chartered bank with innovative concepts for personal finance. Does that mean everyone should invest in SOFI stock, though? Recent news about SoFi Technologies may disappoint cryptocurrency enthusiasts.
On the other hand, a well-known fund manager who seems to be crypto-friendly recently bought a sizable chunk of SoFi Technologies shares. So, let’s delve into the details and then consider whether you should invest in SoFi.
Which Famous Fund Added SOFI Stock?
Ark Invest CEO Cathie Wood favors innovative companies with a technology angle. Wood reportedly once predicted that Bitcoin (BTC-USD) would reach $1.48 million by 2023.
Interestingly, Wood (or more accurately, Ark Invest) bought $1.5 million worth of SOFI stock. That’s a big chunk, and this purchase clearly signals Wood’s confidence in SoFi Technologies. Still, it’s difficult to determine exactly why Wood invested so much money in SoFi.
In contrast, Ark Invest reportedly sold shares of Coinbase (NASDAQ:COIN) stock. Is Wood trying to make a statement here? Is Ark Invest deliberately shifting away from cryptocurrency and blockchain-related investments?
There’s no way to know the answers to these questions, but I can certainly report that CEO Anthony Noto bought $5 million worth of SoFi Technologies shares during the past 12 months (as of mid-November). So, if insider trading is important to you, then Noto’s notable share purchase could be just as meaningful as Wood’s SOFI stock sale.
SoFi Technologies Exits the Crypto Trading Business
Here’s what makes Wood’s SoFi Technologies share purchase, and her COIN stock sale, so noteworthy. Recently, SoFi revealed that it’s ending its cryptocurrency trading services on Dec. 19.
SoFi Technologies is migrating its current crypto trading clients to another firm, Blockchain.com. Some clients may choose to stop trading cryptocurrency altogether.
This raises a significant question. Is SoFi Technologies (and, by extension, Ark Invest) trying to distance itself from the crypto community in the wake of the scandals surrounding FTX and Binance?
This is a valid concern, especially for Bitcoin bulls. If you’re serious about getting direct exposure to cryptocurrency’s potential future growth and adoption, you should probably own COIN stock instead of SOFI stock.
Alternatively, you can hold both stocks, but with a larger position in Coinbase shares. There are still reasons to invest in SoFi Technologies, such as the company’s impressive 27% year-over-year net revenue growth and astounding 121% adjusted EBITDA increase in 2023’s third quarter.
Bitcoin Bulls Don’t Have to Own SOFI Stock
SoFi Technologies is a one-stop shop for personal finance services – or at least, it was until recently. Now, SoFi appears to be distancing itself from the world of cryptocurrency and the blockchain.
Consequently, Bitcoin bulls can choose not to own SoFi Technologies. Or, they can hold a small position in SOFI stock and a larger stake in COIN stock. Meanwhile, feel free to monitor the purchases and sales of Wood and Ark Invest, but also note Noto’s confident investment in his own company, which speaks volumes.
On the date of publication, David Moadel 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.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
More From InvestorPlace
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The post SoFi Steps Back From Crypto. What It Means for SOFI Stock Investors. appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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There’s no way to know the answers to these questions, but I can certainly report that CEO Anthony Noto bought $5 million worth of SoFi Technologies shares during the past 12 months (as of mid-November). There are still reasons to invest in SoFi Technologies, such as the company’s impressive 27% year-over-year net revenue growth and astounding 121% adjusted EBITDA increase in 2023’s third quarter. David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips SoFi Technologies (NASDAQ:SOFI) is a legitimate, chartered bank with innovative concepts for personal finance. There’s no way to know the answers to these questions, but I can certainly report that CEO Anthony Noto bought $5 million worth of SoFi Technologies shares during the past 12 months (as of mid-November). SoFi Technologies Exits the Crypto Trading Business Here’s what makes Wood’s SoFi Technologies share purchase, and her COIN stock sale, so noteworthy.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips SoFi Technologies (NASDAQ:SOFI) is a legitimate, chartered bank with innovative concepts for personal finance. SoFi Technologies Exits the Crypto Trading Business Here’s what makes Wood’s SoFi Technologies share purchase, and her COIN stock sale, so noteworthy. Bitcoin Bulls Don’t Have to Own SOFI Stock SoFi Technologies is a one-stop shop for personal finance services – or at least, it was until recently.
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Does that mean everyone should invest in SOFI stock, though? There’s no way to know the answers to these questions, but I can certainly report that CEO Anthony Noto bought $5 million worth of SoFi Technologies shares during the past 12 months (as of mid-November). SoFi Technologies Exits the Crypto Trading Business Here’s what makes Wood’s SoFi Technologies share purchase, and her COIN stock sale, so noteworthy.
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2023-12-07 00:00:00 UTC
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AAPL Stock Outlook : Don’t Be Scared by the Noise
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https://www.nasdaq.com/articles/aapl-stock-outlook-%3A-dont-be-scared-by-the-noise
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Year-to-date, Apple (NASDAQ:AAPL) stock has risen an impressive 54%. At the same time, it missed expectations and its revenue contracted almost 3% in FY 2023, similarly along with free cash flow and net income. Since 2021, growth has stalled, while operating expenses from R&D have increased, leading many to worry about the future of AAPL stock as R&D expenses grow faster than revenue.
Despite slowing growth, it trades at a P/E ratio of 30.9x compared to the S&Ps 25.24x, over a 22% premium. However, Apple has some key fundamentals that will likely see it continue to be a cash cow in the future.
AAPL Stock and Gen Z
First, it’s a fact that Apple has a firm grip on Gen Z, with 87% saying that they own an iPhone. This isn’t just true for the United States, it’s a trend that is spreading worldwide.
In South Korea, where the most common device is Samsung, only 23% of its population uses an iPhone. However, 52% of people 18-29 own an iPhone. This grew from 44% in just two years. Meanwhile, Samsung’s overall market share has shrunk from 44% to 45%. Globalization will attract more youth to Apple.
Services Are Impressive
Apple’s services segment has grown an impressive 16.3% YoY. Because the services segment is software and inherently high-margin, it has pushed Apple’s overall margin up from 41.8% in 2021 to 44.1% in 2023.
In this time, services have grown to comprise over 35% of the revenue compared to 31%. If this trend continues, margins will continue to improve.
Furthermore, the installed base has continued to grow, providing a steady stream of potential. Since 2018, the installed base has been growing at an average rate of 27% a year. Meanwhile, the percentage of subscribers per installed base has also increased, from roughly 0.18 subscribers per device to 0.5 subscribers per device.
In the future, AI could be a major boost to services revenue. Microsoft’s AI assistant could see $14 billion alone in revenue, with just a 10% take rate of 382 million users. With Apple having access to 2 billion devices, its planned AI rollout will see more usage and could be a major revenue driver.
Dividends and Buybacks
With Apple’s stability in generating cash flow and track record in raising dividends and buying back shares, the stock remains a good long-term investment.
Its 5-year dividend yield is 6.15%, and in the past decade, it has spent almost $600 billion in buying back stores, more than any other U.S. company.
Investors will be rewarded with dividends and buybacks due to the company’s cost control and solid fundamentals.
Valuation
The elephant in the room remains Apple’s valuation and a big reason many are bearish on Apple stock. Looking at its total enterprise value to revenue, it currently trades at 7.59x, just below its all-time high of 8.52x.
For people with a short time horizon, this might mean that Apple’s stock could be risky. The stock’s fundamentals are solid and the business is expected to continue growing with AI integration and attractive software margins.
In addition, Apple’s valuation has lifted as the threat of rising rates has dropped substantially, with inflation cooling. The favorable macro environment, AI applications, and improvement in margins justify Apple’s valuation.
Conclusion
Overall, Apple remains a powerhouse and the device of future generations. Though its valuation seems high, it’s not completely unreasonable. The late Warren Buffet famously advised to buy good businesses at a fair price, and Apple continues to be a good business worthy of holding long term.
Disclaimer: On the date of publication, Michael Que 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.
Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.
More From InvestorPlace
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The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post AAPL Stock Outlook : Don’t Be Scared by the Noise appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post AAPL Stock Outlook : Don’t Be Scared by the Noise appeared first on InvestorPlace.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Year-to-date, Apple (NASDAQ:AAPL) stock has risen an impressive 54%. Dividends and Buybacks With Apple’s stability in generating cash flow and track record in raising dividends and buying back shares, the stock remains a good long-term investment. The stock’s fundamentals are solid and the business is expected to continue growing with AI integration and attractive software margins.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Year-to-date, Apple (NASDAQ:AAPL) stock has risen an impressive 54%. Dividends and Buybacks With Apple’s stability in generating cash flow and track record in raising dividends and buying back shares, the stock remains a good long-term investment. Valuation The elephant in the room remains Apple’s valuation and a big reason many are bearish on Apple stock.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Year-to-date, Apple (NASDAQ:AAPL) stock has risen an impressive 54%. Dividends and Buybacks With Apple’s stability in generating cash flow and track record in raising dividends and buying back shares, the stock remains a good long-term investment. The stock’s fundamentals are solid and the business is expected to continue growing with AI integration and attractive software margins.
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3327728f-6612-4f04-a7c6-e19ea1be65a5
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2023-12-07 00:00:00 UTC
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Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?
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https://www.nasdaq.com/articles/is-jpmorgan-diversified-return-u.s.-mid-cap-equity-etf-jpme-a-strong-etf-right-now-10
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The JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by J.P. Morgan. JPME has been able to amass assets over $341.68 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. JPME, before fees and expenses, seeks to match the performance of the Russell Midcap Diversified Factor Index.
The JP Morgan Diversified Factor US Mid Cap Equity Index utilizes a rules-based approach that combines risk-based portfolio construction with multi-factor security selection, including value, quality and momentum factors.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.24% for JPME, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.87%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For JPME, it has heaviest allocation in the Industrials sector --about 13.10% of the portfolio --while Real Estate and Financials round out the top three.
Looking at individual holdings, Extra Space Storage Inc (EXR) accounts for about 0.61% of total assets, followed by Old Dominion Freight (ODFL) and Vistra Corp Common Stock (VST).
JPME's top 10 holdings account for about 4.76% of its total assets under management.
Performance and Risk
The ETF has gained about 5.29% so far this year and is up roughly 3.53% in the last one year (as of 12/07/2023). In the past 52-week period, it has traded between $79.30 and $91.50.
The ETF has a beta of 1.04 and standard deviation of 17.21% for the trailing three-year period. With about 372 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan Diversified Return U.S. Mid Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $55.60 billion in assets, iShares Core S&P Mid-Cap ETF has $73.28 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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 - Mid Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME): ETF Research Reports
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
Extra Space Storage Inc (EXR) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
Vistra Corp. (VST) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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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. JPME has been able to amass assets over $341.68 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Looking at individual holdings, Extra Space Storage Inc (EXR) accounts for about 0.61% of total assets, followed by Old Dominion Freight (ODFL) and Vistra Corp Common Stock (VST).
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Mid Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. Vanguard Mid-Cap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Mid Cap Equity ETF (JPME): ETF Research Reports Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report Extra Space Storage Inc (EXR) : Free Stock Analysis Report iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports Vanguard Mid-Cap ETF (VO): ETF Research Reports Vistra Corp. (VST) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Mid Cap Equity ETF (JPME) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market. Vanguard Mid-Cap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Mid Cap Equity ETF (JPME): ETF Research Reports Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report Extra Space Storage Inc (EXR) : Free Stock Analysis Report iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports Vanguard Mid-Cap ETF (VO): ETF Research Reports Vistra Corp. (VST) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Mid Cap Equity ETF (JPME) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market. 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. Mid Cap Equity ETF (JPME): ETF Research Reports Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report Extra Space Storage Inc (EXR) : Free Stock Analysis Report iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports Vanguard Mid-Cap ETF (VO): ETF Research Reports Vistra Corp. (VST) : Free Stock Analysis Report To read this article on Zacks.com click here.
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2023-12-07 00:00:00 UTC
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2 Reasons to Buy Nvidia Stock, and 1 Reason to Sell
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https://www.nasdaq.com/articles/2-reasons-to-buy-nvidia-stock-and-1-reason-to-sell-0
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In 2023, Nvidia (NASDAQ: NVDA) has had one of its best years in business since its founding over three decades ago. The company's business exploded after the launch of OpenAI's ChatGPT reignited interest in artificial intelligence (AI) and sent demand for graphics processing units (GPUs) soaring.
Nvidia's dominance in GPUs gave it a head start in AI, beating competitors such as Advanced Micro Devices and Intel to the market and allowing Nvidia to become the primary chip supplier to numerous companies. As a result, the chipmaker's earnings have soared, with its stock up 211% year to date.
There are plenty of reasons to be bullish about Nvidia. The company likely has a crucial role to play in AI over the long term and is profiting from recovering sectors like PCs and gaming. However, prospective investors should be aware of the positives and potential negatives of its business before filling up on its stock.
So, here are two reasons to buy Nvidia stock and one reason to sell.
Reason to buy: Profiting from the $137 billion AI market
According to Grand View Research, the AI market is valued at $137 billion and is projected to expand at a compound annual growth rate of 37% through 2030. Advances in the technology have the potential to boost countless industries, from cloud computing to consumer products, healthcare, education, autonomous vehicles, and more. Meanwhile, high-powered chips are crucial to run and develop AI models.
So, as numerous tech firms have pivoted to developing the sector this year, GPU demand has skyrocketed. The rise in sales has been most prevalent in Nvidia's earnings, delivering quarter after quarter of stellar results. In the company's third quarter of 2024 (ended October 2023), revenue increased by 206% year over year, with operating income climbing 1,600%.
The monster growth came alongside a 279% rise in data center revenue, which massively benefited from increased AI chip sales.
Heading into the new year, the tech market's hyperfocus on AI looks unlikely to dissipate. Nvidia has claimed a lucrative role at the top of the AI chip sector, which could prove challenging for competing chipmakers to overcome.
Reason to buy: A recovering gaming business
Macroeconomic headwinds in 2022 led to steep reductions in consumer spending across tech, with Nvidia hit particularly hard. The company posted repeated sales declines in its gaming segment throughout the year as spikes in inflation caused shoppers to pull back on console and PC component purchases.
The tech giant has multiple footholds in gaming, supplying its chips to Nintendo's Switch console and selling desktop GPUs to gamers worldwide who use the chips for custom-built gaming PCs.
Despite the setbacks, the market appears to be trending upward again. In Q3 2024, Nvidia's gaming segment posted revenue growth of 81% year over year and 15% sequentially. The company attributed the rise to strong demand for its GPUs in the back-to-school period and the start of the holiday season.
A return to growth in gaming means Nvidia is heading into 2024 on a much stronger footing than it started this year with a booming AI business and solid position in video games.
A reason to sell or at least wait
Data by YCharts.
The chart above shows Nvidia's price-to-earnings ratio and price-to-free cash flow have plummeted over the last six months, suggesting its stock is at one of its cheapest positions since June. That could signal another reason to buy. However, it also represents a tumbling stock that might not be finished falling.
Despite stellar earnings in its latest quarter, Nvidia shares have dipped around 9% since posting its Q3 2024 results. The company's meteoric stock rise in the first half of the year made it significantly overvalued compared to its earnings, with investors seemingly unwilling to buy until it can match its current valuation.
Multiple impressive quarters of growth brought back some value in Nvidia's stock, but it remains more expensive than alternative ways to invest in AI and tech in general.
Data by YCharts.
This table compares Nvidia's P/E and price-to-free cash flow to two other tech giants with promising positions in AI: Alphabet and Microsoft. These companies' significantly lower metrics make them a bargain compared to Nvidia, with Alphabet a particularly attractive alternative.
So, it might be worth holding off on Nvidia for now and prioritizing cheaper options for investing in AI and tech.
10 stocks we like better than Nvidia
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, and Nvidia. The Motley Fool recommends Intel and Nintendo and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company posted repeated sales declines in its gaming segment throughout the year as spikes in inflation caused shoppers to pull back on console and PC component purchases. The company's meteoric stock rise in the first half of the year made it significantly overvalued compared to its earnings, with investors seemingly unwilling to buy until it can match its current valuation. Multiple impressive quarters of growth brought back some value in Nvidia's stock, but it remains more expensive than alternative ways to invest in AI and tech in general.
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In Q3 2024, Nvidia's gaming segment posted revenue growth of 81% year over year and 15% sequentially. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, and Nvidia. The Motley Fool recommends Intel and Nintendo and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel.
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Nvidia's dominance in GPUs gave it a head start in AI, beating competitors such as Advanced Micro Devices and Intel to the market and allowing Nvidia to become the primary chip supplier to numerous companies. So, here are two reasons to buy Nvidia stock and one reason to sell. A return to growth in gaming means Nvidia is heading into 2024 on a much stronger footing than it started this year with a booming AI business and solid position in video games.
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Heading into the new year, the tech market's hyperfocus on AI looks unlikely to dissipate. In Q3 2024, Nvidia's gaming segment posted revenue growth of 81% year over year and 15% sequentially. That's right -- they think these 10 stocks are even better buys.
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2023-12-07 00:00:00 UTC
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Why It Sucks to Be Long Tesla Right Now
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https://www.nasdaq.com/articles/why-it-sucks-to-be-long-tesla-right-now
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
There are two ways to look at Tesla’s (NASDAQ:TSLA) year in 2023. On the one hand, Tesla stock is up 121% year-to-date. On the other hand, the company is getting crushed on the public relations front everywhere Elon Musk turns.
Forget X. He’s got bigger worries with his primary money maker.
Between fighting with unions across Scandinavia and delivering an almost universally hated truck, Tesla is a big target for his critics. And that doesn’t even consider all the silly things he says on his social media platform that make him a pariah for most level-headed people.
He’s become so unhinged only the biggest nut bars on the far right give him serious consideration.
Despite all the bad publicity, Tesla stock seems immune, gaining nearly 9% over the past month. Of course, it helps that the markets were on fire during this time.
Whatever the case may be, it must suck to be a TSLA shareholder right now. Even though you’ve made money in 2023, the Mighty Elon looks ready to crumble into a million little pieces.
Does that make Tesla stock uninvestable? Maybe.
Where There’s Smoke, There’s Fire
Whoever said “any PR is good PR” didn’t spend a day in Elon Musk’s shoes.
He’s faced a relentless onslaught of bad press (and lost advertising) from his antisemitic post on X in mid-November. He then apologized for the tweet but then proceeded to curse out advertisers who left the social media platform as a result of his comments.
“‘I don’t want them to advertise,’ he said at the New York Times DealBook Summit in New York. ‘If someone is going to blackmail me with advertising or money go f**k yourself. Go. F**k. Yourself,’ he said. ‘Is that clear? Hey Bob, if you’re in the audience, that’s how I feel’ he added, referring to Disney CEO Bob Iger, who spoke earlier at the summit on Wednesday,” CNN Business reported on Nov. 30.
It’s embarrassing to think that this man once attended Queen’s University in Kingston, Ontario, one of Canada’s finest universities. As a Canadian, I’m appalled at the man’s ignorance and arrogance. Queen’s didn’t make him attend etiquette classes as a prerequisite for his commerce studies.
Long-time Tesla shareholders have known for years that Musk was a powder keg waiting to blow. Are the latest incidents the beginning of the end? Or merely the latest flare-ups of a petulant child whom no one holds accountable for his actions.
It’s not a good look.
The Scando Scandal and Tesla Stock
You would think that someone who’s traveled the world many times, like Elon Musk, would know you don’t mess with Scandinavians regarding labor laws. You just don’t. They take workers’ rights almost as seriously as Germans take them.
On Oct. 27, 130 members of the IF Metall union in Sweden staged a walkout from Tesla’s service centers. AP reported, “Local mechanics have also stopped servicing Tesla cars in efforts to support the union action, and deliveries have been refused at Sweden’s four largest ports.”
In an effort to get vehicles into the country, Tesla unwisely decided it would bring them in by truck through Denmark. That irked Danish unionized dockworkers. 3F Transport announced a sympathy strike on Dec. 5. As part of this strike, Tesla vehicles won’t be able to be transported into Sweden.
“We have some labor market agreements in the Nordic region, and you have to comply with them if you want to run a business here,” CNBC cited the comments of JF Transport Chair Jan Villadsen. “Solidarity is the cornerstone of the trade union movement and extends across national borders. Therefore, we are now taking the tools we have and using them to ensure collective agreements and fair working conditions.”
How dumb are Musk and the human resources personnel at Tesla? They had to know taking Tesla business into the Nordic countries would involve playing nice with organized labor. The actions of the United Auto Workers in America have only emboldened them.
Elon, get a collective agreement already. The Nordic countries buy more Teslas per capita than anywhere else on earth.
You Can’t Fit a Square Cybertruck in a Round Garage
MotorTrend Published an article in March that highlights the ugliest cars ever made. The Cybertruck routinely makes it onto lists of the ugliest trucks.
Canaccord Genuity analysts surveyed consumers about their interest in buying the Cybertruck. Two-thirds of the respondents said they wouldn’t, based on the pricing and specifications. The respondents were not people with Cybertruck reservations.
“Based on the discussions I’ve had individually, which have been in the hundreds, it’s the look of the vehicle that gets people excited or revolts people,” stated Canaccord analyst George Gianarikas in an interview with Yahoo Finance.
As Yahoo Finance reported, Elon Musk initially said the entry-level Cybertruck would sell for $39,000. It’s nearly $61,000 and won’t be available until 2025.
To Tesla’s credit, the analyst said that the Cybertruck technology is “incredible.” Ultimately, Gianarikas believes Tesla can drive global volume. Maybe not to the extent of the Model 3, but higher than most skeptics predict.
Barry Ritholtz, someone I consider very bright, wrote about Cybertruck in his The Big Picture blog on Dec. 3. I liked his conclusion.
“I cannot believe this ugly, goofy pricey truck will sell well — just the looks alone disqualify it for me. But at the same time, I am unwilling to bet against Elon, who has proven his critics wrong time and again.”
He’s not wrong.
In 2012, I wrote Why America Needs More Teslas, suggesting that “America’s future is stronger with a viable, profitable Tesla in the mix.”
I still feel that way.
On the date of publication, Will Ashworth 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.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
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The post Why It Sucks to Be Long Tesla Right Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The Scando Scandal and Tesla Stock You would think that someone who’s traveled the world many times, like Elon Musk, would know you don’t mess with Scandinavians regarding labor laws. “We have some labor market agreements in the Nordic region, and you have to comply with them if you want to run a business here,” CNBC cited the comments of JF Transport Chair Jan Villadsen. The #1 AI Investment Might Be This Company You’ve Never Heard Of The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post Why It Sucks to Be Long Tesla Right Now appeared first on InvestorPlace.
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Despite all the bad publicity, Tesla stock seems immune, gaining nearly 9% over the past month. As part of this strike, Tesla vehicles won’t be able to be transported into Sweden. As Yahoo Finance reported, Elon Musk initially said the entry-level Cybertruck would sell for $39,000.
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The Scando Scandal and Tesla Stock You would think that someone who’s traveled the world many times, like Elon Musk, would know you don’t mess with Scandinavians regarding labor laws. AP reported, “Local mechanics have also stopped servicing Tesla cars in efforts to support the union action, and deliveries have been refused at Sweden’s four largest ports.” In an effort to get vehicles into the country, Tesla unwisely decided it would bring them in by truck through Denmark. To Tesla’s credit, the analyst said that the Cybertruck technology is “incredible.” Ultimately, Gianarikas believes Tesla can drive global volume.
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‘If someone is going to blackmail me with advertising or money go f**k yourself. It’s embarrassing to think that this man once attended Queen’s University in Kingston, Ontario, one of Canada’s finest universities. As part of this strike, Tesla vehicles won’t be able to be transported into Sweden.
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2023-12-07 00:00:00 UTC
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Why Microsoft Stock IS Your Passport to AI Market Wealth
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https://www.nasdaq.com/articles/why-microsoft-stock-is-your-passport-to-ai-market-wealth
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
If you’re looking for a golden ticket to potential gains in the fast-growing market for artificial intelligence technology, Microsoft (NASDAQ:MSFT) stock earns a confident “A” grade for growth and value. There’s no disputing the outstanding performance of Microsoft stock in 2023. Where does Microsoft’s value come from, though?
The answer lies in the company’s relentless drive to innovate in cloud computing, software, AI and other high-tech fields. So, don’t worry too much about Microsoft’s hefty market capitalization. It’s likely to get much bigger in the coming quarters, and Microsoft should continue to provide excellent value to the shareholders.
OpenAI Soap Opera and MSFT Stock Investors
Microsoft is known as a consistent earnings winner and a bellwether in emerging technology industries. Notably, the company gained a leadership position in generative AI when Microsoft invested $13 billion in ChatGPT chatbot developer OpenAI.
However, some stock traders may have become anxious over the past few weeks, due to the executive-level soap opera at OpenAI.
To recap, OpenAI’s board of directors ousted co-founder and CEO Sam Altman, and co-founder Greg Brockman quit the company in protest. Soon afterwards, Altman and Brockman agreed to return to the company, with Altman returning to the chief executive position at OpenAI.
Currently, most of the board members who initially kicked Altman out of OpenAI aren’t on the board anymore. Thus, Altman can lead the company without too much pushback from the board.
That’s good news for Microsoft, which is heavily invested in OpenAI. Even better, Microsoft will reportedly gain a seat on OpenAI’s board of directors. This will be an observing, non-voting member of the board, but it’s a sign that Microsoft should be able to work hand-in-hand with OpenAI.
Microsoft Stock Remains a Prime AI Play
With its multibillion-dollar investment and board seat at OpenAI, Microsoft should have no problem staying at the forefront of AI technology. Yet, that’s not the only reason to consider Microsoft stock a powerful AI play for the coming year.
Reportedly, Microsoft is taking its campaign to dominate the gen-AI market abroad. The company plans to invest a whopping 2.5 billion British pounds over the next three years, with the goal of expanding data centers for AI in the United Kingdom.
The UK government’s economic and finance ministry hailed Microsoft’s “investment in UK AI infrastructure” on X (formerly known as Twitter). Prime Minister Rishi Sunak considers this event a “turning point for the future of AI infrastructure and development in the UK.”
Microsoft clearly has governmental support for its AI technology push in the U.K. Could this region of the world provide fertile ground for future revenue streams? Only time will tell. However, Microsoft is planting its flag in the U.K. early and aggressively, and the company’s rivals may have a tough time playing catch-up.
MSFT Stock: Ride With a Winner for the Long Haul
Microsoft stock rode higher in 2023 and sent the short-sellers into hiding. So, what’s coming in 2024? As long as the market for gen-AI products remains robust, Microsoft’s shareholders should be in good shape.
Of course, there are no guarantees that Microsoft’s investors will win in the long run, but just look at history. Holding MSFT stock has been a solid strategy in the past, and the future looks bright for the stock and the company. Therefore, you’re encouraged to conduct your due diligence on Microsoft and consider a share position in your portfolio.
On the date of publication, Louis Navellier had a long position in MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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The post Why Microsoft Stock IS Your Passport to AI Market Wealth appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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OpenAI Soap Opera and MSFT Stock Investors Microsoft is known as a consistent earnings winner and a bellwether in emerging technology industries. The company plans to invest a whopping 2.5 billion British pounds over the next three years, with the goal of expanding data centers for AI in the United Kingdom. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post Why Microsoft Stock IS Your Passport to AI Market Wealth appeared first on InvestorPlace.
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OpenAI Soap Opera and MSFT Stock Investors Microsoft is known as a consistent earnings winner and a bellwether in emerging technology industries. Notably, the company gained a leadership position in generative AI when Microsoft invested $13 billion in ChatGPT chatbot developer OpenAI. Microsoft Stock Remains a Prime AI Play With its multibillion-dollar investment and board seat at OpenAI, Microsoft should have no problem staying at the forefront of AI technology.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips If you’re looking for a golden ticket to potential gains in the fast-growing market for artificial intelligence technology, Microsoft (NASDAQ:MSFT) stock earns a confident “A” grade for growth and value. Notably, the company gained a leadership position in generative AI when Microsoft invested $13 billion in ChatGPT chatbot developer OpenAI. Microsoft Stock Remains a Prime AI Play With its multibillion-dollar investment and board seat at OpenAI, Microsoft should have no problem staying at the forefront of AI technology.
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Even better, Microsoft will reportedly gain a seat on OpenAI’s board of directors. Microsoft Stock Remains a Prime AI Play With its multibillion-dollar investment and board seat at OpenAI, Microsoft should have no problem staying at the forefront of AI technology. Yet, that’s not the only reason to consider Microsoft stock a powerful AI play for the coming year.
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2023-12-07 00:00:00 UTC
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7 High-Energy Nuclear Stocks to Power Up Your Portfolio
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https://www.nasdaq.com/articles/7-high-energy-nuclear-stocks-to-power-up-your-portfolio
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
This summer’s Oppenheimer movie reinvigorated the public imagination for nuclear energy opportunity, but the energy industry has been quietly moving toward it for years now.
It closely linked the resurgence of nuclear to global efforts to combat climate change and a strategic need for Europe to reduce its dependence on Russian oil and gas imports. This shift in energy strategy is reshaping the landscape for nuclear power as a key component in the transition towards more sustainable energy sources.
In the United States, the Advance Act promotes the development of new nuclear technologies domestically and internationally. This includes transforming conventional energy sites and providing regulatory support for advanced nuclear technologies.
The international trend towards nuclear power shows a significant shift in energy policies, reflecting the growing recognition of nuclear’s role in achieving a more sustainable and secure energy future.
While nuclear opportunities are clear, what’s less clear is which nuclear stocks stand to gain the most from shifting winds.
VanEck Uranium+Nuclear Energy ETF (NLR)
Source: RHJPhtotos / Shutterstock
VanEck Uranium+Nuclear Energy ETF (NYSEARCA:NLR) is on the pricier side of ETFs, with a 0.61% expense ratio ($61 annually on a $10,000 investment).
But, if you’re bullish on nuclear but don’t want to risk betting the farm on single stocks, NLR is your best opportunity to capture sector-wide upside. Better yet, NLR’s uranium mining inclusion means you aren’t completely concentrated in nuclear energy stocks alone.
Since January, the ETF returned a massive 34%, more than doubling the S&P 500’s performance over the same period, which more than offsets the expense ratio. The ETF also offers a small dividend, currently 1.51% over the past twelve months, to help investors with dollar-cost averaging strategies.
Best yet, the ETF offers exposure to many of the same stocks we’re going to cover now. Critically, though, it holds many foreign stocks directly. This means you can increase global diversification without navigating foreign exchanges or trying to determine the difference between ADRs and F-shares.
Constellation Energy (CEG)
Source: Oil and Gas Photographer / Shutterstock
Constellation Energy (NASDAQ:CEG) is the number one producer of carbon-free energy, making it an easy pick among today’s top nuclear stocks.
Besides nuclear opportunities, Constellation boasts over 23,000 megawatts of clean and green energy across solar, wind, and hydro plants. That capacity lets this top nuclear stock produce over 10% of the US’ current energy needs.
As nuclear adoption reaches critical mass, Constellation is one of the few energy producers ready to capture the market at scale.
Constellation realizes the joint financial and sustainability opportunity that nuclear energy stocks offer. This week, management, alongside other climate leaders, signed an industry-wide pledge to triple nuclear energy output by 2050.
Constellation should realize the advantages nuclear offers compared to other clean energy, considering options like solar and wind are more prone to weather risk and infrastructure damage than nuclear.
Though CEG’s 27x price/earnings ratio indicates overvaluation, the nuclear stock is as much a growth play as it is a standard utility stock.
PG&E (PCG)
Source: Shutterstock
PG&E (NYSE:PCG) saw a major win for its nuclear energy operations this summer as federal courts allowed the Californian utility firm to extend its Diablo Canyon nuclear plant’s lifespan.
The plant is the last in California and serves as a symbol of sustainable energy activists butting heads against the clean energy opportunities presented by nuclear.
PG&E is keeping the nuclear light aloft in California and stands to gain substantially if (or when) local legislators begin pivoting toward the clean energy option.
PG&E faces other risks, though, which, combined with regulatory uncertainty, could make this stock lower on the list of nuclear energy stocks to buy. Critically, as with all utilities, PG&E margins are razor thin as high business costs butt up against rate caps.
As they rely on legislators to authorize nuclear, PG&E needs regulatory agencies to allow rate cap increases to improve profitability. California is typically less amenable to that course of action, presenting a substantial risk to this nuclear energy stock.
Public Service Enterprise Group (PEG)
Source: Shutterstock
Public Service Enterprise Group (NYSE:PEG) is a hot nuclear energy stock if you’re an income-focused dividend investor. PEG’s dividend yield sits at 3.59% today.
Notably, for value enthusiasts, the company has paid a dividend yearly since 1907. The company consistently raises its dividend as earnings grow. True to form, PEG’s dividend climbed 6% over the past few years. Management’s commitment to shareholder value is evident as the company’s bottom-line figures improve, showing bullishness.
Beyond its nuclear offerings, PEG also lets energy investors diversify with legacy fuels. The company is working to expand its natural gas infrastructure with a $900 million investment.
This means PEG has one foot in the future – managing multiple nuclear plants – while remaining practical about short-term energy needs. This makes PEG the perfect mix to capture long-term nuclear upside and avoid short-term turbulence as regulatory bodies determine scope and scale of nuclear safety requirements.
NexGen Energy (NXE)
Source: engel.ac / Shutterstock
NexGen Energy (NYSE:NXE) stands out as a potentially high-reward nuclear energy. The penny stock primarily focuses on uranium, a resource increasingly viewed as a cornerstone of sustainable energy.
While investing in uranium and NXE is more speculative than typical utilities, NexGen Energy’s strategic position could mean big things ahead if it can navigate present financial challenges.
Currently unprofitable and with limited immediate growth prospects, NXE receives positive forecasts from industry analysts. Some have set their price targets as high as $8.39 per share, indicating a potential increase of over 35% from its current price.
Focused on energy exploration, NXE’s value could surge as the global emphasis on sustainability intensifies. There’s a growing recognition that electric and lithium battery solutions may have more environmental impact than initially believed, which means uranium will become a hot commodity as global winds shift to emphasize nuclear energy.
Energy Fuels (UUUU)
Source: Shutterstock
Energy Fuels (NYSEAMERICAN:UUUU) is another uranium mining stock to capture the nuclear industry’s supply side.
In addition to uranium, the company also produces vanadium, a metal known for its strength-enhancing properties in steel, making it valuable for applications like armor plating, axles, tools, piston rods, and crankshafts.
This helps investors diversify their mining assets as they wait for nuclear energy to rebound.
Considering uranium’s speculative nature, Energy Fuels is notable for its remarkably high net profit margin of 271%, positioning it as one of the top nuclear energy stocks to consider.
The company’s financial health is further underscored by its lack of debt and impressive returns, with its per-share price climbing over 20% since January. This shows a strong capability in financial management, yielding robust returns for investors and hitting sustainable growth targets in a typically volatile market.
Likewise, the company’s financial performance has shown significant improvement over the past three years, with net income rising from a $27 million loss to a $69 million gain.
BWX Technologies (BWXT)
Source: JHVEPhoto / Shutterstock.com
BWX Technologies (NYSE:BWXT) stands out as a comprehensive provider of nuclear power technology and solutions, catering to various applications, including military, commercial, and medical uses.
Renowned for its military contributions, BWX Technologies has a long-standing reputation for designing and manufacturing nuclear reactors, delivering over 400 such reactors to the U.S. Navy.
The company is equally influential in the commercial sector, supplying more than 300 steam generators to nuclear power plants. BWXT also plays a vital role in managing about twelve crucial atomic sites for the U.S. government.
One of the most intriguing aspects of BWX Technologies’ operations is its involvement in nuclear medicine. The demand for advanced medical solutions is rising as the American population ages.
BWXT is well-positioned to benefit from this trend, as it manufactures medical isotopes and provides products essential for diagnostic imaging and radiotherapeutic treatments.
The company’s stock is surging this year, returning nearly 40% since January. Despite this recent bump, BWXT stock remains an attractive investment opportunity.
It is perceived as a long-term player poised to benefit from the ongoing nuclear renaissance, offering multiple avenues for profit across its diverse range of nuclear technology applications.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.
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The post 7 High-Energy Nuclear Stocks to Power Up Your Portfolio appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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While investing in uranium and NXE is more speculative than typical utilities, NexGen Energy’s strategic position could mean big things ahead if it can navigate present financial challenges. There’s a growing recognition that electric and lithium battery solutions may have more environmental impact than initially believed, which means uranium will become a hot commodity as global winds shift to emphasize nuclear energy. In addition to uranium, the company also produces vanadium, a metal known for its strength-enhancing properties in steel, making it valuable for applications like armor plating, axles, tools, piston rods, and crankshafts.
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Public Service Enterprise Group (PEG) Source: Shutterstock Public Service Enterprise Group (NYSE:PEG) is a hot nuclear energy stock if you’re an income-focused dividend investor. NexGen Energy (NXE) Source: engel.ac / Shutterstock NexGen Energy (NYSE:NXE) stands out as a potentially high-reward nuclear energy. Energy Fuels (UUUU) Source: Shutterstock Energy Fuels (NYSEAMERICAN:UUUU) is another uranium mining stock to capture the nuclear industry’s supply side.
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The international trend towards nuclear power shows a significant shift in energy policies, reflecting the growing recognition of nuclear’s role in achieving a more sustainable and secure energy future. Constellation Energy (CEG) Source: Oil and Gas Photographer / Shutterstock Constellation Energy (NASDAQ:CEG) is the number one producer of carbon-free energy, making it an easy pick among today’s top nuclear stocks. NexGen Energy (NXE) Source: engel.ac / Shutterstock NexGen Energy (NYSE:NXE) stands out as a potentially high-reward nuclear energy.
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Constellation realizes the joint financial and sustainability opportunity that nuclear energy stocks offer. NexGen Energy (NXE) Source: engel.ac / Shutterstock NexGen Energy (NYSE:NXE) stands out as a potentially high-reward nuclear energy. BWX Technologies (BWXT) Source: JHVEPhoto / Shutterstock.com BWX Technologies (NYSE:BWXT) stands out as a comprehensive provider of nuclear power technology and solutions, catering to various applications, including military, commercial, and medical uses.
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2023-12-07 00:00:00 UTC
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Should You Buy Shiba Inu While It's Below One Cent?
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https://www.nasdaq.com/articles/should-you-buy-shiba-inu-while-its-below-one-cent-0
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Touted as the Dogecoin killer and riding the waves of the meme coin frenzy, Shiba Inu (CRYPTO: SHIB) is up an astounding 600,000% since its inception in 2020. Yet, over the last year, things have been less than ideal.
While the rest of the cryptocurrency market has rebounded from a brutal crypto winter, Shiba Inu finds itself down around 4% year to date (YTD). But does this mean it's an ideal opportunity to grab one of crypto's darling meme coins? Or should it be taken as a warning to avoid?
Image source: Getty Images.
Breaking down the bare-bones basics
While both fall into the meme coin category, Dogecoin and Shiba Inu have one fundamental difference. Dogecoin runs on its own blockchain, and Shiba Inu operates on the Ethereum (CRYPTO: ETH) blockchain.
This functionality can be a little confusing, but the critical aspect to understand is that by using Ethereum's blockchain, Shiba Inu inherits the smart contract functionality that has made Ethereum one of the most innovative blockchains. As a result, Shiba Inu can interact with smart contracts, the backbone of decentralized applications, and open the door for developers to create new crypto-based use cases.
Advocates of Shiba Inu point to this functionality as one of the key reasons the token has long-term potential. With SHIB, users can buy non-fungible tokens, participate in decentralized autonomous organizations (DAOs) (although this effort is currently on hold), swap other dog-inspired tokens like BONE and LEASH, and eventually interact in the planned SHIB Metaverse, which will be partially launched by the end of the year. As a result, the Shiba Inu ecosystem has grown considerably in just the last couple of years.
Barking up the wrong tree
The development and progress made in the SHIB ecosystem is undoubtedly admirable. But, to be blunt, it doesn't amount to much of anything. Explaining why this is the case is related to several varying factors.
Most apparent would be Shiba Inu's enormous supply. As it currently stands, there are 589 trillion tokens in circulation. It doesn't take an economic degree to see how this elevated supply can be problematic.
Basic economic theory tells us that if the demand outpaces supply, the price of an asset should increase over time. This is precisely what has happened with Bitcoin (CRYPTO: BTC). Its fixed-supply cap of 21 million has been met with considerable demand from the investment community, causing its price to soar. Unfortunately, this isn't the case with Shiba Inu, likely due to its intentional design to prioritize abundance over scarcity.
Good dog?
The allure of buying one of the more popular meme coins and potentially striking gold is a real challenge investors must combat. However, there are simply too many headwinds forming that will prove problematic for Shiba Inu in the long term. Most evident is its lack of crucial fundamentals that more prominent counterparts boast.
And it seems like the broader market is realizing this. While the total crypto market cap has risen by over 90% YTD, Shiba Inu has been left behind. As previously mentioned, it has lost around 4% of its value since the beginning of the year.
This is particularly telling and problematic because in crypto, liquidity usually trickles down from blue chip assets like Bitcoin and Ethereum and then flows into tokens with smaller market caps, regardless of whether they provide actual utility and value. Since Shiba Inu hasn't benefited from any liquidity surplus, it might be safe to say this dog has seen its last day. For investors looking to build up their crypto portfolios, it is best to stick with more proven assets with solid fundamentals and true long-term potential.
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RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Touted as the Dogecoin killer and riding the waves of the meme coin frenzy, Shiba Inu (CRYPTO: SHIB) is up an astounding 600,000% since its inception in 2020. As a result, Shiba Inu can interact with smart contracts, the backbone of decentralized applications, and open the door for developers to create new crypto-based use cases. This is particularly telling and problematic because in crypto, liquidity usually trickles down from blue chip assets like Bitcoin and Ethereum and then flows into tokens with smaller market caps, regardless of whether they provide actual utility and value.
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Touted as the Dogecoin killer and riding the waves of the meme coin frenzy, Shiba Inu (CRYPTO: SHIB) is up an astounding 600,000% since its inception in 2020. This functionality can be a little confusing, but the critical aspect to understand is that by using Ethereum's blockchain, Shiba Inu inherits the smart contract functionality that has made Ethereum one of the most innovative blockchains. As a result, Shiba Inu can interact with smart contracts, the backbone of decentralized applications, and open the door for developers to create new crypto-based use cases.
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Dogecoin runs on its own blockchain, and Shiba Inu operates on the Ethereum (CRYPTO: ETH) blockchain. This functionality can be a little confusing, but the critical aspect to understand is that by using Ethereum's blockchain, Shiba Inu inherits the smart contract functionality that has made Ethereum one of the most innovative blockchains. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Shiba Inu wasn't one of them!
