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24.11.2022
Major Risks for Tech Giants: Apple

Apple stocks have had a very impressive performance amid a clearly bearish market while losing only 20% of their peak values. However, investors should be prepared for elevated turbulence in these stocks considering the situation in China.

China’s zero-tolerance policy to COVID-19 led to a massive exit of employees from Zhengzhou city plant amid fears over tightening curbs. Over 200,000 workers are rumoured to have left the plant. If this is true, the production of iPhone 14 Pro and iPhone 14 Pro Max would be very complicated with no clear outlook on when it could be resumed. The delivery delay shown on Apple’s website has already hit six weeks. Americans who ordered the brand new IPhone for Thanksgiving Day will only receive it for Christmas now. Meanwhile the last two months of the year are very valuable for any mass-market company in terms of holiday sales.

 

Apple is planning to move iPhone production to India. But that would require years. The company has already invested $75 billion in the Chinese market and now this investment may be at risk as the ruling Communist party in China may put a local ban on the sale of Apple products. China is the third largest market for Apple with the United States at the first place with $153 billion and Europe at the second with $95 billion. Wall Street is expecting Apple’s earning to go up by five percent over the next three years. So, any troubles with production in China may alter these forecasts. 

11.08.2022
Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12th position by market cap with $7.8 billion, which is 4% less than Ethereum’s market cap. AVAX prices dropped by 82% of its peak values, allowing investors to buy it at early 2021 prices. Avalanche’s infrastructure consists of three logically isolated networks, each of these with their own processing, validators, and own set of rules.

This platform is often compared to the existing internet web infrastructure with core connection protocols like HTTP, surrounded by a huge number of networks to their apps. Avalanche allow for the creation of public and private systems as a blockchain or DAG (Directed Acyclic Graph) and for the use of different virtual machines for apps, including EVM engine (Ethereum Virtual Machine) that allows Enthereum network programs to be developed.

Avalanche includes C-chain to create smart contracts that are processed on an advanced EVM engine, P-Chain that coordinates validators that process transactions and also allows for the creation and management of new subnetworks, and X-Chain which is a directed acyclic graph regulating issuance and trade of cryptoassets. DAG systems record new transactions on top of the old ones, allowing for processing speed to be increased and for capacity substantially. It is quite different to other blockchains, where transactions are compiled in blocks in order to be processed.

The advantage of Avalanche is that it provides anyone with the opportunity to create his or her own isolated blockchain with its own set of parameters, including access to apps and the programming language with which it will work. Every subnetwork can process around 4,500 transactions per second compared to 14 processed by the Ethereum network.

28.12.2022
The Most Generous Corporates: Capital One

Capital One Financial corporation shares are trading at 50% off their peak prices. This has inspired the management of the company to deliver a massive buyback program bringing the buyback yield to 19.3%. Together with 2.7% dividend yield, this has made the company one of the most generous in the market. COF shares are in great demand among investors that are focused on value stocks, such as Oakmark Fund with more than $45 billion in assets under management.

The specialisation of Capital One is mostly credit cards, auto loans provided to substandard borrowers, or in other words, people with high credit risk profiles. This business is highly profitable, although it does bear high risks too. The company says it has a reliable risk assessment model in place to run the business. The lender generates not only higher margins compared to its peers, but overruns regulators’ requirements of capital adequacy with 13.6% vs required 6%. Considering these criteria, the company is in line with some of the largest banking institutions in the world, like JP Morgan with 14.1% and the Bank of America with 12.8%.

The company’s capital base, which is built on clients’ deposits, is enough to conduct high-margin lending. Such a model of cheap resources is not only profitable but it is also stable. Capital One has a margin of 10-15% on its tangible equity. The interest for the company’s services is unlikely to decline in the foreseeable future considering the current economic environment. So, COF shares could be selected for long term investments with the upside potential of 30-40% once the market starts recovering.

24.11.2022
Major Risks for Tech Giants: Tesla

Tesla is unique in terms of its share price. TSLA stocks rallied long before the company established the production of viable and steady electric vehicles (EV) and also thanks to the reputation of its leader Elon Musk. It is true that Tesla sometimes misses its mark and deadlines to launch new models and products but it seems that the crowd invests in Tesla not for its hit-and-run strategy but because of their belief in Musk’s ability to transform our everyday life in the long run.