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As a result, the Shiba Inu ecosystem has grown considerably in just the last couple of years. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Shiba Inu wasn't one of them!
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2023-12-07 00:00:00 UTC
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Zacks Earnings Trends Highlights: Disney and United Airlines
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https://www.nasdaq.com/articles/zacks-earnings-trends-highlights%3A-disney-and-united-airlines-1
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For Immediate Release
Chicago, IL – December 7, 2023 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for Q4 have been steadily coming down since the quarter got underway, with the current +0.1% growth pace down from +5.5% in early October."
Q4 Earnings: What Can Investors Expect?
Note: The following is an excerpt from this week’sEarnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Q4 earnings for the S&P 500 index are currently expected to be up +0.1% from the year-earlier level on +2.3% higher revenues, which would follow the +3.4% earnings growth in 2023 Q3 on +2.0% higher revenues.
Earnings estimates for Q4 have been steadily coming down since the quarter got underway, with the current +0.1% growth pace down from +5.5% in early October. This is a bigger decline in earnings estimates compared to what we saw in the comparable periods for the first three quarters of 2023.
The negative revisions trend for Q4 is fairly broad-based, with earnings estimates for 12 of the 16 Zacks sectors coming down since the quarter got underway.
The Q3 earnings season isn’t officially finished yet, with results from 6 S&P 500 members still awaited. Earnings growth turned positive in Q3 after three back-to-back quarters of declines.
The Q3 earnings season showed that the overall earnings picture was stable and largely positive. Earnings growth for the S&P 500 index, which was negative for three back-to-back quarters, turned positive in Q3.
One major sector whose results really stood out in Q3 was the Tech sector, whose earnings increased +24.5% from the same period last year on +4.7% higher revenues. The sector had been going through a profitability drought since the start of 2022, but appears on track to resume its traditional growth attributes going forward, with double-digit earnings growth expected in each of the coming quarters.
For the current period (2023 Q4), the expectation is for S&P 500 earnings to be up +0.1% from the same period last year on +2.3% higher revenues.
This is a bigger decline in quarterly estimates compared to what we had seen in the comparable periods to either of the preceding two quarters. This is a reversal of the favorable revisions trend we have spotlighted in this space since April 2023.
Not only is there a bigger magnitude of cuts to Q4 estimates, but the pressure is also widespread, with estimates for 12 of the 16 Zacks getting cut since the start of October. The most significant cuts to estimates have been for the Autos, Medical, Consumer Discretionary, Transportation, and Basic Materials sectors.
We noted Disney DIS from the Consumer Discretionary sector and United Airlines UAL from the Transportation sector as examples of the aforementioned negative revisions trend.
The current Q4 Zacks Consensus EPS for Disney of $1.04 is down from $1.13 a month ago and $1.39 two months back. Disney shares were up following last week’s better-than-expected results, but the company’s near-term earnings outlook is under pressure.
The negative revisions trend is even more pronounced for United Airlines, which is currently expected to bring in $1.73 per share, down from $2.46 per share in the year-earlier period. United’s $1.73 estimate is down from $2.33 two months ago and $2.94 three months back.
The long-feared recession doesn’t appear in this near-term earnings outlook.
This big-picture view of corporate profitability doesn’t leave much room for that development either, as shown in the chart above. That said, we know that macroeconomic growth is moderating, which should have a negative impact on estimates. We showed earlier how estimates for the current and coming periods have started coming down lately, a trend that will most likely remain in place for some time.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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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.
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For Immediate Release Chicago, IL – December 7, 2023 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for Q4 have been steadily coming down since the quarter got underway, with the current +0.1% growth pace down from +5.5% in early October." You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>> Here are the key points: Q4 earnings for the S&P 500 index are currently expected to be up +0.1% from the year-earlier level on +2.3% higher revenues, which would follow the +3.4% earnings growth in 2023 Q3 on +2.0% higher revenues. The negative revisions trend for Q4 is fairly broad-based, with earnings estimates for 12 of the 16 Zacks sectors coming down since the quarter got underway.
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For Immediate Release Chicago, IL – December 7, 2023 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for Q4 have been steadily coming down since the quarter got underway, with the current +0.1% growth pace down from +5.5% in early October." We noted Disney DIS from the Consumer Discretionary sector and United Airlines UAL from the Transportation sector as examples of the aforementioned negative revisions trend. Click to get this free report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report To read this article on Zacks.com click here.
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For Immediate Release Chicago, IL – December 7, 2023 – Zacks Director of Research Sheraz Mian says, "Earnings estimates for Q4 have been steadily coming down since the quarter got underway, with the current +0.1% growth pace down from +5.5% in early October." You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>> Here are the key points: Q4 earnings for the S&P 500 index are currently expected to be up +0.1% from the year-earlier level on +2.3% higher revenues, which would follow the +3.4% earnings growth in 2023 Q3 on +2.0% higher revenues. The negative revisions trend for Q4 is fairly broad-based, with earnings estimates for 12 of the 16 Zacks sectors coming down since the quarter got underway.
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The negative revisions trend for Q4 is fairly broad-based, with earnings estimates for 12 of the 16 Zacks sectors coming down since the quarter got underway. Earnings growth for the S&P 500 index, which was negative for three back-to-back quarters, turned positive in Q3. See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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2023-12-07 00:00:00 UTC
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AMD Stock Spotlight: Can Advanced Micro Devices Ever Overtake Nvidia in AI?
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https://www.nasdaq.com/articles/amd-stock-spotlight%3A-can-advanced-micro-devices-ever-overtake-nvidia-in-ai
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Advanced Micro Devices (NASDAQ:AMD) stock might not be racking up the same sort of stellar gains as Nvidia (NASDAQ:NVDA) this year, but advancing 81% is no small feat. And it’s also a 4-to-1 drubbing of the S&P 500.
Like its chip rival, AMD delivers on the promise of artificial intelligence. Its new AI accelerator chip, the Instinct MI300X, holds great potential and could steal market share from Nvidia. That’s because it is aimed directly at the heart of its rival’s main business, data centers, and is where Nvidia is most vulnerable.
AI and AMD Stock
AMD is no stranger to being runner-up. For long periods it and Intel (NASDAQ:INTC) would battle for supremacy in personal computing chips. They often switched places as their latest chips hit the market. AMD is still a powerhouse in that field and as the segment recovers, it could give the chip maker an edge elsewhere.
PC shipments are still falling, down 7.6% in the third quarter, but the rate of decline is easing. It’s a slow path to recovery, but next year could be pivotal for AMD stock. Microsoft (NASDAQ:MSFT) is ending support for Windows 10 and a device upgrade cycle could send PC sales climbing once more.
AMD’s Ryzen chips are now infused with AI capabilities. HP (NYSE:HPQ), which uses those chips (but also Nvidia chips), plans to introduce its first AI PC next year.
AMD is also working with Microsoft on the next generation of Windows that will feature AMD’s on-chip AI Engine. The marriage of AI and PCs could spark a whole new round of PC sales itself.
The MI300X accelerator could be the real game changer. It is considered by some to be even better than Nvidia’s AI offering. The chip unifies the semi’s CPUs and GPUs on a single processor by sharing memory and providing greater efficiency.
CEO Lisa Su told analysts AMD has “commitments for significant capacity across the entire supply chain” for the new chips.
It has already seen a seven-fold increase in interest by customers in its AI offerings.
“Multiple customers initiated or expanded programs supporting future deployments of Instinct MI250 and MI300 hardware and software at scale,” Su said.
Closing the Gap
Advanced Micro Devices might not catch up to Nvidia. The latter promises to release its own advanced AI chip, the Grace Hopper Superchip, soon. Analysts say it is every bit as capable as the MI300.
And where AMD has $22 billion in annual sales, NVDA has twice that amount. While those numbers cross a lot of categories, AI promises to blur the distinctions between them. It will infiltrate all aspects of both chip maker’s offerings. So even if AMD doesn’t surpass its rival, it doesn’t mean it’s not the better stock to buy.
For one, the market is still young and growing. There is plenty of room for numerous winners. Due to its leadership position, NVDA stock trades at a premium. Yet there are a few chinks in its armor. With the stock priced for perfection, trade restrictions on technology to China put it at risk.
AMD stock, on the other hand, is a bit more of a bargain. Nvidia trades at 25 times sales, whereas AMD goes for 8. With arguably the better AI chip to hit the market first, Advanced Micro Devices could be the real AI winner for investors even if it doesn’t become top dog.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.
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The post AMD Stock Spotlight: Can Advanced Micro Devices Ever Overtake Nvidia in AI? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Microsoft (NASDAQ:MSFT) is ending support for Windows 10 and a device upgrade cycle could send PC sales climbing once more. CEO Lisa Su told analysts AMD has “commitments for significant capacity across the entire supply chain” for the new chips. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post AMD Stock Spotlight: Can Advanced Micro Devices Ever Overtake Nvidia in AI?
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Advanced Micro Devices (NASDAQ:AMD) stock might not be racking up the same sort of stellar gains as Nvidia (NASDAQ:NVDA) this year, but advancing 81% is no small feat. With arguably the better AI chip to hit the market first, Advanced Micro Devices could be the real AI winner for investors even if it doesn’t become top dog. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post AMD Stock Spotlight: Can Advanced Micro Devices Ever Overtake Nvidia in AI?
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Advanced Micro Devices (NASDAQ:AMD) stock might not be racking up the same sort of stellar gains as Nvidia (NASDAQ:NVDA) this year, but advancing 81% is no small feat. With arguably the better AI chip to hit the market first, Advanced Micro Devices could be the real AI winner for investors even if it doesn’t become top dog. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post AMD Stock Spotlight: Can Advanced Micro Devices Ever Overtake Nvidia in AI?
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Advanced Micro Devices (NASDAQ:AMD) stock might not be racking up the same sort of stellar gains as Nvidia (NASDAQ:NVDA) this year, but advancing 81% is no small feat. Nvidia trades at 25 times sales, whereas AMD goes for 8. With arguably the better AI chip to hit the market first, Advanced Micro Devices could be the real AI winner for investors even if it doesn’t become top dog.
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2023-12-07 00:00:00 UTC
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Is AbbVie Stock a Buy Now?
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https://www.nasdaq.com/articles/is-abbvie-stock-a-buy-now-4
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Leading healthcare company AbbVie (NYSE: ABBV) appears to be hungry for deals to help it diversify its revenue streams. That's because it will need to become less reliant on Humira, its blockbuster rheumatoid arthritis drug, which is losing patent protection. One example of this came in 2020 when it closed on a massive $63 billion acquisition of Botox maker Allergan. To further diversify its operations, the company recently announced another acquisition.
AbbVie to acquire ImmunoGen
On Nov. 30, AbbVie announced plans to acquire oncology company ImmunoGen (NASDAQ: IMGN) for approximately $10.1 billion. It will fund the deal through cash. The acquisition will help strengthen AbbVie's portfolio, giving it a promising asset in Elahere. Elahere is an antibody-drug conjugate (ADC) that regulators have approved for treating platinum-resistant ovarian cancer. Analysts project that at its peak in 2029, the therapy will generate annual revenue of over $1.4 billion.
Unlike other cancer treatments and therapies which can damage other healthy cells in the process, ADCs target cancer cells and can lead to better results for patients. ImmunoGen has other ADCs in its pipeline, though nothing that's beyond phase 2 trials. But with years of experience working on them, the company would instantly improve AbbVie's growth opportunities within oncology.
AbbVie can benefit from more diversification
For AbbVie, the acquisition makes a lot of sense: Its lack of diversification is one reason investors aren't overly bullish on the healthcare stock these days. Its top-selling drug Humira saw a loss in sales this year due to rising competition related to patent expiration. And while the company has a plan to make up for that void with other immunology drugs, Skyrizi and Rinvoq, it hasn't been winning over investors; year to date, share prices of AbbVie are down 11%.
In its third-quarter results, immunology drugs generated $6.8 billion in sales, accounting for nearly half of the company's total revenue of $13.9 billion. This is despite AbbVie having products in many other segments, including eye care, neuroscience, aesthetics, and oncology. Its oncology business is its second-largest, but at $1.5 billion, the revenue the company's cancer drugs brought in was about one-fifth of immunology drug sales.
Acquiring ImmunoGen will help pad AbbVie's oncology revenue while also bolstering its pipeline in the process.
AbbVie is in a great position to spend on acquisitions
Despite the stock's struggles this year, I'm not concerned about AbbVie. This is a solid business that generates ample cash flow to support both its dividend (it now yields 4.3%) and its growth opportunities. Over the past 12 months, the company generated $24.7 billion in free cash flow, with $10.4 billion of that going to cover its dividend payments.
AbbVie's strong cash-generating operations enable it to take on ImmunoGen in a cash deal, without having to rely on stock offerings or taking on mammoth amounts of debt. If the company can continue to pump out such impressive amounts of free cash, don't be surprised to see more deals in the future as it continues to expand its business.
Is AbbVie stock a buy?
AbbVie was a solid stock to buy even before this deal. Acquiring ImmunoGen is a good move for the company. And it should remind investors that AbbVie, equipped with strong financials, will find opportunities to get bigger and more diverse.
The stock trades at a forward price-to-earnings multiple of only 13. At such a modest valuation, AbbVie is practically a no-brainer buy for the long haul.
10 stocks we like better than AbbVie
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and AbbVie wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Leading healthcare company AbbVie (NYSE: ABBV) appears to be hungry for deals to help it diversify its revenue streams. Its top-selling drug Humira saw a loss in sales this year due to rising competition related to patent expiration. And while the company has a plan to make up for that void with other immunology drugs, Skyrizi and Rinvoq, it hasn't been winning over investors; year to date, share prices of AbbVie are down 11%.
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AbbVie to acquire ImmunoGen On Nov. 30, AbbVie announced plans to acquire oncology company ImmunoGen (NASDAQ: IMGN) for approximately $10.1 billion. In its third-quarter results, immunology drugs generated $6.8 billion in sales, accounting for nearly half of the company's total revenue of $13.9 billion. Over the past 12 months, the company generated $24.7 billion in free cash flow, with $10.4 billion of that going to cover its dividend payments.
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AbbVie to acquire ImmunoGen On Nov. 30, AbbVie announced plans to acquire oncology company ImmunoGen (NASDAQ: IMGN) for approximately $10.1 billion. AbbVie can benefit from more diversification For AbbVie, the acquisition makes a lot of sense: Its lack of diversification is one reason investors aren't overly bullish on the healthcare stock these days. AbbVie is in a great position to spend on acquisitions Despite the stock's struggles this year, I'm not concerned about AbbVie.
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Its oncology business is its second-largest, but at $1.5 billion, the revenue the company's cancer drugs brought in was about one-fifth of immunology drug sales. AbbVie was a solid stock to buy even before this deal. * They just revealed what they believe are the ten best stocks for investors to buy right now... and AbbVie wasn't one of them!
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2023-12-07 00:00:00 UTC
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MSFT’s Identity Crisis: Stuck as an ‘Old Man’s Stock’ or Poised for a Tech Rebirth?
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https://www.nasdaq.com/articles/msfts-identity-crisis%3A-stuck-as-an-old-mans-stock-or-poised-for-a-tech-rebirth
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I bought Microsoft (NASDAQ:MSFT) stock years ago at $50 and let the shares ride. Today MSFT stock trades around $369, plus the $3/year dividend represents a fat 6% yield on my original investment..
But the question is always where do we go from here? If you have $370 lying about, do you put it into Microsoft stock or look elsewhere?
The AI Bull Case
The bull case for Microsoft is built around Generative AI. Many analysts believe AI will let Microsoft overtake Apple (NASDAQ:AAPL) as the world’s most valuable company. (Apple’s current lead of $250 billion means it’s less than 10% ahead.)
Microsoft has already rolled out Generative AI to business customers as CoPilot, at $30 per month per user. The base 365 package prices start at $6 per month so this is a huge hike.
But early reports on corporate uptake are positive. Microsoft is claiming big productivity gains in office communications. CoPilot could deliver $10 billion in additional revenue in 2026, one analyst says.
Microsoft’s dance around OpenAI is already a business legend, with CTO Kevin Scott taking a leading role, believing it could level the playing field for tech users.
CEO Satya Nadella is portrayed as a genius in these accounts, calmly watching the World Cricket final and putting out joint statements with OpenAI CEO Sam Altman.
As the “Year of AI” has gone on, MSFT stock has beat analyst estimates consistently. The beat was 3 cents/share in last December’s quarter. It was 34 cents in the September quarter.
The Bear Case for MSFT Stock
A $10 billion/year win from AI tools, however, is not a big deal on an income statement showing over $200 billion per year of revenue. A third of Microsoft revenue is already net income, so even AI’s extraordinary profit potential doesn’t move the needle.
The Microsoft Azure cloud remains second behind Amazon.Com (NASDAQ:AMZN). The costs of upgrading Azure using Nvidia (NASDAQ:NVDA) chips and software are huge.
Bing remains tiny next to Alphabet’s (NASDAQ:GOOG)(NASDASQ:GOOGL) Google, and it’s got nothing in mobile. Apple isn’t going away, and all these companies will have their own Generative AI plays.
The only area where Microsoft truly dominates is in gaming, but even there XBox sales are down even after its purchase of Activision Blizzard.
Despite its price to earnings ratio of 35, everyone loves Microsoft. Traders at Stocktwits are all bullish but just tired of talking about it.
If everyone’s in, where are the new buyers coming from to push Microsoft higher?
The Bottom Line
Microsoft stock is priced to perfection. Analysts expect growth to accelerate with AI and profitability to remain unbelievably strong. The average estimate for fiscal 2025 is for revenue of $277 billion and net income of nearly $13/share. Microsoft has a way of beating estimates.
In a defensive market, that may be good enough. Microsoft is now the bluest of blue chips. It’s what IBM (NYSE:IBM) was when I started writing about tech 40 years ago.
But is that PE of 35 good value? If we’re entering a new tech boom, there will be many better bets, companies that today are what Microsoft was back in the day.
If I were 28 again, I’d be looking for them. MSFT stock is for old men.
As of this writing, Dana Blankenhorn had LONG positions in MSFT, AAPL, GOOGL, AMZN and NVDA. 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. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.
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The post MSFT’s Identity Crisis: Stuck as an ‘Old Man’s Stock’ or Poised for a Tech Rebirth? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Microsoft’s dance around OpenAI is already a business legend, with CTO Kevin Scott taking a leading role, believing it could level the playing field for tech users. The Bear Case for MSFT Stock A $10 billion/year win from AI tools, however, is not a big deal on an income statement showing over $200 billion per year of revenue. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post MSFT’s Identity Crisis: Stuck as an ‘Old Man’s Stock’ or Poised for a Tech Rebirth?
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I bought Microsoft (NASDAQ:MSFT) stock years ago at $50 and let the shares ride. The AI Bull Case The bull case for Microsoft is built around Generative AI. As of this writing, Dana Blankenhorn had LONG positions in MSFT, AAPL, GOOGL, AMZN and NVDA.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I bought Microsoft (NASDAQ:MSFT) stock years ago at $50 and let the shares ride. Many analysts believe AI will let Microsoft overtake Apple (NASDAQ:AAPL) as the world’s most valuable company. The Bear Case for MSFT Stock A $10 billion/year win from AI tools, however, is not a big deal on an income statement showing over $200 billion per year of revenue.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips I bought Microsoft (NASDAQ:MSFT) stock years ago at $50 and let the shares ride. Apple isn’t going away, and all these companies will have their own Generative AI plays. As of this writing, Dana Blankenhorn had LONG positions in MSFT, AAPL, GOOGL, AMZN and NVDA.
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a0ab1787-dfa0-4e2e-9274-be7f2abde422
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714248.0
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2023-12-07 00:00:00 UTC
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This Stock Has Made Investors 10 Times Richer Than UPS or FedEx
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https://www.nasdaq.com/articles/this-stock-has-made-investors-10-times-richer-than-ups-or-fedex
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Despite strong recent performance by FedEx (NYSE: FDX) stock, and what may look like a good opportunity to buy United Parcel Service (NYSE: UPS) on the dip, neither has a very good long-term history of shareholder returns. In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down why that's been the case, and explain why Old Dominion Freight Line (NASDAQ: ODFL) has been a much better investment.
*Stock prices used were from the morning of Nov. 28, 2023. The video was published on Dec. 6, 2023.
10 stocks we like better than United Parcel Service
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and United Parcel Service wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Jason Hall has no position in any of the stocks mentioned. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx and Old Dominion Freight Line. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy. Jason Hall is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down why that's been the case, and explain why Old Dominion Freight Line (NASDAQ: ODFL) has been a much better investment. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and United Parcel Service wasn't one of them!
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down why that's been the case, and explain why Old Dominion Freight Line (NASDAQ: ODFL) has been a much better investment. The Motley Fool has positions in and recommends FedEx and Old Dominion Freight Line. The Motley Fool recommends United Parcel Service.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down why that's been the case, and explain why Old Dominion Freight Line (NASDAQ: ODFL) has been a much better investment. 10 stocks we like better than United Parcel Service When our analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Jason Hall has no position in any of the stocks mentioned.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down why that's been the case, and explain why Old Dominion Freight Line (NASDAQ: ODFL) has been a much better investment. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Jason Hall has no position in any of the stocks mentioned. The Motley Fool recommends United Parcel Service.
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714249.0
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2023-12-07 00:00:00 UTC
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Wall St futures listless as traders await payrolls data for policy cues
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https://www.nasdaq.com/articles/wall-st-futures-listless-as-traders-await-payrolls-data-for-policy-cues
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For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures: Dow down 0.19%, S&P flat, Nasdaq up 0.22%
Dec 7 (Reuters) - Futures tracking the Dow and the S&P 500 indexes were largely flat on Thursday ahead of the monthly payrolls report later this week, while Nasdaq futures were propped up by a rise in Google.
Equities have come under pressure in December after strong gains last month on bets that the Federal Reserve was done with its interest rate hikes given easing inflation.
The payrolls data on Friday will likely give investors pointers to the Fed's interest rate path and the potential for a "soft landing" of the U.S. economy.
At 5:20 a.m. ET, Dow e-minis 1YMcv1 were down 68 points, or 0.19%, S&P 500 e-minis EScv1 were up 0.25 points, or 0.01%, and Nasdaq 100 e-minis NQcv1 were up 35.25 points, or 0.22%.
Shares of Google-parent Alphabet GOOGL.O were up 2.8% in premarket trading, a day after the release of its most advanced artificial intelligence model. Other megacap stocks were mixed.
Weak private payrolls and job openings have reinforced expectations the Fed's rate-hiking campaign is slowing the economy, allowing the central bank to potentially start cutting interest rates early next year.
Traders have nearly fully priced in the likelihood of the Fed keeping interest rates unchanged at its meeting next week, with 61% betting on a rate cut as soon as March 2024, according to the CME Group's FedWatch tool.
However, some analysts have warned that markets have been too optimistic about rate cuts and also said the upcoming jobs report will be crucial in determining the chances of a soft landing - where the Fed manages to avert a recession.
"US jobs numbers tomorrow and central bank meetings next week could inform the market if it has got carried away with the level of rate cuts which are now being priced in for 2024," Russ Mould, investment director at AJ Bell said in a note.
The Labor Department's report is expected to show non-farm payrolls increased by 180,000 jobs last month after rising by 150,000 in October.
Another report due at 8:30 a.m. ET on Thursday is expected to show initial jobless claims ticked up to 222,000 for the week ended Dec. 2 compared to 218,000 in the prior week.
Meanwhile, comments from Bank of Japan Governor Kazuo Ueda added to growing speculation that the central bank could soon shift away from its ultra-easy monetary policy.
Among major movers, Advanced Micro DevicesAMD.O jumped 3.6% premarket, a day after the chipmaker estimated there was a $45 billion market for its data center artificial intelligence processors this year.
GameStopGME.N tumbled 7.6% after the videogame retailer missed quarterly revenue estimates, hurt by rising competition.
(Reporting by Amruta Khandekar; Editing by Saumyadeb Chakrabarty)
((Amruta.Khandekar@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Weak private payrolls and job openings have reinforced expectations the Fed's rate-hiking campaign is slowing the economy, allowing the central bank to potentially start cutting interest rates early next year. However, some analysts have warned that markets have been too optimistic about rate cuts and also said the upcoming jobs report will be crucial in determining the chances of a soft landing - where the Fed manages to avert a recession. "US jobs numbers tomorrow and central bank meetings next week could inform the market if it has got carried away with the level of rate cuts which are now being priced in for 2024," Russ Mould, investment director at AJ Bell said in a note.
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Futures: Dow down 0.19%, S&P flat, Nasdaq up 0.22% Dec 7 (Reuters) - Futures tracking the Dow and the S&P 500 indexes were largely flat on Thursday ahead of the monthly payrolls report later this week, while Nasdaq futures were propped up by a rise in Google. Weak private payrolls and job openings have reinforced expectations the Fed's rate-hiking campaign is slowing the economy, allowing the central bank to potentially start cutting interest rates early next year. Traders have nearly fully priced in the likelihood of the Fed keeping interest rates unchanged at its meeting next week, with 61% betting on a rate cut as soon as March 2024, according to the CME Group's FedWatch tool.
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Futures: Dow down 0.19%, S&P flat, Nasdaq up 0.22% Dec 7 (Reuters) - Futures tracking the Dow and the S&P 500 indexes were largely flat on Thursday ahead of the monthly payrolls report later this week, while Nasdaq futures were propped up by a rise in Google. Weak private payrolls and job openings have reinforced expectations the Fed's rate-hiking campaign is slowing the economy, allowing the central bank to potentially start cutting interest rates early next year. "US jobs numbers tomorrow and central bank meetings next week could inform the market if it has got carried away with the level of rate cuts which are now being priced in for 2024," Russ Mould, investment director at AJ Bell said in a note.
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Weak private payrolls and job openings have reinforced expectations the Fed's rate-hiking campaign is slowing the economy, allowing the central bank to potentially start cutting interest rates early next year. Traders have nearly fully priced in the likelihood of the Fed keeping interest rates unchanged at its meeting next week, with 61% betting on a rate cut as soon as March 2024, according to the CME Group's FedWatch tool. The Labor Department's report is expected to show non-farm payrolls increased by 180,000 jobs last month after rising by 150,000 in October.
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714250.0
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2023-12-07 00:00:00 UTC
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BMO Optimistic About Fintech Stocks in 2024; Here Are 3 Top Picks to Keep an Eye On
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https://www.nasdaq.com/articles/bmo-optimistic-about-fintech-stocks-in-2024-here-are-3-top-picks-to-keep-an-eye-on
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Finance and technology are two economic sectors that have always generated more than their share of innovation and headlines, and are seeing rapid growth in our modern world. The combination of them, fintech, is realizing the promise of digital networking to change the ways that we do business – and has created a slew of opportunities for investors.
The fintech industry finds its support in a variety of ways, from the industry’s impact on the B2B payment market, for example, as well as its general smoothing of our ongoing shift toward digitized payments in general. Without fintech, the digital world as we know it likely could not exist.
Scanning the industry’s prospects, and how that translates to investors, BMO analyst Rufus Hone is highly optimistic about the fintech sector as we head into 2024.
“While Fintech stocks have been rallying in recent weeks, we are still bullish on the setup for our coverage for the year ahead,” Hone said. “Valuations have reset meaningfully and (in most cases) are undemanding on an absolute basis, sentiment is negative (albeit we see early signs of improvement), and the rising cost of capital has forced disruptors to dial-back growth ambitions and customer acquisition, leaving a more rational competitive environment. We see benefits for the scaled incumbents, and while the macro remains challenging, the industry secular tailwinds around cash-to-cash conversion, the broader digital transformation (opening up B2B payments), and emerging revenue pools (e.g., embedded finance) remain compelling growth drivers.”
Now here are 3 stocks that Hone recommends specifically, all ‘top picks’ for the analyst. We’ve drawn their details from the TipRanks database and present them here with Hone’s comments.
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International Money Express, Inc. (IMXI)
We live in a strongly interconnected world. The advent of digital technology is only one aspect of this; the proliferation of relatively inexpensive long-distance travel is another, and has facilitated a dramatic movement of people around the globe, one that would have been unthinkable just a century ago. Many of these travelers are seeking economic opportunities, for themselves and their families, and are sending money remittances back to their home countries. That’s where International Money Express, our first BMO pick, comes in.
This company, from its Miami, Florida base, is a leader in the international money transfer business. The company has offices in Mexico and Guatemala, and has operations in 30 countries – 20 in Latin America, 8 in Africa, and 2 in Asia. International Money Express, or Intermex, can boast more than 100,000 payout locations, serving more than 4.5 million customers. The company specializes in money transfers from the US and Canada to addressees in the target countries.
International Money Express offers services online, through its website and its mobile app, as well as through retail locations. Senders can choose to wire funds via ACH, or through credit or debit cards, and addressees can receive funds in cash from ATM or a company location, or electronically through a bank account or digital wallet.
The international transfer market is big business, and Intermex’s most recent financial release, for 3Q23, shows that the company is working it successfully. The firm beat expectations at both the top and bottom lines. Revenue came in at $172.4 million, up more than 22% year-over-year and 2.3 million ahead of the estimates, while adj. earnings were reported as 51 cents per share, a penny better than expected.
When we turn to analyst Hone, writing for BMO, we find that he is appreciative of this company’s recent successes, and sees it capable of continuing to grow. Hone writes, “IMXI’s stock has bounced back since demonstrating improved momentum in 3Q, with stronger YoY growth in its core business that has carried over into 4Q (expecting ~8% growth YoY in transactions versus ~5% prior). Despite the recovery, we believe the stock is now priced for much lower future growth than we anticipate, despite IMXI’s long track record of double-digit revenue/earnings growth, and meaningful market share gains in key LACA corridors...”
All of this adds up to an Outperform (Buy) rating, and a $30 price target that implies a 47% increase in share value over the next 12 months. (To watch Hone’s track record, click here.)
This stock has earned a Moderate Buy rating from the consensus of the Street’s analysts, based on 5 reviews that include 3 Buys and 2 Holds. The shares are trading for $20.43 and their $24.50 average target price points toward a one-year upside potential of 20%. (See Intermex’s stock forecast.)
Block, Inc. (SQ)
Next up is Block, Inc., a parent company and owner of some major names in the expansion of the world of digital finance. Block owns both Square and Cash App, among other applications, and its various services have altered the payment environment for both buyers and sellers. The company makes mobile payment easy, allowing sellers to conduct business anytime, anywhere, and allowing buyers to make electronic payments as easily as handing over cash. The company also has its hands in the crypto world, through the cryptocurrency platform Spiral.
Flexibility is the key here, and Block excels at that. The company’s Square application includes hardware that can turn smartphones into card readers and tablet computers into cash registers, while the Cash App boasts that it is universally accessible. Block’s tools and apps, together, have become a go-to place for online customers looking to network and streamline their financial transactions.
It’s not just smoothing out financial transactions that makes Block interesting. The company is expanding the applicability of its apps and tools, to make them more adaptable to our busy lives. Square’s interface can be optimized for particular businesses – restaurants, or package delivery, for example - while the Cash App can offer users some of the same advantages as bank accounts – options to save money, access to debit and credit cards, even options to invest in stocks.
The stock has been charging ahead over the past month, propelled by a better-than-expected Q3 report. Total revenue grew 24% y/y, to reach $5.6 billion, and beat the forecasts by $190 million. At the bottom line, Block reported adj. earnings of 55 cents per share, outpacing the estimates by 9 cents per share. The company also guided for adjusted EBITDA of $2.40 billion in 2024, way above consensus at $1.94 billion.
These solid results caught Hone’s attention as he looked at the fintech landscape, and the analyst wrote of Block’s ability to continue generating returns, “We expect SQ’s cash EPS to double by 2025E, with meaningful growth again in 2026 — relative to its scaled peer group, this is easily best-in-class. Newly introduced 2024E and longer-term guidance (e.g., achieving Rule of 40 by 2026E) were material positive surprises. This provided investors with much-needed visibility towards a significant increase in adjusted operating margins and EPS growth.”
Hone went on to explain why he believes that this stock is likely to keep on its upward trajectory, especially on profit growth: “We believe 3Q23 was a turning point for SQ, with earnings/operating income growth at a material positive inflection, and we foresee durable gross profit growth across both Cash App and Square Seller over the medium term, in tandem with much greater operating efficiency.”
Once again, we’re looking at a stock that Hone rates as Outperform (a Buy). His price target of $84 suggests a one-year gain of 23.5% for the shares.
This stock’s 34 recent analyst reviews, with their 26 to 8 breakdown favoring Buy over Hold, add up to a Strong Buy consensus rating. Shares in SQ are selling for $68, and the $72.4 average target price implies a 6.5% upside on the one-year horizon. (See Block’s stock forecast.)
FleetCor Technologies (FLT)
Last on our list of BMO recommendations, is FleetCor Technologies, a niche company in the digital payment realm. FleetCor specializes in business payment and spend management, offering tools that make it easier for enterprise clients to track and control their outflow. The company started out as a major provider of spending programs for corporate vehicle fleets and workforces, providing fuel cards and lodging payments when clients’ employees were on the road.
Today, FleetCor still does that – and more. It also provides access to smart business cards that can manage spending for easier control, avoid reimbursement hassles, and generate simplified reports; FleetCor can even manage employee use of controlled access transportation arteries, such as toll roads and bridges, through the use of RFID chips.
Branching out, FleetCor can also facilitate cross-border payments, always a hassle for businesses, especially if they are located near to an international border; provide small businesses with an all-in-one platform for managing vendor payment and bookkeeping; and consolidate commercial card programs, for easier reporting, data management, and credit invoicing.
The company last reported quarterly earnings, for 3Q23, in early November. The top-line showed a quarterly revenue total of $970.9 million, a total that was up almost 9% y/y – but that missed the forecast by $7.9 million. The firm’s adj. earnings came to $4.49 per share, 6% higher than the year-ago result but 1 penny less than had been anticipated.
Nevertheless, checking in one last time with BMO analyst Rufus Hone, we find him upbeat on FleetCor, citing the company’s leading position in its niche and its prospect for further growth. Hone says of this stock, “As a leader in several B2B payment verticals, FLT is poised to benefit from the secular digitization of B2B payments and several vertical-specific tailwinds while executing on its successful M&A strategy. Consensus estimates appear to only reflect organic growth (our model incorporates 14%/13% revenue growth in 2024E/2025E respectively, versus consensus at 9%/10%)… FLT’s revenue model is highly recurring (retention >90%) and highly profitable (EBITDA margins >50%), with a long runway of grow ahead across multiple business lines (notably in its Corporate Payments business).”
Tracking this stance forward, Hone gives FLT an Outperform (Buy) rating, with a $300 price target that shows his confidence in a 19% gain in the year ahead.
The analyst consensus on FLT is a Moderate Buy, based on 13 recent reviews that include 9 Buys to 4 Holds. FLT shares are trading for $251.23 and have an average price target of $289.92; this combination suggests a one-year upside potential for 15%. (See FleetCor’s stock forecast.)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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“Valuations have reset meaningfully and (in most cases) are undemanding on an absolute basis, sentiment is negative (albeit we see early signs of improvement), and the rising cost of capital has forced disruptors to dial-back growth ambitions and customer acquisition, leaving a more rational competitive environment. These solid results caught Hone’s attention as he looked at the fintech landscape, and the analyst wrote of Block’s ability to continue generating returns, “We expect SQ’s cash EPS to double by 2025E, with meaningful growth again in 2026 — relative to its scaled peer group, this is easily best-in-class. Consensus estimates appear to only reflect organic growth (our model incorporates 14%/13% revenue growth in 2024E/2025E respectively, versus consensus at 9%/10%)… FLT’s revenue model is highly recurring (retention >90%) and highly profitable (EBITDA margins >50%), with a long runway of grow ahead across multiple business lines (notably in its Corporate Payments business).” Tracking this stance forward, Hone gives FLT an Outperform (Buy) rating, with a $300 price target that shows his confidence in a 19% gain in the year ahead.
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The company makes mobile payment easy, allowing sellers to conduct business anytime, anywhere, and allowing buyers to make electronic payments as easily as handing over cash. It also provides access to smart business cards that can manage spending for easier control, avoid reimbursement hassles, and generate simplified reports; FleetCor can even manage employee use of controlled access transportation arteries, such as toll roads and bridges, through the use of RFID chips. Consensus estimates appear to only reflect organic growth (our model incorporates 14%/13% revenue growth in 2024E/2025E respectively, versus consensus at 9%/10%)… FLT’s revenue model is highly recurring (retention >90%) and highly profitable (EBITDA margins >50%), with a long runway of grow ahead across multiple business lines (notably in its Corporate Payments business).” Tracking this stance forward, Hone gives FLT an Outperform (Buy) rating, with a $300 price target that shows his confidence in a 19% gain in the year ahead.
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Despite the recovery, we believe the stock is now priced for much lower future growth than we anticipate, despite IMXI’s long track record of double-digit revenue/earnings growth, and meaningful market share gains in key LACA corridors...” All of this adds up to an Outperform (Buy) rating, and a $30 price target that implies a 47% increase in share value over the next 12 months. This provided investors with much-needed visibility towards a significant increase in adjusted operating margins and EPS growth.” Hone went on to explain why he believes that this stock is likely to keep on its upward trajectory, especially on profit growth: “We believe 3Q23 was a turning point for SQ, with earnings/operating income growth at a material positive inflection, and we foresee durable gross profit growth across both Cash App and Square Seller over the medium term, in tandem with much greater operating efficiency.” Once again, we’re looking at a stock that Hone rates as Outperform (a Buy). Consensus estimates appear to only reflect organic growth (our model incorporates 14%/13% revenue growth in 2024E/2025E respectively, versus consensus at 9%/10%)… FLT’s revenue model is highly recurring (retention >90%) and highly profitable (EBITDA margins >50%), with a long runway of grow ahead across multiple business lines (notably in its Corporate Payments business).” Tracking this stance forward, Hone gives FLT an Outperform (Buy) rating, with a $300 price target that shows his confidence in a 19% gain in the year ahead.
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Despite the recovery, we believe the stock is now priced for much lower future growth than we anticipate, despite IMXI’s long track record of double-digit revenue/earnings growth, and meaningful market share gains in key LACA corridors...” All of this adds up to an Outperform (Buy) rating, and a $30 price target that implies a 47% increase in share value over the next 12 months. At the bottom line, Block reported adj. Consensus estimates appear to only reflect organic growth (our model incorporates 14%/13% revenue growth in 2024E/2025E respectively, versus consensus at 9%/10%)… FLT’s revenue model is highly recurring (retention >90%) and highly profitable (EBITDA margins >50%), with a long runway of grow ahead across multiple business lines (notably in its Corporate Payments business).” Tracking this stance forward, Hone gives FLT an Outperform (Buy) rating, with a $300 price target that shows his confidence in a 19% gain in the year ahead.
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2023-12-07 00:00:00 UTC
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This Newly Discovered Risk Could Be a Big Headache for Vertex Pharmaceuticals and CRISPR Therapeutics
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DCOMP
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https://www.nasdaq.com/articles/this-newly-discovered-risk-could-be-a-big-headache-for-vertex-pharmaceuticals-and-crispr
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In the gene editing therapies space, there aren't any competitors being watched more closely than Vertex Pharmaceuticals (NASDAQ: VRTX) and CRISPR Therapeutics (NASDAQ: CRSP). The pair scored regulatory approval in the U.K. on Nov. 16 to market their first gene therapy developed in collaboration and investors have high hopes for a positive commercialization decision by the Food and Drug Administration (FDA) in the U.S. on Friday, Dec. 8.
But according to data described in a scientific journal article published in the middle of November, U.S. regulators may have reason to hesitate rather than grant a full approval. Here's what's going on and what the risks are for shareholders.
New research uncovers troublesome possibilities
The gene therapy candidate made by Vertex and CRISPR Therapeutics is called exa-cel, and it's intended to treat sickle cell disease (SCD), a hereditary blood disorder that causes red blood cells to have a shape that's closer to a waxing crescent moon than their proper and iconic frisbee-like form. The sickle-cell-shaped blood cells become sticky and can cause blood flow issues, leading to pain and organ damage.
To treat sickle cell disease, exa-cel first needs to be manufactured. Rather than being produced from easily procurable precursors, the main raw material for the process is a large sample of the patient's stem cells. A large number of cells is needed because it's inevitable that many will die or become too lethargic to function normally as a result of the manufacturing process.
To get at enough of those cells, they need to be mobilized from their home in the bone marrow using special chemicals and then removed from the patient's bloodstream altogether. Then, they're genetically edited to correct the gene responsible for causing sickling of the patient's red blood cells and reimplanted into the patient a few weeks later. After that, the engineered stem cells spend the rest of their active life multiplying themselves to create daughter cells, some of which then differentiate and become healthy new red blood cells, and some of which remain stem cells doing the same as their parent. The daughter stem cells retain the corrected genes as well as any other mutations they picked up along the way. Therein lies the potential problem.
Per a new paper published in the prestigious journal Nature Medicine on Nov. 16, there is a new risk of treatment that hadn't been characterized before. According to the researchers, patients who had been treated with a gene therapy for sickle cell disease using an approach identical to exa-cel's exhibited a higher-than-expected proportion of stem cells with driver mutations that are associated with developing certain blood cancers. The driver mutations do not guarantee a future cancer diagnosis, only a higher risk burden.
But before rushing to sell shares of the two companies making exa-cel, be aware that this isn't a case of the editing process introducing new problems where there weren't any before. Instead, the researchers think that the earlier part of the process, where the patient's stem cells are mobilized and removed, is involved somehow. They speculate that the cells most likely to survive the roughness of the cell removal, manufacturing, and editing process are those that already have the driver mutations. If that's the case, the gene therapy process could unintentionally be acting as a filter or concentrator that ends up removing the patient's healthy cells, leaving the proportion of cells with dangerous driver mutations intact. Given that the cells pass on the same mutations to their progeny, patients could thus have a much higher risk of developing cancer due to their treatment.
How much should investors worry?
There are a handful of possible scenarios for how this new risk might play out. In the most optimistic scenario, patients don't ever experience any actual negative consequences from the newly identified risks, and regulators quietly accept that as additional evidence of its safety. Until there's firmer evidence to support the contrary, the optimistic case is the most likely to occur, and it would result in the best outcome for all of the stakeholders involved with the companies, including for patients and shareholders.
A mixed scenario is the second most likely. In a mixed outcome, treated patients ultimately retain their newly improved health without mishap, but regulators in the U.S. interpret the possibility of increased cancer risk as a critical question that needs to be addressed comprehensively with a structured inquiry. As a result, either pre- or post-commercialization, they'd demand CRISPR Therapeutics and Vertex do additional studies into the risks so as to confirm that they actually exist, and quantify their likelihood of occurring under real-world conditions. That could easily cost many millions in additional research and development (R&D) fees. The two stocks are all but guaranteed to take a hit in the mixed scenario, though it might not be a large or enduring one.
Then there's the worst-case scenario where patients develop blood cancers at significantly higher-than-anticipated rates, prompting regulators to pull the therapy from the market or dramatically limit its use. This outcome is very unlikely, and there is no evidence suggesting that it will happen. But if it happens, it'll be ruinous for pretty much every party involved and mark a major setback in multiple areas of the gene editing therapy space.
Hope for the best, prepare for the worst
So investors should mentally prepare themselves for the above possibilities to occur. The most important task will be to identify if the mixed scenario is occurring, as it implies that you'll need to brace yourself for some losses. Plus, in the mixed context, falling share prices might actually make for a decent buying opportunity if you want to increase your position. Don't panic and sell your shares if regulators are publicly making stipulations about what they want the companies to investigate. If they're saying that they want certain questions answered with additional research, it means that they're still broadly on board with the therapy being used once their concerns are addressed.
10 stocks we like better than Vertex Pharmaceuticals
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Vertex Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The pair scored regulatory approval in the U.K. on Nov. 16 to market their first gene therapy developed in collaboration and investors have high hopes for a positive commercialization decision by the Food and Drug Administration (FDA) in the U.S. on Friday, Dec. 8. In a mixed outcome, treated patients ultimately retain their newly improved health without mishap, but regulators in the U.S. interpret the possibility of increased cancer risk as a critical question that needs to be addressed comprehensively with a structured inquiry. As a result, either pre- or post-commercialization, they'd demand CRISPR Therapeutics and Vertex do additional studies into the risks so as to confirm that they actually exist, and quantify their likelihood of occurring under real-world conditions.
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New research uncovers troublesome possibilities The gene therapy candidate made by Vertex and CRISPR Therapeutics is called exa-cel, and it's intended to treat sickle cell disease (SCD), a hereditary blood disorder that causes red blood cells to have a shape that's closer to a waxing crescent moon than their proper and iconic frisbee-like form. To treat sickle cell disease, exa-cel first needs to be manufactured. The daughter stem cells retain the corrected genes as well as any other mutations they picked up along the way.
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New research uncovers troublesome possibilities The gene therapy candidate made by Vertex and CRISPR Therapeutics is called exa-cel, and it's intended to treat sickle cell disease (SCD), a hereditary blood disorder that causes red blood cells to have a shape that's closer to a waxing crescent moon than their proper and iconic frisbee-like form. After that, the engineered stem cells spend the rest of their active life multiplying themselves to create daughter cells, some of which then differentiate and become healthy new red blood cells, and some of which remain stem cells doing the same as their parent. According to the researchers, patients who had been treated with a gene therapy for sickle cell disease using an approach identical to exa-cel's exhibited a higher-than-expected proportion of stem cells with driver mutations that are associated with developing certain blood cancers.
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In the gene editing therapies space, there aren't any competitors being watched more closely than Vertex Pharmaceuticals (NASDAQ: VRTX) and CRISPR Therapeutics (NASDAQ: CRSP). According to the researchers, patients who had been treated with a gene therapy for sickle cell disease using an approach identical to exa-cel's exhibited a higher-than-expected proportion of stem cells with driver mutations that are associated with developing certain blood cancers. They speculate that the cells most likely to survive the roughness of the cell removal, manufacturing, and editing process are those that already have the driver mutations.
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714252.0
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2023-12-07 00:00:00 UTC
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These 2 High-Yielding Dividend Stocks Are Planning to Send Their Investors Even More Cash in 2024
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DCOMP
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https://www.nasdaq.com/articles/these-2-high-yielding-dividend-stocks-are-planning-to-send-their-investors-even-more-cash
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Dividend stocks are a great way to generate some passive investment income. What often makes dividend payments better than interest income from bonds or bank CDs is that many companies increase their payouts each year. That enables investors to collect a rising income stream that can help offset inflation.
Enbridge (NYSE: ENB) and Kinder Morgan (NYSE: KMI) recently revealed plans to give their investors a raise next year. The energy infrastructure companies already offer above-average payouts that will become even more attractive in 2024. That will make them even better investments for income-seeking investors.
29 down, with plenty more to go
Enbridge recently announced its financial guidance for 2024. The Canadian pipeline and utility behemoth expects to deliver 4% growth in its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Meanwhile, it sees its distributable cash flow (DCF) rising by 3%. The company is benefiting from growth across its legacy assets, new project completions, and recent acquisitions.
That earnings growth is giving Enbridge the confidence to increase its dividend by 3.1% next year. That will push the company's dividend growth streak to 29 years, one of the longest in the energy sector. It will also increase the company's already attractive dividend yield (currently 7.7%).
Enbridge is in an excellent position to continue increasing its dividend in the future. There is lots more growth coming down the pipeline. One big growth driver is its pending acquisition of three U.S. natural gas utilities from Dominion.
While the company expects to close the $14 billion transaction next year, its guidance does not include any impact from the deals. They'll supply the company with partial contributions next year, with an even greater impact in 2025.
That acquisition will also enhance the company's capital project backlog. It stood at 24 billion Canadian dollars ($17.7 billion) at the end of the third quarter, including $3.7 billion of growth projects across the three U.S. gas utilities. It has projects that will come online and grow its cash flow through 2028.
Enbridge is in an excellent position to fund its growth. It generates meaningful excess free cash flow after paying dividends (it expects its dividend payout ratio to be between 60% to 70%). Meanwhile, it has a low leverage ratio (currently within its 4.5 to 5.0 times target).
These features give it the financial flexibility to fund its projects, make acquisitions as opportunities arise, and increase its dividend. Enbridge believes it has the fuel to grow its earnings by 5% annually over the medium term, giving it plenty of power to increase its dividend.
Make that seven in a row
Kinder Morgan also recently revealed its 2024 financial expectations. The natural gas pipeline giant expects its adjusted EBITDA and distributable cash flow (DCF) to increase by 5% next year. It's benefiting from a strong natural gas market, driving demand for capacity across its pipelines. It will also benefit from expansion projects, particularly those focused on producing and handling biofuels.
That earnings growth will enable Kinder Morgan to increase its dividend again next year. It plans to nudge its payout up by about 2%. That raise pushes its dividend growth streak to seven straight years while further increasing its already attractive 6.4%-yielding payout.
Like Enbridge, Kinder Morgan is in an excellent position to continue pushing its payout higher beyond 2024. It also has a needle-moving deal it expects to close next year. The pipeline company recently agreed to buy STX Midstream from NextEra Energy Partners in a $1.8 billion deal. The acquisition will provide an additional boost to its adjusted EBITDA and DCF next year, since it doesn't currently include any contribution in its guidance.
Meanwhile, the company has about $3.8 billion of expansion projects in its backlog that should come online and contribute incremental cash flow through 2025. Kinder Morgan also has significant financial capacity to make additional opportunistic acquisitions. It has a low dividend payout ratio (slightly more than 50%) and a conservative leverage ratio (its leverage ratio will be below 4.0 times next year, well under its 4.5 times target). The growth from expansion projects and acquisitions should give it more fuel to increase its dividend in the future.
Another raise in 2024 with more likely to follow
Enbridge and Kinder Morgan are giving their investors another raise next year, pushing their already high-yielding payouts even higher. Both companies should be able to continue growing their dividends in the future, given their pending acquisitions, growth project backlogs, and financial flexibility. That makes them great stocks for the long haul for investors seeking steadily rising income streams that should be able to keep pace with (if not beat) the inflation rate over the coming years.
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Matthew DiLallo has positions in Enbridge, Kinder Morgan, and NextEra Energy Partners. The Motley Fool has positions in and recommends Enbridge and Kinder Morgan. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The Canadian pipeline and utility behemoth expects to deliver 4% growth in its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Enbridge believes it has the fuel to grow its earnings by 5% annually over the medium term, giving it plenty of power to increase its dividend. That makes them great stocks for the long haul for investors seeking steadily rising income streams that should be able to keep pace with (if not beat) the inflation rate over the coming years.
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Enbridge (NYSE: ENB) and Kinder Morgan (NYSE: KMI) recently revealed plans to give their investors a raise next year. The natural gas pipeline giant expects its adjusted EBITDA and distributable cash flow (DCF) to increase by 5% next year. Both companies should be able to continue growing their dividends in the future, given their pending acquisitions, growth project backlogs, and financial flexibility.
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That earnings growth is giving Enbridge the confidence to increase its dividend by 3.1% next year. That earnings growth will enable Kinder Morgan to increase its dividend again next year. Both companies should be able to continue growing their dividends in the future, given their pending acquisitions, growth project backlogs, and financial flexibility.
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It generates meaningful excess free cash flow after paying dividends (it expects its dividend payout ratio to be between 60% to 70%). That earnings growth will enable Kinder Morgan to increase its dividend again next year. Meanwhile, the company has about $3.8 billion of expansion projects in its backlog that should come online and contribute incremental cash flow through 2025.
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2023-12-07 00:00:00 UTC
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Zacks Industry Outlook Highlights Apple, HP and 3D Systems
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https://www.nasdaq.com/articles/zacks-industry-outlook-highlights-apple-hp-and-3d-systems-0
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For Immediate Release
Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses Apple AAPL, HP HPQ and 3D Systems DDD.
Industry: Mini-Computers
Link: https://www.zacks.com/commentary/2194223/3-stocks-to-watch-from-the-prospering-computer-industry
The Zacks Computer – Mini Computers industry is benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. Industry participants like Apple, HP and 3D Systems are benefiting from these trends. The improving availability of 5G-enabled smartphones has been a key catalyst for the industry participants.
The launch of foldable, and AI and ML-infused smartphones, tablets, wearables and hearables is another major growth driver for the industry participants. Robust demand for production printers, materials and software bodes well for 3-D printing solution providers. However, waning demand for consumer PCs and geopolitical challenges, including raging inflation and high interest, are major headwinds.
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 Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung.
Expanding screen size, better display and enhanced storage capabilities have been the 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 the demand for wearables.
3 Mini Computer Industry Trends to Watch
Enterprise Adoption Remains Healthy: Strong enterprise demand has been benefiting the industry participants. The growing adoption of a hybrid working environment bodes well for the players, as demand for laptops and tablets is expected to increase. Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security.
Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from the likes of Qualcomm, NVIDIA, Apple and Samsung. Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers.
Improved graphics quality is making smartphones suitable for playing sophisticated games. This is driving the demand for high-end smartphones and opening up significant opportunities for device makers.
PCs Face Extinction Risk: Personal computers (desktops and laptops), be it Windows or Apple’s MacOS-based ones, 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 catalysts in expanding the total addressable market of PCs.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Computer – Mini Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #37, which places it in the top 15% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Oct 31, 2023, the Zacks Consensus Estimate for this industry’s 2024 earnings has moved up 0.3%.
Given the bullish outlook, there are a few stocks worth watching in the sector. But before we present those 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 Lags Sector Beats S&P 500
The Zacks Computer – Mini Computers industry has underperformed the broader Zacks Computer and Technology sector but beat the S&P 500 index over the past year.
The industry has gained 33.9% over this period compared with the S&P 500’s return of 16.4% and the broader sector’s rise of 37.8%.
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 27.81X compared with the S&P 500’s 19.17X and the sector’s 24.04X.
Over the last five years, the industry has traded as high as 32.32X and as low as 11.49X, with the median being 24.43X.
3 Computer Stocks to Watch Right Now
3D Systems: This Zacks Rank #1 (Strong Buy) company expects the dental market to stabilize amid the high inventory level in the supply chain and weakness in consumer discretionary spending. You can see the complete list of today’s Zacks #1 Rank stocks here.
3D System expects a slower recovery in 2024 than its earlier expectation. Dental sales are expected to benefit from the continuing migration of orthodontic solutions from metal brackets and wires to clear aligners in the long run. Improved asset management and resource utilization are anticipated to reduce its total inventory significantly in 2024.
The Zacks Consensus Estimate for 2023 loss has narrowed by 7 cents to 13 cents per share over the past 30 days. The stock has declined 38.5% in the year-to-date period.
Apple: This Zacks Rank #3 (Hold) company is benefiting from a steady demand for iPhone devices, as well as an expanding footprint in emerging markets. A growing subscriber base and improving customer engagement are tailwinds for the services business.
Apple currently has more than 1 billion paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers worldwide, helping it offer appealing new apps that drive the App Store’s traffic. A growing number of AI-infused apps will attract subscribers to the App Store.
The Zacks Consensus Estimate for fiscal 2024 earnings has increased by a penny to $6.56 per share over the past 30 days. The stock has gained 37.2% in the year-to-date period.
HP: This Zacks Rank #3 company’s sustained focus on launching the latest and innovative products is likely to help it stay afloat in the current uncertain macroeconomic environment.
Product innovation and differentiations are the key drivers that have helped HPQ maintain its leading position in the PC and printer markets.
The Zacks Consensus Estimate for fiscal 2023 earnings has decreased 1.2% to $3.43 per share over the past 30 days. HP shares have gained 3.7% year to date.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Apple Inc. (AAPL) : Free Stock Analysis Report
HP Inc. (HPQ) : Free Stock Analysis Report
3D Systems Corporation (DDD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Demand for smart devices that offer facial recognition, retina scans or finger impressions to verify the user for biometrics is gaining traction as enterprises enhance security. 3 Computer Stocks to Watch Right Now 3D Systems: This Zacks Rank #1 (Strong Buy) company expects the dental market to stabilize amid the high inventory level in the supply chain and weakness in consumer discretionary spending. HP: This Zacks Rank #3 company’s sustained focus on launching the latest and innovative products is likely to help it stay afloat in the current uncertain macroeconomic environment.
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Industry: Mini-Computers Link: https://www.zacks.com/commentary/2194223/3-stocks-to-watch-from-the-prospering-computer-industry The Zacks Computer – Mini Computers industry is benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. Impressive Form Factor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report HP Inc. (HPQ) : Free Stock Analysis Report 3D Systems Corporation (DDD) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Industry: Mini-Computers Link: https://www.zacks.com/commentary/2194223/3-stocks-to-watch-from-the-prospering-computer-industry The Zacks Computer – Mini Computers industry is benefiting from steady demand for enterprise devices, including laptops, tablets and smartphones. Zacks Industry Rank Indicates Bright Prospects The Zacks Computer – Mini Computers industry is housed within the broader Zacks Computer and Technology sector. Industry Lags Sector Beats S&P 500 The Zacks Computer – Mini Computers industry has underperformed the broader Zacks Computer and Technology sector but beat the S&P 500 index over the past year.
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HP shares have gained 3.7% year to date. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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2023-12-07 00:00:00 UTC
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Here is What to Know Beyond Why Costco Wholesale Corporation (COST) is a Trending Stock
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DCOMP
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https://www.nasdaq.com/articles/here-is-what-to-know-beyond-why-costco-wholesale-corporation-cost-is-a-trending-stock-5
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Costco (COST) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this warehouse club operator have returned +7.1% over the past month versus the Zacks S&P 500 composite's +4.4% change. The Zacks Retail - Discount Stores industry, to which Costco belongs, has gained 7.3% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Costco is expected to post earnings of $3.44 per share, indicating a change of +11% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.3% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $15.70 points to a change of +6.9% from the prior year. Over the last 30 days, this estimate has remained unchanged.
For the next fiscal year, the consensus earnings estimate of $17.07 indicates a change of +8.7% from what Costco is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Costco is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Costco, the consensus sales estimate for the current quarter of $57.62 billion indicates a year-over-year change of +5.8%. For the current and next fiscal years, $252.54 billion and $270.11 billion estimates indicate +4.2% and +7% changes, respectively.
Last Reported Results and Surprise History
Costco reported revenues of $78.94 billion in the last reported quarter, representing a year-over-year change of +9.5%. EPS of $4.86 for the same period compares with $4.20 a year ago.
Compared to the Zacks Consensus Estimate of $78.56 billion, the reported revenues represent a surprise of +0.48%. The EPS surprise was +3.18%.
Over the last four quarters, Costco surpassed consensus EPS estimates three times. The company topped consensus revenue estimates just once over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Costco is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Costco. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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Costco Wholesale Corporation (COST) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Conclusion The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Costco.
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A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. For the next fiscal year, the consensus earnings estimate of $17.07 indicates a change of +8.7% from what Costco is expected to report a year ago. The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Projected Revenue Growth While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues.
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Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Costco is rated Zacks Rank #3 (Hold). Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
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And if earnings estimates go up for a company, the fair value for its stock goes up. The Zacks Consensus Estimate has changed -0.3% over the last 30 days. For the next fiscal year, the consensus earnings estimate of $17.07 indicates a change of +8.7% from what Costco is expected to report a year ago.
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2023-12-07 00:00:00 UTC
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Loan Growth to Aid Commerce Bancshares (CBSH) Amid Cost Woes
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https://www.nasdaq.com/articles/loan-growth-to-aid-commerce-bancshares-cbsh-amid-cost-woes
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Commerce Bancshares, Inc. CBSH is expected to witness growth in the top line, supported by the decent rise in loan demand, along with the company’s efforts to grow fee income. Given its earnings strength, CBSH will likely be able to sustain the current capital distributions in the future, thereby enhancing shareholder value.
Analysts seem optimistic regarding the company’s earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for its 2023 earnings has been revised 1.4% upward.
However, given the current tough economic backdrop, the company's asset quality is expected to remain under pressure in the near term. Also, elevated expenses might hurt bottom-line growth. Thus, CBSH currently carries a Zacks Rank #3 (Hold).
Shares of the company have gained 5.7% over the past six months compared with the industry’s growth of 8%.
Image Source: Zacks Investment Research
Looking at its fundamentals, Commerce Bancshares’ revenues have witnessed a five-year (2017-2022) compound annual growth rate (CAGR) of 4.5%, with the uptrend continuing in the first nine months of 2023. The increase was primarily driven by solid loan demand and strength in fee income sources.
The company’s net loans saw a CAGR of 3.6% over the four-year period ended 2022, with the upward trend continuing in the first nine months of 2023.
Decent growth in loans and solid non-interest income performance will likely keep driving the company’s top-line growth. For 2023, we estimate total revenues to grow 4.7% and loan balances to rise 4.4%.
While rising funding costs will put some pressure on Commerce Bancshares’ net yield on interest-earning assets, the metric is expected to improve in the near term to some extent, given the current high interest rate environment.
Supported by higher rates, net yield on interest-earning assets expanded to 2.85% in 2022 from 2.58% in 2021. The upward momentum continued in the first nine months of 2023. We expect the metric to be 3.06% in 2023.
However, the company’s non-interest expenses have witnessed a CAGR of 2.7% over the last six years ended 2022, with the uptrend continuing in the first nine months of 2023. The rise was mainly due to higher salaries and employee benefit costs.
Overall costs are expected to remain elevated as CBSH invests in technology upgrades amid inflationary pressure. We expect total expenses to rise 8.2%, 7.7% and 3.7% in 2023, 2024 and 2025, respectively.
Commerce Bancshares' asset quality has been deteriorating over the past few years. While the company recorded a provision benefit in 2021, a substantial rise in provisions was witnessed in 2022 and the first nine months of 2023, as the company had built reserves to combat the tough operating environment. The worsening macroeconomic outlook is expected to keep provisions high in the near term. We expect provision for credit losses to surge 71.5% this year.
Further, Commerce Bancshares has significant exposure to revolving home equity and real estate loans. As of Sep 30, 2023, the company’s exposure to these loan portfolios was 49.7% of total loans. Though there has been an improvement in the housing sector, any deterioration in real estate prices will pose a problem.
Stocks to Consider
A couple of better-ranked stocks from the finance space are Prospect Capital Corporation PSEC and Horizon Technology Finance Corporation HRZN.
Earnings estimates for PSEC have been revised 8.1% upward for the current fiscal year over the past 60 days. The company’s share price has decreased 6% over the past three months. PSEC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Horizon Technology also flaunts a Zacks Rank of 1 at present. Its earnings estimates have been revised upward by 7.6% for the current year over the past 60 days. In the past three months, HRZN’s share price has increased 7.4%.
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Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
Horizon Technology Finance Corporation (HRZN) : Free Stock Analysis Report
Prospect Capital Corporation (PSEC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Commerce Bancshares, Inc. CBSH is expected to witness growth in the top line, supported by the decent rise in loan demand, along with the company’s efforts to grow fee income. Image Source: Zacks Investment Research Looking at its fundamentals, Commerce Bancshares’ revenues have witnessed a five-year (2017-2022) compound annual growth rate (CAGR) of 4.5%, with the uptrend continuing in the first nine months of 2023. While rising funding costs will put some pressure on Commerce Bancshares’ net yield on interest-earning assets, the metric is expected to improve in the near term to some extent, given the current high interest rate environment.
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While rising funding costs will put some pressure on Commerce Bancshares’ net yield on interest-earning assets, the metric is expected to improve in the near term to some extent, given the current high interest rate environment. Stocks to Consider A couple of better-ranked stocks from the finance space are Prospect Capital Corporation PSEC and Horizon Technology Finance Corporation HRZN. Click to get this free report Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report Horizon Technology Finance Corporation (HRZN) : Free Stock Analysis Report Prospect Capital Corporation (PSEC) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Commerce Bancshares, Inc. CBSH is expected to witness growth in the top line, supported by the decent rise in loan demand, along with the company’s efforts to grow fee income. Image Source: Zacks Investment Research Looking at its fundamentals, Commerce Bancshares’ revenues have witnessed a five-year (2017-2022) compound annual growth rate (CAGR) of 4.5%, with the uptrend continuing in the first nine months of 2023. Click to get this free report Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report Horizon Technology Finance Corporation (HRZN) : Free Stock Analysis Report Prospect Capital Corporation (PSEC) : Free Stock Analysis Report To read this article on Zacks.com click here.
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While rising funding costs will put some pressure on Commerce Bancshares’ net yield on interest-earning assets, the metric is expected to improve in the near term to some extent, given the current high interest rate environment. We expect total expenses to rise 8.2%, 7.7% and 3.7% in 2023, 2024 and 2025, respectively. Stocks to Consider A couple of better-ranked stocks from the finance space are Prospect Capital Corporation PSEC and Horizon Technology Finance Corporation HRZN.
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65891a21-0a58-49c9-94b9-598bdb70f47a
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714256.0
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2023-12-07 00:00:00 UTC
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Lowe's Companies, Inc. (LOW) Is a Trending Stock: Facts to Know Before Betting on It
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DCOMP
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https://www.nasdaq.com/articles/lowes-companies-inc.-low-is-a-trending-stock%3A-facts-to-know-before-betting-on-it-1
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nan
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Lowe's (LOW) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this home improvement retailer have returned +7.2%, compared to the Zacks S&P 500 composite's +4.4% change. During this period, the Zacks Building Products - Retail industry, which Lowe's falls in, has gained 10.3%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Lowe's is expected to post earnings of $1.70 per share for the current quarter, representing a year-over-year change of -25.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -14.1%.
For the current fiscal year, the consensus earnings estimate of $13.04 points to a change of -6.1% from the prior year. Over the last 30 days, this estimate has changed -2.8%.
For the next fiscal year, the consensus earnings estimate of $13.28 indicates a change of +1.9% from what Lowe's is expected to report a year ago. Over the past month, the estimate has changed -8.3%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Lowe's, the consensus sales estimate of $18.51 billion for the current quarter points to a year-over-year change of -17.5%. The $86.13 billion and $85.72 billion estimates for the current and next fiscal years indicate changes of -11.3% and -0.5%, respectively.
Last Reported Results and Surprise History
Lowe's reported revenues of $20.47 billion in the last reported quarter, representing a year-over-year change of -12.8%. EPS of $3.06 for the same period compares with $3.27 a year ago.
Compared to the Zacks Consensus Estimate of $20.97 billion, the reported revenues represent a surprise of -2.4%. The EPS surprise was +0.33%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Lowe's is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lowe's. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Only $1 to See All Zacks' Buys and Sells
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Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
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Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. Conclusion The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Lowe's.
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Last Reported Results and Surprise History Lowe's reported revenues of $20.47 billion in the last reported quarter, representing a year-over-year change of -12.8%. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. Click to get this free report Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell). While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
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When earnings estimates for a company go up, the fair value for its stock goes up as well. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Lowe's is rated Zacks Rank #4 (Sell). Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
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586e4caa-3d46-4833-b9d6-1b3e5afbba2b
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714257.0
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2023-12-07 00:00:00 UTC
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Validea Motley Fool Strategy Daily Upgrade Report - 12/7/2023
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DCOMP
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https://www.nasdaq.com/articles/validea-motley-fool-strategy-daily-upgrade-report-12-7-2023
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nan
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The following are today's upgrades for Validea's Small-Cap Growth Investor model based on the published strategy of Motley Fool. This strategy looks for small cap growth stocks with solid fundamentals and strong price performance.
LIVE OAK BANCSHARES INC (LOB) is a small-cap growth stock in the Money Center Banks industry. The rating according to our strategy based on Motley Fool changed from 45% to 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Live Oak Bancshares, Inc. is a bank holding company. The Company conducts business operations through its commercial bank subsidiary, Live Oak Banking Company (the Bank). The Bank specializes in providing lending and deposit-related services to small businesses nationwide. Its segments include Banking and Fintech. The Banking segment specializes in providing financing services to small businesses nationwide in industries and deposit-related services to small businesses, consumers, and other customers nationwide. The Fintech segment is involved in making strategic investments in emerging financial technology companies. The Fintech segment is comprised of the Company's direct wholly owned subsidiaries, Live Oak Ventures, Inc. and Canapi Advisors, LLC, and the investments held by those entities, as well as the Bank's investment in Apiture, Inc. Its loan portfolio includes commercial and industrial loans, construction and development loans, commercial real estate, and commercial land.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PROFIT MARGIN: PASS
RELATIVE STRENGTH: FAIL
COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: FAIL
INSIDER HOLDINGS: PASS
CASH FLOW FROM OPERATIONS: PASS
PROFIT MARGIN CONSISTENCY: PASS
R&D AS A PERCENTAGE OF SALES: NEUTRAL
CASH AND CASH EQUIVALENTS: PASS
"THE FOOL RATIO" (P/E TO GROWTH): FAIL
AVERAGE SHARES OUTSTANDING: PASS
SALES: FAIL
DAILY DOLLAR VOLUME: PASS
PRICE: PASS
INCOME TAX PERCENTAGE: FAIL
Detailed Analysis of LIVE OAK BANCSHARES INC
LOB Guru Analysis
LOB Fundamental Analysis
FAIRFAX FINANCIAL HOLDINGS LTD (FRFHF) is a large-cap value stock in the Insurance (Prop. & Casualty) industry. The rating according to our strategy based on Motley Fool changed from 65% to 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Fairfax Financial Holdings Limited is a Canada-based holding company. The Company, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management. The Company's segments include Property and Casualty Insurance and Reinsurance, Life insurance and Run-off and Non-insurance companies. The Property and Casualty Insurance and Reinsurance segment includes North American Insurers, Global Insurers and Reinsurers and International Insurers and Reinsurers. The Life Insurance and Run-off segment include Eurolife and Run-off. The Non-insurance companies segment includes restaurants and retail, Fairfax India, Thomas Cook India and others. Eurolife underwrites traditional life insurance policies (endowments, deferred annuities, whole life and term life), group benefits, including retirement benefits, and accident and health insurance policies. The North American Insurers include Northbridge, Crum & Forster and Zenith National.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PROFIT MARGIN: PASS
RELATIVE STRENGTH: PASS
COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: FAIL
INSIDER HOLDINGS: FAIL
CASH FLOW FROM OPERATIONS: FAIL
PROFIT MARGIN CONSISTENCY: PASS
R&D AS A PERCENTAGE OF SALES: NEUTRAL
CASH AND CASH EQUIVALENTS: PASS
ACCOUNTS RECEIVABLE TO SALES: PASS
"THE FOOL RATIO" (P/E TO GROWTH): PASS
AVERAGE SHARES OUTSTANDING: PASS
SALES: FAIL
DAILY DOLLAR VOLUME: PASS
PRICE: PASS
INCOME TAX PERCENTAGE: FAIL
Detailed Analysis of FAIRFAX FINANCIAL HOLDINGS LTD
FRFHF Guru Analysis
FRFHF Fundamental Analysis
CORVEL CORPORATION (CRVL) is a mid-cap growth stock in the Healthcare Facilities industry. The rating according to our strategy based on Motley Fool changed from 69% to 76% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: CorVel Corporation is engaged in applying technology, including artificial intelligence, machine learning, and natural language processing designed to address the management of episodes of care and the related health-care costs. The Company's services include claims management, bill review, preferred provider networks, utilization management, case management, pharmacy services, directed care, and Medicare services. It partners with employers, third party administrators (TPAs), insurance companies, and government agencies to assist its customers in managing the medical costs of workers compensation, group health, and auto insurance and in monitoring the quality of care provided to claimants. Its network solutions services include professional nurse review, expert fee negotiations, specialty networks, preferred provider organization management, medical bill repricing, automated adjudication, and electronic reimbursement. Its bill review services include coding review and re-bundling.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PROFIT MARGIN: PASS
RELATIVE STRENGTH: PASS
COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: FAIL
INSIDER HOLDINGS: PASS
CASH FLOW FROM OPERATIONS: PASS
PROFIT MARGIN CONSISTENCY: PASS
R&D AS A PERCENTAGE OF SALES: NEUTRAL
CASH AND CASH EQUIVALENTS: FAIL
ACCOUNTS RECEIVABLE TO SALES: PASS
LONG TERM DEBT/EQUITY RATIO: PASS
"THE FOOL RATIO" (P/E TO GROWTH): FAIL
AVERAGE SHARES OUTSTANDING: PASS
SALES: FAIL
DAILY DOLLAR VOLUME: PASS
PRICE: PASS
INCOME TAX PERCENTAGE: PASS
Detailed Analysis of CORVEL CORPORATION
CRVL Guru Analysis
CRVL Fundamental Analysis
ETHAN ALLEN INTERIORS INC (ETD) is a small-cap value stock in the Furniture & Fixtures industry. The rating according to our strategy based on Motley Fool changed from 49% to 76% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Ethan Allen Interiors Inc. is an interior design company, which is a manufacturer and retailer in the home furnishings marketplace. The Company operates through two segments: wholesale and retail. The wholesale segment is involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale, and distribution of the Company's broad range of home furnishings and accents. The retail segment sells home furnishings and accents to clients through a network of 139 Company-operated design centers. The Company operates approximately 139 retail design centers with 135 located in the United States and four in Canada. The Company also owns and operates ten manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and one kiln dry lumberyard in the United States, two manufacturing plants in Mexico and one manufacturing plant in Honduras.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
PROFIT MARGIN: PASS
RELATIVE STRENGTH: FAIL
COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: FAIL
INSIDER HOLDINGS: FAIL
CASH FLOW FROM OPERATIONS: PASS
PROFIT MARGIN CONSISTENCY: PASS
R&D AS A PERCENTAGE OF SALES: NEUTRAL
CASH AND CASH EQUIVALENTS: PASS
INVENTORY TO SALES: PASS
ACCOUNTS RECEIVABLE TO SALES: PASS
LONG TERM DEBT/EQUITY RATIO: PASS
"THE FOOL RATIO" (P/E TO GROWTH): PASS
AVERAGE SHARES OUTSTANDING: PASS
SALES: FAIL
DAILY DOLLAR VOLUME: PASS
PRICE: PASS
INCOME TAX PERCENTAGE: PASS
Detailed Analysis of ETHAN ALLEN INTERIORS INC
ETD Guru Analysis
ETD Fundamental Analysis
Motley Fool Portfolio
About Motley Fool: Brothers David and Tom Gardner often wear funny hats in public appearances, but they're hardly fools -- at least not the kind whose advice you should readily dismiss. The Gardners are the founders of the popular Motley Fool web site, which offers frank and often irreverent commentary on investing, the stock market, and personal finance. The Gardners' "Fool" really is a multi-media endeavor, offering not only its web content but also several books written by the brothers, a weekly syndicated newspaper column, and subscription newsletter services.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Company Description: CorVel Corporation is engaged in applying technology, including artificial intelligence, machine learning, and natural language processing designed to address the management of episodes of care and the related health-care costs. The wholesale segment is involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale, and distribution of the Company's broad range of home furnishings and accents. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig.
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Detailed Analysis of LIVE OAK BANCSHARES INC LOB Guru Analysis LOB Fundamental Analysis FAIRFAX FINANCIAL HOLDINGS LTD (FRFHF) is a large-cap value stock in the Insurance (Prop. Detailed Analysis of FAIRFAX FINANCIAL HOLDINGS LTD FRFHF Guru Analysis FRFHF Fundamental Analysis CORVEL CORPORATION (CRVL) is a mid-cap growth stock in the Healthcare Facilities industry. Detailed Analysis of ETHAN ALLEN INTERIORS INC ETD Guru Analysis ETD Fundamental Analysis Motley Fool Portfolio About Motley Fool: Brothers David and Tom Gardner often wear funny hats in public appearances, but they're hardly fools -- at least not the kind whose advice you should readily dismiss.
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The Fintech segment is comprised of the Company's direct wholly owned subsidiaries, Live Oak Ventures, Inc. and Canapi Advisors, LLC, and the investments held by those entities, as well as the Bank's investment in Apiture, Inc. Its loan portfolio includes commercial and industrial loans, construction and development loans, commercial real estate, and commercial land. The Company's segments include Property and Casualty Insurance and Reinsurance, Life insurance and Run-off and Non-insurance companies. The Property and Casualty Insurance and Reinsurance segment includes North American Insurers, Global Insurers and Reinsurers and International Insurers and Reinsurers.
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Its segments include Banking and Fintech. The Company's segments include Property and Casualty Insurance and Reinsurance, Life insurance and Run-off and Non-insurance companies. Detailed Analysis of ETHAN ALLEN INTERIORS INC ETD Guru Analysis ETD Fundamental Analysis Motley Fool Portfolio About Motley Fool: Brothers David and Tom Gardner often wear funny hats in public appearances, but they're hardly fools -- at least not the kind whose advice you should readily dismiss.
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e1f809fa-640c-4481-9dc9-f508223b89ab
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714258.0
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2023-12-07 00:00:00 UTC
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Will AMD Be a Trillion-Dollar Stock by 2030?
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DCOMP
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https://www.nasdaq.com/articles/will-amd-be-a-trillion-dollar-stock-by-2030-0
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nan
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Advanced Micro Devices (NASDAQ: AMD) has been a top performer on the stock market over the past seven years, turning an investment of just $1,000 into more than $12,500 as of this writing, thanks mainly to the company's market share gains in the client and server central processing unit (CPU) markets against Intel.
The launch of AMD's Epyc series of server processors in 2018 and the release of the Ryzen personal computer (PC) processors in early 2017 at aggressive price points have played a key role in powering AMD's revenue and earnings growth over the years by allowing it to take share away from Intel. The stock's impressive rise over the past seven years has brought its market cap to $191 billion from just $9 billion at the end of December 2016.
AMD data by YCharts.
In other words, AMD's market cap jumped over 20x during this period. It is worth noting that AMD's market cap grew at a faster pace than its stock price in the past seven years thanks to an increase in the number of outstanding shares, which may happen if the company issues more shares, executes a stock split, or there is redemption of stock options by employees.
This suggests that the market rewarded AMD for its growth over the years despite the dilution that an increase in the number of outstanding shares brings (stock splits don't lead to dilution, however, and AMD last split its stock in the year 2000). Can AMD sustain its impressive stock market run through the end of the decade and hit a trillion-dollar valuation (assuming the number of outstanding shares remains constant)? Let's explore more about AMD.
AMD needs to step on the gas to hit a $1 trillion valuation by 2030
AMD was a relatively smaller company in 2016 than it is right now. It generated $4.27 billion in revenue for that year, along with a net loss of $117 million. In 2022, AMD delivered non-GAAP (adjusted) net income of $3.4 billion, along with $23.6 billion in revenue. This tells us that AMD grew impressively over the years. But 2023 has been a difficult year for the company on account of weak demand for PCs and tepid spending by enterprise customers on its data center processors.
Analysts forecast a 4% drop in AMD's top line this year to $22.7 billion. Its adjusted earnings are anticipated to drop to $2.65 per share from $3.50 per share last year. AMD, therefore, will have to clock significantly stronger growth if it is to reach a $1 trillion valuation. The good part, however, is that AMD's growth is anticipated to accelerate from 2024.
AMD EPS Estimates for Current Fiscal Year data by YCharts.
There are a few reasons why analysts expect an uptick in the company's pace of growth. First, the PC market should see some recovery in 2024, and it could keep getting better from there when the support for Windows 10 ends in 2025, which could trigger sales of new PCs. IDC estimates that the global PC market could clock 3.1% annual growth through 2027.
However, there are a couple of growth hotspots within the PC market that could help supercharge AMD. The first is the growing demand for gaming PCs. Grand View Research estimates that the gaming PC market could grow at an annual pace of almost 13% through the end of the decade, generating $130 billion in revenue in 2030.
Meanwhile, the market for artificial intelligence (AI)-powered PCs is expected to grow at an impressive annual rate of 50% through 2030, according to Counterpoint Research. These fast-growing opportunities could be key in powering the growth of AMD's client business, which regained its mojo last quarter with a 42% year-over-year increase in revenue to $1.5 billion.
AMD management says that the inventory correction in the PC market is over, and demand has started returning. Even better, AMD continues to claw away share from Intel in the PC market. Mercury Research estimates that AMD's share of the client processor market (which includes CPUs deployed in both desktops and laptops) increased 4.4 percentage points in the third quarter to 19.4%.
This also means that the company still has a lot of room to grow by capturing more market share, which should help sustain the recent turnaround in its client revenue.
Another area where AMD has been gaining rapidly against Intel is the server processor market. AMD's share of server processors increased an impressive 5.8 percentage points year over year in the third quarter to 23.3%, driven by the growing adoption of its server CPUs by cloud service providers. The global server processor market is expected to generate $175 billion in revenue in 2030, which means that AMD's top line could grow substantially if it continues to capture a bigger piece of this market.
Also, AMD's foray into the market for AI processors is going to unlock a $150 billion revenue opportunity by 2027, according to CEO Lisa Su. Given that AMD has already started building a revenue pipeline with the help of its AI chips, this is yet another sizable opportunity that could help the chipmaker deliver impressive growth in the long run.
Where will AMD be in 2030?
At its financial analyst day presentation in 2022, AMD management said that it expects to clock a long-term annual revenue growth rate of 20%. Of course, the company's performance has been nowhere near this level in 2023, but it cannot be ignored that AMD's revenue increased at a compound annual growth rate (CAGR) of 52% from 2020 to 2022.
Also, AMD's growth has started accelerating, and the long-term opportunities suggest that it could indeed maintain a healthy pace of growth through the end of the decade. Assuming AMD's revenue does clock a 20% CAGR through 2030, its top line could increase to $81 billion at the end of the forecast period (using its estimated revenue of $22.6 billion in 2023 as the base).
Multiplying the projected revenue of $81 billion in 2030 with AMD's five-year average sales multiple of almost 8 points toward a market cap of almost $650 billion at the end of the decade. While that would fall short of the $1 trillion milestone, investors shouldn't forget that AMD could deliver 240% gains over the next seven years even if it hits a $650 billion market cap.
Also, it may even hit the $1 trillion mark if the market rewards it with a higher price-to-sales multiple thanks to new catalysts such as AI. In all, AMD could turn out to be a solid growth stock in the long run even if it doesn't become a $1 trillion company, which is why investors can consider buying it before its turnaround begins next year.
10 stocks we like better than Advanced Micro Devices
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*Stock Advisor returns as of December 4, 2023
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Can AMD sustain its impressive stock market run through the end of the decade and hit a trillion-dollar valuation (assuming the number of outstanding shares remains constant)? Mercury Research estimates that AMD's share of the client processor market (which includes CPUs deployed in both desktops and laptops) increased 4.4 percentage points in the third quarter to 19.4%. While that would fall short of the $1 trillion milestone, investors shouldn't forget that AMD could deliver 240% gains over the next seven years even if it hits a $650 billion market cap.
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This suggests that the market rewarded AMD for its growth over the years despite the dilution that an increase in the number of outstanding shares brings (stock splits don't lead to dilution, however, and AMD last split its stock in the year 2000). The global server processor market is expected to generate $175 billion in revenue in 2030, which means that AMD's top line could grow substantially if it continues to capture a bigger piece of this market. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel.
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Advanced Micro Devices (NASDAQ: AMD) has been a top performer on the stock market over the past seven years, turning an investment of just $1,000 into more than $12,500 as of this writing, thanks mainly to the company's market share gains in the client and server central processing unit (CPU) markets against Intel. It is worth noting that AMD's market cap grew at a faster pace than its stock price in the past seven years thanks to an increase in the number of outstanding shares, which may happen if the company issues more shares, executes a stock split, or there is redemption of stock options by employees. This suggests that the market rewarded AMD for its growth over the years despite the dilution that an increase in the number of outstanding shares brings (stock splits don't lead to dilution, however, and AMD last split its stock in the year 2000).
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The stock's impressive rise over the past seven years has brought its market cap to $191 billion from just $9 billion at the end of December 2016. Grand View Research estimates that the gaming PC market could grow at an annual pace of almost 13% through the end of the decade, generating $130 billion in revenue in 2030. Assuming AMD's revenue does clock a 20% CAGR through 2030, its top line could increase to $81 billion at the end of the forecast period (using its estimated revenue of $22.6 billion in 2023 as the base).
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2023-12-07 00:00:00 UTC
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Warren Buffett Is on Track to Make $13.6 Billion in 2023. Here's Exactly How He'll Likely Do It.
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https://www.nasdaq.com/articles/warren-buffett-is-on-track-to-make-%2413.6-billion-in-2023.-heres-exactly-how-hell-likely-do
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We've all heard the old saying, "It takes money to make money." It's no surprise, therefore, to learn that super-wealthy individuals often make a lot of money.
Few people in the world are wealthier than Warren Buffett. And few will add to their wealth as much as the Oracle of Omaha will in 2023. Buffett is on track to make $13.6 billion this year. Here's how he'll likely do it.
Buffett's gold mine
Most of Buffett's fortune is in Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) stock. Berkshire has been a gold mine for Buffett through the years, delivering a gain of close to 37,875x since 1964.
Berkshire has continued to be golden for Buffett in 2023. The share price of the giant conglomerate is up more than 14%. That's enough to add roughly $13.6 billion to Buffett's net worth.
Where did this figure come from? Berkshire's market cap is on pace to increase by around $87 billion this year. Buffett owns 15.6% of the aggregate economic interest of Berkshire's class A and class B shares. His portion of the increase in Berkshire Hathaway's valuation, therefore, is worth roughly $13.6 billion.
Of course, Berkshire's share price could decline over the next few weeks and result in Buffett making less money. However, if we experience a Santa Claus rally, which often takes place at the end of the year, the legendary investor could end up with an even bigger gain.