Tesla stocks are trading 60% off their peak prices thanks to the market correction that has been squeezing the market since the end of 2021. Nevertheless, market participants are discussing some drivers that may hit the company’s business. For example, lower gasoline prices may hamper EV sales. It is true that Americans are now paying around $3.6 per gallon compared to $5 a few months ago. But this driver is largely exaggerated as gasoline prices is not the major reason for someone to buy an electric car. A move towards green energy and minimising carbon footprints is not a short term affair, but a sustainable long-term trend that is supported by governments, including the United States and China. Besides. oil producers forecast global demand will outweigh the supply side over the coming years while also betting on higher prices of fuel. So, no short-term movements of gasoline prices would affect EV buyers, as well as TSLA stock buyers.

The more serious issue is the declining prices for Tesla’s second-hand EVs. Tesla used cars are now 15% cheaper after a summer peak. If this downtrend is sustained pressure on sales of new model could mount. Tesla is planning to increase EV’s quarterly production to 500,000 by the end of 2022 and it is likely to increase production further after launching new production facilities in Berlin and Austin. But Tesla is not a mass market. So, Tesla fans are unlikely to pay much more to get a brand-new Tesla.

28.12.2022
The Most Generous Corporates: eBay

eBay stocks are trading 50% off their peak prices despite significant progress in key businesses that increase the possibility of an increasing turnover of the auction platform. The dividend yield of the company is at 2.2%, while its buyback yield is at an impressive 24.4%. So, the overall reward for investors is at 26.6% in 2022, a record among public corporates. eBay has bought back shares for $5.3 billion during the last four quarters. So, outstanding shares have been reduced to 551 million from 685 million a year ago.

The company is actively developing collectable trading, including an acquisition of TCGplayer, a marketplace where enthusiasts exchange their collectables like Pokemon, Magic: The Gathering and others. The most important service that the platform provides is guaranteed authenticity of the collectables that ensures the buyers will not be subject to scams and also protect sellers from any malicious fraud. eBay has recently made this service available for jewellery above $500.

The company has published strong forward guidance for Q4 2022 with turnover at $17.8 billion, revenues at $2.46 billion, and EPS at $1.06. The EPS in the Q4 2021 was at $1.05. So, considering the tense situation in the retail market this year, any figures above record values of 2021 should be considered an achievement. eBay stocks will be able to recover rapidly to their peak prices once the market reverses to the upside, and that would mean 100% profit from the current values.

B
Airbus Is Ready to Take Off

While Boeing (BA) stock is sinking well below $150 (nearly 43% down year-to-date), on damaged demand because of continuous safety investigations and strike impact, Airbus (AIR) is also on a stage of an almost 25% share price correction from its peaking values of March around €170. However, it has lost only less than 7% since the beginning of 2024 and won an enormous number of new orders when its major rival lost its chances. I already depicted all the details of Airbus 20% rally from January to March against Boeing's door plug fall and more failures. It actually began at almost the same, and even somewhat higher, price area than the Airbus attitude on charts. So, I personally bet again on Airbus' readiness to take-off once again very soon.

A more than +27% upside space for Airbus is in the picture you can see below. I saved it in the middle of the week, particularly this Wednesday's night, when Reuters reported from Paris that Airbus deliveries fell 9% to 50 planes fully finished in September vs the same month in 2024, but managed to book fresh demand for 235 jets. Well, Airbus shares already gained by nearly 2.5% for the next two days, including today, but 25% of free space is still here to go in the upward direction.

The total deliveries by Airbus so far are 497 jetliners, which is up 2% from 488 during a 9-month period in 2023. So, everything is O.K. for me. The manufacturer is going on slowly but safely, which is the most important thing when its rival is disgraced. Citing Reuters, Airbus is just "facing a sprint towards the finish line in the traditionally busy fourth quarter", when targeting 770 deliveries for the full year after reducing its former goal of 800 in summer. But this was not due to any demand problems, only shortages of engines and other parts were blamed. This may decrease the incoming money flow to Airbus in the current year, yet its assembly shops would have to deliver 273 aircrafts before Christmas to meet the target.

The number would be 11% up from Q4 2023, which is an argument number one in favour of the future rally in Airbus stock. It will happen at least on expectations the goal would be complete. An even more important argument number two is collecting excessive demand in the form of new orders for the whole next decade. The demand collection is already overheated, as for me, after Airbus confirmed it won orders for a total of 667 jets, including that 235 in September, or 648 after cancellations. Again, Airbus does not publish any target for orders, but Reuters cited "industry sources" saying Airbus is "informally aiming for about 1,100 orders". A huge amount suggests that Airbus will earn even more than many expected before, while Boeing could be written off as scrap, suffering a clear lack of customers in this small world.