What made Berkshire Hathaway's stock rise this year?
I promised to explain exactly how Buffett will likely make $13.6 billion in 2023. To do that, I think we need to explore what made Berkshire Hathaway's stock rise this year. What makes any stock go up? As is the case with other products, the laws of supply and demand are the primary drivers of price increases.
The supply of Berkshire Hathaway stock has decreased in 2023 thanks to stock buybacks. Berkshire repurchased $7 billion of its Class A and Class B shares in the first nine months of the year. This isn't a major factor behind the stock's jump in 2023, though, as the buybacks represent only 1% of Berkshire's market cap at the beginning of the year.
We can therefore logically conclude that the demand for Berkshire Hathaway stock has increased quite a bit. Why? Arguably, the biggest reason is that investor sentiment has improved with the overall market rising.
This is especially important for Berkshire because it's invested heavily in other publicly traded companies. During the first three quarters of 2023, Berkshire's investment gains of $38 billion made up more than half of its earnings before income taxes.
One stock especially stands out as a major driver of those hefty investment gains. Nearly 49% of Berkshire's portfolio is invested in Apple (NASDAQ: AAPL). So far in 2023, Apple's share price has soared close to 50%.
Berkshire's stock performance this year is also due in part to the company's underlying business performance. The conglomerate's insurance business has done well, with premiums rising 13.6% year over year in the first three quarters of 2023 to $61.7 billion. Berkshire's utility and energy businesses have performed even better during the period, with operating revenue more than quadrupling to $53.5 billion.
How much will Buffett make in 2024?
Whether or not Buffett's net worth increases in 2024 -- and by how much -- will again depend on how Berkshire Hathaway stock performs. What happens with Berkshire stock will again hinge heavily on Apple and the overall stock market.
The good news for Buffett is that the stock market tends to perform pretty well during U.S. presidential election years. If the U.S. economy continues to roll along, Berkshire's underlying businesses should also grow.
There's no way to know for sure how much Buffett will make next year. However, it won't be surprising if he adds several more billions of dollars to his fortune.
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*Stock Advisor returns as of December 4, 2023
Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This isn't a major factor behind the stock's jump in 2023, though, as the buybacks represent only 1% of Berkshire's market cap at the beginning of the year. During the first three quarters of 2023, Berkshire's investment gains of $38 billion made up more than half of its earnings before income taxes. The good news for Buffett is that the stock market tends to perform pretty well during U.S. presidential election years.
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Buffett's gold mine Most of Buffett's fortune is in Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) stock. That's enough to add roughly $13.6 billion to Buffett's net worth. What made Berkshire Hathaway's stock rise this year?
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Buffett's gold mine Most of Buffett's fortune is in Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) stock. The supply of Berkshire Hathaway stock has decreased in 2023 thanks to stock buybacks. Whether or not Buffett's net worth increases in 2024 -- and by how much -- will again depend on how Berkshire Hathaway stock performs.
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How much will Buffett make in 2024? What happens with Berkshire stock will again hinge heavily on Apple and the overall stock market. There's no way to know for sure how much Buffett will make next year.
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2023-12-07 00:00:00 UTC
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Another Artificial Intelligence (AI) Stock Is Surging: Can Elastic N.V. Stock Go Higher? Here's What Wall Street Thinks.
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https://www.nasdaq.com/articles/another-artificial-intelligence-ai-stock-is-surging%3A-can-elastic-n.v.-stock-go-higher
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The stock market is having an incredibly strong year in 2023 with the Nasdaq-100 technology index soaring 47% so far. Even so, the artificial intelligence (AI) sector is outperforming it with monster gains by some of its most popular names:
Nvidia is up 226% for the year.
C3.ai is up 179%.
Amazon is up 71%.
And Microsoft is up 56%.
But one lesser-known stock caught investors' attention last week, when it surged 37% in a single day following the release of its financial results for the recent fiscal 2024 second quarter (ended Oct. 31). That stock is Elastic N.V. (NYSE: ESTC).
Wall Street is incredibly bullish on this enterprise software company, which is quickly building a presence in AI, but can its stock continue to march higher? Here's what you need to know.
Elastic is transforming enterprise-level search
Data is the nectar of modern organizations, and the amount we generate is growing rapidly. From 2025 onward, we will be creating 480 exabytes of data every single day according to the International Data Corporation (a single exabyte is equivalent to 1 million terabytes). That number will only increase with time.
That data is incredibly powerful when harnessed correctly, and Elastic is helping 20,700 businesses get the most from it through its search, observability, and security platforms.
Its Elasticsearch is perhaps the most intriguing. It's a fully customizable tool that organizations can use to give employees a comprehensive search experience based on internal data. For example, employees can quickly find details on everything from company policies to customer data, without having to open multiple documents or applications.
Similarly, it can be used in customer-facing channels like an e-commerce retail website. It can parse mountains of data to deliver responses within milliseconds, which is especially useful in large organizations with lots of moving parts.
However, the widespread adoption of AI is taking Elasticsearch's abilities to the next level.
The Elasticsearch relevance engine (ESRE) is designed to help developers build AI into their search applications. ESRE allows for semantic search, meaning employees and customers can generate results using natural language, which reduces the need for specificity and unlocks a new layer of potential.
Elastic provided a great example in its recent investor presentation. If you had to build an irrigation system in your backyard, what would you do? First, you might search Google for instructions, then you might visit the website of your local hardware store and search for each specific product required for the job.
However, if that website has a search function powered by ESRE and AI, you could simply ask what materials and tools are required to complete the irrigation system, and then be shown a full list of products -- all you'd have to do is click "buy." You could also enter your location and the size of your backyard to add context and generate refined results specific to your situation.
Image source: Getty Images.
Elastic is delivering steady growth while improving its bottom line
Elastic just reported its financial results for the fiscal 2024 second quarter. Like most tech companies, it has grappled with the challenging economy, with its elevated inflation and rising interest rates, but it continues to make progress across key metrics.
Revenue came in at $311 million, representing 17% year-over-year growth. It was also comfortably above its forecast of $305 million. On the flip side, the result marked a slowdown from the 28% revenue growth in the same quarter last year.
Beneath the surface of the headline number, however, there was a bright spot. More customers are deploying the company's platforms in the cloud because it offers more versatility and, as a result, Elastic Cloud revenue soared by 31% year over year. That actually marked a growth acceleration over the first quarter as opposed to a slowdown.
But, as I mentioned, the economy is a headwind right now -- not only for demand but also because Elastic is more carefully managing its costs to improve its bottom line. In the second quarter, the company increased its operating expenses by only 5%, and because its revenue grew at a much faster pace, it meant the company reduced its net loss by 47% to just $24.8 million.
That is a positive step on Elastic's path to profitability, but a reduction in spending growth for line items like marketing could lead to a further slowdown in overall revenue growth.
Wall Street is bullish on Elastic stock
As I touched on at the top, the stock has more than doubled this year and currently trades at $110.20. The Wall Street Journal tracks 25 analysts covering the company, and here's the good news: They remain quite bullish.
A total of 14 of the analysts have given Elastic the highest-possible buy rating. Two other analysts are in the overweight (bullish) camp, eight recommend holding, and one has given it an underweight (bearish) rating. Not a single analyst outright recommends selling.
But here's the rub: The average price target of the 25 analysts is just $102.16. The 37% surge in Elastic stock last Friday sent it comfortably above that target, so further upside from here appears limited.
However, as Wall Street digests Elastic's latest results, estimates will likely climb. An analyst at Wells Fargo, for example, just upgraded the stock to overweight and increased the price target big time: from $70 to $115.
Elastic is still cheap compared to other AI stocks. Based on its $1.1 billion in trailing-12-month revenue and its current valuation of $10.9 billion, its stock trades at a price-to-sales (P/S) ratio of 9.4. By comparison:
C3.ai trades at a P/S of 12.5.
Microsoft's P/S is 12.8.
Nvidia has a P/S of 35.7.
With that in mind, it's entirely possible Elastic continues to gain more ground from here, and it could become a valuable piece of any tech-focused portfolio.
10 stocks we like better than Elastic
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Elastic wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of November 29, 2023
Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Elastic, Microsoft, and Nvidia. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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But one lesser-known stock caught investors' attention last week, when it surged 37% in a single day following the release of its financial results for the recent fiscal 2024 second quarter (ended Oct. 31). Wall Street is incredibly bullish on this enterprise software company, which is quickly building a presence in AI, but can its stock continue to march higher? However, if that website has a search function powered by ESRE and AI, you could simply ask what materials and tools are required to complete the irrigation system, and then be shown a full list of products -- all you'd have to do is click "buy."
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Elastic is delivering steady growth while improving its bottom line Elastic just reported its financial results for the fiscal 2024 second quarter. More customers are deploying the company's platforms in the cloud because it offers more versatility and, as a result, Elastic Cloud revenue soared by 31% year over year. The Motley Fool has positions in and recommends Amazon, Elastic, Microsoft, and Nvidia.
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Wall Street is bullish on Elastic stock As I touched on at the top, the stock has more than doubled this year and currently trades at $110.20. 10 stocks we like better than Elastic When our analyst team has a stock tip, it can pay to listen. The Motley Fool has positions in and recommends Amazon, Elastic, Microsoft, and Nvidia.
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Wall Street is incredibly bullish on this enterprise software company, which is quickly building a presence in AI, but can its stock continue to march higher? Wall Street is bullish on Elastic stock As I touched on at the top, the stock has more than doubled this year and currently trades at $110.20. The Motley Fool has positions in and recommends Amazon, Elastic, Microsoft, and Nvidia.
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2023-12-07 00:00:00 UTC
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AT&T or Verizon for High Yields? 2 Better Stocks for Yield and Income
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https://www.nasdaq.com/articles/att-or-verizon-for-high-yields-2-better-stocks-for-yield-and-income
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Whether measured in the short term or over many years, telecom giants Verizon Communications (NYSE: VZ) and AT&T (NYSE: T) have not delivered for shareholders. In this video, Motley Fool contributors Jason Hall and Tyler Crowe make the case for Realty Income (NYSE: O) and One Liberty Properties (NYSE: OLP) as better, likely safer investments, whether you're looking for dividends for today's income or long-term compounding of your wealth.
*Stock prices used were from the morning of Nov. 28, 2023. The video was published on Dec. 6, 2023.
10 stocks we like better than Verizon Communications
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*Stock Advisor returns as of December 4, 2023
Jason Hall has positions in Realty Income. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy. Jason Hall is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe make the case for Realty Income (NYSE: O) and One Liberty Properties (NYSE: OLP) as better, likely safer investments, whether you're looking for dividends for today's income or long-term compounding of your wealth. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Verizon Communications wasn't one of them!
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe make the case for Realty Income (NYSE: O) and One Liberty Properties (NYSE: OLP) as better, likely safer investments, whether you're looking for dividends for today's income or long-term compounding of your wealth. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool recommends Verizon Communications.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe make the case for Realty Income (NYSE: O) and One Liberty Properties (NYSE: OLP) as better, likely safer investments, whether you're looking for dividends for today's income or long-term compounding of your wealth. 10 stocks we like better than Verizon Communications When our analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Jason Hall has positions in Realty Income.
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In this video, Motley Fool contributors Jason Hall and Tyler Crowe make the case for Realty Income (NYSE: O) and One Liberty Properties (NYSE: OLP) as better, likely safer investments, whether you're looking for dividends for today's income or long-term compounding of your wealth. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Jason Hall has positions in Realty Income. The Motley Fool recommends Verizon Communications.
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714262.0
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2023-12-07 00:00:00 UTC
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Thor (THO) Q1 Earnings Beat Estimates, Decline Sharply Y/Y
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https://www.nasdaq.com/articles/thor-tho-q1-earnings-beat-estimates-decline-sharply-y-y
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Thor Industries, Inc. THO reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. The bottom line tumbled 60.9% from the year-ago quarter’s earnings of $2.53 per share.
The company registered revenues of $2,500.8 million for the quarter under review, lagging the Zacks Consensus Estimate of $2,510.4 million. The top line declined 19.5% year over year.
Segmental Results
North American Towable RVs: Revenues from the segment came in at $945.5 million, down 28.3% year over year due to a decrease in unit shipments and overall net price per unit. It also missed our estimate of $1,186 million.
Gross profit totaled $118 million, declining 39.7% year over year. The pretax income totaled $49.2 million, down from $111 million recorded in the year-ago period amid lower sales and gross profit margins. The unit’s total backlog was $795.8 million at the quarter's end, down sharply from $1,567.8 million as of Oct 31, 2022.
North American Motorized RVs: Revenues from the segment totaled $711.2 million, which fell 36.7% year over year, owing to a decrease in unit shipments and net price per unit. However, the figure surpassed our estimate of $597.5 million.
Gross profit totaled $79.4 million, falling 57.3% year over year. Consequently, pretax profit came in at $37.1 million, declining 70.2% from the year-ago period. The segment’s backlog was $1,237.5 million, down from $2,864.3 million as of Oct 31, 2022.
European RVs: Revenues from the segment came in at $708.2 million, up 40.4% from the year-ago period due to an increase in unit shipments and net price per unit. It also outpaced our estimate of $613.5 million.
Gross profit of $122.8 million increased by 78.4% year over year. The segment reported a pretax income of $28.8 million, higher than the year-ago pretax loss of $6.5 million. The backlog of the segment was $3,331.1 million, reflecting a rise from $2,985.2 million recorded as of Oct 31, 2022.
Financials
As of Oct 31, 2023, Thor had cash and cash equivalents of $425.8 million and long-term debt of $1,271.9 million. During the first quarter of fiscal 2024, THO repurchased $30 million of common stock at an average price of $91.61.
Guidance for Fiscal 2024
Thor has reaffirmed its full-year guidance for fiscal 2024. It projects its full-year consolidated net sales in the range of $10.5-$11 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are expected to be in the range of $6.25-$7.25.
Zacks Rank & Key Picks
THO currently carries Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Volvo VLVLY, Renault SA RNLSY and BYD Company Limited BYDDY, each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 65.6%, respectively. The EPS estimates for 2023 and 2024 have increased by 3 cents and 2 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for RNLSY’s 2023 sales and earnings indicates year-over-year growth of 4.5% and 128.1%, respectively. The EPS estimates for 2023 and 2024 have increased by 15 cents and 2 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales indicates year-over-year growth of 160.2%. The EPS estimates for 2023 and 2024 have increased by 59 cents and 55 cents, respectively, in the past 60 days.
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To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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During the first quarter of fiscal 2024, THO repurchased $30 million of common stock at an average price of $91.61. Some better-ranked players in the auto space are Volvo VLVLY, Renault SA RNLSY and BYD Company Limited BYDDY, each sporting Zacks Rank #1 (Strong Buy). Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1.
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Thor Industries, Inc. THO reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. North American Motorized RVs: Revenues from the segment totaled $711.2 million, which fell 36.7% year over year, owing to a decrease in unit shipments and net price per unit. Click to get this free report Thor Industries, Inc. (THO) : Free Stock Analysis Report AB Volvo (VLVLY) : Free Stock Analysis Report RENAULT (RNLSY) : Free Stock Analysis Report Byd Co., Ltd. (BYDDY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Thor Industries, Inc. THO reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. The company registered revenues of $2,500.8 million for the quarter under review, lagging the Zacks Consensus Estimate of $2,510.4 million. Click to get this free report Thor Industries, Inc. (THO) : Free Stock Analysis Report AB Volvo (VLVLY) : Free Stock Analysis Report RENAULT (RNLSY) : Free Stock Analysis Report Byd Co., Ltd. (BYDDY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Thor Industries, Inc. THO reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. The unit’s total backlog was $795.8 million at the quarter's end, down sharply from $1,567.8 million as of Oct 31, 2022. Some better-ranked players in the auto space are Volvo VLVLY, Renault SA RNLSY and BYD Company Limited BYDDY, each sporting Zacks Rank #1 (Strong Buy).
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2023-12-07 00:00:00 UTC
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Is 8.8% Yielding Redwood Trust a No-Brainer Buy or a Stock to Avoid?
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https://www.nasdaq.com/articles/is-8.8-yielding-redwood-trust-a-no-brainer-buy-or-a-stock-to-avoid
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The first thing that most investors will probably notice about Redwood Trust (NYSE: RWT) is its huge 8.8% dividend yield. For investors searching out dividend stocks, that high of a yield is as irresistible as a flame to a moth. In the end, however, if you take the time to look at this real estate investment trust's (REIT's) history, you'll probably err on the side of caution and look elsewhere. Here's why.
Simple REITs and complicated ones
REIT stalwart Realty Income (NYSE: O) has a 5.5% dividend yield, which is fairly attractive. The average REIT's yield is around 4.9%, using the Vanguard Real Estate ETF as a proxy, and the S&P 500 index's yield is roughly 1.5%. Realty Income's yield also happens to be near its highest levels over the past decade, hinting that the stock is on sale right now.
O data by YCharts
But the real reason to like Realty Income stock is how boring it is. The REIT basically buys physical properties and leases them out, which is exactly what you would do if you owned a rental property. This is a simple business to understand and the model has supported 29 consecutive years worth of annual dividend increases. That's a story that dividend investors could easily get behind.
But what about the much higher dividend yield that Redwood Trust is offering? On an absolute basis, it is roughly 3.3 percentage points larger, which equates to a 60% bump in the income you would collect. That's hard to ignore.
The problem is that Redwood Trust isn't as easy to understand as Realty Income. Redwood Trust is a mortgage REIT. It originates mortgages for single homes and apartments, owns a portfolio of mortgages, and bundles mortgages up into bond-like investments that it sells to others. This is not something that most people could do on their own. It would require a fair amount of effort to fully understand the company's three main business segments and even more to keep tabs on them over time.
The proof is in the dividend
For a big yield, though, some income investors might be willing to put in the extra legwork. Here's the problem: Redwood is more of a total return investment than a dividend stock. If you go back to the turn of the century, the stock is down roughly 40%. But the total return, which assumes the reinvestment of dividends, is up 430%. The high yield is a key part of the equation here.
RWT data by YCharts
Basically, a big dividend allows for more shares to be purchased while the stock price is low. For investors thinking about total return and asset allocation Redwood Trust might be a good choice for adding mortgage exposure to an otherwise diversified portfolio. But this is mostly going to be big investors like insurance companies and pension funds. If you are looking to eventually live off of the passive income your portfolio generates, history suggests that Redwood Trust will be a bad choice.
RWT data by YCharts
Look at the dividend history above (the orange line): It is volatile at best with multiple dividend cuts. The stock price (the purple line) has basically followed the dividend lower over time. That's quite normal for a mortgage REIT, but it is a terrible outcome for a dividend investor who is trying to supplement Social Security in retirement. You have less income and less capital!
Lower-yielding, boring REITs are better
For most investors, finding a reliable dividend-paying REIT like Realty Income, despite its more modest yield, will be a better choice than chasing yield with a more complicated REIT like Redwood Trust. That's not to suggest the mortgage REIT is a bad company, it just isn't designed to provide a reliable income stream over time. If you are tempted by Redwood Trust's fat yield, you should probably step back and consider a safer, more reliable option.
10 stocks we like better than Redwood Trust
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See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income and Vanguard Specialized Funds-Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For investors thinking about total return and asset allocation Redwood Trust might be a good choice for adding mortgage exposure to an otherwise diversified portfolio. If you are looking to eventually live off of the passive income your portfolio generates, history suggests that Redwood Trust will be a bad choice. That's not to suggest the mortgage REIT is a bad company, it just isn't designed to provide a reliable income stream over time.
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In the end, however, if you take the time to look at this real estate investment trust's (REIT's) history, you'll probably err on the side of caution and look elsewhere. Simple REITs and complicated ones REIT stalwart Realty Income (NYSE: O) has a 5.5% dividend yield, which is fairly attractive. The Motley Fool has positions in and recommends Realty Income and Vanguard Specialized Funds-Vanguard Real Estate ETF.
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The first thing that most investors will probably notice about Redwood Trust (NYSE: RWT) is its huge 8.8% dividend yield. Simple REITs and complicated ones REIT stalwart Realty Income (NYSE: O) has a 5.5% dividend yield, which is fairly attractive. Lower-yielding, boring REITs are better For most investors, finding a reliable dividend-paying REIT like Realty Income, despite its more modest yield, will be a better choice than chasing yield with a more complicated REIT like Redwood Trust.
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The first thing that most investors will probably notice about Redwood Trust (NYSE: RWT) is its huge 8.8% dividend yield. Redwood Trust is a mortgage REIT. Lower-yielding, boring REITs are better For most investors, finding a reliable dividend-paying REIT like Realty Income, despite its more modest yield, will be a better choice than chasing yield with a more complicated REIT like Redwood Trust.
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714264.0
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2023-12-07 00:00:00 UTC
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Want $1 Million in Retirement? 5 Stocks to Buy Now and Hold for Decades
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DCOMP
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https://www.nasdaq.com/articles/want-%241-million-in-retirement-5-stocks-to-buy-now-and-hold-for-decades
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nan
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nan
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Want to retire with a million-dollar-plus nest egg? Most people understand that stocks can offer long-term returns capable of growing a modest annual contribution into a seven-figure sum. However, many don't fully appreciate the idea that less is more and simpler is better. More to the point, it's all too easy to undermine your portfolio's growth by limiting yourself to high-risk stocks and then swapping them out too often.
Here's a rundown of five top names you might want to consider owning for the long haul if you're serious about becoming a millionaire within your lifetime. Each of these stocks is as much a bet on an industry or a business model as it is a bet on the company itself and requires a multi-decade commitment.
1. Bank of America
Bank of America (NYSE: BAC), the nation's second-biggest bank (as measured by assets), has been around a while, and it's apt to be around into the future for at least as long.
Most major banks handle customer deposits, make loans, are capital-market middlemen, and help serve investors. When one is doing well, they're all likely doing about as well. When one's doing poorly, they're all doing poorly. The bigger bet being made with this stock, therefore, is a bet on the banking industry itself.
It's certainly a sound bet. As long as the world uses money to store buying power and conduct commercial transactions, it will need banks. The cyclical ebbs and flows that work for and against banks will certainly continue in the future. But, the business has never failed to recover from its cyclical setbacks, bouncing back bigger than ever. Bank of America, of course, has the size it needs to ensure it remains one of the industry's very biggest names, which is no insignificant nuance.
Don't dismiss the impact of Bank of America's dividend either. Although its yield of 3.1% at the current share price is respectable, it's hardly stellar. And the bank dramatically cut its payouts in the wake of 2008's subprime mortgage meltdown, confirming it's not infallible.
Even so, its dividend payment's long-term growth accounts for a great deal of long-term shareholders' net gains -- directly and indirectly -- by virtue of making the stock more valuable.
2. Invesco QQQ Trust
If it seems to you like most of the market's gains since the late 1990s have been powered by technology stocks, you're not crazy. They have been. That's because the underlying technology companies have introduced the world's most meaningful advancements since then. And, this tech-centric progress isn't apt to run out of steam anytime soon either.
Problem: Owning a stake in every technology name you'd likely want to own can be complicated, and even a little overwhelming.
The simplest solution to this problem is buying shares of the Invesco QQQ ETF (NASDAQ: QQQ). This exchange-traded fund holds a piece of 100 of the biggest Nasdaq-listed stocks. But because it's based on a cap-weighted index, it holds oversized positions in mega-cap companies like Apple, Microsoft, Amazon, and Nvidia.
These may not always be the world's biggest technology outfits. Assuming the world's most impactful Nasdaq-listed companies will also eventually be its biggest, though, the folks at Invesco will adjust this fund's holdings as needed. All you need to do is stick with the Invesco QQQ ETF even when it's struggling.
3. Realty Income
Whereas the Invesco QQQ ETF is your best shot at long-term market-beating growth, Realty Income (NYSE: O) sits at the other end of the investment spectrum. This real estate investment trust (REIT) is first and foremost a dividend payer, sporting a trailing dividend yield of 5.5% at the current share price.
That's better than Bank of America's current yield -- but it's not exactly a jaw-dropping payout. So what makes this ticker so special? A couple of things.
The first is the frequency of its payments. Unlike most dividend-paying stocks, Realty Income's payments are dished out on a monthly basis. Even if you're only planning on reinvesting its dividend payments in more shares of Realty Income, you're still putting that money to work sooner than you would with a stock that makes dividend payments on a quarterly basis.
And the second noteworthy nuance? Realty Income has paid its monthly dividend like clockwork for more than 53 years and has raised its monthly payments every quarter for the past 26 years.
O data by YCharts.
The key to this consistent payment growth is the nature of its business. Realty Income is a landlord mostly to consumer-facing companies like retailers Walgreens and Dollar General, gyms such as Lifetime Fitness, and convenience store chains like 7-Eleven. Retailers generally seem vulnerable to economic headwinds. The REIT's top tenants, however, tend to stick around once they establish a store. They've got too much invested in a particular build to simply abandon a lease. That's why Realty Income's occupancy rate as of September is still an incredibly healthy 98.8%.
4. Coca-Cola
Don't look for any soaring gains from Coca-Cola (NYSE: KO) shares -- you're just not going to get them. Rather, look for methodical forward progress in nearly all market environments, with lots of dividend income bolstering your bottom line.
Coca-Cola is, of course, the outfit behind the world's best-known beverage brand; it also owns a host of others, including Gold Peak tea, Minute Maid juice, Dasani water, and Powerade sports drink. It's got something to sell to any consumer at any time in any environment.
That's not a bad bet to make. Coca-Cola is one of the most effective marketers on the planet, with an advertising program ranging from lifestyle ads to coupons to product-specific purchase promotions. The company's also got incredibly deep pockets, and it does spend energetically to ensure its products are top-of-mind names for consumers when they're thirsty. The drinks giant spent over $4 billion on marketing alone last year. Most of its rivals simply can't keep up with that sort of spending on marketing.
Between its slow growth and the dividend increases you can expect -- it has a streak of 61 consecutive years of payout hikes so far -- reinvesting the dividends paid by Coca-Cola shares could help make you a millionaire by the time you retire.
5. Ares Capital
Ares Capital (NASDAQ: ARCC) is a business development company, or BDC. As the name suggests, such organizations help young (and usually smaller) organizations grow by providing them with much-needed capital when they may not be able to secure (or want) a conventional bank loan. These funds are sometimes offered in exchange for equity in the up-and-coming company. More often than not, however, this capital is supplied in the form of a loan ... a loan usually made at an above-average interest rate. That's how a BDC like Ares Capital can afford to distribute a dividend that at current share prices yields 9.7%.
And its quarterly payout, by the way, has grown from less than $0.29 per share in 2004 to $0.48 per share now. Arguably, those dividends are best reinvested in more shares of the stock paying them.
That being said, the dividend isn't the only compelling argument for owning a piece of Ares for the long haul. This company is also one of the leading names in a narrow niche that has a much more compelling future than many other stocks simply because it's a way of indirectly investing in small, high-growth companies that aren't always publicly traded. As more and more well-hyped outfits like Blue Apron, GoPro, and Beyond Meat end up disappointing investors, people will pursue higher-odds options like this one, putting bullish pressure on this ticker.
10 stocks we like better than Bank of America
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Bank of America wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Beyond Meat, Microsoft, Nvidia, and Realty Income. The Motley Fool recommends Nasdaq and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Realty Income is a landlord mostly to consumer-facing companies like retailers Walgreens and Dollar General, gyms such as Lifetime Fitness, and convenience store chains like 7-Eleven. Coca-Cola is, of course, the outfit behind the world's best-known beverage brand; it also owns a host of others, including Gold Peak tea, Minute Maid juice, Dasani water, and Powerade sports drink. As more and more well-hyped outfits like Blue Apron, GoPro, and Beyond Meat end up disappointing investors, people will pursue higher-odds options like this one, putting bullish pressure on this ticker.
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The simplest solution to this problem is buying shares of the Invesco QQQ ETF (NASDAQ: QQQ). Between its slow growth and the dividend increases you can expect -- it has a streak of 61 consecutive years of payout hikes so far -- reinvesting the dividends paid by Coca-Cola shares could help make you a millionaire by the time you retire. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Beyond Meat, Microsoft, Nvidia, and Realty Income.
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Bank of America Bank of America (NYSE: BAC), the nation's second-biggest bank (as measured by assets), has been around a while, and it's apt to be around into the future for at least as long. Even if you're only planning on reinvesting its dividend payments in more shares of Realty Income, you're still putting that money to work sooner than you would with a stock that makes dividend payments on a quarterly basis. Between its slow growth and the dividend increases you can expect -- it has a streak of 61 consecutive years of payout hikes so far -- reinvesting the dividends paid by Coca-Cola shares could help make you a millionaire by the time you retire.
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These may not always be the world's biggest technology outfits. Even if you're only planning on reinvesting its dividend payments in more shares of Realty Income, you're still putting that money to work sooner than you would with a stock that makes dividend payments on a quarterly basis. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Beyond Meat, Microsoft, Nvidia, and Realty Income.
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4713732c-8943-4b64-8831-4cb08695ad49
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714265.0
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2023-12-07 00:00:00 UTC
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Why You Should Retain DuPont (DD) Stock in Your Portfolio
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DCOMP
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https://www.nasdaq.com/articles/why-you-should-retain-dupont-dd-stock-in-your-portfolio-2
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nan
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nan
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DuPont de Nemours, Inc. DD is expected to gain from its productivity and pricing actions, innovation-driven investment and the Spectrum Plastics Group acquisition amid headwinds including demand softness in certain areas.
The company’s shares are up 1.3% over a year against a 14.5% decline of its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Productivity, Innovation & Spectrum Buyout to Aid Results
DuPont remains focused on driving growth though innovation and new product development. Its innovation-driven investment is focused on several high-growth areas. DD remains committed to drive returns from its R&D investment.
The company, in August 2023, completed the buyout of leading manufacturer of specialty medical devices and components, Spectrum Plastics Group from AEA Investors for $1.75 billion. The acquired business, with annual sales of around $500 million, has been integrated into the industrial solutions line of business within the Electronics & Industrial segment.
The acquisition strengthens DuPont’s existing position in stable and fast-growing healthcare end markets. It is also in sync with its focus on high-growth, customer-driven innovation for the healthcare market. The addition of Spectrum is expected to boost revenues in the Electronics & Industrial segment.
DuPont is also benefiting from cost synergy savings and productivity improvement actions. Its structural cost actions are contributing to its bottom line. DD also continues to implement strategic price increases in the wake of cost inflation. These actions are likely to support its results in 2023. The company is also managing its portfolio with an aim for value creation. It is divesting non-core assets to focus more on high-growth, high-margin businesses.
Softness in Water Business Ails
The company’s water business faces challenges from the slowdown in China. Its water solutions business is expected to see sales moderation in the fourth quarter of 2023 due to softer demand in China resulting from the slowdown in the industrial economy and inventory de-stocking.
The softness in construction end markets is also expected to impact the shelter solutions business within the Water & Protection segment in 2023. Also, customer de-stocking in shelter solutions is expected to continue through the fourth quarter.
While the company is seeing a recovery in Interconnect Solutions, the business is expected to continue to be impacted by reduced consumer electronics spending in the near term. Interconnect Solutions witnessed an 11% year-over-year decrease in organic sales in the third quarter, partly driven by reduced consumer electronics volumes and inventory de-stocking. Softer smartphone, personal computing and tablet demand is likely to weigh on volumes in this business over the near term.
DuPont de Nemours, Inc. Price and Consensus
DuPont de Nemours, Inc. price-consensus-chart | DuPont de Nemours, Inc. Quote
Stocks to Consider
Better-ranked stocks worth a look in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE.
Denison Mines has a projected earnings growth rate of 100% for the current year. DNN has a trailing four-quarter earnings surprise of roughly 225%, on average. The stock is up around 64% in a year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Axalta Coating Systems’ current-year earnings has been revised upward by 8.2%. AXTA, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 6.7%. The company’s shares have gained around 24% in the past year.
Andersons currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 5.1% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in three of the last four quarters while missed once. It delivered a trailing four-quarter earnings surprise of 32.8%, on average. ANDE shares have rallied roughly 45% in a year.
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The Andersons, Inc. (ANDE) : Free Stock Analysis Report
DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report
Denison Mine Corp (DNN) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company, in August 2023, completed the buyout of leading manufacturer of specialty medical devices and components, Spectrum Plastics Group from AEA Investors for $1.75 billion. Its water solutions business is expected to see sales moderation in the fourth quarter of 2023 due to softer demand in China resulting from the slowdown in the industrial economy and inventory de-stocking. Interconnect Solutions witnessed an 11% year-over-year decrease in organic sales in the third quarter, partly driven by reduced consumer electronics volumes and inventory de-stocking.
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DuPont de Nemours, Inc. DD is expected to gain from its productivity and pricing actions, innovation-driven investment and the Spectrum Plastics Group acquisition amid headwinds including demand softness in certain areas. DuPont de Nemours, Inc. Price and Consensus DuPont de Nemours, Inc. price-consensus-chart | DuPont de Nemours, Inc. Quote Stocks to Consider Better-ranked stocks worth a look in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE. Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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DuPont de Nemours, Inc. Price and Consensus DuPont de Nemours, Inc. price-consensus-chart | DuPont de Nemours, Inc. Quote Stocks to Consider Better-ranked stocks worth a look in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and The Andersons Inc. ANDE. AXTA, carrying a Zacks Rank #1, beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 6.7%. Click to get this free report The Andersons, Inc. (ANDE) : Free Stock Analysis Report DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report Denison Mine Corp (DNN) : Free Stock Analysis Report Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report To read this article on Zacks.com click here.
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DuPont de Nemours, Inc. DD is expected to gain from its productivity and pricing actions, innovation-driven investment and the Spectrum Plastics Group acquisition amid headwinds including demand softness in certain areas. While the company is seeing a recovery in Interconnect Solutions, the business is expected to continue to be impacted by reduced consumer electronics spending in the near term. The stock is up around 64% in a year.
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714266.0
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2023-12-07 00:00:00 UTC
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3 High-Yield Dividend Stocks to Buy in December and Hold at Least a Decade
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DCOMP
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https://www.nasdaq.com/articles/3-high-yield-dividend-stocks-to-buy-in-december-and-hold-at-least-a-decade
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If you'd rather set yourself up with a hefty stream of passive income than work for a living, there are lots of options. You could write a book and then live off the proceeds, but this requires heaps of effort upfront. You could buy properties and rent them out, but this requires enough effort that we really shouldn't consider such income truly passive.
Whether you have a few million or just a few hundred to invest, sinking your hard-earned money into dividend-paying stocks is probably your most effective option for generating a truly passive income stream.
Of course, picking the right stocks at the right time is a big part of any dividend investing strategy. These three dividend-paying stocks offer high yields upfront at the moment. Plus, there's a good chance the payouts they deliver can keep rising for at least another decade.
Image source: Getty Images.
Altria Group
Shares of the American tobacco giant Altria (NYSE: MO) have fallen about 10% over the past year. At its beaten-down price, the stock offers a huge 9.2% dividend yield.
Investors should know that sales of combustible cigarettes have been in decline for decades. With the leading Marlboro brand in its portfolio, though, Altria's been able to raise its quarterly payout for 54 consecutive years.
Strict government regulations make it nearly impossible for competing tobacco companies to promote competing brands. As a result, Marlboro still boasts a 42% share of the U.S. cigarette market, even though nobody's seen the Marlboro man in decades.
Overall cigarette volumes are down, but Altria has no trouble raising prices on the leading brand. While the volume of cigarettes shipped fell 10.5% in the first nine months of 2023, revenue net of excise taxes is down just 1.4% year over year.
Combustible cigarettes are in decline, but Altria's smoke-free portfolio could drive growth in the years ahead. The company's NJOY brand is the only one approved to market a pod-based e-vapor product.
Realty Income
If you don't like waiting around for dividend raises or dividend payments, consider Realty Income (NYSE: O). At recent prices, the stock offers a 5.6% yield, which is way above average for a legendary dividend program that has grown its payout for 29 consecutive years.
Realty Income is a real estate investment trust (REIT), so it must distribute at least 90% of earnings to shareholders as a dividend. It generates highly reliable cash flows by employing long-term net leases that transfer all the variable costs of building ownership, such as taxes and maintenance, to the renter.
At the end of September, Realty Income boasted a 98.8% occupancy rate across its portfolio of 13,282 properties.
More than three-fourths of Realty Income's portfolio is rented out to retail businesses, but this REIT doesn't sign leases with every retail business that comes calling. Pharmacy, dollar store, and grocery store operators are its largest tenants. These businesses tend to thrive whether the overall economy is booming or in a slump. With a well-positioned portfolio, investors can reasonably expect this stock's payout to rise steadily for at least another decade.
AT&T
Can you remember the last time you changed service providers for your mobile phone? How about your internet service provider? If you're in the U.S., odds are good that at least one of these extremely sticky services is provided to you by AT&T (NYSE: T).
Even if you're not using an AT&T service now, there's a good chance that you will soon. In the third quarter, the company added 468,000 new phone subscribers and 296,000 new fiber-internet subscribers.
In October, AT&T Fiber was available for 20.7 million customers, and the company expects this figure to reach 30 million by the end of 2025.
At recent prices, the telecommunications giant offers a huge 6.5% yield that could climb steadily higher in the decade ahead. Over the past year, AT&T used just 41% of the free cash flow it generated to meet its dividend commitment. This means there's plenty of cash to raise its payout, pay down its sizable debt, and continue growing its business.
10 stocks we like better than Altria Group
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Altria Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Whether you have a few million or just a few hundred to invest, sinking your hard-earned money into dividend-paying stocks is probably your most effective option for generating a truly passive income stream. At recent prices, the stock offers a 5.6% yield, which is way above average for a legendary dividend program that has grown its payout for 29 consecutive years. It generates highly reliable cash flows by employing long-term net leases that transfer all the variable costs of building ownership, such as taxes and maintenance, to the renter.
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These three dividend-paying stocks offer high yields upfront at the moment. With the leading Marlboro brand in its portfolio, though, Altria's been able to raise its quarterly payout for 54 consecutive years. More than three-fourths of Realty Income's portfolio is rented out to retail businesses, but this REIT doesn't sign leases with every retail business that comes calling.
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Realty Income If you don't like waiting around for dividend raises or dividend payments, consider Realty Income (NYSE: O). At recent prices, the stock offers a 5.6% yield, which is way above average for a legendary dividend program that has grown its payout for 29 consecutive years. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Cory Renauer has no position in any of the stocks mentioned.
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You could buy properties and rent them out, but this requires enough effort that we really shouldn't consider such income truly passive. With the leading Marlboro brand in its portfolio, though, Altria's been able to raise its quarterly payout for 54 consecutive years. More than three-fourths of Realty Income's portfolio is rented out to retail businesses, but this REIT doesn't sign leases with every retail business that comes calling.
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fc2bae7c-8f4a-4194-a292-d0292f9135c4
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714267.0
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2023-12-07 00:00:00 UTC
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GOOGL, META: 2 Tech Stocks to Buy, According to Hedge Funds
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DCOMP
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https://www.nasdaq.com/articles/googl-meta%3A-2-tech-stocks-to-buy-according-to-hedge-funds
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Looking for some advice on which stocks to invest in? Consider taking advice from experts. TipRanks accumulates data from Form 13-Fs released by about 483 hedge funds to show which stocks hedge funds are buying and selling. Investors can use the TipRanks Hedge Fund Confidence Signal to see how bullish hedge fund managers are about a stock. Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) are among the technology stocks that hedge fund managers bought in the previous quarter.
Let’s take a closer look at these two stocks.
Alphabet
The reacceleration in Alphabet’s cloud segment and improvement in ad spending provide a solid foundation for future growth. Alongside this, the company’s investments in AI and its integration into its products are keeping hedge funds bullish about the stock.
Hedge funds bought 5.8 million shares of GOOGL stock last quarter. Overall, Alphabet has a Very Positive Hedge Fund Confidence Signal at present. Buyers include Ken Fisher of Fisher Asset Management LLC and Pershing Square Capital Management’s Bill Ackman.
What is the Future Price of GOOGL?
Wall Street is bullish about GOOGL stock. It has received 26 Buy and six Hold recommendations, translating into a Strong Buy consensus rating. Meanwhile, analysts’ average price target of $153.63 implies 18.2% upside potential. Shares of the company declined 3.9% in the past three months.
On a positive note, the stock has a maximum Smart Score of “Perfect 10” on TipRanks. Note that shares with a “Perfect 10” Smart Score have historically outperformed the S&P 500 Index (SPX) by a wide margin.
Meta Platforms
The company’s dominant position among social networking platform providers, ability to generate advertising revenues, and continuous efforts to launch new updates support hedge fund managers’ bullish views.
TipRanks data shows that hedge funds bought 3.5 million shares of Meta last quarter. Several hedge fund managers increased their holdings in the stock, including Joel Greenblatt of Gotham Asset Management and Ray Dalio of Bridgewater Associates, LP, among others. Also, the Hedge Fund Confidence Signal is currently Very Positive.
Is Meta a Buy, Sell, or Hold?
Meta stock has received 37 Buys and one Hold for a Strong Buy consensus rating. Further, analysts’ average price target of $387.71 implies 22.1% upside potential. The stock is up 6.3% over the past three months.
Concluding Thoughts
Investment decisions in such uncertain times can be a difficult task. However, one can rely on experts, such as hedge fund managers, who are known for beating the average market returns. Undoubtedly, both of these stocks, GOOGL and META, display the potential to generate strong returns based on positive signals from hedge funds and analysts’ optimism.
Find out which stock the biggest hedge fund managers are buying right now.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Alongside this, the company’s investments in AI and its integration into its products are keeping hedge funds bullish about the stock. Note that shares with a “Perfect 10” Smart Score have historically outperformed the S&P 500 Index (SPX) by a wide margin. Undoubtedly, both of these stocks, GOOGL and META, display the potential to generate strong returns based on positive signals from hedge funds and analysts’ optimism.
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Hedge funds bought 5.8 million shares of GOOGL stock last quarter. TipRanks data shows that hedge funds bought 3.5 million shares of Meta last quarter. Undoubtedly, both of these stocks, GOOGL and META, display the potential to generate strong returns based on positive signals from hedge funds and analysts’ optimism.
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TipRanks accumulates data from Form 13-Fs released by about 483 hedge funds to show which stocks hedge funds are buying and selling. Investors can use the TipRanks Hedge Fund Confidence Signal to see how bullish hedge fund managers are about a stock. Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) are among the technology stocks that hedge fund managers bought in the previous quarter.
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Investors can use the TipRanks Hedge Fund Confidence Signal to see how bullish hedge fund managers are about a stock. Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) are among the technology stocks that hedge fund managers bought in the previous quarter. Undoubtedly, both of these stocks, GOOGL and META, display the potential to generate strong returns based on positive signals from hedge funds and analysts’ optimism.
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2023-12-07 00:00:00 UTC
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The 3 Best AI Stocks to Buy in December
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https://www.nasdaq.com/articles/the-3-best-ai-stocks-to-buy-in-december
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Sam Altman returning as CEO of Open AI this past week has refocused many investors on the sector. With so many eyes on how this industry leader will continue to move on and expand after this drama, we wanted to reassess the top AI stocks for December.
Artificial intelligence has implications in industries like robotics, data analytics and even art. Just this past year, the AI market was valued at an enormous market value of $136 billion and shows no signs of slowing down. Analysts project that its growth will continue skyrocketing by an immense compound annual growth rate of 19% from 2023 to 2030. This surge in growth is largely attributed to advancements in industry verticals, allowing for seamless transitions that aid in all aspects, from efficiency to communication and data collection. Here are three of the best AI stocks to keep on your radar.
C3.ai (AI)
Source: Tada Images / Shutterstock.com
C3.ai (NYSE:AI) is a leading AI software company that seeks to scale AI to numerous industries. With generative AI and strong interest rates boosting this stock in the past year, analysts project an average 1-year price target of $28.
In November C3.ai signed a strategic partnership with Amazon (NASDAQ:AMZN) and its AWS division. Amazon has a large amount of resources, which should help boost the growth of the company in the coming months.
Looking at its financials, we see that C3.ai has had troubles with earnings in the past. However, most of the company’s free cash flow is going into heavy research in R&D. I believe this is a strategic investment to ensure future growth. While the stock has underperformed in the market, recent developments and a forward-looking focus on recurring revenues keep me optimistic. I think AI has the ability to capitalize off the boom in artificial intelligence.
Taiwan Semiconductor Manufacturing Company (TSM)
Source: ToyW / Shutterstock
Established in 1987, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) stands as a semiconductor industry powerhouse. TSMC’s semiconductor chips play a vital role across diverse applications, from advanced electronics to 5G technology. Positioned as a growth stock, analysts project an average one-year price of $113.
TSMC differentiates itself through its leadership in advanced semiconductor manufacturing. The company’s market share of 56.4% means that it has an overwhelmingly large presence in the global semiconductor foundry market. In the AI stocks domain, TSMC remains a key player, contributing to AI innovation through advanced chip manufacturing with unmatched expertise.
With a current P/E ratio of around 18.1x, TSMC aligns with industry standards. Over the last five years, the company exhibited robust EPS growth, boasting a CAGR of approximately 22.4%, surpassing its historical mean. TSMC’s resilient gross margins and impressive 18.3% year-over-year revenue growth underscore its financial stability. Pioneering advancements in semiconductor fabrication technology and maintaining a strong free cash flow position TSMC for sustained growth. In conclusion, TSMC’s commitment to innovation, unmatched market share and impressive financial performance make it a compelling choice for investors seeking a robust semiconductor and AI-focused stock in their portfolios.
UiPath (PATH)
Source: dennizn / Shutterstock.com
UiPath (NYSE:PATH) is paving the way in robotic process automation (RPA) innovation and has transformed corporate processes. PATH sets itself apart from its competition with an outstanding 35.8% market share, with extensive services in the RPA area. Because of its market leadership, UiPath is in an excellent spot to thrive in the rapidly changing AI sector. As part of a recent strategic initiative, the company partnered with Microsoft (NASDAQ:MSFT) to improve its integration capabilities with Microsoft Azure.
Although the company’s earnings this year are not the best, the trajectory for future profitability. PATH is predicted to have positive free cash flow and operating cash flow, both of which are significantly higher than previous years. The company has also outperformed the RPA market average in recent years, showcasing excellent revenue growth of 24% this year. Driven by strong financial metrics, UiPath remains at the forefront of the automation revolution. In conclusion, UiPath is a tempting option for investors looking to gain exposure to the underrepresented AI automation business because of its dedication to strategic alliances and distinct market position.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.
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The post The 3 Best AI Stocks to Buy in December appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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This surge in growth is largely attributed to advancements in industry verticals, allowing for seamless transitions that aid in all aspects, from efficiency to communication and data collection. In conclusion, TSMC’s commitment to innovation, unmatched market share and impressive financial performance make it a compelling choice for investors seeking a robust semiconductor and AI-focused stock in their portfolios. In conclusion, UiPath is a tempting option for investors looking to gain exposure to the underrepresented AI automation business because of its dedication to strategic alliances and distinct market position.
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With generative AI and strong interest rates boosting this stock in the past year, analysts project an average 1-year price target of $28. Taiwan Semiconductor Manufacturing Company (TSM) Source: ToyW / Shutterstock Established in 1987, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) stands as a semiconductor industry powerhouse. The company has also outperformed the RPA market average in recent years, showcasing excellent revenue growth of 24% this year.
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C3.ai (AI) Source: Tada Images / Shutterstock.com C3.ai (NYSE:AI) is a leading AI software company that seeks to scale AI to numerous industries. Taiwan Semiconductor Manufacturing Company (TSM) Source: ToyW / Shutterstock Established in 1987, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) stands as a semiconductor industry powerhouse. In the AI stocks domain, TSMC remains a key player, contributing to AI innovation through advanced chip manufacturing with unmatched expertise.
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In November C3.ai signed a strategic partnership with Amazon (NASDAQ:AMZN) and its AWS division. The company’s market share of 56.4% means that it has an overwhelmingly large presence in the global semiconductor foundry market. The company has also outperformed the RPA market average in recent years, showcasing excellent revenue growth of 24% this year.
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2023-12-07 00:00:00 UTC
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Better Stock to Buy: Coca-Cola vs. McDonald's
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https://www.nasdaq.com/articles/better-stock-to-buy%3A-coca-cola-vs.-mcdonalds
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Their businesses are growing, but a look at their stock prices over that past few months would indicate that investors have decided to ignore both McDonald's (NYSE: MCD) and Coca-Cola (NYSE: KO) stocks. The two Dow dividend giants didn't participate in the 2023 stock market rally, in fact, and trail the S&P 500's 18.8% performance by 10 and 26 percentage points, respectively, through early December.
They'll be back. Despite some short-term growth challenges, Coke and McDonald's are likely to continue setting annual earnings records well into the future. With that bright outlook in mind, let's look at which of the two stocks is a more attractive option for patient investors today.
Coke is growing
Both companies managed to boost sales in a tough consumer spending environment, but Coke came out ahead in the growth arena. Revenue in the most recent quarter was up a robust 11% year over year, thanks to rising prices and increased sales volumes. It helps that the beverage titan owns several of the world's biggest soda brands and dozens of other hit products spread through niches such as sparkling waters, energy drinks, and teas. Coke's massive global infrastructure also makes it nearly impossible for rivals to challenge its market share.
McDonald's expanded its comparable-store sales by 9% last quarter, reflecting strong growth in most of its major markets. Yet customer traffic dipped into negative territory in the core U.S. segment in Q3. The fast-food chain is working on a rebound, in part by stressing its value menu options. But investors will want to watch that metric for improvements over the coming quarters.
McDonald's is setting records
Another great reason to like both stocks is that the businesses improved on their already industry-leading profit margins. Coke's operating income ticked up to 30% of sales last quarter, or roughly double that of rival PepsiCo. This success reflects its pricing power and the company's highly efficient business. Coke also benefits from a more focused portfolio that centers on on-the-go beverage sales, whereas Pepsi also maintains a large snacks and meals segment.
Yet investors will prefer the financial strength of McDonald's over Coke. The fast-food titan not only boosted its margin in 2023, but its blazing 46% rate is also an all-time high for the business. Investors had thought the chain was essentially done increasing its profit margin following a refranchising program that wrapped up before the pandemic struck. But the combination of strong customer traffic and rising prices has unlocked another level of earnings expansion for the burger seller.
Price and cash flow
The most appealing business in the world won't be a very positive force in your portfolio if you pay too high of a price for it. The good news is that investors aren't taking on huge risks in shelling out for McDonald's or Coke right now. The fast-food giant is valued at 8.4 times annual sales, which is elevated compared with its industry peers, to be sure. But that premium is below the over 9 times sales that investors were paying for the stock at a few other points in 2023.
Coke's discount is even more pronounced. You can own shares today for 5.6 times sales, down from a P/S ratio of 7 in early 2023. Coke also delivers a meatier dividend yield of 3.1%, compared with 2.3% rate at Mickey D's.
Overall, then, Coke seems more attractive for its faster growth, higher dividend payout, and lower valuation. While investors won't regret owning either stock over the long term, the beverage giant is likely to deliver better returns from here.
10 stocks we like better than Coca-Cola
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*Stock Advisor returns as of November 29, 2023
Demitri Kalogeropoulos has positions in McDonald's. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The two Dow dividend giants didn't participate in the 2023 stock market rally, in fact, and trail the S&P 500's 18.8% performance by 10 and 26 percentage points, respectively, through early December. It helps that the beverage titan owns several of the world's biggest soda brands and dozens of other hit products spread through niches such as sparkling waters, energy drinks, and teas. Coke also benefits from a more focused portfolio that centers on on-the-go beverage sales, whereas Pepsi also maintains a large snacks and meals segment.
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But the combination of strong customer traffic and rising prices has unlocked another level of earnings expansion for the burger seller. You can own shares today for 5.6 times sales, down from a P/S ratio of 7 in early 2023. While investors won't regret owning either stock over the long term, the beverage giant is likely to deliver better returns from here.
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Their businesses are growing, but a look at their stock prices over that past few months would indicate that investors have decided to ignore both McDonald's (NYSE: MCD) and Coca-Cola (NYSE: KO) stocks. Coke is growing Both companies managed to boost sales in a tough consumer spending environment, but Coke came out ahead in the growth arena. But that premium is below the over 9 times sales that investors were paying for the stock at a few other points in 2023.
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McDonald's is setting records Another great reason to like both stocks is that the businesses improved on their already industry-leading profit margins. You can own shares today for 5.6 times sales, down from a P/S ratio of 7 in early 2023. While investors won't regret owning either stock over the long term, the beverage giant is likely to deliver better returns from here.
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2023-12-07 00:00:00 UTC
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Is Nio Stock a Buy Now After Earnings? Or Is It a Trap?
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https://www.nasdaq.com/articles/is-nio-stock-a-buy-now-after-earnings-or-is-it-a-trap
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In this video, I will talk about Nio (NYSE: NIO) and its recent earnings report, which was well received by investors because of the focus on profitability. But I'll explain why investors should exercise caution before celebrating prematurely.
*Stock prices used were from the trading day of Dec. 5, 2023. The video was published on Dec. 6, 2023.
10 stocks we like better than Nio
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Nio wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Neil Rozenbaum has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio. The Motley Fool has a disclosure policy. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Nio wasn't one of them! If you choose to subscribe through his link, he will earn some extra money that supports his channel.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Neil Rozenbaum has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio.
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In this video, I will talk about Nio (NYSE: NIO) and its recent earnings report, which was well received by investors because of the focus on profitability. 10 stocks we like better than Nio When our analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Neil Rozenbaum has no position in any of the stocks mentioned.
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See the 10 stocks *Stock Advisor returns as of December 4, 2023 Neil Rozenbaum has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio. His opinions remain his own and are unaffected by The Motley Fool.
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2023-12-07 00:00:00 UTC
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Which Stock Is More Likely to Help You Retire as a Millionaire: AbbVie or Eli Lilly?
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https://www.nasdaq.com/articles/which-stock-is-more-likely-to-help-you-retire-as-a-millionaire%3A-abbvie-or-eli-lilly
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Many investors have flocked to big pharma stocks throughout the years. And doing so has paid off handsomely with several of those stocks.
AbbVie (NYSE: ABBV) and Eli Lilly (NYSE: LLY) stand out as two of the biggest pharma stocks around. Both have generated solid returns for investors. But which stock is more likely to help you retire as a millionaire?
The case for Eli Lilly
There's a strong case to be made that Eli Lilly is the better pick over AbbVie for long-term investors. Lilly ranks among the biggest healthcare winners of 2023, and its growth prospects continue to look bright.
Mounjaro has become a juggernaut for Lilly in type 2 diabetes. The same underlying drug, tirzepatide, was also recently approved by the U.S. Food and Drug Administration (FDA) for weight loss, with Lilly using the brand name Zepbound.
Some analysts project that Mounjaro and Zepbound could achieve peak annual sales of more than $50 billion. To put that figure into context, Lilly expects to generate total sales in 2023 of between $33.4 billion and $33.9 billion.
The company could have another huge blockbuster drug on the way, as well. Lilly expects an FDA approval decision on donanemab in treating Alzheimer's disease in the first quarter of 2024. Morningstar predicts the drug could reach peak annual sales of $7 billion.
Lilly's current lineup also includes six other products with solid sales growth, with cancer drug Verzenio especially standing out after its sales skyrocketed 68% year over year in the third quarter. In addition, the company's pipeline features 22 late-stage programs and 45 programs in earlier testing.
AbbVie's advantage
AbbVie simply can't compete with Lilly's growth story. The company's revenue and earnings are declining due to biosimilar competition for its top-selling drug, Humira. The big pharma stock's performance in 2023 reflects this reality.
However, AbbVie does have at least one key advantage over Lilly: It offers one of the most attractive dividends around. AbbVie's dividend yield currently stands at nearly 4.3%. The company has increased its dividend for 52 consecutive years, putting it in the elite group of stocks known as Dividend Kings.
Don't underestimate the importance of dividends in growing your retirement account. Since its spinoff from Abbott in 2013, AbbVie's share price has increased by a little over 310%. But if we include dividends, the stock's total return during the period is a much higher 547%.
Also, AbbVie's current challenges should only be temporary. The company expects to return to rapid growth by 2025. Its key growth drivers include Rinvoq and Skyrizi, autoimmune disease drugs that should together top the peak annual sales generated by Humira.
AbbVie's pipeline holds a lot of potential, too. The company has over 90 programs in clinical development, 23 of which are in late-stage testing. Blood cancer drug epcoritamab looks especially promising, with Wall Street analysts projecting peak annual sales of close to $3 billion.
Better pick for a million-dollar retirement
So which of these two stocks is the better pick to help you retire as a millionaire? Let me first mention a few caveats.
Investors are usually better off building a diversified portfolio instead of betting the farm on a small number of stocks. Putting an inordinately large percentage of your retirement savings in one stock can be highly risky.
There's also no guarantee that you'll be able to build your retirement account to $1 million or more. Your likelihood of success depends heavily on how much you have to invest and your time horizon. The more money to invest and the longer you wait, the better your chances will be.
That said, I think that both AbbVie and Eli Lilly are good picks for long-term investors. However, if I had to choose only one of them right now as the most likely to be a millionaire-maker, it would be Lilly. The company's growth opportunities are just too good for AbbVie to match.
Things could change over time, though. AbbVie could launch huge winners in the future. Lilly could stumble. My pick is Lilly, but I wouldn't rule out a "tortoise-and-the-hare" scenario where AbbVie ultimately delivers the greatest total return.
10 stocks we like better than Eli Lilly
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Eli Lilly wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 4, 2023
Keith Speights has positions in AbbVie. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Its key growth drivers include Rinvoq and Skyrizi, autoimmune disease drugs that should together top the peak annual sales generated by Humira. Blood cancer drug epcoritamab looks especially promising, with Wall Street analysts projecting peak annual sales of close to $3 billion. My pick is Lilly, but I wouldn't rule out a "tortoise-and-the-hare" scenario where AbbVie ultimately delivers the greatest total return.
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Some analysts project that Mounjaro and Zepbound could achieve peak annual sales of more than $50 billion. Lilly's current lineup also includes six other products with solid sales growth, with cancer drug Verzenio especially standing out after its sales skyrocketed 68% year over year in the third quarter. That said, I think that both AbbVie and Eli Lilly are good picks for long-term investors.
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AbbVie (NYSE: ABBV) and Eli Lilly (NYSE: LLY) stand out as two of the biggest pharma stocks around. The case for Eli Lilly There's a strong case to be made that Eli Lilly is the better pick over AbbVie for long-term investors. 10 stocks we like better than Eli Lilly When our analyst team has a stock tip, it can pay to listen.
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The company could have another huge blockbuster drug on the way, as well. Lilly's current lineup also includes six other products with solid sales growth, with cancer drug Verzenio especially standing out after its sales skyrocketed 68% year over year in the third quarter. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Eli Lilly wasn't one of them!
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2023-12-07 00:00:00 UTC
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5 Unstoppable Trends to Invest $1,000 in for 2024
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https://www.nasdaq.com/articles/5-unstoppable-trends-to-invest-%241000-in-for-2024
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For the past 30 years, Wall Street has had no shortage of next-big-thing investment trends to latch onto. Some of these have been game changers, such as the advent of the internet in the 1990s, while others never came close to living up to lofty expectations (e.g., consumer-level 3D printers).
No matter what happens with the U.S. economy and stock market in 2024, there are bound to be investment trends that garner the attention of professional and everyday investors.
However, today's hottest trends may not carry over into the following year. Recently, I discussed why artificial intelligence (AI) and electric vehicles (EV) are two popular trends that could face-plant next year. Thankfully, other investment trends stand at the ready to take their place.
What follows are five unstoppable trends to invest $1,000 in for 2024.
Image source: Getty Images.
1. Cybersecurity
Perhaps the most surefire trend investors can continue to count on in the upcoming year is cybersecurity. Regardless of how well or poorly the U.S. economy and stock market perform, hackers and robots don't take time off from trying to steal sensitive business or customer information. Any company that has an online or cloud-based presence requires protection, and this is increasingly falling into the hands of third-party providers.
The cream of the crop in cybersecurity looks to be CrowdStrike Holdings (NASDAQ: CRWD). CrowdStrike's cloud-native security platform, known as Falcon, relies on AI and machine learning (ML) solutions to become more effective at identifying and responding to potential end-user threats over time. Falcon is overseeing trillions of events each week.
Despite being a pricier cloud-based, software-as-a-service (SaaS) solution than many of its peers, CrowdStrike's gross retention rate is superior. Moreover, 63% of its ever-growing client base has purchased at least five or more cloud-module subscriptions.
Don't overlook Okta (NASDAQ: OKTA), either. Despite the negative press associated with a recent security breach, identity-verification company Okta is also relying on AI and ML to steadily improve the efficiency of its cybersecurity solutions.
In particular, the acquisition of Auth0 opens new doors in international markets for Okta, as well as gives the company a firmer foundation to build on its Customer Identity segment, which is a $30 billion addressable market, according to the company.
2. Gene editing
A second potentially unbeatable trend to consider putting $1,000 to work in for 2024 is gene editing.
Generally speaking, investors don't have to dig too deeply to find exciting and promising new research in the drug-development space. Gene editing just happens to be one of the more revolutionary approaches.
As its name suggests, gene editing involves the "editing" of targeted DNA. A small piece of guide ribonucleic acid (RNA) is attached to an enzyme (e.g., the Cas9 enzyme) and introduced into target cells. The enzyme then "cuts" the DNA at the targeted location. The belief among the scientific community is that gene editing could be a successful approach to treating single-gene disorders, which include cystic fibrosis.
What really puts gene editing on the map as a hot investment trend for 2024 is the approval of Casgevy (formerly exa-cel) in the U.K., i.e., the very first approval anywhere for a gene-editing drug. On Nov. 16, Vertex Pharmaceuticals (NASDAQ: VRTX) and CRISPR Therapeutics (NASDAQ: CRSP) announced the groundbreaking approval of Cas9 gene-editing therapy Casgevy for the treatment of sickle cell disease and transfusion-dependent beta thalassemia. With label-expansion opportunities and approvals awaiting in other regions, including the U.S., this gene-editing treatment developed by Vertex and CRISPR has the potential to top $1 billion in annual sales.
It's worth noting that gene editing may also hold promise beyond single-gene diseases. It's being examined by CRISPR Therapeutics as a treatment for a variety of cancer types.
Image source: Getty Images.
3. Financial technology (fintech)
The third unstoppable trend you can confidently invest $1,000 in for 2024 is financial technology, which you probably know better as "fintech." Fintech involves the use of software or technology to facilitate banking and lending services.
Based on a report from Boston Consulting Group that was issued in May, global fintech revenue is expected to catapult by more than 500% to $1.5 trillion by 2030. This type of growth isn't hard to believe considering that many of the world's emerging markets are still underbanked, including Southeastern Asia, the Middle East, and Africa. Mobile-based payments and lending solutions may be the answer to bridging this lack of access to basic financial services.
PayPal Holdings (NASDAQ: PYPL) currently finds itself in the driver's seat in the fintech space. Even with an above-average inflation rate weighing on the purchasing power of lower-earning workers, PayPal has seen its total payment volume (TPV) grow by a double percentage, without fail, on a currency-neutral basis.
Furthermore, PayPal's active users are more engaged than ever. This is a particularly important point given that PayPal's top platforms (PayPal and Venmo) are driven by transaction fees. In other words, more transactions will equate to higher gross profit for the company. In less than three years, PayPal's active customers have increased their average number of transactions completed over the trailing-12-months from 40.9 to 56.6.
Even in a challenging economic climate, fintech stocks would be expected to sustain growth in TPV.
4. Data-center economy
A fourth seemingly invincible trend to invest $1,000 in for next year is the data-center economy. By this, I mean almost anything that's directly or indirectly tied to the growing demand for data centers.
As the world becomes more digitized and data gets moved into the cloud at an accelerated pace, demand for everything from physical facilities that house data-center server towers to the host of solutions powering this expansion will fuel the data-center economy.
Perhaps the safest way to play this expansion is with real estate investment trust (REIT) American Tower (NYSE: AMT). Just days before 2021 came to a close, American Tower completed its acquisition of CoreSite Realty, which owned 25 data centers at the time. Purchasing properties and leasing them out for extended periods usually leads to highly predictable operating cash flow and a market-topping yield for REITs.
The puzzle pieces are also in place for storage stocks to rebound nicely in 2024. Companies like Western Digital (NASDAQ: WDC) are well positioned to take advantage of the growing storage needs presented by data-center expansion. Though hard-disk drives have been a staple in data centers for as far back as the eye can see, Western Digital's NAND flash-memory solutions have the potential to become the new standard in enterprise data centers.
For investors with a higher tolerance for risk, Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) present smart ways to play the burgeoning data-center economy. Amazon Web Services (AWS) and Google Cloud respectively accounted for 31% and 10% of global cloud infrastructure-service spending in the third quarter -- and enterprise cloud spending is still in its early innings.
5. Small-cap investing
As of this time last month, megacap tech stocks were outperforming small-cap stocks by the largest margin on record -- yes, even more than during the dot-com bubble in the early 2000s. While this, in some way, speaks to the time-tested nature of brand-name businesses, it also suggests a generational buying opportunity awaits small-cap investors.
As of the closing bell on Dec. 5, the benchmark S&P 500, which houses mostly large-cap and megacap components, had a forward price-to-earnings (P/E) ratio of 18.7. This is roughly the midpoint of where the broad-based index has traded on a forward-earnings basis over the past 25 years.
Meanwhile, the S&P 600, which is comprised of small-cap companies, had a forward P/E ratio of 13.2, which isn't too far from its 25-year low. In my view, this makes small-cap stocks a bargain, and 2024 could be the year value investors wake up to this realization.
A perfect example of a small-cap company with the potential for multiple expansion is furniture retailer Lovesac (NASDAQ: LOVE). Whereas traditional furniture retailers offer little in the way of true product differentiation and are heavily reliant on foot traffic into physical stores, Lovesac has resolved these headwinds.
Lovesac's sactionals (modular couches) are unique in that they can be rearranged to fit most living spaces, have more than 200 different cover choices, come with an assortment of upgrade options, and use recycled plastic water bottles for their yarn. That's functionality, optionality, and eco-friendliness all rolled into one.
Furthermore, Lovesac's omnichannel sales platform features a burgeoning online presence, pop-up showrooms, and a couple of brand-name partnerships. With lower overhead expenses and a reduced reliance on brick-and-mortar stores, Lovesac has handily outperformed its peers. This should continue in 2024 and beyond.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Sean Williams has positions in Alphabet, Amazon, Lovesac, PayPal, Vertex Pharmaceuticals, and Western Digital. The Motley Fool has positions in and recommends Alphabet, Amazon, American Tower, CRISPR Therapeutics, CrowdStrike, Okta, PayPal, and Vertex Pharmaceuticals. The Motley Fool recommends Lovesac and recommends the following options: long January 2026 $180 calls on American Tower, short December 2023 $67.50 puts on PayPal, and short January 2026 $185 calls on American Tower. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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CrowdStrike's cloud-native security platform, known as Falcon, relies on AI and machine learning (ML) solutions to become more effective at identifying and responding to potential end-user threats over time. Even with an above-average inflation rate weighing on the purchasing power of lower-earning workers, PayPal has seen its total payment volume (TPV) grow by a double percentage, without fail, on a currency-neutral basis. Lovesac's sactionals (modular couches) are unique in that they can be rearranged to fit most living spaces, have more than 200 different cover choices, come with an assortment of upgrade options, and use recycled plastic water bottles for their yarn.
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Sean Williams has positions in Alphabet, Amazon, Lovesac, PayPal, Vertex Pharmaceuticals, and Western Digital. The Motley Fool has positions in and recommends Alphabet, Amazon, American Tower, CRISPR Therapeutics, CrowdStrike, Okta, PayPal, and Vertex Pharmaceuticals. The Motley Fool recommends Lovesac and recommends the following options: long January 2026 $180 calls on American Tower, short December 2023 $67.50 puts on PayPal, and short January 2026 $185 calls on American Tower.
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For investors with a higher tolerance for risk, Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) present smart ways to play the burgeoning data-center economy. The Motley Fool has positions in and recommends Alphabet, Amazon, American Tower, CRISPR Therapeutics, CrowdStrike, Okta, PayPal, and Vertex Pharmaceuticals. The Motley Fool recommends Lovesac and recommends the following options: long January 2026 $180 calls on American Tower, short December 2023 $67.50 puts on PayPal, and short January 2026 $185 calls on American Tower.
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As its name suggests, gene editing involves the "editing" of targeted DNA. Based on a report from Boston Consulting Group that was issued in May, global fintech revenue is expected to catapult by more than 500% to $1.5 trillion by 2030. The Motley Fool has positions in and recommends Alphabet, Amazon, American Tower, CRISPR Therapeutics, CrowdStrike, Okta, PayPal, and Vertex Pharmaceuticals.
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2023-12-07 00:00:00 UTC
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Cathie Wood Has a Bold Prediction for 2024
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https://www.nasdaq.com/articles/cathie-wood-has-a-bold-prediction-for-2024
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Stocks have been rallying in recent weeks on the hopes that U.S. inflation will continue to come down and that interest rate cuts may be around the corner. That, however, is by no means a certainty. But a lower rate of inflation would eventually lead to lower interest rates, which, in turn, would make growth stocks more attractive buys.
One portfolio manager who is optimistic about inflation coming down next year is Cathie Wood, whose Ark Innovation ETF (exchange-traded fund) is often viewed as a barometer for growth stocks. It's up 55% this year. But if Wood's expectations for next year prove accurate, then the fund could just be getting warmed up.
Could deflation happen?
Since shortly after the start of the pandemic, the Federal Reserve had been holding the benchmark federal funds interest rate at essentially zero. But about two years ago, in response to sharply rising inflation, the Fed began a series of rate hikes intended to curb inflation. Those hikes had the desired effect, but while inflation did ease, its decline has stalled in recent months in the 3% to 4% range -- still above the Fed's target of around 2%.
Wood, however, expects that not only will inflation continue to go down, but that it could even go negative at some point during 2024. A 10-year history of the inflation rate shows that periods of deflation aren't exactly unheard of, but they are rare.
US Inflation Rate data by YCharts.
When deflation last occurred, in 2015, it was brief. It was, however, a mediocre year for the S&P 500: The index was down almost 1%.
Winners and losers if inflation comes down sharply in 2024
A negative inflation rate appears unlikely, but if inflation comes down significantly in 2024, it could have varying consequences for stocks. Here's a look at the types of stocks that could benefit, and which ones may struggle.
Interest-rate sensitive stocks: Winners. Upstart Holdings, which is sensitive to interest rates, could thrive in a scenario where an extremely low rate of inflation leads to the Federal Reserve slashing interest rates. Its lending platform, which utilizes artificial intelligence (AI) to help lenders make loan decisions, could benefit from an uptick in demand.
Real estate investment trusts (REITs): Winners. REITs haven't been doing well this year as higher interest rates impact their ability to raise money, as well as raising their interest expenses. These businesses typically carry a high amount of debt, and a reduction in interest rates could make them more attractive investments.
Big-box retailers: Winners. If deflation were to occur, retailers such as Walmart and Costco could benefit as they could acquire products for lower prices and improve their margins. As the rate of inflation starts to cool, these companies could use their pricing power to load up on goods in bulk, locking in even more cost savings before consumers expect to see them reflected on store shelves.
Consumer staples: Losers. The types of stocks that could suffer the most in a deflationary environment are ones that have been hiking prices to offset rising prices. Grocery stores are a good example of this. Consumers are likely not going to eat more food just because prices are lower. Instead, if food takes up less of people's budgets, they'll have more to spend on discretionary items. If deflation occurs, their volumes may remain the same, but grocery businesses and other consumer staples companies will no longer benefit from being able to charge higher prices.
Oil and natural gas stocks: Losers. Oil and natural gas companies have been doing well due to rising commodity prices in recent years. But this is a cyclical industry, and if there's another downturn in the industry due to a decline in energy prices, these stocks could quickly become unpopular investments.
Investors shouldn't put too much faith in forecasts
Regardless of what may or may not happen, investors shouldn't worry too much about any expert's specific prediction or macroeconomic forecast.
Billionaire investor Warren Buffett says he simply doesn't worry about such forecasts when he's making investment decisions because of how quickly conditions can change. And investors should expect volatility over the long term.
"When you get into economics, there's so many variables, and the truth is, you've got to expect good times and bad times in business," Buffett said during an interview last year with Yahoo Finance.
While it can be helpful to know what to expect in a deflationary environment, investors shouldn't radically change their investing strategies for something that may last for only a brief period, if at all.
Instead, the better strategy is to invest in quality businesses that should perform well in the long term, regardless of economic cycles. By sticking to stocks with strong fundamentals and pricing power, investors can maximize their odds for great returns in the long run.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Upstart, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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One portfolio manager who is optimistic about inflation coming down next year is Cathie Wood, whose Ark Innovation ETF (exchange-traded fund) is often viewed as a barometer for growth stocks. Its lending platform, which utilizes artificial intelligence (AI) to help lenders make loan decisions, could benefit from an uptick in demand. As the rate of inflation starts to cool, these companies could use their pricing power to load up on goods in bulk, locking in even more cost savings before consumers expect to see them reflected on store shelves.
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But a lower rate of inflation would eventually lead to lower interest rates, which, in turn, would make growth stocks more attractive buys. Since shortly after the start of the pandemic, the Federal Reserve had been holding the benchmark federal funds interest rate at essentially zero. While it can be helpful to know what to expect in a deflationary environment, investors shouldn't radically change their investing strategies for something that may last for only a brief period, if at all.
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But a lower rate of inflation would eventually lead to lower interest rates, which, in turn, would make growth stocks more attractive buys. Winners and losers if inflation comes down sharply in 2024 A negative inflation rate appears unlikely, but if inflation comes down significantly in 2024, it could have varying consequences for stocks. Upstart Holdings, which is sensitive to interest rates, could thrive in a scenario where an extremely low rate of inflation leads to the Federal Reserve slashing interest rates.
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It's up 55% this year. Winners and losers if inflation comes down sharply in 2024 A negative inflation rate appears unlikely, but if inflation comes down significantly in 2024, it could have varying consequences for stocks. Upstart Holdings, which is sensitive to interest rates, could thrive in a scenario where an extremely low rate of inflation leads to the Federal Reserve slashing interest rates.
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2023-12-07 00:00:00 UTC
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Zacks Industry Outlook Highlights IPG Photonics and Lumentum
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https://www.nasdaq.com/articles/zacks-industry-outlook-highlights-ipg-photonics-and-lumentum-0
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For Immediate Release
Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses IPG Photonics IPGP and Lumentum LITE.
Industry: Lasers
Link: https://www.zacks.com/commentary/2194249/2-laser-systems-stocks-to-watch-in-a-challenging-industry
The Zacks Laser Systems and Components industry is suffering from challenging macroeconomic conditions globally, weak economic conditions in Europe, a sluggish economic environment in China, softer demand in industrial markets, and lackluster capital equipment spending. However, industry participants like IPG Photonics and Lumentum benefit from upbeat demand from electric vehicles, electronics, semiconductors and healthcare end-markets. Robust demand for high-power continuous wave and pulsed laser for cutting and battery-processing applications, growing demand for high-performance optical devices, and the ongoing adoption of cloud computing, autonomous driving, IoT and 5G are the key catalysts.
Industry Description
The Zacks Laser Systems and Components industry comprises companies offering high-performance fiber lasers, fiber amplifiers and diode lasers, optical and photonic products, and scanning technology solutions. The key end markets are semiconductors, metrology, advanced communication and medical devices. Industry participants also provide high-precision 3D sensors and system products for inspection and metrology.
Moreover, in the medical devices space, laser and other energy-based aesthetic treatments can achieve therapeutic results by affecting structures within the skin. Developing safe and effective aesthetic treatments has resulted in a well-established market for these procedures. The industry also operates in the cyclical surface mount technology and semiconductor capital equipment markets.
3 Laser Systems & Components Industry Trends to Watch
Emerging Applications Driving Demand for Lasers: The industry is benefiting from increasing demand for emerging applications like additive manufacturing, facial recognition, gesture recognition, LiDAR applications and IoT. Advanced lasers, especially those with 3D sensing (3DS) capabilities, are enhancing interactions using technology. Notably, 3DS — the technology that allows users to create 3D printable objects, control games with body gestures and measure objects — is in high demand.
Laser-IoT Combination Supports Efficiency: As industries are increasingly adopting automation techniques, combining lasers with IoT improves operating efficiency. IoT-supported manufacturing equipment is far easier to update with firmware. The combination reduces costs and increases the flexibility and reliability manifold by enabling material-handling capabilities through remote sources. Strong demand from semiconductor and allied markets, which are seeing a rapid shift toward the production of micro and nano devices, is another positive for industry participants.
Challenging Macroeconomic Condition Hurts Prospect: Industry participants suffer from sluggish capital spending by original equipment manufacturers. Moreover, raging inflation, a strong U.S. dollar, energy headwinds in Europe and weakness in China are expected to hurt industry participants in the near term.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Laser Systems and Components industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #173, which places it in the bottom 31% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Despite the lackluster outlook, there are a few stocks worth watching in the industry. But before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first.
Industry Underperforms Broader Sector and S&P 500
The Zacks Laser Systems and Components industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 composite over the past year.
The industry has declined 19% over this period against the S&P 500’s rise of 16.1% and the broader sector’s return of 36.8%.
Industry's Current Valuation
On the basis of the trailing 12-month P/S, which is a commonly used multiple for valuing Laser Systems and Components stocks, we see that the industry is currently trading at 5.94X compared with the S&P 500’s 3.83X. It is also trading above the sector’s trailing 12-month P/S of 3.72X.
Over the last five years, the industry has traded as high as 12.64X and as low as 3.19X, with a median of 6.06X.
2 Laser Stocks to Watch
IPG Photonics: Oxford, MA-based IPG Photonics develops and manufactures fiber and diode lasers, fiber amplifiers, and transceivers for diverse applications like materials processing, advanced applications, communications and medical. The stock has gained 7.9% in the year-to-date period.
IPG Photonics benefits from solid demand for AMB lasers, LightWELD, green and ultrafast lasers, as well as beam delivery. IPG expects medical sales to recover to normal levels in the third quarter. Its diversifying revenue base and declining exposure to low-margin businesses are the key catalysts. Focus on expanding footprint in the e-mobility and renewable energy end-markets are drivers.
The Zacks Consensus Estimate for IPGP’s 2023 earnings has been unchanged at $4.69 per share in the past 30 days. IPG Photonics currently has a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lumentum: This San Jose, CA-based company anticipates strong growth in Cloud & Networking revenues, driven by an accelerating demand for AI in 2024. It expects cloud applications to drive more than 30% of Lumentum cloud and networking revenues.
LITE shares have lost 18.9% in the past year. The consensus mark for this Zacks Rank #3 company’s fiscal 2024 earnings has declined 17.69% to $1.54 per share over the past 30 days.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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IPG Photonics Corporation (IPGP) : Free Stock Analysis Report
Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For Immediate Release Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses IPG Photonics IPGP and Lumentum LITE. Lumentum: This San Jose, CA-based company anticipates strong growth in Cloud & Networking revenues, driven by an accelerating demand for AI in 2024. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.
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Industry: Lasers Link: https://www.zacks.com/commentary/2194249/2-laser-systems-stocks-to-watch-in-a-challenging-industry The Zacks Laser Systems and Components industry is suffering from challenging macroeconomic conditions globally, weak economic conditions in Europe, a sluggish economic environment in China, softer demand in industrial markets, and lackluster capital equipment spending. 3 Laser Systems & Components Industry Trends to Watch Emerging Applications Driving Demand for Lasers: The industry is benefiting from increasing demand for emerging applications like additive manufacturing, facial recognition, gesture recognition, LiDAR applications and IoT. Click to get this free report IPG Photonics Corporation (IPGP) : Free Stock Analysis Report Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Industry: Lasers Link: https://www.zacks.com/commentary/2194249/2-laser-systems-stocks-to-watch-in-a-challenging-industry The Zacks Laser Systems and Components industry is suffering from challenging macroeconomic conditions globally, weak economic conditions in Europe, a sluggish economic environment in China, softer demand in industrial markets, and lackluster capital equipment spending. Zacks Industry Rank Indicates Dim Prospects The Zacks Laser Systems and Components industry is housed within the broader Zacks Computer and Technology sector. Industry Underperforms Broader Sector and S&P 500 The Zacks Laser Systems and Components industry has underperformed the broader Zacks Computer and Technology sector and the S&P 500 composite over the past year.
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But before we present the top industry picks, it is worth looking at the industry’s shareholder returns and current valuation first. IPG Photonics currently has a Zacks Rank #3 (Hold). See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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2023-12-07 00:00:00 UTC
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Nvidia Is the Best "Magnificent Seven" Stock to Buy Right Now, According to Wall Street
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https://www.nasdaq.com/articles/nvidia-is-the-best-magnificent-seven-stock-to-buy-right-now-according-to-wall-street
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The "Magnificent Seven" is a basket of mega-cap companies collectively worth more than $10 trillion. They account for more than one-quarter of the broad-based S&P 500 and nearly one-half of the technology-heavy Nasdaq Composite when measured by weighted exposure.
The Magnificent Seven are listed alphabetically below along with their median 12-month price target set by Wall Street analysts, as well as the implied upside from the current price.
Alphabet: $153 per share (16% upside).
Amazon: $175 per share (19% upside).
Apple: $200 per share (5% upside).
Meta Platforms: $380 per share (17% upside).
Microsoft: $413 per share (10% upside).
Nvidia (NASDAQ: NVDA): $650 per share (39% upside).
Tesla: $256 per share (7% upside).
Wall Street sees upside in all seven stocks, but none more so than Nvidia. Despite the stock climbing 220% year to date, analysts see another 39% upside for shareholders over the next year or so.
Read on to learn more about this magnificent company.
Nvidia GPUs are the gold standard in accelerated computing
Nvidia specializes in accelerated computing. The company is often described as a chipmaker, but it actually provides a variety of hardware, software, and services to customers across four end markets: gaming, professional visualization, data center, and automotive.
Nvidia initially focused on computer graphics. Its invention of the graphics processing unit (GPU) in 1999 brought groundbreaking visual effects to video games and films, and the company still holds more than 90% market share in workstation graphics processors. But Nvidia turned its attention to the data center in 2006 when it introduced CUDA, a programming model that allows its GPUs to function as general-purpose processors.
Since then, Nvidia GPUs have become the gold standard in accelerating complex data center workloads like analytics, scientific computing, and artificial intelligence (AI). In fact, Forrester Research says Nvidia GPUs are synonymous with AI infrastructure, and the company holds an astonishing 80% to 95% market share in machine learning processors, according to analysts.
Nvidia evolved into a data center computing company
Nvidia has a visionary leader in CEO Jensen Huang. He anticipated the importance of the data center before the market really materialized, and he prepared his company accordingly. "Over a decade ago, Jensen Huang understood where the market was going to go, so [Nvidia] invested billions of dollars in not only silicon, but software," Baird analyst Ted Mortonson told Business Insider earlier this year.
Nvidia has indeed reinforced its role in the data center (and cemented its leadership in AI and graphics) by branching into high-performance networking equipment, subscription software, and cloud services. One of its newest innovations, DGX Cloud, is especially noteworthy because it brings together and democratizes the entire Nvidia AI platform.
Specifically, DGX Cloud lets businesses rent the supercomputing infrastructure, software, and pretrained models they need to build and deploy AI applications, rather than buying costly hardware for private data centers. DGX Cloud includes development frameworks that address specific use cases, such as product recommender systems for retail, intelligent avatars for customer service, and route optimization software for logistics. It also supports the development of generative AI applications for text, images, video, and even biological molecules.
Argus analyst Jim Kelleher sees DGX Cloud as a particularly momentous development. He recently wrote the following in a note to clients: "Nvidia stands out, in our view, not only because it participates in so many parts of the dynamic AI economy, but because it has synthesized its offerings into a first-of-its-kind AI-as-a-service delivered through the cloud."
Nvidia has hardly tapped its $1 trillion addressable market
Nvidia reported phenomenal financial results in the third quarter, beating expectations on the top and bottom lines. Revenue rose 206% to $18.1 billion, due primarily to record sales in the data center segment, as detailed below:
Data center sales increased 279% to $14.5 billion.
Gaming sales increased 81% to $2.9 billion.
Professional visualization sales increased 108% to $416 million.
Automotive sales increased 4% to $261 million.
Additionally, non-GAAP (adjusted) net income soared 588% to $10 billion as high-margin software and services accounted for a larger portion of total sales. Yet, Nvidia has hardly tapped its $1 trillion addressable market and AI spend is forecast to grow at 37% annually through 2030, according to Grand View Research. In that context, the company is well-positioned to maintain its momentum.
Indeed, Morningstar analyst Brian Colello expects Nvidia to grow revenue at 22% annually over the next decade, implying that sales will increase 630% by 2033. In that context, its current valuation of 25.9 times sales looks rather reasonable, despite being a premium to its three-year average of 23.4 times sales. Patient investors who can handle volatility should consider buying a small position in Nvidia stock today.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. 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. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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"Over a decade ago, Jensen Huang understood where the market was going to go, so [Nvidia] invested billions of dollars in not only silicon, but software," Baird analyst Ted Mortonson told Business Insider earlier this year. Specifically, DGX Cloud lets businesses rent the supercomputing infrastructure, software, and pretrained models they need to build and deploy AI applications, rather than buying costly hardware for private data centers. DGX Cloud includes development frameworks that address specific use cases, such as product recommender systems for retail, intelligent avatars for customer service, and route optimization software for logistics.