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Rafael Quintana Martinez
Money Manager de alto rendimiento, con una sólida formación académica, profesional y de campo. Más de 9 años de experiencia especializada en el comercio de mercados financieros internacionales. La devoción, la fiabilidad, la responsabilidad y la ética impulsan mi vida. Actualmente me desempeño como Analista Senior para Metadoro. https://metadoro.com/es https://mx.investing.com/members/contributors/235587671/ https://es.tradingview.com/chart/EURUSD/rE9gVips/
Shiba Inu Is Likely to Continue Up

Shiba Inu (SHIB) is down 4.2% this week, trading at $0.0000170, underperforming the broader market where Bitcoin (BTC) has shed only 1.8% to $61,120. This decline comes after a strong 58% rally in September, characteristic of the coin's elevated volatility, which can be attractive for traders.

Currently, SHIB is trading near trend support, making it an interesting level to consider long trades, with a potential 27% upside toward $0.0000200. The project shows strength, backed by rising network activity and increased whale accumulation. Additionally, the accelerating SHIB incineration process is pushing prices higher. If the broader crypto market maintains positive momentum, SHIB could surpass its primary target and continue its upward trend.

8
Cruise Operators Are Back Onto the Fairway

The group of a few cruise stocks suddenly made a tremendous run up in their market values. The bullish momentum quickly intensified into a double-digit percentage growth in previously unwanted shares of Norwegian Cruise Line (NCLH), following an upgrade from Citi analysts to Buy from Neutral and more confident and detailed comments by Stifel wealth management and investment banking company on Carnival Corporation (CCL) prospects. Cruise traffic in September was "among the best on record", as North Americans kept spending more money on experiences and services than on discretionary goods, which led to record booking rates for affordable cruise voyages, City noted. "Norwegian's shift in strategy from quality at all costs to a more balanced yield/cost relationship gives us confidence that the considerable pricing power and the company's increased focus on costs 'can't help but bear fruit'," Citi said in a client's note, when raising its price targets on Norwegian Cruise to $30 from $20, Royal Caribbean to $253 from $204 and Carnival to $28 from $25, which was also more than 20% above its price level at the moment.

Carnival Corporation added 13.33% for the first four trading sessions of the week to cross an 18-month-long technical border at $20 per share. Potentially, this escapade action paves the way for a jump to the area above $27, where the peaks of September 2021 are waiting, if we consider CCL earnings beat with EPS (earnings per share) of $1.27 vs $1.17 in consensus estimates on $7.89 billion sales in the company's public release only two weeks ago. A great step forward, compared to near-zero profits during the previous three quarters on revenue within a 26.7% to 31.5% lower range between $5.4 billion to $5.78 billion. Carnival's actually improving financial performance amid elevated costs was not properly appreciated so far. Moving closer to the specifics of the business, its newest sailing next-generation cruise ship, the Sun Princess, is built in 2024 and ready for new destinations like Celebration Key, which helps to achieve higher occupancy.

Meanwhile, Stifel highlighted even better hopes for Carnival. When investigating its current bookings dynamics for 2025 and early 2026, with "no signs of a slowdown in demand or spending" for sea-based vacations despite more expensive tickets, they see a space for the cruise company's EPS to exceed $2.00 next year. So, the stock still looks currently undervalued to represent a chance for good mid-term investment, especially since its Royal Caribbean (RCL) rival is now soaring more than 40% higher than its pre-coronavirus peaking prices after rising another 5% for the last several days. Carnival and Norwegian Cruise Lines still keep a 60% discount in market value after pricing erosion since 2020.

William Blair, a global boutique with expertise in investment banking, issued an Outperform rating on the Carnival stock. Barclays and Goldman Sachs also raised their price targets for the cruise operators on "solid KPIs" (key performance indicators), while mentioning fuel prices among major risks for the segment. Cruise operators may grow capacity at a healthy 6% annual clip over the next three years, according to Citi. Some view that recent jumps in cruise stocks could be a "catch-up trade", yet City feels that growth in the segment has "more longevity".

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Rafael Quintana Martinez
Money Manager de alto rendimiento, con una sólida formación académica, profesional y de campo. Más de 9 años de experiencia especializada en el comercio de mercados financieros internacionales. La devoción, la fiabilidad, la responsabilidad y la ética impulsan mi vida. Actualmente me desempeño como Analista Senior para Metadoro. https://metadoro.com/es https://mx.investing.com/members/contributors/235587671/ https://es.tradingview.com/chart/EURUSD/rE9gVips/
EOS Seen Recovering to $0.5500

EOS is down 2.5% this week, trading at $0.4600, mirroring Bitcoin's (BTC) 1.8% decline to $61,048. EOS is hovering near a key 10-week support level. Should prices fall below $0.4500, there is a risk of a further decline toward $0.3000. However, the baseline scenario suggests a recovery toward $0.5000-0.5500, provided that Bitcoin stages a solid rally.

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