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Nvidia GPUs are the gold standard in accelerated computing Nvidia specializes in accelerated computing. The company is often described as a chipmaker, but it actually provides a variety of hardware, software, and services to customers across four end markets: gaming, professional visualization, data center, and automotive. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla.
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In fact, Forrester Research says Nvidia GPUs are synonymous with AI infrastructure, and the company holds an astonishing 80% to 95% market share in machine learning processors, according to analysts. Nvidia evolved into a data center computing company Nvidia has a visionary leader in CEO Jensen Huang. Revenue rose 206% to $18.1 billion, due primarily to record sales in the data center segment, as detailed below: Data center sales increased 279% to $14.5 billion.
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Wall Street sees upside in all seven stocks, but none more so than Nvidia. The company is often described as a chipmaker, but it actually provides a variety of hardware, software, and services to customers across four end markets: gaming, professional visualization, data center, and automotive. Revenue rose 206% to $18.1 billion, due primarily to record sales in the data center segment, as detailed below: Data center sales increased 279% to $14.5 billion.
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2023-12-07 00:00:00 UTC
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Next-Gen Biotech: 3 Companies Leading the Charge in Gene Therapy
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https://www.nasdaq.com/articles/next-gen-biotech%3A-3-companies-leading-the-charge-in-gene-therapy
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Using gene therapy, companies can change patients’ DNA. One type of gene therapy, called CRISPR, largely mimics a method used by bacteria to fend off viruses. As a result, they can reverse defects in cells that cause diseases. Companies are constantly improving CRISPR and other gene editing techniques, and one firm is already reportedly close to using the tech to cure a very prevalent disease. With that said, here are three leading gene therapy stocks for investors to consider.
CRISPR Therapeutics (CRSP)
Source: rafapress / Shutterstock.com
Using the CRISPR technique, CRISPR Therapeutics (NASDAQ:CRSP) has developed a treatment for sickle-cell anemia, a very prevalent disease that affects people with African heritage. Some say that the treatment will cure the disease. As a result, CRSP is certainly one of the top gene therapy stocks.
Sickle cell patients have a “defect” in their hemoglobin proteins that causes their red blood cells to become abnormally shaped. CRISPR’s treatment, which was developed in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX), works by altering patients’ blood stem cells so that they produce normal hemoglobin proteins.
The U.K. has already approved the treatment, and the U.S. FDA is expected to do the same in the near term. The agency’s advisory panel found that the treatment’s benefits far outweighed its risks.
Seeking Alpha columnist Edmund Ingham reports that about 20,000 patients are likely to receive the treatment, which will probably cost about $2 million. CRSP is slated to receive 40% of the revenue from the drug. If we assume that 5,000 patients get the treatment each year, that would equate to revenue of $4 billion annually.
The shares currently have a market capitalization of $5.6 billion, meaning that they are changing hands for about 1.4 times my sales estimate. That’s a very low valuation for the company.
Gilead (GILD)
Source: Sundry Photography / Shutterstock.com
Gilead (NASDAQ:GILD) owns therapies that have been approved by the FDA, Yescarta and Tecartus. The revenue of the treatments climbed last quarter 23% and 18% year-over-year helping the firm’s overall sales jump 33% YOY.
Oncology treatments accounted for only $769 million of the company’s $7 billion of revenue in Q3. But if Gilead’s revenue from these treatments continue to climb at 30%+ YOY clips, I believe that the firm’s overall top line will soon grow much faster. And, in turn, would probably push GILD stock meaningfully higher. That’s particularly true because the forward price-earnings ratio of GILD stock is a very low 10.8.
On its Q3earnings callin November, Gilead executives reported that the use of its CAR T therapies were being hampered by the fact that the treatments were primarily available in large hospitals. However, most patients were treated in their local community hospitals. To remedy the latter situation, Gilead is adding more treatment hospitals in large population centers. That strategy could prove to be very successful for GILD.
Caribou Biosciences (CRBU)
Source: Matej Kastelic / Shutterstock
Caribou Biosciences (NASDAQ:CRBU) utilizes the CRISPR technique to alter the immune system’s T cells in order to enable them to fight cancer more effectively.
In a Phase 1 study which comprised 16 blood cancer patients patients, all but one of the patients responded positively to the therapy. Moreover, 44% of the patients’ cancer either diminished or disappeared after at least six months of treatment.
Also noteworthy is that Pfizer (NYSE:PFE) showed some confidence in the company’s treatments. The pharma giant bought $25 million of CRBU stock in July.
Finally, eight of the nine Wall Street analysts following the stock have “buy” or “strong buy” ratings on the shares.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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The post Next-Gen Biotech: 3 Companies Leading the Charge in Gene Therapy appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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CRISPR’s treatment, which was developed in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX), works by altering patients’ blood stem cells so that they produce normal hemoglobin proteins. More From InvestorPlace ChatGPT IPO Could Shock the World, Make This Move Before the Announcement Musk’s “Project Omega” May Be Set to Mint New Millionaires. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post Next-Gen Biotech: 3 Companies Leading the Charge in Gene Therapy appeared first on InvestorPlace.
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CRISPR Therapeutics (CRSP) Source: rafapress / Shutterstock.com Using the CRISPR technique, CRISPR Therapeutics (NASDAQ:CRSP) has developed a treatment for sickle-cell anemia, a very prevalent disease that affects people with African heritage. Gilead (GILD) Source: Sundry Photography / Shutterstock.com Gilead (NASDAQ:GILD) owns therapies that have been approved by the FDA, Yescarta and Tecartus. Caribou Biosciences (CRBU) Source: Matej Kastelic / Shutterstock Caribou Biosciences (NASDAQ:CRBU) utilizes the CRISPR technique to alter the immune system’s T cells in order to enable them to fight cancer more effectively.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips Using gene therapy, companies can change patients’ DNA. CRISPR Therapeutics (CRSP) Source: rafapress / Shutterstock.com Using the CRISPR technique, CRISPR Therapeutics (NASDAQ:CRSP) has developed a treatment for sickle-cell anemia, a very prevalent disease that affects people with African heritage. CRISPR’s treatment, which was developed in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX), works by altering patients’ blood stem cells so that they produce normal hemoglobin proteins.
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Gilead (GILD) Source: Sundry Photography / Shutterstock.com Gilead (NASDAQ:GILD) owns therapies that have been approved by the FDA, Yescarta and Tecartus. Oncology treatments accounted for only $769 million of the company’s $7 billion of revenue in Q3. In a Phase 1 study which comprised 16 blood cancer patients patients, all but one of the patients responded positively to the therapy.
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ef7eae94-d0da-4b57-932a-383f383286d2
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714277.0
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2023-12-07 00:00:00 UTC
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5 Reasons to Buy Realty Income Stock Like There's No Tomorrow
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DCOMP
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https://www.nasdaq.com/articles/5-reasons-to-buy-realty-income-stock-like-theres-no-tomorrow
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nan
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nan
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Realty Income (NYSE: O) is one of the most watched real estate investment trusts (REITs) on Wall Street. If you are looking for a reliable dividend stock, now could be the best time in roughly a decade to jump aboard this industry-leading stock. Here are five good reasons why.
1. Realty Income's yield is historically high
There's no point in mincing words -- if you are a dividend investor you likely care a lot about a stock's dividend yield. Right now Realty Income's yield is 5.5% or so. That's attractive on an absolute basis, given that the S&P 500 Index is only yielding around 1.6% and the average REIT roughly 4.9%, using Vanguard Real Estate ETF as a proxy.
Image source: Getty Images.
But the real story here is that Realty Income's yield is high relative to its own history, as it is toward the high end of the REIT's yield range over the past decade. The yield was higher in the early days of the coronavirus pandemic (just over 6%), so it wouldn't be fair to say now is the best time to buy it in the past decade. But Realty Income's yield is still very, very attractive from a historical perspective.
2. Realty Income has been a reliable dividend stock
Backing Realty Income's historically high yield is a streak of 29 consecutive annual dividend increases. Within that streak, however, is another. The dividend has been increased for 109 consecutive quarters, which is roughly 27 years. Dividend investors will likely find both of those streaks quite attractive.
But there's another little nuance. Realty Income is a monthly-pay dividend stock. So owning it is very much like replacing a paycheck, only you get regular quarterly raises. It would be hard for a retired dividend investor to complain about that, given how much easier it can be to budget with a steadily growing monthly dividend in the mix.
3. Realty Income has a solid foundation
The dividend here is built atop a REIT with a solid foundation.
For starters, it is investment-grade rated, so it has the financial strength to weather difficult times. Second, the portfolio is gigantic at more than 13,000 properties, so no single asset is all that important to the top and bottom line.
Third, it is increasingly geographically diversified as it reaches further and further into the European market. Fourth, its adjusted funds from operations (FFO) payout ratio is a reasonable 75% or so. There's no particular reason to worry about the dividend being cut anytime soon.
4. Realty Income is slow, but still fast enough
The one drawback with Realty Income is likely to be its slow pace of dividend growth. Over the past 29 years, the average annualized dividend increase was 4.3%. But you have to compare that to inflation to really understand the value. While inflation has been high of late, the historical rate of inflation growth is something closer to 3% a year.
So while slow and steady has been the pace, Realty Income's tortoise-like approach has still managed to grow the buying power of its dividend over time. Perhaps you'll want to layer some higher-growing dividend stocks on top of Realty Income, but it can still provide a solid foundation to a diversified portfolio.
5. Realty Income's size comes with advantages
As noted, Realty Income has a huge portfolio. That doesn't do justice to its size, given that its nearly-$40 billion market cap is roughly three times the size of its next closest peer. This means that Realty Income's stock is more liquid and, keeping in mind the investment-grade rating, the company will likely have easier access to debt markets. Both help to keep Realty Income's cost of capital low in a business where cost of capital is a key differentiator.
On top of that, Realty Income is big enough to do deals that peers couldn't even consider, including consolidating the net-lease industry. It has already completed the purchase of VEREIT, with a deal to buy Spirit Realty on tap to be consummated in 2024. It takes a lot to move the needle at Realty Income, but it has the wherewithal to do just that.
Realty Income is a core REIT holding
Like all stocks, Realty Income has its flaws, slow growth being the most prominent. But it can be a core holding for conservative income investors, providing a foundation on which higher dividend growth stocks are layered.
And with the yield historically high, now is a great time to add it to your portfolio if you don't already own it. If you do own it, you might want to consider buying more.
10 stocks we like better than Realty Income
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Reuben Gregg Brewer has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income and Vanguard Specialized Funds-Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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That's attractive on an absolute basis, given that the S&P 500 Index is only yielding around 1.6% and the average REIT roughly 4.9%, using Vanguard Real Estate ETF as a proxy. So while slow and steady has been the pace, Realty Income's tortoise-like approach has still managed to grow the buying power of its dividend over time. This means that Realty Income's stock is more liquid and, keeping in mind the investment-grade rating, the company will likely have easier access to debt markets.
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Realty Income has been a reliable dividend stock Backing Realty Income's historically high yield is a streak of 29 consecutive annual dividend increases. Realty Income is a core REIT holding Like all stocks, Realty Income has its flaws, slow growth being the most prominent. But it can be a core holding for conservative income investors, providing a foundation on which higher dividend growth stocks are layered.
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Realty Income's yield is historically high There's no point in mincing words -- if you are a dividend investor you likely care a lot about a stock's dividend yield. Realty Income has been a reliable dividend stock Backing Realty Income's historically high yield is a streak of 29 consecutive annual dividend increases. Realty Income is slow, but still fast enough The one drawback with Realty Income is likely to be its slow pace of dividend growth.
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Realty Income's yield is historically high There's no point in mincing words -- if you are a dividend investor you likely care a lot about a stock's dividend yield. Realty Income has been a reliable dividend stock Backing Realty Income's historically high yield is a streak of 29 consecutive annual dividend increases. Perhaps you'll want to layer some higher-growing dividend stocks on top of Realty Income, but it can still provide a solid foundation to a diversified portfolio.
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d6e84ae8-ef20-4e80-b56b-855f14510b6b
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714278.0
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2023-12-07 00:00:00 UTC
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After Fisker's 81% November Plunge, Is it Time to Panic?
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https://www.nasdaq.com/articles/after-fiskers-81-november-plunge-is-it-time-to-panic
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nan
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nan
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There's little doubt that it's a tough time to be an electric vehicle (EV) manufacturer. Companies not named Tesla (NASDAQ: TSLA) are burning cash producing EVs at low volume with high costs, and range anxiety, pricing, interest rates, and quality questions have caused investors to lose sleep at night.
Fisker (NYSE: FSR) hasn't escaped these concerns, and with the stock plunging 81% in November, is it time for investors to press the panic button?
What happened?
It's pretty clear taking a look at the graph below that November was a rough speed bump for the young EV maker.
Heading into November, Fisker was fresh off slashing the price of its Ocean crossover by $7,500 for the top trim only four months after launching it in the U.S. market. The price decrease was a ripple effect of Tesla's price war, which caused numerous rivals to slash prices or boost incentives -- sometimes both.
That price cut created a weary tone heading into the third quarter, which was made far worse when Fisker delayed its earnings report and conference call. That delay, caused by the appointment of a new chief accounting officer, sent the stock sharply lower -- and the new chief accounting officer would resign within two weeks of taking the role.
Then, as one would probably expect, when Fisker did report its third-quarter earnings roughly one week later, it cut its 2023 production guidance in a mostly gloomy earnings report. It then estimated production to check in between 13,000 and 17,000 vehicles for the full year, down from 20,000 to 23,000 previously.
Management noted that the company simply hadn't been able to deliver its vehicles fast enough, and that paying consumers were waiting for cars and "getting really annoyed," which doesn't exactly inspire confidence among investors.
So what?
It's clear Fisker is facing challenges that many young EV makers face: balancing production and deliveries as it creates infrastructure and logistics to get product to consumers. That's exactly what management is focusing on currently, to adjust guidance and get vehicles to consumers, as it might take a vehicle up to eight weeks longer to reach consumers in the U.S. market compared to European consumers.
"This is a very prudent change that we need to do to enable our global delivery and logistics platform to scale so we can serve our customers even better and we are not sitting on inventory," Fisker CFO Geeta Fisker said on the third-quarter earnings conference call. "It may not be something Wall Street wants to hear."
Now what
Fisker's third-quarter earnings also checked in with a net loss of $91 million, worse than analysts' estimates of a $75 million loss. Ultimately, these are growing pains that early investors should have planned on enduring. Remember that Fisker doesn't have a manufacturing plant and relies on partnerships to make its vehicles.
While November was a massive speed bump for the company, investors did receive some decent news that injected some life into the stock price as the calendar flipped over to December. The news was that Fisker would again dial back production from a range of 13,000 to 17,000 down to just over 10,000, but that the reduction would improve liquidity and unlock over $300 million of working capital for business "flexibility".
Ultimately, the news that Fisker was prioritizing its financial health over short-term production numbers gave investors a glimmer of hope amid a rough couple of months that sent its stock plunging. It perhaps gives investors more confidence about the company's ability to get to its next two vehicles, which are aimed to be an affordable subcompact crossover and a midsize pickup. In other words, things are rough, but the time for investors to panic isn't here just yet -- but things could get worse before they get better.
10 stocks we like better than Fisker
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*Stock Advisor returns as of December 4, 2023
Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Companies not named Tesla (NASDAQ: TSLA) are burning cash producing EVs at low volume with high costs, and range anxiety, pricing, interest rates, and quality questions have caused investors to lose sleep at night. While November was a massive speed bump for the company, investors did receive some decent news that injected some life into the stock price as the calendar flipped over to December. Ultimately, the news that Fisker was prioritizing its financial health over short-term production numbers gave investors a glimmer of hope amid a rough couple of months that sent its stock plunging.
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That price cut created a weary tone heading into the third quarter, which was made far worse when Fisker delayed its earnings report and conference call. Then, as one would probably expect, when Fisker did report its third-quarter earnings roughly one week later, it cut its 2023 production guidance in a mostly gloomy earnings report. It's clear Fisker is facing challenges that many young EV makers face: balancing production and deliveries as it creates infrastructure and logistics to get product to consumers.
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Fisker (NYSE: FSR) hasn't escaped these concerns, and with the stock plunging 81% in November, is it time for investors to press the panic button? Ultimately, the news that Fisker was prioritizing its financial health over short-term production numbers gave investors a glimmer of hope amid a rough couple of months that sent its stock plunging. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Daniel Miller has no position in any of the stocks mentioned.
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Now what Fisker's third-quarter earnings also checked in with a net loss of $91 million, worse than analysts' estimates of a $75 million loss. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Fisker wasn't one of them! See the 10 stocks *Stock Advisor returns as of December 4, 2023 Daniel Miller has no position in any of the stocks mentioned.
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0b023dfa-f702-49b0-8915-3d0512c972ed
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714279.0
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2023-12-07 00:00:00 UTC
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1 Stock I Wouldn't Touch With a 10-Foot Pole
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https://www.nasdaq.com/articles/1-stock-i-wouldnt-touch-with-a-10-foot-pole
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nan
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nan
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My investment goal is to generate a reliable and growing stream of income from a portfolio of stocks. I have a preference for high-yield investments because they generate more income, but there's almost always a trade-off to be made: The higher the yield, the greater the trade-off.
With that in mind, I wouldn't touch AGNC Investment (NASDAQ: AGNC) with a 10-foot pole, because the trade-offs are just too great for me.
What is AGNC Investment?
AGNC Investment is structured as a real estate investment trust (REIT). I like this corporate structure because it's designed to pass income on to investors and avoids corporate-level taxation. Put a REIT into a tax-advantaged Roth account and you can avoid taxes altogether. But AGNC isn't a typical REIT. It's a mortgage REIT.
Image source: Getty Images.
A traditional property-owning REIT is fairly easy to understand. It will buy a property and lease it out to tenants. A mortgage REIT like AGNC buys mortgages that have been pooled into bond-like securities, often referred to as something like a collateralized mortgage obligation (CMO). Generally, leverage is employed so that more CMOs can be bought, with the CMO portfolio acting as collateral for the loan. The goal is to earn the spread between the interest from the portfolio and the interest costs on the debt employed to build the portfolio.
There are more moving parts here than I care to track. Interest rate changes can cause havoc, and so can property market trends, mortgage repayment trends, and mortgage default rates, among other things. In some ways, a mortgage REIT is more like a mutual fund than a company.
The proof is in the dividend
The truth is that AGNC Investment really isn't made for an investor like me. It's more appropriate for those who focus on asset allocation, using the REIT as a diversification tool to add mortgage exposure to a much broader portfolio. While that might include some small investors, AGNC is really most appropriate for large investors like pension funds and insurance companies. A couple of charts will help explain this point.
AGNC data by YCharts
The total return AGNC achieved over the past decade was around 50%, even though the stock was down 50%. How does that make sense? The answer is that total return includes the reinvestment of dividends. And the yield here is massive, at 15.8%. The dividend yield has fluctuated over the past decade, but it's always lofty. So every dividend is buying a lot more shares. But this is where we start to get into the big problem for me.
AGNC data by YCharts
There's a lot going on in this chart, but every line is important. The blue line shows that the yield has remained elevated throughout that last decade, only falling sustainably below 10% for a short period of time. The orange line is the dividend, which headed steadily lower over the past decade. The purple line is the stock price, which has followed the dividend lower, thus keeping the yield high throughout the span. (Yield and price go in opposite directions.)
While the total return graph shows that AGNC could have a place in a portfolio for the right type of investor -- one who's total return-focused -- the dividend graph explains why this stock would be a terrible fit for my portfolio. Basically, my goal is to eventually start using the income my portfolio creates. If I did that with AGNC, I'd be left with less income, thanks to dividend cuts, and less capital, thanks to stock price depreciation. That's about the worst outcome I could hope to achieve.
AGNC is not for the average investor
There's nothing inherently wrong with AGNC Investment. The company does exactly what it sets out to do. The problem is that the goals of this mortgage REIT just don't align with my goals. And for that reason, this is a stock that I wouldn't add to my portfolio no matter how high the yield got. If you're tempted by AGNC's massive dividend yield, you should make sure you truly understand what it does and how it fits into your portfolio. My guess is that most average investors won't want to own it any more than I do.
10 stocks we like better than AGNC Investment
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They just revealed what they believe are the ten best stocks for investors to buy right now... and AGNC Investment Corp. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Generally, leverage is employed so that more CMOs can be bought, with the CMO portfolio acting as collateral for the loan. It's more appropriate for those who focus on asset allocation, using the REIT as a diversification tool to add mortgage exposure to a much broader portfolio. The blue line shows that the yield has remained elevated throughout that last decade, only falling sustainably below 10% for a short period of time.
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With that in mind, I wouldn't touch AGNC Investment (NASDAQ: AGNC) with a 10-foot pole, because the trade-offs are just too great for me. Interest rate changes can cause havoc, and so can property market trends, mortgage repayment trends, and mortgage default rates, among other things. AGNC data by YCharts The total return AGNC achieved over the past decade was around 50%, even though the stock was down 50%.
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AGNC data by YCharts The total return AGNC achieved over the past decade was around 50%, even though the stock was down 50%. While the total return graph shows that AGNC could have a place in a portfolio for the right type of investor -- one who's total return-focused -- the dividend graph explains why this stock would be a terrible fit for my portfolio. * They just revealed what they believe are the ten best stocks for investors to buy right now... and AGNC Investment Corp. wasn't one of them!
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It's a mortgage REIT. AGNC data by YCharts The total return AGNC achieved over the past decade was around 50%, even though the stock was down 50%. * They just revealed what they believe are the ten best stocks for investors to buy right now... and AGNC Investment Corp. wasn't one of them!
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d95b23aa-3678-43bc-991c-d2f3ade5f965
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714280.0
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2023-12-07 00:00:00 UTC
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Want $600 in Super Safe Annual Dividend Income? Invest $8,100 Into the Following 3 Ultra-High-Yield S&P 500 Stocks
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https://www.nasdaq.com/articles/want-%24600-in-super-safe-annual-dividend-income-invest-%248100-into-the-following-3-ultra
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When examined over multiple decades, few investing strategies are as profitable as buying dividend stocks.
Companies that dole out a regular payout to their shareholders tend to be profitable on a recurring basis, time-tested, and can offer transparent long-term growth outlooks. Income stocks may not jaw-drop investors with their growth rates, but they're precisely the type of businesses we'd expect to increase in value over the long run.
Dividend stocks also offer a history of outperformance. A comprehensive study from J.P. Morgan Asset Management, the wealth management division of JPMorgan Chase, found that companies initiating and growing their dividends delivered a 9.5% annualized return between 1972 and 2012, compared to just 1.6% on an annualized basis for nonpaying public companies over the same stretch.
Image source: Getty Images.
One of the best places to locate high-quality dividend stocks is within the benchmark S&P 500 (SNPINDEX: ^GSPC). With a majority of the S&P 500's components paying a regular dividend, the broad-based index is a dream come true for income-seeking investors.
However, not all dividend stocks are created equal. Even though high-yield stocks can, occasionally, be yield traps, careful research can uncover some rock-solid income juggernauts.
If you're looking to generate $600 in super safe annual dividend income, simply invest $8,100 (split equally, three ways) into the following three ultra-high-yield S&P 500 stocks, which sport an average yield of 7.42%.
Verizon Communications: 6.89% yield
The first supercharged income stock that can help you generate $600 in super safe annual income from a starting investment of $8,100 (split in thirds) is telecom company Verizon Communications (NYSE: VZ).
Telecom stocks have been reeling throughout much of the year because of higher interest rates -- most telecom companies carry a lot of debt -- and a July report from the Wall Street Journal that suggests lead-sheathed cables still in use by legacy telecoms could lead to hefty replacement costs and financial liabilities.
Although the WSJ report did get the attention of investors, it, in hindsight, seems to be much ado about nothing. Verizon has stated that only a small percentage of its network still relies on lead-clad cables. There's also no conclusive evidence that lead-sheathed cables represent a health hazard to its workers. Even if Verizon were to eventually face some form of monetary liability, this would be determined by the U.S. court system, which would probably take years to resolve.
Instead of focusing on the "what-ifs" that may never happen, investors should pay attention to what truly matters with Verizon: namely, how the 5G revolution is moving the needle in a positive direction.
Upgrading its infrastructure to handle 5G wireless download speeds is expected to result in more data consumption by consumers. Data is the key margin driver for Verizon's wireless segment. When coupled with historically low churn rates, Verizon's traditional cash-cow segment is in great shape.
But it's not just wireless services doing the heavy lifting. Verizon invested big bucks into mid-band spectrum, with the goal of drawing in new broadband subscribers with 5G speeds. The September-ended quarter marked the fourth straight quarter of at least 400,000 net broadband additions. Though broadband won't deliver jaw-dropping growth, it's a source of consistent cash flow, and a means to encourage service-bundling.
Valued at roughly 8 times forward-year earnings, Verizon offers a favorable risk-versus-reward profile for income seekers and value investors.
Whirlpool: 6.16% yield
A second high-octane income stock that can help produce $600 in super safe annual dividend income from a beginning investment of $8,100 (split equally across three stocks) is home-appliance company Whirlpool (NYSE: WHR), whose quarterly payout has more than quadrupled over the past 12 years.
There's no question that Whirlpool has dealt with adversity over the past couple of quarters. Above-average inflation rates have pushed up material costs, while consumer spending is being pressured by rapidly rising interest rates and the possibility of a recession in the coming months or quarters. Not surprisingly, Whirlpool now expects adjusted full-year earnings to come in at the low end of its prior guidance of $16 to $18 per share.
While reduced guidance isn't great news in the short term, Whirlpool has a number of long-term catalysts working in its favor -- most of which include levers the company's management team can pull to meaningfully improve margins.
For starters, Whirlpool has a cost-cutting program in place that should realize $800 million in savings this year. These cost savings are the result of reducing parts complexity (e.g., consolidating similar parts and components) and minimizing supply chain disruptions by standardizing certain designs.
Even more important, Whirlpool is in the process of divesting its European operations. With the approvals to complete said divestment in its back pocket, Whirlpool expects to generate an extra $250 million in annual free cash flow and see its margins rise by 150 basis points once the deal closes in April 2024.
Something else to consider is Whirlpool's highly cyclical operating model. Though periods of economic instability are inevitable, expansions last disproportionately longer than contractions. This suggests Whirlpool will possess significant pricing power more often than not.
Whirlpool is priced at roughly 6 times adjusted earnings for the current year, which makes it yet another example of a cheap, brand-name, ultra-high-yield S&P 500 stock with a favorable risk-versus-reward profile.
Image source: Getty Images.
Altria Group: 9.2% yield
The third ultra-high-yield S&P 500 stock that can deliver $600 in super safe annual dividend income from an $8,100 starting investment split equally among three stocks is tobacco company Altria Group (NYSE: MO). Altria has increased its dividend 58 times over the past 54 years, which makes it a Dividend King.
The clear challenge for tobacco companies like Altria is that consumers are more aware of the potential health hazards of long-term tobacco use than they've ever been. Since the mid-1960s, U.S. adult-use smoking rates have fallen from around 42% to just 11.5% as of 2021, according to the Centers for Disease Control and Prevention (CDC). A shrinking pool of consumers has meant reduced cigarette shipments for Altria and its peers.
Despite this challenge, Altria has catalysts it can rely on to move the needle in its favor.
At the top of the list is Altria's pricing power. Tobacco contains nicotine, an addictive chemical. The addictive quality of tobacco products allows Altria and its peers to increase their prices without driving away their customers. It also doesn't hurt that premium brand Marlboro, which is owned by Altria, accounts for a greater than 42% share of the cigarette market, which makes it easy to increase its prices and offset any decline in cigarette shipment volume.
Altria's future is also dependent on expanding its sales channels. In June, it completed a $2.75 billion acquisition of electronic-vapor company NJOY Holdings. What makes NJOY special is that it's received a half-dozen marketing granted orders (MGOs) from the U.S. Food and Drug Administration for various products and devices. MGOs authorize e-vapor products to be sold, while non-MGO products run the risk of being pulled from store shelves. The vast majority of e-vapor products and devices are non-MGO.
Additionally, Altria would find itself in a favorable position if the U.S. were to legalize cannabis at the federal level. It invested $1.8 billion in Canadian licensed producer Cronos Group in 2019. Though this equity stake has thus far been a flop, the federal rescheduling of cannabis in the U.S. would allow Altria to play a key role in helping Cronos develop, market, and distribute pot products throughout North America.
Keeping with the theme, Altria Group is inexpensive at 8 times forward-year earnings. When coupled with a steady share repurchase program, it offers all the tools to fatten long-term investors' pocketbooks.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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While reduced guidance isn't great news in the short term, Whirlpool has a number of long-term catalysts working in its favor -- most of which include levers the company's management team can pull to meaningfully improve margins. With the approvals to complete said divestment in its back pocket, Whirlpool expects to generate an extra $250 million in annual free cash flow and see its margins rise by 150 basis points once the deal closes in April 2024. Though this equity stake has thus far been a flop, the federal rescheduling of cannabis in the U.S. would allow Altria to play a key role in helping Cronos develop, market, and distribute pot products throughout North America.
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Verizon Communications: 6.89% yield The first supercharged income stock that can help you generate $600 in super safe annual income from a starting investment of $8,100 (split in thirds) is telecom company Verizon Communications (NYSE: VZ). Whirlpool: 6.16% yield A second high-octane income stock that can help produce $600 in super safe annual dividend income from a beginning investment of $8,100 (split equally across three stocks) is home-appliance company Whirlpool (NYSE: WHR), whose quarterly payout has more than quadrupled over the past 12 years. Altria Group: 9.2% yield The third ultra-high-yield S&P 500 stock that can deliver $600 in super safe annual dividend income from an $8,100 starting investment split equally among three stocks is tobacco company Altria Group (NYSE: MO).
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Verizon Communications: 6.89% yield The first supercharged income stock that can help you generate $600 in super safe annual income from a starting investment of $8,100 (split in thirds) is telecom company Verizon Communications (NYSE: VZ). Whirlpool: 6.16% yield A second high-octane income stock that can help produce $600 in super safe annual dividend income from a beginning investment of $8,100 (split equally across three stocks) is home-appliance company Whirlpool (NYSE: WHR), whose quarterly payout has more than quadrupled over the past 12 years. Altria Group: 9.2% yield The third ultra-high-yield S&P 500 stock that can deliver $600 in super safe annual dividend income from an $8,100 starting investment split equally among three stocks is tobacco company Altria Group (NYSE: MO).
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Altria Group: 9.2% yield The third ultra-high-yield S&P 500 stock that can deliver $600 in super safe annual dividend income from an $8,100 starting investment split equally among three stocks is tobacco company Altria Group (NYSE: MO). Altria has increased its dividend 58 times over the past 54 years, which makes it a Dividend King. The addictive quality of tobacco products allows Altria and its peers to increase their prices without driving away their customers.
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2023-12-07 00:00:00 UTC
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2 Artificial Intelligence (AI) Growth Stocks Up 63% and 183% This Year That Wall Street Billionaires Are Buying Hand Over Fist
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https://www.nasdaq.com/articles/2-artificial-intelligence-ai-growth-stocks-up-63-and-183-this-year-that-wall-street
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Recent breakthroughs in artificial intelligence (AI) have investors fired up from Wall Street to Main Street. Namely, the intelligent chatbot ChatGPT from OpenAI provided concrete proof that AI could drive a step function increase in productivity, and its record-breaking rate of adoption points to tremendous demand for automation.
The AI boom is still in its nascent stages, but Nvidia CEO Jensen Huang says machine learning will be competitive with humans in five years, and many experts believe AI will be one of the most transformative technologies in human history. That hints at significant wealth creation.
In that context, AI is a once-in-a-generation opportunity for investors, and keeping tabs on successful money managers is one way to get inspiration. Here are two AI stocks hedge fund billionaires were buying in the third quarter.
1. Palantir Technologies: 183% year-to-date return
Data analytics company Palantir Technologies (NYSE: PLTR) has seen its share price soar 183% year to date. Here's a list of billionaire fund managers who started or added to positions in Palantir during the third quarter, and the number of shares they bought:
Israel Englander (Millennium Management): 787,200
Jim Simons (Renaissance Technologies): 3,805,496
John Overdeck (Two Sigma Investments): 4,655,969
Philippe Laffont (Coatue Management): 893,931
Palantir provides two primary data analytics platforms. Gotham was initially designed for defense and intelligence agencies, while Foundry was built for commercial customers. Both platforms integrate data and simple analytical models and sophisticated artificial intelligence (AI) models to create applications that improve decision-making.
Palantir not only supports model integration, but also the development and optimization of models, and it does so to great effect. The company is a recognized leader in ModelOps, a discipline concerned with model lifecycle management. Palantir is also a recognized leader in artificial intelligence/machine learning (AI/ML) platforms, and Wedbush Securities analyst Dan Ives recently referred to the company as "the gold standard in AI."
Palantir reported solid financial results in the third quarter. Its customer count increased 34% to 453, revenue rose 17% to $558 million, and generally accepted accounting principles (GAAP) net income improved to $72 million, up from a loss of $124 million in the prior year. Investors can expect similar momentum in the future.
The big data software market is forecasted to compound at 12% annually to reach $333 billion by 2027, but Palantir should grow more quickly due to its strong presence in the ModelOps and AI/ML platforms markets. Indeed, Morningstar analysts expect sales to grow at 23% annually over the next five years. That forecast makes its current valuation of 19.3 time sales seem somewhat reasonable.
The biggest problem with Palantir is revenue concentration. The company has a small customer base, so losing even a few customers could have a very big impact on the top line. Investors can buy a small position in this growth stock today, provided they understand that risk and keep tabs on the situation. But risk-averse investors should wait for a cheaper valuation.
2. Microsoft: 63% year-to-date return
Software and cloud giant Microsoft (NASDAQ: MSFT) has seen its share price soar 63% year to date. Here's a list of billionaire fund managers who started or added to positions in Microsoft during the third quarter, and the number of shares they bought:
Andreas Halvorsen (Viking Global Investors): 1,822,348
David Shaw (D.E. Shaw & Co): 1,459,352
Ken Griffin (Citadel Advisors): 1,631,542
Steve Cohen (Point72 Asset Management): 203,018
Microsoft has a strong presence in several enterprise software markets -- so much so that it accounted for 16.4% of software-as-a-service (SaaS) spending in 2022. The next closest competitor was Salesforce, with 8.4% market share. Microsoft has pivoted to a Copilot-focused growth strategy in software, hoping to capitalize on the growing demand for generative AI.
For instance, Microsoft 365 Copilot uses natural language to automate workflows across office productivity applications like Word, PowerPoint, and Excel. Similarly, Dynamics 365 Copilot leans on AI to automate workflows across enterprise resource planning applications ranging from sales and marketing to field service and finance.
Microsoft also has a strong presence in cloud computing. Azure accounted for 23% of cloud infrastructure and platform services spending in the third quarter, up nearly two percentage points from the previous year. One reason for those share gains is that Azure has "the best AI infrastructure for both training and inference," according to CEO Satya Nadella.
Additionally, Azure has an exclusive partnership with OpenAI, making it the only cloud vendor that offers access to OpenAI technology, such as the AI models that power ChatGPT and DALL-E. In other words, only Azure customers can use those models to build custom generative AI applications. That could draw more business to the platform in the future.
In short, Microsoft is leaning into AI across its enterprise SaaS and cloud computing products to cement its strong presence in both markets, and that seems to be a winning strategy so far. Microsoft delivered solid financial results in the most recent quarter. Revenue increased 13% to $56.5 billion, and GAAP net income climbed 27% to $22.3 billion.
The company should maintain a similar sales growth trajectory in the coming years, given that the enterprise SaaS and cloud computing markets are projected to compound at 14% annually through 2030. Additionally, CFRA analyst Angelo Zino believes Microsoft is the company "best positioned to monetize generative, given its ample offerings/pricing power."
In that context, its current valuation of 12.6 times sales seems relatively reasonable, though it is a premium to the three-year average of 11.4 times sales. Investors who are interested in owning this growth stock should start with a small position, then dollar-cost average should better buying opportunities present themselves.
10 stocks we like better than Palantir Technologies
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*Stock Advisor returns as of December 4, 2023
Trevor Jennewine has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Microsoft, Nvidia, Palantir Technologies, and Salesforce. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Namely, the intelligent chatbot ChatGPT from OpenAI provided concrete proof that AI could drive a step function increase in productivity, and its record-breaking rate of adoption points to tremendous demand for automation. Here's a list of billionaire fund managers who started or added to positions in Microsoft during the third quarter, and the number of shares they bought: Andreas Halvorsen (Viking Global Investors): 1,822,348 David Shaw (D.E. Shaw & Co): 1,459,352 Ken Griffin (Citadel Advisors): 1,631,542 Steve Cohen (Point72 Asset Management): 203,018 Microsoft has a strong presence in several enterprise software markets -- so much so that it accounted for 16.4% of software-as-a-service (SaaS) spending in 2022.
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Palantir Technologies: 183% year-to-date return Data analytics company Palantir Technologies (NYSE: PLTR) has seen its share price soar 183% year to date. Here's a list of billionaire fund managers who started or added to positions in Palantir during the third quarter, and the number of shares they bought: Israel Englander (Millennium Management): 787,200 Jim Simons (Renaissance Technologies): 3,805,496 John Overdeck (Two Sigma Investments): 4,655,969 Philippe Laffont (Coatue Management): 893,931 Palantir provides two primary data analytics platforms. Both platforms integrate data and simple analytical models and sophisticated artificial intelligence (AI) models to create applications that improve decision-making.
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Palantir Technologies: 183% year-to-date return Data analytics company Palantir Technologies (NYSE: PLTR) has seen its share price soar 183% year to date. Here's a list of billionaire fund managers who started or added to positions in Palantir during the third quarter, and the number of shares they bought: Israel Englander (Millennium Management): 787,200 Jim Simons (Renaissance Technologies): 3,805,496 John Overdeck (Two Sigma Investments): 4,655,969 Philippe Laffont (Coatue Management): 893,931 Palantir provides two primary data analytics platforms. The big data software market is forecasted to compound at 12% annually to reach $333 billion by 2027, but Palantir should grow more quickly due to its strong presence in the ModelOps and AI/ML platforms markets.
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The big data software market is forecasted to compound at 12% annually to reach $333 billion by 2027, but Palantir should grow more quickly due to its strong presence in the ModelOps and AI/ML platforms markets. In other words, only Azure customers can use those models to build custom generative AI applications. The Motley Fool has positions in and recommends Microsoft, Nvidia, Palantir Technologies, and Salesforce.
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2023-12-07 00:00:00 UTC
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Not Sure Which Dividend Stock You Should Own? Buy This Exchange-Traded Fund and Relax
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https://www.nasdaq.com/articles/not-sure-which-dividend-stock-you-should-own-buy-this-exchange-traded-fund-and-relax
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Want to generate passive income while you sleep? One excellent way to do so is by investing in companies that pay out dividends consistently. Dividend stocks are an excellent income source and can produce better returns than non-dividend payers.
However, with so many dividend stocks to choose from, picking individual companies can be a daunting task. If you're unsure which dividend stock to buy, the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT: NOBL) could be a solid choice to invest in instead. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC.)
Dividend raisers have outperformed the S&P 500 over the past 50 years
According to a study by Hartford Funds, 69% of the S&P 500 index's total returns since 1960 are attributable to the contributions of reinvested dividends to its compound growth.
Another study by Hartford Funds and Ned Davis Research found that since 1973, companies that grew or initiated dividend payments have delivered annualized returns of 10.3% with a beta coefficient of 0.88 (meaning their returns are less volatile than those of the broader market). In the same period, an equal-weight S&P 500 fund returned 7.7% annually, while dividend non-payers delivered a 3.95% annualized return with a beta coefficient of 1.18.
Annualized returns and volatility by dividend policy, S&P 500 stocks 1973-2022
STOCK CATEGORY
AVERAGE ANNUALIZED RETURNS
BETA
Dividend growers and initiators
10.24%
0.88
Dividend payers
9.18%
0.94
No change in dividend policy
6.60%
1.01
Dividend cutters and eliminators
(0.60%)
1.22
Dividend non-payers
3.95%
1.18
Equal-weighted S&P 500 index
7.68%
1.00
Data Source: Hartford Funds.
Companies that consistently increase their dividend payouts tend to have strong businesses, good capital management, and a commitment to rewarding shareholders.
The ProShares S&P 500 Dividend Aristocrats ETF (exchange-traded fund) only invests in companies that have increased their dividend payouts every year for at least 25 consecutive years. The ETF aims to track the performance of the S&P 500 Dividend Aristocrats® Index, and currently yields a solid 2.3%.
ETFs can help you diversify your portfolio
ETFs are appealing because they allow investors to easily diversify across assets, industries, or stocks without needing a significant amount of capital up front. This diversification can help reduce portfolio risk and improve returns by smoothing out the ups and downs of the market.
The ProShares S&P 500 Dividend Aristocrats ETF has investments across 67 stocks spanning 10 industries. Investors can take comfort in knowing that no single industry makes up even as much as one-quarter of the value of the fund's portfolio. The consumer staples and industrial segments have the largest concentrations, each accounting for around 23% of the portfolio's value.
Chart by author.
The portfolio includes many familiar names. Target, which yields 3.3% and has raised its dividend for 52 consecutive years, is the largest holding, accounting for 1.71% of the portfolio. Other top holdings include credit rating agency S&P Global, which has raised its payouts for 50 consecutive years, Clorox (46 years of dividend hikes), Ecolab (31 years), and Sherwin-Williams (46 years).
When considering an ETF, look closely at the expense ratio
One critical factor to consider when investing in ETFs is the expense ratio -- the percentage of your investment that you'll pay annually to cover the fund's operating expenses, including administrative costs, management fees, and marketing expenses. For example, if you invested in an ETF with a 0.5% expense ratio, you'd pay $1 for every $200 invested.
The average expense ratio for ETFs is around 0.45%, according to Morningstar. The ProShares S&P 500 Dividend Aristocrats ETF comes in below this, with an expense ratio of 0.35%.
Finally, you'll want to consider your objectives. If you want to diversify your portfolio and collect additional income, the ProShares S&P 500 Dividend Aristocrats ETF is a solid choice. However, if you're merely looking for diversification, don't care as much about dividend payments, and don't mind a little more volatility, the Vanguard S&P 500 Index Fund may be a better option, as it has an expense ratio of just 0.03%.
A solid choice for risk-averse investors looking to generate extra income
The ProShares S&P 500 Dividend Aristocrats ETF can be great if you're an investor starting with a small amount of capital and looking to generate some additional income from your portfolio. Its dividend yield of 2.3% is above that of the S&P 500 (which currently yields around 1.4%), making it a solid option for risk-averse investors looking for stable dividends while reducing volatility and drawdowns relative to the broader market.
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*Stock Advisor returns as of December 4, 2023
Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ProShares Trust-ProShares S&P 500 Dividend Aristocrats ETF, S&P Global, Target, and Vanguard S&P 500 ETF. The Motley Fool recommends Ecolab and Sherwin-Williams. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Companies that consistently increase their dividend payouts tend to have strong businesses, good capital management, and a commitment to rewarding shareholders. This diversification can help reduce portfolio risk and improve returns by smoothing out the ups and downs of the market. If you want to diversify your portfolio and collect additional income, the ProShares S&P 500 Dividend Aristocrats ETF is a solid choice.
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In the same period, an equal-weight S&P 500 fund returned 7.7% annually, while dividend non-payers delivered a 3.95% annualized return with a beta coefficient of 1.18. Dividend growers and initiators 10.24% 0.88 Dividend payers 9.18% 0.94 No change in dividend policy 6.60% 1.01 Dividend cutters and eliminators (0.60%) 1.22 Dividend non-payers 3.95% 1.18 Equal-weighted S&P 500 index 7.68% 1.00 Data Source: Hartford Funds. The ProShares S&P 500 Dividend Aristocrats ETF (exchange-traded fund) only invests in companies that have increased their dividend payouts every year for at least 25 consecutive years.
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If you're unsure which dividend stock to buy, the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT: NOBL) could be a solid choice to invest in instead. Dividend growers and initiators 10.24% 0.88 Dividend payers 9.18% 0.94 No change in dividend policy 6.60% 1.01 Dividend cutters and eliminators (0.60%) 1.22 Dividend non-payers 3.95% 1.18 Equal-weighted S&P 500 index 7.68% 1.00 Data Source: Hartford Funds. The ProShares S&P 500 Dividend Aristocrats ETF (exchange-traded fund) only invests in companies that have increased their dividend payouts every year for at least 25 consecutive years.
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The ProShares S&P 500 Dividend Aristocrats ETF (exchange-traded fund) only invests in companies that have increased their dividend payouts every year for at least 25 consecutive years. The ProShares S&P 500 Dividend Aristocrats ETF has investments across 67 stocks spanning 10 industries. Its dividend yield of 2.3% is above that of the S&P 500 (which currently yields around 1.4%), making it a solid option for risk-averse investors looking for stable dividends while reducing volatility and drawdowns relative to the broader market.
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2023-12-07 00:00:00 UTC
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These 2 Blue Chip Stocks Just Announced $51 Billion in Stock Buybacks
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https://www.nasdaq.com/articles/these-2-blue-chip-stocks-just-announced-%2451-billion-in-stock-buybacks
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Stock markets finished lower on Wednesday, giving back early gains as investors started to worry about just how sustainable the bull market move in November was. Losses were biggest for the Nasdaq Composite (NASDAQINDEX: ^IXIC), but even there, the declines were relatively modest in comparison to the huge gains stock investors have enjoyed since the end of October. The S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI) eased lower as well.
INDEX
DAILY PERCENTAGE CHANGE
DAILY POINT CHANGE
Dow
(0.19%)
(70)
S&P 500
(0.39%)
(18)
Nasdaq
(0.58%)
(83)
Data source: Yahoo! Finance.
In a rising interest rate environment, many companies have had to scramble to get capital. However, other businesses generate huge amounts of cash flow, giving them the opportunity to return capital to shareholders through stock buybacks. On Wednesday, blue chip stocks ExxonMobil (NYSE: XOM) and Mastercard (NYSE: MA) were the latest companies to announce new share repurchase programs that could return as much as $51 billion to investors over the next couple of years.
ExxonMobil announces its capital plans
Shares of ExxonMobil were down more than 1% on Wednesday. That made sense, given a $3 drop in the price of crude oil to $69 per barrel, but the oil giant also released its strategy for capital allocation over the next several years.
ExxonMobil believes that it should be able to boost its annual earnings and cash flow by $14 billion per year through 2027. That's because the company has cut its structural costs while improving the mix of its business to include higher-value performance chemicals and lubricants, as well as low-emission fuels. Meanwhile, investments in high-return, low-cost projects in the upstream segment should help Exxon double the segment's earnings compared to pre-pandemic 2019 levels.
As a result, ExxonMobil now sees itself being able to spend $20 billion per year after the merger with Pioneer Natural Resources (NYSE: PXD) closes, likely in 2024. That could return $40 billion to shareholders by the end of 2025. Moreover, if oil prices behave more favorably, then those numbers could end up being relatively low. That $40 billion figure is 10% of ExxonMobil's market capitalization, representing a real boost for continuing shareholders.
Mastercard looks to buy high
Shares of Mastercard rose a fraction of a percent on Wednesday, moving ever closer to new all-time highs. Even with the stock looking a bit expensive, the card giant announced a new stock buyback program to supplement its existing repurchase arrangement.
Mastercard's board of directors authorized the company to spend up to $11 billion repurchasing its stock. The new program will take effect once the current buyback program is complete. With $3.5 billion left on the existing buyback authorization, investors in Mastercard could eventually see $14.5 billion in stock get repurchased by the company.
At the same time, shareholders also learned that they'd get a bigger cash reward for being investors. Mastercard increased its dividend by 16% and will now pay shareholders $0.66 per share each quarter. The first new payment will go to investors in February 2024. Given the massive move higher in Mastercard stock over the past decade, the dividend yield is still small at 0.6%, but it's an incremental part of shareholder return.
Some investors worry when companies buy back stock near record levels. Yet since its initial public offering in 2006, it's been rare for Mastercard not to be close to an all-time high. Previous buybacks have turned out well for the company and investors.
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*Stock Advisor returns as of December 4, 2023
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard. The Motley Fool recommends Pioneer Natural Resources and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Losses were biggest for the Nasdaq Composite (NASDAQINDEX: ^IXIC), but even there, the declines were relatively modest in comparison to the huge gains stock investors have enjoyed since the end of October. That's because the company has cut its structural costs while improving the mix of its business to include higher-value performance chemicals and lubricants, as well as low-emission fuels. Given the massive move higher in Mastercard stock over the past decade, the dividend yield is still small at 0.6%, but it's an incremental part of shareholder return.
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Stock markets finished lower on Wednesday, giving back early gains as investors started to worry about just how sustainable the bull market move in November was. Some investors worry when companies buy back stock near record levels. The Motley Fool recommends Pioneer Natural Resources and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard.
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On Wednesday, blue chip stocks ExxonMobil (NYSE: XOM) and Mastercard (NYSE: MA) were the latest companies to announce new share repurchase programs that could return as much as $51 billion to investors over the next couple of years. With $3.5 billion left on the existing buyback authorization, investors in Mastercard could eventually see $14.5 billion in stock get repurchased by the company. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Dan Caplinger has no position in any of the stocks mentioned.
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On Wednesday, blue chip stocks ExxonMobil (NYSE: XOM) and Mastercard (NYSE: MA) were the latest companies to announce new share repurchase programs that could return as much as $51 billion to investors over the next couple of years. That could return $40 billion to shareholders by the end of 2025. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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2023-12-07 00:00:00 UTC
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The Zacks Analyst Blog Highlights Alphabet, NVIDIA, Roche, Intuit and AT&T
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights-alphabet-nvidia-roche-intuit-and-att
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For Immediate Release
Chicago, IL – December 7, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alphabet Inc. GOOGL, NVIDIA Corp. NVDA, Roche Holding AG RHHBY, Intuit Inc. INTU and AT&T Inc. (T).
Here are highlights from Wednesday’s Analyst Blog:
Top Research Reports Alphabet, NVIDIA and Roche
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc., NVIDIA Corp. and Roche Holding AG. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Alphabet shares have outperformed the Zacks Internet - Services industry over the year-to-date period (+48.5% vs. +47.6%). The company’s strong cloud division is aiding substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space.
Further, major updates in its search segment are enhancing the search results. Also, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term. Further, its deepening focus on the wearables category remains a tailwind.
Alphabet’s expanding presence in the autonomous driving space is contributing well. Its growing efforts to gain a foothold in the healthcare industry are other positives. However, sluggishness in the company’s Network advertisement business remains a headwind. Additionally, its growing litigation issues and increasing expenses are concerns.
(You can read the full research report on Alphabet here >>>)
Shares of NVIDIA have outperformed the Zacks Semiconductor - General industry over the past six months (+24.3% vs. +20.3%). The company’s Compute & Networking revenues are gaining from strong growth of artificial intelligence (AI), high-performance computing and accelerated computing.
The datacenter end-market business is likely to benefit from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. A surge in Hyperscale demand and a solid uptake of AI-based smart cockpit infotainment solutions are acting as tailwinds.
Collaborations with Mercedes-Benz and Audi are likely to advance its presence in autonomous vehicles and other automotive electronics space. However, its near-term prospects are likely to be hurt by weakening demand for chips used in the professional visualization end-market.
(You can read the full research report on NVIDIA here >>>)
Shares of Roche have underperformed the Zacks Large Cap Pharmaceuticals industry over the past six months (-9.1% vs. +7.0%). The company’s performance has been impacted by lower COVID-19-product-related sales, which has significantly impacted its top line, even though the diagnostics base business and newer drugs maintain growth.
Sales are likely to be affected further by the expected nosedive in sales of COVID-19 products worth nearly CHF 4.5 billion. Competition from biosimilars for established cancer medicines like Avastin, MabThera/Rituxan and Herceptin also hurt sales.
Nevertheless, new drugs, namely Ocrevus, Hemlibra, Evrysdi, Phesgo, Polivy and Tecentriq, have put up a stellar performance. The uptake of the new eye drug, Vabysmo, has been outstanding. The company’s efforts to develop new drugs to combat the decline in legacy drugs are encouraging.
(You can read the full research report on Roche here >>>)
Other noteworthy reports we are featuring today include Intuit Inc. and AT&T Inc.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Media Contact
Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Roche Holding AG (RHHBY) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
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Intuit Inc. (INTU) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include: Alphabet Inc. GOOGL, NVIDIA Corp. NVDA, Roche Holding AG RHHBY, Intuit Inc. INTU and AT&T Inc. (T). The datacenter end-market business is likely to benefit from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA Hopper and Ampere architectures. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.
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Stocks recently featured in the blog include: Alphabet Inc. GOOGL, NVIDIA Corp. NVDA, Roche Holding AG RHHBY, Intuit Inc. INTU and AT&T Inc. (T). Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc., NVIDIA Corp. and Roche Holding AG. Click to get this free report Roche Holding AG (RHHBY) : Free Stock Analysis Report AT&T Inc. (T) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Intuit Inc. (INTU) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Here are highlights from Wednesday’s Analyst Blog: Top Research Reports Alphabet, NVIDIA and Roche The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc., NVIDIA Corp. and Roche Holding AG. Click to get this free report Roche Holding AG (RHHBY) : Free Stock Analysis Report AT&T Inc. (T) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Intuit Inc. (INTU) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Today's Research Daily features new research reports on 16 major stocks, including Alphabet Inc., NVIDIA Corp. and Roche Holding AG. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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2023-12-07 00:00:00 UTC
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Buying These 2 Stocks Is a Good Way to Hedge Against a Market Crash
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https://www.nasdaq.com/articles/buying-these-2-stocks-is-a-good-way-to-hedge-against-a-market-crash-14
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There is some irony in the fact that uncertainty is the only certainty in the stock market. The general long-term direction for the broader stock market is positive, but there will always be volatility and swings along the way. There are bear markets, bull markets, corrections, spurts, and market crashes, all adding to the stock market roller coaster ride.
After a great 2023 so far, stock market indexes like the S&P 500 are approaching all-time highs, bringing a bit of caution from some investors who may fear a crash is waiting on the horizon. Although nobody can say for sure if or when a market crash will happen, what you can do is be overprepared instead of underprepared.
One of the ways to prepare is to have stocks in your portfolio that can withstand these conditions. Below are two go-to stocks.
1. Berkshire Hathaway
Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is the cream of the crop when it comes to conglomerates, having amassed a market capitalization of over $770 billion (as of Dec. 5). This didn't happen by luck, either. Berkshire Hathaway, led by Warren Buffett and his team, has made strategic investments and acquisitions over the decades that have returned lots of value for the company and its shareholders.
Part of what makes Berkshire Hathaway a good buy to hedge a market crash is its vast portfolio. Apple accounts for more than 48% of its stock portfolio, so it's not the most diversified in individual stock weightings, but it still contains key companies from most major sectors. Below are a handful of examples:
Consumer staples: Coca-Cola
Energy: Chevron
Financials: Bank of America
Health Care: Davita
Information technology: Amazon
Having exposure to so many sectors (albeit skewed with its Apple investment) reduces the likelihood of Berkshire Hathaway suffering from sector-specific risks during market crashes.
Outside of its stock holdings' performances, Berkshire Hathaway has diverse wholly owned businesses, like insurance company GEICO and supply chain company McLane. Those two companies specifically are good businesses during down periods because their services remain in demand regardless of economic conditions.
This multifaceted approach of operational businesses and stock investments positions Berkshire Hathaway to weather most economic storms that come its way.
2. Microsoft
Microsoft (NASDAQ: MSFT) doesn't own stakes in dozens of public companies like Berkshire Hathaway or operate in multiple sectors, but it does cover as much ground within technology as any company. Microsoft first made its name through its Windows operating system, but has since built a world-class ecosystem of technology products and services.
Microsoft divides its business into three broad segments -- Productivity and Business Processes, Intelligent Cloud, and More Personal Computing -- but within those segments are plenty of products and services that have made great businesses:
Productivity and Business Processes: LinkedIn, Office products (Word, PowerPoint, Excel, Outlook, etc.), Dynamics
Intelligent Cloud: Azure, server products, Enterprise Mobility, various cloud services
More Personal Computing: Windows, Xbox and gaming, search and news advertising
Of the $56.2 billion in revenue Microsoft made in the fourth quarter of its 2023 fiscal year (ended June 30), no segment accounted for more than 43%. That's a major difference from other big tech companies that rely heavily on a few products or services and lessens some of Microsoft's risk in a market crash.
The main reason isn't necessarily the products and services themselves, but more so who's buying them from Microsoft: Other corporations. With employers using LinkedIn to recruit, PCs for the workforce, Office products for their operations, and Azure for their cloud services, a lot of Microsoft's money comes from other companies.
This helps Microsoft during market crashes because businesses are less likely to opt out of services during downturns than individuals are. Foregoing the newest smartphone model is far easier than canceling your cloud service that houses important company data.
Both companies have proven results
Both Berkshire Hathaway and Microsoft have been around for decades and survived all the downturns that have happened. Just recently, during the market downturn caused by the COVID-19 pandemic, both companies held up much better than the S&P 500 and have had better returns since the March 2020 bottom.
There's an inherent risk that comes with investing in individual companies during market crashes, but Berkshire Hathaway and Microsoft have shown constant resilience and adaptability. These are two companies you can feel safe holding in your portfolio for the long haul.
10 stocks we like better than Berkshire Hathaway
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*Stock Advisor returns as of December 4, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Berkshire Hathaway, and Microsoft. The Motley Fool recommends Chevron and recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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After a great 2023 so far, stock market indexes like the S&P 500 are approaching all-time highs, bringing a bit of caution from some investors who may fear a crash is waiting on the horizon. Below are a handful of examples: Consumer staples: Coca-Cola Energy: Chevron Financials: Bank of America Health Care: Davita Information technology: Amazon Having exposure to so many sectors (albeit skewed with its Apple investment) reduces the likelihood of Berkshire Hathaway suffering from sector-specific risks during market crashes. With employers using LinkedIn to recruit, PCs for the workforce, Office products for their operations, and Azure for their cloud services, a lot of Microsoft's money comes from other companies.
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Berkshire Hathaway Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is the cream of the crop when it comes to conglomerates, having amassed a market capitalization of over $770 billion (as of Dec. 5). Microsoft divides its business into three broad segments -- Productivity and Business Processes, Intelligent Cloud, and More Personal Computing -- but within those segments are plenty of products and services that have made great businesses: Productivity and Business Processes: LinkedIn, Office products (Word, PowerPoint, Excel, Outlook, etc. The Motley Fool has positions in and recommends Amazon, Apple, Bank of America, Berkshire Hathaway, and Microsoft.
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There are bear markets, bull markets, corrections, spurts, and market crashes, all adding to the stock market roller coaster ride. Microsoft Microsoft (NASDAQ: MSFT) doesn't own stakes in dozens of public companies like Berkshire Hathaway or operate in multiple sectors, but it does cover as much ground within technology as any company. Microsoft divides its business into three broad segments -- Productivity and Business Processes, Intelligent Cloud, and More Personal Computing -- but within those segments are plenty of products and services that have made great businesses: Productivity and Business Processes: LinkedIn, Office products (Word, PowerPoint, Excel, Outlook, etc.
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This helps Microsoft during market crashes because businesses are less likely to opt out of services during downturns than individuals are. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Berkshire Hathaway wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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3 Millionaire-Maker Cloud Computing Stocks to Buy for 2024
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https://www.nasdaq.com/articles/3-millionaire-maker-cloud-computing-stocks-to-buy-for-2024
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With the start of a new burgeoning bull market, now is the time to consider the best millionaire-maker cloud computing stocks. Over the last decade, cloud computing has provided tremendous benefits to business operations. Some of the benefits include increased collaboration, scalability, cost-effectiveness and data security.
Investors who seek to capitalize on this investing trend have a number of options to choose from. However, they must select companies who have strong liquidity and are best positioned to meet the evolving demands of the market. According to Grand View Research, the cloud computing market was last valued at $483.98 billion, estimated at a 14.1% CAGR from 2023 – 2030. As small, medium and large enterprises look to improve business performance, cloud computing is set for explosive growth over the next decade.
Now, let’s discuss the three best millionaire-maker cloud computing stocks to buy for 2024!
Alphabet (GOOG, GOOGL)
Source: salarko / Shutterstock.com
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is synonymous when it comes to the cloud computing market. Its cloud computing platform includes a number of different services ranging from AI and machine learning, data storage, data analytics and networking. Alphabet’s stock is up 46% YTD on the back of strong revenue and EPS growth.
Over the last decade, Alphabet has been investing significant CAPEX into cloud computing. Since 2008, its cloud computing business has remained unprofitable. But things are starting to change, after the company reported its first operating profit in the cloud business in Q1 2023. Google’s cloud operating income was $266 million, compared to a loss of $440 million in the year prior. CEO Sundar Pichai has also been ramping up AI driven initiatives in order to accelerate advertising revenue in Google Search and YouTube. As AI continues to drive the cloud industry forward, Alphabet is one of the best cloud computing stocks to buy for 2024.
Amazon (AMZN)
Source: Tada Images / Shutterstock.com
Amazon (NASDAQ:AMZN) is having a transformative year and the stock is up more than 70% YTD. The company’s wholly owned subsidiary, Amazon Web Services (AWS), is currently the largest cloud computing company in the world. As of Q2 2023, AWS holds a 32% market share in the cloud infrastructure services market.
After a year of slow growth in 2022, the company has refocused its efforts on cost-cutting and generative AI. Its cloud business has been seeing strong double digit growth, thanks to generative AI deployments through Amazon Bedrock. In Q3 2023, AWS revenue increased 12% YOY to $23.1 billion. CEO Andy Jassy is bullish on the long term prospects of generative AI. Amazon’s first-generation AWS Inferentia chip will accelerate generative AI and LLM’s in the cloud. With operating income and FCF on the rise, now is a good time to scoop up shares before the new year.
Microsoft (MSFT)
Source: The Art of Pics / Shutterstock.com
Microsoft (NASDAQ:MSFT) is on a tear this year and Microsoft Azure is driving increased visibility for its generative AI services. Azure is currently seeing high double digit growth in the 2023 fiscal year. After reporting its Q1 FY24 financial results, Microsoft has been focused on Azure cloud deployment.
The company has increased capex to meet the growing demands of generative AI services. CEO Satya Nadella said the company has been integrating AI across all levels of its technology stack. During the quarter, revenue in the intelligent cloud was $24.3 billion, up 19% YOY. Azure and other cloud revenue services also grew 29%. As Alex Sirois notes from InvestorPlace.com, Microsoft’s AI investments are already paying off. This has been evident as net income grew 27% YOY to $22.3 billion. If you’re bullish on the long-term growth prospects of generative AI, Microsoft is among the best millionaire-maker cloud computing stocks to buy.
On the date of publication, Terel Miles 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.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.
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The post 3 Millionaire-Maker Cloud Computing Stocks to Buy for 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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As small, medium and large enterprises look to improve business performance, cloud computing is set for explosive growth over the next decade. CEO Sundar Pichai has also been ramping up AI driven initiatives in order to accelerate advertising revenue in Google Search and YouTube. The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors The post 3 Millionaire-Maker Cloud Computing Stocks to Buy for 2024 appeared first on InvestorPlace.
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Alphabet (GOOG, GOOGL) Source: salarko / Shutterstock.com Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is synonymous when it comes to the cloud computing market. Its cloud business has been seeing strong double digit growth, thanks to generative AI deployments through Amazon Bedrock. Microsoft (MSFT) Source: The Art of Pics / Shutterstock.com Microsoft (NASDAQ:MSFT) is on a tear this year and Microsoft Azure is driving increased visibility for its generative AI services.
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips With the start of a new burgeoning bull market, now is the time to consider the best millionaire-maker cloud computing stocks. As AI continues to drive the cloud industry forward, Alphabet is one of the best cloud computing stocks to buy for 2024. If you’re bullish on the long-term growth prospects of generative AI, Microsoft is among the best millionaire-maker cloud computing stocks to buy.
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As of Q2 2023, AWS holds a 32% market share in the cloud infrastructure services market. In Q3 2023, AWS revenue increased 12% YOY to $23.1 billion. If you’re bullish on the long-term growth prospects of generative AI, Microsoft is among the best millionaire-maker cloud computing stocks to buy.
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2023-12-07 00:00:00 UTC
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Zacks Industry Outlook Highlights Mr. Cooper Group and Navient
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https://www.nasdaq.com/articles/zacks-industry-outlook-highlights-mr.-cooper-group-and-navient
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For Immediate Release
Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses Mr. Cooper Group Inc. COOP and Navient Corp. NAVI.
Industry: Consumer Loans
Link: https://www.zacks.com/commentary/2193978/2-consumer-loan-stocks-to-buy-amid-gloomy-industry-prospects
The Zacks Consumer Loans industry continues to bear the brunt of weak consumer sentiments, high inflation and expectations of economic slowdown. This will dampen the demand for consumer loans and hamper industry players’ top-line growth. Deteriorating asset quality is a major near-term headwind too.
However, easing lending standards, which have increased the number of clients eligible for consumer loans, and the digitization of operations will keep benefiting consumer loan providers. Hence, industry players like Mr. Cooper Group Inc. and Navient Corp. are worth betting on right now.
About the Industry
The Zacks Consumer Loans industry comprises companies that provide mortgages, refinancing, home equity lines of credit, credit card loans, automobile loans, education/student loans and personal loans, among others. These help the industry players generate net interest income (NII), which forms the most important part of total revenues. Prospects of the companies in this industry are highly sensitive to the nation’s overall economic condition and consumer sentiments.
In addition to offering the above-mentioned products and services, many consumer loan providers are involved in other businesses like commercial lending, insurance, loan servicing and asset recovery. These support the companies in generating fee revenues. Furthermore, this helps the firms diversify revenue sources and be less dependent on the vagaries of the economy.
3 Themes Shaping the Future of the Consumer Loan Industry
Weakening Consumer Sentiments: The persistently high inflation (though cooling now) and other macroeconomic headwinds continue to weigh on consumer sentiments. Though the Conference Board Consumer Confidence Index improved marginally in November, the Expectations Index, which shows a six-month outlook, was below 80 for the third straight month. This level historically indicated a recession within the next year.
Similar sentiments were recently echoed by several top executives of large banks, with their numbers reflecting slowing consumer spending. Therefore, this will result in muted demand for consumer loans in the near term. Thus, growth in net interest margin (NIM) and NII for consumer loan companies is likely to decline.
Worsening Asset Quality: For the major part of 2020, consumer loan providers built additional provisions to tide over unexpected defaults and payment delays due to the economic downturn resulting from the COVID-19 mayhem. This considerably hurt their financials. However, with solid economic growth and support from government stimulus packages, industry players began to release these reserves back into the income statement.
The current macroeconomic headwinds may curtail consumers’ ability to pay back loans. Thus, consumer loan providers are building additional reserves to counter any adverse fallout from unexpected defaults and payment delays. This is leading to a deterioration in industry players’ asset quality, and several credit quality metrics have crept up toward pre-pandemic levels.
Easing Lending Standards: With the nation’s big credit reporting agencies removing all tax liens from consumer credit reports since 2018, several consumers' credit scores have improved. This has raised the number of consumers for the industry participants. Further, easing credit lending standards is helping consumer loan providers meet loan demand.
Zacks Industry Rank Reflects Grim Picture
The Zacks Consumer Loans industry is a 16-stock group within the broader Zacks Finance sector. The industry currently carries a Zacks Industry Rank #225, 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 the member stocks, indicates underperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a disappointing earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Over the past year, the industry’s earnings estimates for 2023 have moved 10.2% lower.
Before we present a couple of stocks that you may want to buy, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry vs. Broader Market
The Zacks Consumer Loans industry has underperformed both the Zacks S&P 500 composite and its sector over the past two years.
The stocks in this industry have collectively dropped 21.4% over this period, while the Zacks S&P 500 composite and the Zacks Finance sector have declined 4% and 4.9%, respectively.
Industry's Valuation
One might get a good sense of the industry’s relative valuation by looking at its price-to-tangible book ratio (P/TBV), commonly used for valuing consumer loan stocks because of significant variations in their earnings results from one quarter to the next.
The industry currently has a trailing 12-month P/TBV of 0.95X, below the median level of 1.13X, over the past five years. This compares with the highest level of 1.56X and the lowest level of 0.48X over this period. The industry is trading at a considerable discount when compared with the market at large, as the trailing 12-month P/TBV ratio for the S&P 500 is 9.93X and the median level is 10.10X.
As finance stocks typically have a lower P/TBV, comparing consumer loan providers with the S&P 500 may not make sense to many investors. However, a comparison of the group’s P/TBV ratio with that of its broader sector ensures that the group is trading at a decent discount. The Zacks Finance sector’s trailing 12-month P/TBV of 4.54X for the same period is way above the Zacks Consumer Loan industry’s ratio.
2 Consumer Loan Stocks to Invest In
Cooper Group: Headquartered in Coppell, TX, the company is engaged in non-banking services for mortgage loans. The company operates through its primary brands — Mr. Cooper and Xome.
Though the demand for mortgages is subdued now due to higher rates, COOP is well-placed to leverage its scale (it is one of the largest non-bank mortgage servicers in the United States) and bolster its top-line growth. Further, the strategic acquisitions of Home Point Capital Inc. and Roosevelt Management Company, LLC in August 2023 will boost the company’s servicing business.
With the Federal Reserve likely to keep interest rates high in the near term to control inflation, this Zacks Rank #2 (Buy) company’s NII and NIM are expected to witness improvements, though rising funding costs will weigh on both. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for earnings for 2023 and 2024 has remained unchanged over the past seven days. Also, COOP shares have jumped 27.3% over the past six months.
Navient: This Zacks Rank #2 stock is a leading provider of education loan management and business processing solutions. Headquartered in Wilmington, DE, the company is one of the leading servicers to the U.S. Department of Education under its Direct Student Loan Program.
NAVI is growing its in-school originations. Nonetheless, with the increase in overall interest rates, the extension of the federal loan payment holiday, loan forgiveness proposals and programs are anticipated to create uncertainty and limit refinance loan origination volume in the near term. However, the demand for refinancing loans is likely to rebound once direct federal loan repayments begin.
A focus on introducing new products leveraged with technology and cost-control efforts will continue supporting Navient in the quarters ahead. Also, the company focuses on delivering operating efficiency and improving customer experience by building technology-enabled solutions.
Navient shares have rallied 1.1% over the past six months. Over the past week, the Zacks Consensus Estimate for earnings has remained unchanged for both 2023 and 2024.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services likeSurprise Trader, Stocks Under $10, Technology Innovators,and more. They've already closed 162 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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
Navient Corporation (NAVI) : Free Stock Analysis Report
MR. COOPER GROUP INC (COOP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Worsening Asset Quality: For the major part of 2020, consumer loan providers built additional provisions to tide over unexpected defaults and payment delays due to the economic downturn resulting from the COVID-19 mayhem. However, with solid economic growth and support from government stimulus packages, industry players began to release these reserves back into the income statement. With the Federal Reserve likely to keep interest rates high in the near term to control inflation, this Zacks Rank #2 (Buy) company’s NII and NIM are expected to witness improvements, though rising funding costs will weigh on both.
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About the Industry The Zacks Consumer Loans industry comprises companies that provide mortgages, refinancing, home equity lines of credit, credit card loans, automobile loans, education/student loans and personal loans, among others. Zacks Industry Rank Reflects Grim Picture The Zacks Consumer Loans industry is a 16-stock group within the broader Zacks Finance sector. Click to get this free report Navient Corporation (NAVI) : Free Stock Analysis Report MR. COOPER GROUP INC (COOP) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Industry: Consumer Loans Link: https://www.zacks.com/commentary/2193978/2-consumer-loan-stocks-to-buy-amid-gloomy-industry-prospects The Zacks Consumer Loans industry continues to bear the brunt of weak consumer sentiments, high inflation and expectations of economic slowdown. About the Industry The Zacks Consumer Loans industry comprises companies that provide mortgages, refinancing, home equity lines of credit, credit card loans, automobile loans, education/student loans and personal loans, among others. Zacks Industry Rank Reflects Grim Picture The Zacks Consumer Loans industry is a 16-stock group within the broader Zacks Finance sector.
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About the Industry The Zacks Consumer Loans industry comprises companies that provide mortgages, refinancing, home equity lines of credit, credit card loans, automobile loans, education/student loans and personal loans, among others. Industry vs. See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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2023-12-07 00:00:00 UTC
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Zacks Industry Outlook Highlights Nucor, United States Steel and Universal Stainless & Alloy Products
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https://www.nasdaq.com/articles/zacks-industry-outlook-highlights-nucor-united-states-steel-and-universal-stainless-alloy
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For Immediate Release
Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses Nucor Corp. NUE, United States Steel Corp. X and Universal Stainless & Alloy Products, Inc. USAP.
Industry: Steel
Link: https://www.zacks.com/commentary/2193928/3-steel-producer-stocks-to-watch-in-a-promising-industry
The Zacks Steel Producers industry is expected to benefit from an uptick in steel demand in automotive, a major market, driven by a ramp-up in automotive production following the easing of the semiconductor crisis. A resilient non-residential construction market and healthy demand in the energy space also act as tailwinds for the industry.
The sizable infrastructure investment augurs well for the U.S. steel industry. Infrastructure spending and higher end-market demand are also expected to support steel prices. Players from the industry, such as Nucor Corp., United States Steel Corp. and Universal Stainless & Alloy Products, Inc. are set to gain from these trends.
About the Industry
The Zacks Steel Producers industry serves a vast spectrum of end-use industries such as automotive, construction, appliance, container, packaging, industrial machinery, mining equipment, transportation, and oil and gas with various steel products. These products include hot-rolled and cold-rolled coils and sheets, hot-dipped and galvanized coils and sheets, reinforcing bars, billets and blooms, wire rods, strip mill plates, standard and line pipe, and mechanical tubing products.
Steel is primarily produced using two methods — Blast Furnace and Electric Arc Furnace. It is regarded as the backbone of the manufacturing industry. The automotive and construction markets have historically been the largest consumers of steel. Notably, the housing and construction sector is the biggest consumer of steel, accounting for roughly half of the world’s total consumption.
What's Shaping the Future of the Steel Producers' Industry?
Strong Demand in Major End-use Markets: Steel producers are set to gain from strong demand across major steel end-use markets, including automotive and construction. They are expected to benefit from higher order booking from the automotive market. Steel demand in automotive is expected to rise on the back of an easing global shortage in semiconductor chips that weighed heavily on the automotive industry for nearly two years.
Also, the United Auto Workers (UAW) reached a deal with the Detroit Big Three in November 2023, ending the roughly six-week strike that weighed on the U.S. steel industry due to a slowdown in automotive demand. The resolution to the UAW strikes augurs well for steel demand moving ahead.
Meanwhile, order activities in the non-residential construction market remain strong, underscoring the inherent strength of this industry. Demand in the energy sector has improved on the back of strength in oil and gas prices. Favorable trends across these markets bode well for the steel industry.
A Recovery in Steel Prices Bodes Well: Steel prices witnessed a sharp correction globally in 2022 as the Russia-Ukraine conflict, skyrocketing energy costs in Europe, persistently high inflation, interest rate hikes and the slowdown in China due to new COVID-19 lockdowns dampened demand for steel across key end-use markets. After rebounding during the first three months of 2023, the benchmark hot-rolled coil ("HRC") prices tumbled more than 40% from their April 2023 peak of around $1,200 per short ton to below the $700 per short ton level.
The downward drift was partly driven by shorter lead times. The UAW strike and lower cost of raw materials (including scrap prices) also weighed on HRC prices. However, HRC prices have rebounded of late, driven by U.S. steel mills’ price hike actions and supply tightness, as well as a recovery in demand. The massive infrastructure development project should also act as a catalyst for the American steel industry and U.S. HRC prices.
The sizable federal infrastructure spending should favor the U.S. steel industry, given the expected rise in consumption of the commodity. Moreover, the Inflation Reduction Act and the CHIPS and Science Act will spur demand for domestic steel in the United States.
Slowdown in China a Worry: Steel demand in China, the world’s top consumer of the commodity, has softened due to a slowdown in the country’s economy due to the protracted property crisis and weak global demand. The real estate sector has taken a hard hit amid a decline in new home prices, property investment and housing sales. Notably, real estate accounts for roughly 40% of China's steel consumption.
A slowdown in manufacturing activities has led to a contraction in demand for steel in China. The manufacturing sector has taken a beating due to weaker external demand for manufactured goods and a slowdown in infrastructure spending. China has also seen a slowdown in the construction sector. The sluggishness in these key steel-consuming sectors is expected to hurt demand for steel over the short term.
Zacks Industry Rank Indicates Upbeat Prospects
The Zacks Steel Producers industry is part of the broader Zacks Basic Materials Sector. It carries a Zacks Industry Rank #86, which places it at the top 34% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
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 Steel Producers industry has outperformed both the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.
The industry has gained 17.3% over this period compared with the S&P 500’s rise of 16.1% and the broader sector’s rise of 1.2%.
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing steel stocks, the industry is currently trading at 8.34X, below the S&P 500’s 13.21X and the sector’s 11.28X.
Over the past five years, the industry has traded as high as 11.85X, as low as 2.55X and at the median of 6.09X.
3 Steel Producers Stocks to Invest In
U.S. Steel: Pennsylvania-based U.S. Steel produces and sells flat-rolled and tubular steel products. It is gaining from strong demand across its end markets, diverse order book and cost actions. U.S. Steel remains focused on executing its ongoing strategic investments. It is executing its “Best for All” strategy by expanding the mini-mill steelmaking advantage. The investment in Big River Steel is expected to be accretive to its earnings and will generate significant synergies. Cost-saving initiatives and efforts to improve operation efficiency should drive its results.
The Zacks Consensus Estimate for current-year earnings for U.S. Steel has been revised 5.4% upward over the last 60 days. The company has also surpassed the Zacks Consensus Estimate in each of the trailing four quarters at an average of 24.1%. X currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Universal Stainless & Alloy Products: Pennsylvania-based Universal Stainless & Alloy Products, carrying a Zacks Rank #2, makes and markets finished and semi-finished specialty steels, including stainless steel, tool steels and other alloy steels. The company is benefiting from strengthening demand in the aerospace market, which is driving its premium alloy sales and the top line.
USAP is seeing strong growth in aerospace sales as demand for new airplanes is being driven by a recovery in air travel and higher demand for business jets and freighters. The company is also gaining from a favorable product mix and higher selling prices. The completion of its capital project is expected to enable the expansion of its portfolio with technologically advanced, higher-margin products.
Universal Stainless & Alloy Products has an expected earnings growth rate of 170.3% for the current year. USAP has a trailing four-quarter earnings surprise of roughly 44.4%, on average.
Nucor: Charlotte, NC-based Nucor makes steel and steel products with operating facilities in the United States, Canada and Mexico. Nucor is expected to gain from the strength in the non-residential construction market. The company remains focused on achieving greater penetration in automotive. Nucor should also gain from considerable market opportunities from its strategic investments in its most significant growth projects. NUE remains committed to boosting production capacity, which should drive growth and strengthen its position as a low-cost producer.
Nucor carries a Zacks Rank #3 (Hold). Its earnings beat the Zacks Consensus Estimate in each of the last four quarters. NUE has a trailing four-quarter earnings surprise of roughly 11.3%, on average.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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For Immediate Release Chicago, IL – December 7, 2023 – Today, Zacks Equity Research discusses Nucor Corp. NUE, United States Steel Corp. X and Universal Stainless & Alloy Products, Inc. USAP. Also, the United Auto Workers (UAW) reached a deal with the Detroit Big Three in November 2023, ending the roughly six-week strike that weighed on the U.S. steel industry due to a slowdown in automotive demand. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.
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Strong Demand in Major End-use Markets: Steel producers are set to gain from strong demand across major steel end-use markets, including automotive and construction. Universal Stainless & Alloy Products: Pennsylvania-based Universal Stainless & Alloy Products, carrying a Zacks Rank #2, makes and markets finished and semi-finished specialty steels, including stainless steel, tool steels and other alloy steels. Click to get this free report United States Steel Corporation (X) : Free Stock Analysis Report Nucor Corporation (NUE) : Free Stock Analysis Report Universal Stainless & Alloy Products, Inc. (USAP) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Industry: Steel Link: https://www.zacks.com/commentary/2193928/3-steel-producer-stocks-to-watch-in-a-promising-industry The Zacks Steel Producers industry is expected to benefit from an uptick in steel demand in automotive, a major market, driven by a ramp-up in automotive production following the easing of the semiconductor crisis. About the Industry The Zacks Steel Producers industry serves a vast spectrum of end-use industries such as automotive, construction, appliance, container, packaging, industrial machinery, mining equipment, transportation, and oil and gas with various steel products. Universal Stainless & Alloy Products: Pennsylvania-based Universal Stainless & Alloy Products, carrying a Zacks Rank #2, makes and markets finished and semi-finished specialty steels, including stainless steel, tool steels and other alloy steels.
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Infrastructure spending and higher end-market demand are also expected to support steel prices. 3 Steel Producers Stocks to Invest In U.S. Steel: Pennsylvania-based U.S. Steel produces and sells flat-rolled and tubular steel products. Universal Stainless & Alloy Products has an expected earnings growth rate of 170.3% for the current year.
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2023-12-07 00:00:00 UTC
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Bain Capital last bidder in race for SoftwareOne - sources
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https://www.nasdaq.com/articles/bain-capital-last-bidder-in-race-for-softwareone-sources
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By Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt
LONDON/ZURICH, Dec 7 (Reuters) - Bain Capital is the last remaining bidder for software company SoftwareOne Holding AG SWON.S after other interested parties, including private equity firm Apax Partners, dropped out, three people familiar with the situation said.
This makes buyout group Bain the frontrunner to acquire the Swiss software manager after it first emerged as a bidder back in June.
Spokespeople for Bain, Apax and SoftwareOne declined to comment. SoftwareOne shares fell 1.1% on Thursday morning after the Reuters report.
SoftwareOne received at least four non-binding bid proposals, as part of a strategic review, including from Bain and Apax, Reuters reported in October.
Bain's proposal valued SoftwareOne at up to 3.2 billion Swiss francs ($3.55 billion), in a range of 19.5-20.5 Swiss franc per share, a person with knowledge of the terms said at the time.
It is unclear, given SoftwareOne's recent results, if Bain would still be able to make an offer in that range, the same person said on Wednesday.
But an agreement between the two sides, potentially over exclusivity of negotiations as one option, could be reached by Christmas, the person said, who was speaking on condition of anonymity.
Last month, SoftwareOne revised downward its full-year 2023 revenue growth guidance to high single-digits, from double-digits.
SoftwareOne rejected two offers from Bain in the summer, with the second offer in July being in the same range of 19.5-20.5 Swiss francs per share.
That had followed a 2.9 billion Swiss franc offer from Bain, or the equivalent of 18.50 Swiss francs per share, for the company in June. This had the support of founding shareholders Daniel von Stockar, B Curti Holding and Rene Gilli, who together hold 29.1% of the company.
At the time SoftwareOne had said that the offer "materially undervalued" the company. That offer to take the company private was a 33% premium to the closing price on May 31.
In the wake of the failed takeover attempt, SoftwareOne said in August it was running a strategic review to maximise shareholder value.
The company reiterated in November that the strategic review was proceeding as planned and the board continued to make significant progress in evaluating various options.
SoftwareOne helps companies manage software purchases from vendors such as Microsoft MSFT.O, Adobe ADBE.O and IBM IBM.N.
(Reporting by Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt, additional reporting by Emma-Victoria Farr, editing by Jane Merriman)
((anousha.sakoui@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt LONDON/ZURICH, Dec 7 (Reuters) - Bain Capital is the last remaining bidder for software company SoftwareOne Holding AG SWON.S after other interested parties, including private equity firm Apax Partners, dropped out, three people familiar with the situation said. SoftwareOne received at least four non-binding bid proposals, as part of a strategic review, including from Bain and Apax, Reuters reported in October. The company reiterated in November that the strategic review was proceeding as planned and the board continued to make significant progress in evaluating various options.
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By Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt LONDON/ZURICH, Dec 7 (Reuters) - Bain Capital is the last remaining bidder for software company SoftwareOne Holding AG SWON.S after other interested parties, including private equity firm Apax Partners, dropped out, three people familiar with the situation said. Bain's proposal valued SoftwareOne at up to 3.2 billion Swiss francs ($3.55 billion), in a range of 19.5-20.5 Swiss franc per share, a person with knowledge of the terms said at the time. (Reporting by Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt, additional reporting by Emma-Victoria Farr, editing by Jane Merriman) ((anousha.sakoui@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Amy-Jo Crowley, Anousha Sakoui and Oliver Hirt LONDON/ZURICH, Dec 7 (Reuters) - Bain Capital is the last remaining bidder for software company SoftwareOne Holding AG SWON.S after other interested parties, including private equity firm Apax Partners, dropped out, three people familiar with the situation said. Bain's proposal valued SoftwareOne at up to 3.2 billion Swiss francs ($3.55 billion), in a range of 19.5-20.5 Swiss franc per share, a person with knowledge of the terms said at the time. SoftwareOne rejected two offers from Bain in the summer, with the second offer in July being in the same range of 19.5-20.5 Swiss francs per share.
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SoftwareOne received at least four non-binding bid proposals, as part of a strategic review, including from Bain and Apax, Reuters reported in October. Bain's proposal valued SoftwareOne at up to 3.2 billion Swiss francs ($3.55 billion), in a range of 19.5-20.5 Swiss franc per share, a person with knowledge of the terms said at the time. SoftwareOne rejected two offers from Bain in the summer, with the second offer in July being in the same range of 19.5-20.5 Swiss francs per share.
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714290.0
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2023-12-07 00:00:00 UTC
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1 AI Stock Cathie Wood Is Buying That Could Soar in 2024
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https://www.nasdaq.com/articles/1-ai-stock-cathie-wood-is-buying-that-could-soar-in-2024
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Shares of next-gen data storage company Pure Storage (NYSE: PSTG) fell hard after its latest financial update, and tech investor Cathie Wood took the opportunity to nearly double up on a small existing position within the Ark Next Generation Internet ETF.
After the post-earnings tumble, Pure Storage stock is now up just 10% in the last 12-month stretch, lagging behind the nearly 23% gain of the Nasdaq Composite index over the same time span.
Investors might have temporarily soured on the stock, but the company is still putting up significant growth as it helps customers resolve pain points when expanding their digital workloads. This could be a top investment for 2024.
The market hates parsing through accounting effects
Let's first address why the stock fell following the latest quarterly update. In the fiscal 2024 third quarter (for the three months ended in October 2023), revenue slightly beat management's guidance and was $763 million, a 13% year-over-year increase.
However, full-year revenue guidance (for the 12 months ending in January 2024) was slightly downgraded to $2.82 billion, implying growth of just 2.5% over last year. The previous guidance was for full-year growth in the mid- to high-single-digit percentages. Is the Pure Storage growth story coming to an abrupt end?
Not at all. However, the market hates dealing with accounting effects that distort a growth story, and that's what is eating at Pure Storage stock at the moment. The company is a hybrid of sorts, selling its flash memory products and bundled software outright (a consumption-based model), but also offering subscriptions to its digital memory systems (the Evergreen//One and Portworx services).
The subscription services are performing wonderfully for Pure Storage. An increasing number of customers are making their data storage needs a flexible and ongoing operating expense, rather than big, lumpy capital expenditures on storage hardware.
This is good for Pure Storage's stable long-term growth and also smooths out its own profit margins (the fourth-quarter adjusted operating margin is expected to be 19%, higher than the full-year expectation of 16%).
But more subscription revenue reduces the immediate-term outlook. Subscription service revenue was up to 41% of the total in the third quarter and has been steadily rising as a percentage of total sales every year.
METRIC FY 2020 FY 2021 FY 2022 FY 2023 FY 2024*
Subscription revenue growth (YOY) 43% 33% 37% 30% 26%
Subscriptions as share of overall revenue 25% 32% 34% 35% 43%
Data source: Pure Storage. Note: The fiscal year ends in early February of each year. * = accounts for just the first nine months of the fiscal year. YOY = year over year.
Add in the delay of a $41 million order delivery to a telecom customer from the fourth quarter to early next year, and management reduced its revenue guidance for the current fiscal year. The company's upward trajectory remains intact, though.
Pure Storage is the real deal
Pure Storage has consistently been named a leader in enterprise data storage by tech researcher Gartner, and the importance of data storage is only rising in this new era of generative AI. The company has been landing new AI deals as many of its customers tap its flexible offerings for the management of data used in training AI models.
Pair this with its affordable and high-performance work in all-flash storage (which has far higher performance than traditional hard disk memory), and Pure Storage is the real deal. It's shaping up as a great investment, offering far more consistent revenue streams and profitability than memory chip manufacturers and other hardware-only based memory stocks -- like Micron Technology for example.
Data by YCharts. TTM = trailing 12 months.
That said, Pure Storage is a newer business, founded in 2009 and making its publicly traded debut in 2015. The stock price can be volatile as a result. As is often the case with stocks like this one, I employ a dollar-cost averaging plan to build a position over time.
Nevertheless, after the recent sell-off that overlooks Pure Storage's momentum, I agree with Cathie Wood and think this stock is a great buy headed into 2024. Shares trade for about 25 times trailing-12-month free cash flow and about 25 times Wall Street analysts' early expectations for next year's earnings per share. This could be a great long-term value among top memory chip and semiconductor stocks.
10 stocks we like better than Pure Storage
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Pure Storage wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Nicholas Rossolillo and his clients have positions in Micron Technology and Pure Storage. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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After the post-earnings tumble, Pure Storage stock is now up just 10% in the last 12-month stretch, lagging behind the nearly 23% gain of the Nasdaq Composite index over the same time span. Investors might have temporarily soured on the stock, but the company is still putting up significant growth as it helps customers resolve pain points when expanding their digital workloads. Nevertheless, after the recent sell-off that overlooks Pure Storage's momentum, I agree with Cathie Wood and think this stock is a great buy headed into 2024.
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Shares of next-gen data storage company Pure Storage (NYSE: PSTG) fell hard after its latest financial update, and tech investor Cathie Wood took the opportunity to nearly double up on a small existing position within the Ark Next Generation Internet ETF. Subscription revenue growth (YOY) 43% 33% 37% 30% 26% Subscriptions as share of overall revenue 25% 32% 34% 35% 43% Data source: Pure Storage. Add in the delay of a $41 million order delivery to a telecom customer from the fourth quarter to early next year, and management reduced its revenue guidance for the current fiscal year.
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Shares of next-gen data storage company Pure Storage (NYSE: PSTG) fell hard after its latest financial update, and tech investor Cathie Wood took the opportunity to nearly double up on a small existing position within the Ark Next Generation Internet ETF. Subscription revenue growth (YOY) 43% 33% 37% 30% 26% Subscriptions as share of overall revenue 25% 32% 34% 35% 43% Data source: Pure Storage. Pure Storage is the real deal Pure Storage has consistently been named a leader in enterprise data storage by tech researcher Gartner, and the importance of data storage is only rising in this new era of generative AI.
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Subscription revenue growth (YOY) 43% 33% 37% 30% 26% Subscriptions as share of overall revenue 25% 32% 34% 35% 43% Data source: Pure Storage. Pure Storage is the real deal Pure Storage has consistently been named a leader in enterprise data storage by tech researcher Gartner, and the importance of data storage is only rising in this new era of generative AI. Shares trade for about 25 times trailing-12-month free cash flow and about 25 times Wall Street analysts' early expectations for next year's earnings per share.
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714291.0
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2023-12-07 00:00:00 UTC
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UiPath Stock Analysis: Should Growth Stock Investors Buy UiPath Stock?
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https://www.nasdaq.com/articles/uipath-stock-analysis%3A-should-growth-stock-investors-buy-uipath-stock
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Fool.com contributor Parkev Tatevosian reviews UiPath's (NYSE: PATH) results and answers if the stock makes an excellent buy for growth stock investors.
*Stock prices used were the afternoon prices of Dec. 4, 2023. The video was published on Dec. 6, 2023.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and UiPath wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of December 4, 2023
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends UiPath. The Motley Fool has a disclosure policy.
Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through 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.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Parkev Tatevosian 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.
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Fool.com contributor Parkev Tatevosian reviews UiPath's (NYSE: PATH) results and answers if the stock makes an excellent buy for growth stock investors. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Parkev Tatevosian, CFA has no position in any of the stocks mentioned.
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Fool.com contributor Parkev Tatevosian reviews UiPath's (NYSE: PATH) results and answers if the stock makes an excellent buy for growth stock investors. 10 stocks we like better than UiPath When our analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of December 4, 2023 Parkev Tatevosian, CFA has no position in any of the stocks mentioned.
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See the 10 stocks *Stock Advisor returns as of December 4, 2023 Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends UiPath. His opinions remain his own and are unaffected by The Motley Fool.
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714292.0
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2023-12-07 00:00:00 UTC
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Zacks.com featured highlights Freshpet, American Public Education, Aspen Aerogels, Cerence and Pinterest
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DCOMP
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https://www.nasdaq.com/articles/zacks.com-featured-highlights-freshpet-american-public-education-aspen-aerogels-cerence
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For Immediate Release
Chicago, IL – December 7, 2023 – Stocks in this week’s article are Freshpet FRPT, American Public Education APEI, Aspen Aerogels ASPN, Cerence CRNC and Pinterest PINS.
5 Stocks to Buy for Remarkable Earnings Acceleration
Earnings acceleration is the incremental growth in a company’s earnings per share (EPS). In other words, if the rate of a company’s quarter-over-quarter earnings growth increases within a stipulated frame of time, it can be called earnings acceleration.
Studies have shown that most successful stocks have seen an acceleration in earnings before an uptick in the stock price. In the case of earnings growth, you pay for something that is already reflected in the stock price. But earnings acceleration helps spot stocks that haven’t yet caught the attention of investors and, once secured, will invariably lead to a rally in the share price. This is because earnings acceleration considers both the direction and magnitude of growth rates.
An increasing percentage of earnings growth means that the company is fundamentally sound and has been on the right track for a considerable period. Meanwhile, a sideways percentage of earnings growth indicates a period of consolidation or slowdown, while a decelerating percentage of earnings growth may at times drag prices down.
The above criteria narrowed the universe of around 7,735 stocks to only seven. Here are the top five stocks:
Freshpet is a pet food company. Freshpet currently has a Zacks Rank #2 (Buy). FRPT’s expected earnings growth rate for the current year is 27.1%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
American Public Education is an online and campus-based postsecondary education provider. American Public Education currently has a Zacks Rank #2. APEI’s expected earnings growth rate for the current year is 43.4%.
Aspen Aerogels is an energy technology company. Aspen Aerogels currently has a Zacks Rank #2. ASPN’s expected earnings growth rate for the current year is 61.4%.
Cerence provides AI-powered assistants and innovations for connected and autonomous vehicles. Cerence currently has a Zacks Rank #2. CRNC’s expected earnings growth rate for the current year is 300%.
Pinterest provides a platform to show its users (called Pinners) visual recommendations (called Pins) based on their tastes and interests. Pinterest currently has a Zacks Rank #2. PINS’ expected earnings growth rate for the current year is 72.6%.
You can sign up now for your 2-week free trial to the Research Wizard and start using this screen in your trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2193986/5-stocks-to-buy-for-remarkable-earnings-acceleration
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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American Public Education, Inc. (APEI) : 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.
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For Immediate Release Chicago, IL – December 7, 2023 – Stocks in this week’s article are Freshpet FRPT, American Public Education APEI, Aspen Aerogels ASPN, Cerence CRNC and Pinterest PINS. But earnings acceleration helps spot stocks that haven’t yet caught the attention of investors and, once secured, will invariably lead to a rally in the share price. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.
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For Immediate Release Chicago, IL – December 7, 2023 – Stocks in this week’s article are Freshpet FRPT, American Public Education APEI, Aspen Aerogels ASPN, Cerence CRNC and Pinterest PINS. For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2193986/5-stocks-to-buy-for-remarkable-earnings-acceleration Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. Click to get this free report American Public Education, Inc. (APEI) : Free Stock Analysis Report Freshpet, Inc. (FRPT) : Free Stock Analysis Report Aspen Aerogels, Inc. (ASPN) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report Cerence Inc. (CRNC) : Free Stock Analysis Report To read this article on Zacks.com click here.
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5 Stocks to Buy for Remarkable Earnings Acceleration Earnings acceleration is the incremental growth in a company’s earnings per share (EPS). See Stocks Free >> Follow us on Twitter: https://www.twitter.com/zacksresearch Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. Click to get this free report American Public Education, Inc. (APEI) : Free Stock Analysis Report Freshpet, Inc. (FRPT) : Free Stock Analysis Report Aspen Aerogels, Inc. (ASPN) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report Cerence Inc. (CRNC) : Free Stock Analysis Report To read this article on Zacks.com click here.
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For Immediate Release Chicago, IL – December 7, 2023 – Stocks in this week’s article are Freshpet FRPT, American Public Education APEI, Aspen Aerogels ASPN, Cerence CRNC and Pinterest PINS. Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance. See Stocks Now >> Want the latest recommendations from Zacks Investment Research?
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f9bec873-fb14-4725-9e4b-2e2e0836c6cf
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714293.0
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2023-12-07 00:00:00 UTC
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KKR seeks to raise up to $7 billion for first global climate fund - source
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https://www.nasdaq.com/articles/kkr-seeks-to-raise-up-to-%247-billion-for-first-global-climate-fund-source
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By Yantoultra Ngui
SINGAPORE, Dec 7 (Reuters) - U.S. investment firm KKR & Co KKR.N is looking to raise up to $7 billion for its first global climate fund that seeks to invest in energy transition opportunities, according to a person with direct knowledge of the matter.
The New York-headquartered firm is looking to hit first-close of the fund in the first half of next year, the source added, declining to be named as the matter was confidential.
Private equity funds typically, but not necessarily, begin investing after their first-close, which is when they have received an initial round of commitments from investors.
KKR's global climate fund will focus on investments involving environmentally friendly technologies such as energy storage, battery-related ventures and transportation, and decarbonizing of existing assets like conventional power and infrastructure, the source said.
The fund will scout for opportunities across the United States, Europe and Asia Pacific for investments of between $300 million and $750 million each, the source added.
KKR declined to comment.
KKR's first global climate fund comes as investors are increasing their focus on investments and funds that can help fight global warming. This year's U.N. COP28 climate summit in Dubai is now debating the future of fossil fuels, the burning of which is the biggest cause of climate change.
Goldman Sachs Asset Management, the fund arm of Goldman Sachs GS.N, announced in January that it had raised $1.6 billion for its first private equity fund focused on investing in companies providing climate and environmental solutions.
Earlier this month, the U.S. pledged $3 billion to the Green Climate Fund, an international fund dedicated to climate action.
KKR has been beefing up its climate investing strategy.
In August, the firm appointed former Goldman Sachs' energy transition head Charlie Gailliot as co-head of its global climate strategy, less than a year after it recruited Emmanuel Lagarrigue from Schneider Electric and Neil Arora from Macquarie for the same role.
KKR has committed more than $40 billion to sustainability focused investments, including over $30 billion to climate and environmental sustainability investments since 2010, according to its website.
It announced in September a $750 million investment into British-headquartered battery solutions firm Zenobē. Other investments include Indian renewable energy platform Virescent Infrastructure and Britain's waste-to-energy company Viridor.
(Reporting by Yantoultra Ngui; Editing by Kane Wu and Miral Fahmy)
((Yantoultra.Ngui@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The New York-headquartered firm is looking to hit first-close of the fund in the first half of next year, the source added, declining to be named as the matter was confidential. KKR's global climate fund will focus on investments involving environmentally friendly technologies such as energy storage, battery-related ventures and transportation, and decarbonizing of existing assets like conventional power and infrastructure, the source said. In August, the firm appointed former Goldman Sachs' energy transition head Charlie Gailliot as co-head of its global climate strategy, less than a year after it recruited Emmanuel Lagarrigue from Schneider Electric and Neil Arora from Macquarie for the same role.
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KKR's global climate fund will focus on investments involving environmentally friendly technologies such as energy storage, battery-related ventures and transportation, and decarbonizing of existing assets like conventional power and infrastructure, the source said. Goldman Sachs Asset Management, the fund arm of Goldman Sachs GS.N, announced in January that it had raised $1.6 billion for its first private equity fund focused on investing in companies providing climate and environmental solutions. KKR has committed more than $40 billion to sustainability focused investments, including over $30 billion to climate and environmental sustainability investments since 2010, according to its website.
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By Yantoultra Ngui SINGAPORE, Dec 7 (Reuters) - U.S. investment firm KKR & Co KKR.N is looking to raise up to $7 billion for its first global climate fund that seeks to invest in energy transition opportunities, according to a person with direct knowledge of the matter. KKR's first global climate fund comes as investors are increasing their focus on investments and funds that can help fight global warming. Goldman Sachs Asset Management, the fund arm of Goldman Sachs GS.N, announced in January that it had raised $1.6 billion for its first private equity fund focused on investing in companies providing climate and environmental solutions.
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KKR's first global climate fund comes as investors are increasing their focus on investments and funds that can help fight global warming. Goldman Sachs Asset Management, the fund arm of Goldman Sachs GS.N, announced in January that it had raised $1.6 billion for its first private equity fund focused on investing in companies providing climate and environmental solutions. In August, the firm appointed former Goldman Sachs' energy transition head Charlie Gailliot as co-head of its global climate strategy, less than a year after it recruited Emmanuel Lagarrigue from Schneider Electric and Neil Arora from Macquarie for the same role.
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56bcb51e-052f-4bc4-b981-5caffa5d3d23
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714294.0
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2023-12-07 00:00:00 UTC
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Sanofi: Sarclisa Phase 3 Trial Meets Primary Endpoint Of Progression Free Survival
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https://www.nasdaq.com/articles/sanofi%3A-sarclisa-phase-3-trial-meets-primary-endpoint-of-progression-free-survival
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(RTTNews) - Sanofi (SNY) announced the Phase 3 IMROZ trial evaluating the investigational use of Sarclisa or isatuximab in combination with standard-of-care bortezomib, lenalidomide and dexamethasone or VRd met its primary endpoint at a planned interim analysis for efficacy, showing statistically significant improvement in progression-free survival compared with VRd alone in transplant-ineligible patients with newly diagnosed multiple myeloma.
The company said the study results will be submitted for presentation at an upcoming medical meeting and form the basis of a future regulatory submission.
For More Such Health News, visit rttnews.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Sanofi (SNY) announced the Phase 3 IMROZ trial evaluating the investigational use of Sarclisa or isatuximab in combination with standard-of-care bortezomib, lenalidomide and dexamethasone or VRd met its primary endpoint at a planned interim analysis for efficacy, showing statistically significant improvement in progression-free survival compared with VRd alone in transplant-ineligible patients with newly diagnosed multiple myeloma. The company said the study results will be submitted for presentation at an upcoming medical meeting and form the basis of a future regulatory submission. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Sanofi (SNY) announced the Phase 3 IMROZ trial evaluating the investigational use of Sarclisa or isatuximab in combination with standard-of-care bortezomib, lenalidomide and dexamethasone or VRd met its primary endpoint at a planned interim analysis for efficacy, showing statistically significant improvement in progression-free survival compared with VRd alone in transplant-ineligible patients with newly diagnosed multiple myeloma. The company said the study results will be submitted for presentation at an upcoming medical meeting and form the basis of a future regulatory submission. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Sanofi (SNY) announced the Phase 3 IMROZ trial evaluating the investigational use of Sarclisa or isatuximab in combination with standard-of-care bortezomib, lenalidomide and dexamethasone or VRd met its primary endpoint at a planned interim analysis for efficacy, showing statistically significant improvement in progression-free survival compared with VRd alone in transplant-ineligible patients with newly diagnosed multiple myeloma. The company said the study results will be submitted for presentation at an upcoming medical meeting and form the basis of a future regulatory submission. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Sanofi (SNY) announced the Phase 3 IMROZ trial evaluating the investigational use of Sarclisa or isatuximab in combination with standard-of-care bortezomib, lenalidomide and dexamethasone or VRd met its primary endpoint at a planned interim analysis for efficacy, showing statistically significant improvement in progression-free survival compared with VRd alone in transplant-ineligible patients with newly diagnosed multiple myeloma. The company said the study results will be submitted for presentation at an upcoming medical meeting and form the basis of a future regulatory submission. For More Such Health News, visit rttnews.com.
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714295.0
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2023-12-07 00:00:00 UTC
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UNH, HUM, BIIB: 3 Healthcare Stocks to Buy, Say Analysts
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https://www.nasdaq.com/articles/unh-hum-biib%3A-3-healthcare-stocks-to-buy-say-analysts
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As the market rally enters a more advanced stage, many investors may be at risk of assuming we'll be in for an economic "soft landing" just because of the latest cooler-than-expected inflation report and the prospect of 2024 rate cuts. In many ways, 2024 could be a good year, but investors ought to always be prepared for a broader range of scenarios (including a hard landing) with more defensively-focused firms like healthcare stocks (UNH, BIIB, and HUM will be covered in this piece).
Therefore, let's use TipRanks' Comparison Tool to see how a trio of highly-rated healthcare stocks stack up if that "Goldilocks" market environment (falling rates, soaring earnings) just isn't in the cards for 2024.
UnitedHealth Group (NYSE:UNH)
UnitedHealth Group is a stellar long-term performer that's seen momentum stall in recent years. Over the past year and three quarters, UNH stock has stayed well below its long-term ceiling of resistance of around $555. Even after the latest surge on the back of an upbeat annual Investor Day and quarterly earnings beat (Q3 adjusted earnings per share of $6.56 vs. $6.33 estimate on $92.4 billion revenue), that resistance level still seems like a high hurdle that'll be tough to pass. In any case, I'm a fan of the firm's continued focus on value-based care and am inclined to stay bullish alongside the analyst community.
The stock goes for 23.9 times trailing price-to-earnings, a premium to the healthcare plan industry average of 19.4 times. That's a well-deserved premium, given that its medical loss ratio (MLR) — a performance metric (lower is better) used to gauge managed health providers — has been on the right track of late, hitting 82.3% in the latest quarter, topping estimates by an impressive 50 bps.
Additionally, the firm has a habit of raising the bar, recently hiking the low end of full-year adjusted net earnings by a slight margin.
Further, as weight-loss (GLP-1) drugs become more widespread, I'd look for UnitedHealth's MLR to fall even further from here. Pending negative, unforeseen health consequences of such drugs, I do view their rise to glory as a potential long-term positive for the firm. Lower obesity rates could spell a lower chance of health consequences, and coverage for GLP-1 drugs is sure to be viewed in a positive light by customers.
What is the Price Target for UNH Stock?
UnitedHealth is a Strong Buy, according to analysts, with 16 Buys and one Hold assigned in the past three months. The average UNH stock price target of $596.00 implies 8.46% upside potential.
Humana (NYSE:HUM)
Humana is another health insurance play that's seen longer-term momentum stall out in recent years. The company has been in rally mode since mid-summer, led higher by promising quarterly earnings reports. At a slight discount to UnitedHealth, Humana certainly seems like a more value-rich way to play the managed care space and the potential tailwind sparked by GLP-1 drugs.
Of late, the big headline has revolved around a potential merger with fellow health insurer Cigna (NYSE:CI) in what would be a sure blockbuster. Reportedly, there are talks of a stock-and-cash deal that could be inked by year's end. Specifics to the deal are hazy right now, but the chatter has managed to pummel shares of Humana and Cigna just over a week ago. Further, any such merger could be struck down by anti-trust regulators.
I view the negative reaction as overblown and a potential opportunity for value-conscious contrarians. Deal or no deal, I can't help but be bullish on Humana as it continues to navigate through profound macro uncertainties.
At 20.7 times trailing price-to-earnings, HUM is still trading at a premium to the healthcare plan industry average of 19.4 times. That said, I view the narrow premium as justified, given the potential synergies to be had if Humana were to tie up with Cigna.
What is the Price Target for HUM Stock?
Humana stock is a Strong Buy, according to analysts, based on 11 Buys and three Holds assigned in the past three months. The average HUM stock price target of $585.57 entails 21.04% upside potential.
Biogen (NASDAQ:BIIB)
Biogen is a biotech company that Warren Buffett's Berkshire Hathaway (NYSE:BRK.B) briefly invested in several years ago. Recently, Biogen stock has been a major dud, sinking over 28% in the past five years. Biogen may be perceived as a value trap to some, but I think there's real value to be had for patient investors. As such, I'm staying bullish on the stock as it looks to gain some sort of meaningful traction on the back of its latest acquisition.
The company has a solid portfolio of treatments for neurological conditions like Alzheimer's. The purchase of Reata Pharmaceuticals, which bolstered Biogen's rare disease portfolio, helped propel the firm to its first quarter of sales growth in three years.
Biogen's managers believe they're in a spot to sustain long-term growth. However, it doesn't seem like investors are buying what they're selling. The stock is in a major funk right now, and that alone is enough to stay in more of a "wait-and-see" mode. At 2.33 times price-to-book (P/B), below the 4.89 times of the biotech industry average, Biogen stock sure does look deeply discounted. However, until the firm can prove it can keep the growth going strong, don't expect shares to reverse course in the near term.
Nonetheless, the analyst community continues to praise the name. And it's hard not to, given the potential upside as the firm aims to turn the growth tides. Though untimely, I think there's a lot of gain by giving management the benefit of the doubt in its much-awaited return to growth.
What is the Price Target for BIIB Stock?
Biogen sits at a Strong Buy on TipRanks based on 19 Buys and six Holds assigned by analysts in the past three months. The average BIIB stock price target of $313.17 implies 33.9% upside potential.
The Takeaway
Healthcare stocks can be a great place to profit from defensive growth. Should 2024 not live up to the hopeful expectations of investors, the following trio of stocks may be worth a look. Of the trio, analysts see the most upside from BIIB (a whopping ~34%).
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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As the market rally enters a more advanced stage, many investors may be at risk of assuming we'll be in for an economic "soft landing" just because of the latest cooler-than-expected inflation report and the prospect of 2024 rate cuts. In many ways, 2024 could be a good year, but investors ought to always be prepared for a broader range of scenarios (including a hard landing) with more defensively-focused firms like healthcare stocks (UNH, BIIB, and HUM will be covered in this piece). That's a well-deserved premium, given that its medical loss ratio (MLR) — a performance metric (lower is better) used to gauge managed health providers — has been on the right track of late, hitting 82.3% in the latest quarter, topping estimates by an impressive 50 bps.
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UnitedHealth Group (NYSE:UNH) UnitedHealth Group is a stellar long-term performer that's seen momentum stall in recent years. The average UNH stock price target of $596.00 implies 8.46% upside potential. The average BIIB stock price target of $313.17 implies 33.9% upside potential.
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In many ways, 2024 could be a good year, but investors ought to always be prepared for a broader range of scenarios (including a hard landing) with more defensively-focused firms like healthcare stocks (UNH, BIIB, and HUM will be covered in this piece). Humana stock is a Strong Buy, according to analysts, based on 11 Buys and three Holds assigned in the past three months. The average BIIB stock price target of $313.17 implies 33.9% upside potential.
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Over the past year and three quarters, UNH stock has stayed well below its long-term ceiling of resistance of around $555. However, it doesn't seem like investors are buying what they're selling. Of the trio, analysts see the most upside from BIIB (a whopping ~34%).
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2023-12-07 00:00:00 UTC
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Investors Heavily Search Texas Instruments Incorporated (TXN): Here is What You Need to Know
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https://www.nasdaq.com/articles/investors-heavily-search-texas-instruments-incorporated-txn%3A-here-is-what-you-need-to-0
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Texas Instruments (TXN) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this chipmaker have returned +7.5%, compared to the Zacks S&P 500 composite's +4.4% change. During this period, the Zacks Semiconductor - General industry, which Texas Instruments falls in, has gained 1.5%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Texas Instruments is expected to post earnings of $1.46 per share, indicating a change of -31.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.1% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $7.04 points to a change of -25% from the prior year. Over the last 30 days, this estimate has changed -0.4%.
For the next fiscal year, the consensus earnings estimate of $6.56 indicates a change of -6.8% from what Texas Instruments is expected to report a year ago. Over the past month, the estimate has changed -1.8%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Texas Instruments is rated Zacks Rank #4 (Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Texas Instruments, the consensus sales estimate for the current quarter of $4.11 billion indicates a year-over-year change of -11.9%. For the current and next fiscal years, $17.56 billion and $17.69 billion estimates indicate -12.4% and +0.8% changes, respectively.
Last Reported Results and Surprise History
Texas Instruments reported revenues of $4.53 billion in the last reported quarter, representing a year-over-year change of -13.5%. EPS of $1.80 for the same period compares with $2.45 a year ago.
Compared to the Zacks Consensus Estimate of $4.57 billion, the reported revenues represent a surprise of -0.77%. The EPS surprise was -0.55%.
Over the last four quarters, Texas Instruments surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Texas Instruments is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Texas Instruments. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
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Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Bottom Line The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Texas Instruments.
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Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Texas Instruments is rated Zacks Rank #4 (Sell). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Projected Revenue Growth While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
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Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Texas Instruments is rated Zacks Rank #4 (Sell). While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
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And if earnings estimates go up for a company, the fair value for its stock goes up. For the next fiscal year, the consensus earnings estimate of $6.56 indicates a change of -6.8% from what Texas Instruments is expected to report a year ago. While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
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c4e13704-40c7-4671-a7cf-88cbe7a96ae5
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714297.0
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2023-12-07 00:00:00 UTC
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Dalian iron surges nearly 4% amid upbeat export figures
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DCOMP
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https://www.nasdaq.com/articles/dalian-iron-surges-nearly-4-amid-upbeat-export-figures
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nan
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nan
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Dalian and SGX iron ore up
Steel benchmarks and steelmaking ingredients up
Updates with closing prices
SINGAPORE, Dec 7 (Reuters) - Iron ore futures gained on Thursday, as market participants reacted to upbeat export figures from China and positive updates from major producers.
The most-traded May iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 rose 3.9% to 941 yuan ($131.46) per metric ton at closing.
On the Singapore Exchange, the benchmark January iron ore SZZFF4 was up 1.8% to $131.65 a metric ton as of 0750 GMT.
China's iron ore imports in November climbed 3.4% from October, customs data showed on Thursday, as improved steel mill margins and a rebound in the yuan underpinned buying of the key steelmaking ingredient.
Brazilian miner Vale VALE3.SA, one of the world's largest iron ore producers, held its production target for the second straight year, as it counts on stronger-than-expected Chinese demand.
Rio Tinto RIO.AX, RIO.L on Wednesday brought forward the start of production from its giant Simandou iron ore project to a year earlier, which will add around 5% to global seaborne supply.
"The stable output guidance from major producers would continue to support the upward rally of the raw material prices next year as well, given the expectations of recovering downstream demand," ING analysts said in a report.
State-backed DCE on Nov. 30 said it will enhance supervision of the iron ore market. This came after an announcement on Nov. 24 that China will reinforce oversight to curb a price rally.
Despite its initial effectiveness at price control, its effects are waning, analysts said.
Steel benchmarks on the Shanghai Futures Exchange rose. The most-active rebar contract SRBcv1 strengthened 2.2%, hot-rolled coil SHHCcv1 grew 3.2%, wire rod SWRcv1 increased 2.2%, and stainless steel SHSScv1 gained 1.3%.
Other steelmaking ingredients Dalian coking coal DJMcv1 and coke DCJcv1 inched up 2.3% and 4%, respectively.
($1 = 7.1579 yuan)
(Reporting by Ashley Fang; Editing by Mrigank Dhaniwala and Janane Venkatraman)
((ashley.fang@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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China's iron ore imports in November climbed 3.4% from October, customs data showed on Thursday, as improved steel mill margins and a rebound in the yuan underpinned buying of the key steelmaking ingredient. Rio Tinto RIO.AX, RIO.L on Wednesday brought forward the start of production from its giant Simandou iron ore project to a year earlier, which will add around 5% to global seaborne supply. "The stable output guidance from major producers would continue to support the upward rally of the raw material prices next year as well, given the expectations of recovering downstream demand," ING analysts said in a report.
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Dalian and SGX iron ore up Steel benchmarks and steelmaking ingredients up Updates with closing prices SINGAPORE, Dec 7 (Reuters) - Iron ore futures gained on Thursday, as market participants reacted to upbeat export figures from China and positive updates from major producers. The most-traded May iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 rose 3.9% to 941 yuan ($131.46) per metric ton at closing. On the Singapore Exchange, the benchmark January iron ore SZZFF4 was up 1.8% to $131.65 a metric ton as of 0750 GMT.
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Dalian and SGX iron ore up Steel benchmarks and steelmaking ingredients up Updates with closing prices SINGAPORE, Dec 7 (Reuters) - Iron ore futures gained on Thursday, as market participants reacted to upbeat export figures from China and positive updates from major producers. The most-traded May iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 rose 3.9% to 941 yuan ($131.46) per metric ton at closing. China's iron ore imports in November climbed 3.4% from October, customs data showed on Thursday, as improved steel mill margins and a rebound in the yuan underpinned buying of the key steelmaking ingredient.
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Dalian and SGX iron ore up Steel benchmarks and steelmaking ingredients up Updates with closing prices SINGAPORE, Dec 7 (Reuters) - Iron ore futures gained on Thursday, as market participants reacted to upbeat export figures from China and positive updates from major producers. The most-traded May iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 rose 3.9% to 941 yuan ($131.46) per metric ton at closing. Brazilian miner Vale VALE3.SA, one of the world's largest iron ore producers, held its production target for the second straight year, as it counts on stronger-than-expected Chinese demand.
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9a51d1f1-b81b-451a-a80f-1986c693029a
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714298.0
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2023-12-07 00:00:00 UTC
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Zacks Investment Ideas feature highlights: Alphabet, Meta Platforms and Coinbase
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DCOMP
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https://www.nasdaq.com/articles/zacks-investment-ideas-feature-highlights%3A-alphabet-meta-platforms-and-coinbase
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nan
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nan
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For Immediate Release
Chicago, IL – December 7, 2023 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Meta Platforms META and Coinbase Global COIN.
Uncertainty on the Rise in 2024: 3 Stocks Investors Should Buy
Although 2023 has been a banner year thus far, with the S&P 500 up 20% YTD and the Nasdaq 100 up 46% YTD, I think there are some concerning data points leading me to enter 2024 cautiously. However, even though I am a bit worried, there are a few stocks that should perform well regardless of the kind of economic landscape.
Recession Indicators
One well-known recession marker is the treasury yield curve inversion. What is often not included about the indicator is that it isn’t the inversion that signals a recession, but rather the disinversion. In the chart below, which shows the spread between the 10yr treasury yield and the 2yr treasury yield, we can see that the normalization of the yield curve precedes the recession marked in gray.
We can also see in the chart below, that the curve is nearing this disinversion signal. Although these signals are not a guarantee, it has definitely alerted me to a possibility of increasing market uncertainty.
We have also seen a marked deterioration in the job market, as well as some rapid revisions lower in US GDP growth estimates. Just this week we saw both job openings and ADP employment figures come in well below estimates.
Additionally, following the Q3 GDP estimates showing an impressive 5.3% figure, Q4 annualized GDP estimates have fallen to just 1.2%. All these factors together have me anticipating at least a moderate slowdown sometime in early 2024.
Discount Mega-Cap Tech
Both Alphabet and Meta Platforms are trading at very appealing relative valuations. Even after a strong performance this year for both stocks, the valuations are still below historical averages. Furthermore, their business models are as secure as ever, with billions of people using the products daily.
Meta Platforms is trading at a one year forward earnings multiple of 22.3x, below its 10-year median of 26.6x, and Alphabet is trading at a one year forward earnings multiple of 22.8x, below its 10-year median of 26.3x.
Furthermore, these companies are both producing tremendous free cash flow, especially relative to the valuations. Free cash flow yield is one of my favorite ways to value companies, as FCF is a no-nonsense measure of business profitability.
Alphabet is near its 10-year high at 4.7% FCF yield and although Meta is well off its high from last year it is still well above its average at 4.5%. These are the most compelling mega-cap tech stocks of the bunch in my opinion.
Both companies are also forecasting the highest EPS growth estimates among the magnificent seven. GOOGL estimates EPS growth over the next 3-5 years of 16.6% annually, and META expects 21.3%.
The combination of strong growth and fair valuations make these two stocks especially appealing in the case of a downturn or a strong market. If there is a slowdown like I expect may happen, these stocks have limited downside. And if I am wrong, and the economy is strong, they should benefit tremendously.
Coinbase Global
Coinbase Global on the other hand, while not trading at a discount valuation, is appealing in its own way. If market uncertainty rises in 2024, investors may rotate into Bitcoin as a way to hedge their portfolios, which should in turn push COIN stock higher as well.
We can see exactly that happened this year as the price of Bitcoin is up 166% YTD and Coinbase Global stock is up nearly 300% over the same period. Coinbase Global has also benefited from the crackdown on cryptocurrency exchanges, as nearly all of them have been hampered by regulatory issues.
Although COIN has experienced similar changes, it seems to have dealt with them in a more effective way and is now the clear leader in the space. Being the biggest brand in crypto means Coinbase should continue to attract new entrants in the market.
COIN has also seen some very strong earnings estimate increases from analysts, giving it a Zacks Rank #2 (Buy) rating. Current quarter earnings estimates have been revised higher by 56% in the last month and are projected to climb 91% YoY. FY23 earnings estimates have jumped by 22% and are expected to grow 92% YoY.
Bottom Line
Of course, nobody knows for sure what the economy will look like in three to six months but based on the evolving environment I lean to the defensive side. Fortunately, some of the best companies in the market are still trading at attractive levels, which allows investors to still participate even in a challenging environment.
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Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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See Stocks Now >>
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
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Free cash flow yield is one of my favorite ways to value companies, as FCF is a no-nonsense measure of business profitability. If market uncertainty rises in 2024, investors may rotate into Bitcoin as a way to hedge their portfolios, which should in turn push COIN stock higher as well. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security.
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For Immediate Release Chicago, IL – December 7, 2023 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Meta Platforms META and Coinbase Global COIN. Meta Platforms is trading at a one year forward earnings multiple of 22.3x, below its 10-year median of 26.6x, and Alphabet is trading at a one year forward earnings multiple of 22.8x, below its 10-year median of 26.3x. Click to get this free report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Coinbase Global, Inc. (COIN) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here.
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For Immediate Release Chicago, IL – December 7, 2023 – Today, Zacks Investment Ideas feature highlights Alphabet GOOGL, Meta Platforms META and Coinbase Global COIN. Meta Platforms is trading at a one year forward earnings multiple of 22.3x, below its 10-year median of 26.6x, and Alphabet is trading at a one year forward earnings multiple of 22.8x, below its 10-year median of 26.3x. Click to get this free report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Coinbase Global, Inc. (COIN) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Even after a strong performance this year for both stocks, the valuations are still below historical averages. GOOGL estimates EPS growth over the next 3-5 years of 16.6% annually, and META expects 21.3%. Today you can access their live picks without cost or obligation.
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5a2c96a3-b626-4a46-882e-63af7c2e39cb
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714299.0
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2023-12-07 00:00:00 UTC
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Australian shares rangebound as financials weigh; US data in focus
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DCOMP
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https://www.nasdaq.com/articles/australian-shares-rangebound-as-financials-weigh-us-data-in-focus
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nan
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nan
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By Aaditya GovindRao
Dec 7 (Reuters) - Australian shares ended marginally lower on Thursday, as gains by miners largely offset losses in financial stocks, while investors exercised caution ahead of a key U.S. jobs data later in the day for further cues on the Federal Reserve's next moves.
The S&P/ASX 200 index .AXJO ended nearly 0.1% lower at 7,173.30 points, after hitting a two-month high on Wednesday.
Softening data from the world's largest economy and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. rates have peaked and that rate cuts will roll in as early as March.
Back in Australia, economic data has been undershooting expectations over the past week, with retail sales, CPI (Consumer Price Index) and GDP all pointing towards an economy that is cooling, according to Tim Waterer, chief market analyst at KCM Trade.
"The cautious mood is giving traders reason to take some profits off the table given the strong run higher in equity markets throughout the last month and a half."
Financial stocks .AXFJ weighed the most on the benchmark, falling 0.4% after clocking a more than two-month high in the previous session.
Sector majors ANZ Group ANZ.AX and National Australia Bank NAB.AX both lost about 0.4%.
Heavyweight miners, on the other hand, gained about 0.7%, buoyed by a rise in iron ore prices on positive updates from major producers and ongoing robust demand.IRONORE/
Shares of Rio Tinto RIO.AX gained about 1% while Fortescue FMG.AX rose around 1.6%
World's largest miner BHP Group BHP.AX jumped 0.4% after appointing Vandita Pant as its chief financial officer.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 gained nearly 0.3% to finish the session at 11496.61 points.
Among individual companies, Fonterra Co-Operative FCG.NZ rose as much as 3.2% on improved earnings and milk price forecasts.
(Reporting by Aaditya Govind Rao in Bengaluru; Editing by Janane Venkatraman)
((Aaditya.govindrao@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Aaditya GovindRao Dec 7 (Reuters) - Australian shares ended marginally lower on Thursday, as gains by miners largely offset losses in financial stocks, while investors exercised caution ahead of a key U.S. jobs data later in the day for further cues on the Federal Reserve's next moves. Back in Australia, economic data has been undershooting expectations over the past week, with retail sales, CPI (Consumer Price Index) and GDP all pointing towards an economy that is cooling, according to Tim Waterer, chief market analyst at KCM Trade. "The cautious mood is giving traders reason to take some profits off the table given the strong run higher in equity markets throughout the last month and a half."
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The S&P/ASX 200 index .AXJO ended nearly 0.1% lower at 7,173.30 points, after hitting a two-month high on Wednesday. Softening data from the world's largest economy and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. rates have peaked and that rate cuts will roll in as early as March. Heavyweight miners, on the other hand, gained about 0.7%, buoyed by a rise in iron ore prices on positive updates from major producers and ongoing robust demand.IRONORE/ Shares of Rio Tinto RIO.AX gained about 1% while Fortescue FMG.AX rose around 1.6% World's largest miner BHP Group BHP.AX jumped 0.4% after appointing Vandita Pant as its chief financial officer.
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By Aaditya GovindRao Dec 7 (Reuters) - Australian shares ended marginally lower on Thursday, as gains by miners largely offset losses in financial stocks, while investors exercised caution ahead of a key U.S. jobs data later in the day for further cues on the Federal Reserve's next moves. Back in Australia, economic data has been undershooting expectations over the past week, with retail sales, CPI (Consumer Price Index) and GDP all pointing towards an economy that is cooling, according to Tim Waterer, chief market analyst at KCM Trade. Heavyweight miners, on the other hand, gained about 0.7%, buoyed by a rise in iron ore prices on positive updates from major producers and ongoing robust demand.IRONORE/ Shares of Rio Tinto RIO.AX gained about 1% while Fortescue FMG.AX rose around 1.6% World's largest miner BHP Group BHP.AX jumped 0.4% after appointing Vandita Pant as its chief financial officer.
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By Aaditya GovindRao Dec 7 (Reuters) - Australian shares ended marginally lower on Thursday, as gains by miners largely offset losses in financial stocks, while investors exercised caution ahead of a key U.S. jobs data later in the day for further cues on the Federal Reserve's next moves. The S&P/ASX 200 index .AXJO ended nearly 0.1% lower at 7,173.30 points, after hitting a two-month high on Wednesday. Softening data from the world's largest economy and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. rates have peaked and that rate cuts will roll in as early as March.
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63c681b3-06a0-4c5a-baf2-d2e703e2c041
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