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15.09.2022
Safe Haven Assets for Long-Term Investments: Broadcom

Broadcom is an American semiconductor and infrastructure software development company. Soon it is expected to close a merger deal with VMware, a cloud computing and visualization company, that will open new cross-sales opportunities for Broadcom to boost its revenues. Broadcom stocks are now 25% off their peak values.

According to the Q3 FY 2022 financial report that ended July 31, consolidated revenues grew by 25% year-over-year to $8.46 billion, and EPS went up by 40% to $9.73 per share. The semiconductors segment, that added 32% year-over-year, was the primary driver for the company’s profit. The company’s free cash flows (FCF) topped $4.3 billion, allowing it to spend $1.7 billion on dividends and 1.5 billion on the shares repurchase program. The company is planning to continue spending at least 50% of FCF on dividends that added 43% every year on average since 2016. 

According to the Q4 FY 2022 forward guidance, the company is expecting its revenues to go up by 20% year-over-year to $8.9 billion and for EDITDA to go up by 25% to $5.6 billion. Broadcom has great experience in expanding its product portfolio by M&A operations, and apparently it will continue on this way. The company is also expected to benefit greatly from the $52.7 billion CHIPS bill in the United States.


06.10.2022
Top 3 Financial Stocks: CME Group

CME Group is the largest market place for derivatives. CME stocks dropped by 25% from the beginning of 2022. The only reason for such a decline is the overall market correction and not any business issues. High volatility is a benefit for the company as it offers the most important derivatives to mitigate financial risks. Among those are the most popular S&P 500 index futures and other indexes linked to derivatives, agricultural products, gold, silver, and crude derivatives. So, the company continues to receive decent profit that allows for the payment of high dividends to its investors.

Free Cash Flow (FCF) of the company in 2022 is expected to hit $2.8 billion. CME is improving its efficiency as every Dollar received in 2021 was converted into $0.48 of FCF, while this year this figure is expected to rise to $0.55, and in 2023 to $0.57. Regular annual dividends is at $4 or 2.3% of share value. CME is also paying interim dividends. By doing so, it paid $3.6 regular dividend and $3.25 interim dividends in 2021, or $6.85 per share, slightly above FCF per share at $6.77.

CME has a solid business model and sound financials without substantial debt. These facts allow the management to take more care of the company’s shareholders. The current overall downside configuration offers great opportunities for investors to add CME stocks to their long-term investment portfolios.

15.12.2022
Three Undervalued Value Stocks: Costco

Costco Wholesale Corporation has presented quite disappointing earnings report for the Fiscal Q1 2023. Revenues were reported up 8.1% year-on-year to $54.44 billion missing expectations of $54.65 billion. This is obviously not the reason for long-term investors to remove COST stocks from their portfolios as the company is set to maintain strong financial discipline and cost structure, not to stimulate high growth in the short term at any cost.

The operational margin in financial Q1 2022 was at 3.4%, and in Q1 2023 it was 3.2%. Costco is aiming to provide the most reasonable prices on their products to keep their clients loyal. That is why the operational margin is suffering. Meanwhile, EPS was up by 4.4% to $3.1, and membership fees rose by 6% year-on-year. So, the strategy seems to be buying itself.

Inflation in the United States is expected to return under control over the next year. So, there will be no need to deliver various marketing activities like coupon sales and others while loyal clients will be grateful for the support during the period of uncertainty. Costco is planning to open 24 new stores in 2023, increasing its potential to generate revenues.

11.01.2023
Advanced Crypto Assets: dYdX

DYDX tokens suffered a lot during the ongoing market correction and lost over 95% off their peak prices. dYdX is an advanced decentralised exchange, where clients can exchange cryptocurrencies and derivatives with marginal collateral. There are no KYC procedures to be followed within the exchange, as well as no need to disclose your personal data.

dYdX is runs on the Ethereum blockchain, known for its expensive transaction fees. However, StarkWare solution allows for lower fees as only commissions for trading are charged. The platform now runs on Layer 2 protocol which is incorporated into Ethereum’s  main network. This solution allows for transactions to be conducted instantly, while traders do not have to pay miners for validating transactions.

Market players are closely monitoring the dYdX V4 vehicle, which is  a standalone Cosmos blockchain, featuring a fully decentralised, off-chain, orderbook and matching engine. In other words, developers are going to create the entire trading infrastructure to scale up processes without involving any third-party applications. The service  cancelled two stimulus programs in order to lessen the effects of inflation within the dYdX platform and to support token prices.

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.

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Japanese Yen is Seen to be Largely Unchanged

The Japanese Yen remains unchanged against the US Dollar after inflation data in Japan met expectations. The USDJPY continues to run within the range of 134-135. The Japanese currency may rise ahead of the Bank of Japan’s (BoJ) meeting this week. However, the pair may extend its trading range to 133-137 this week. It could be related to the changes inside BoJ after new governor Kazuo Ueda took office.  The Consumer Price Index in Japan in March rose by 3.2% year-on-year, which is in line with expectations, but slightly below February readings of 3.3%. Headline inflation eased from a four-decade high of 4.3% in January, but is still short of the BoJ’s 2% target. The BoJ will meet on April 27-28, and this will be the first meeting of Japan's new central bank governor, Kazuo Ueda, as the chairman. During his inaugural press conference, he said there was no rush to change the ultra-soft policy settings, including control over the yield curve. This fact added doubts as to whether the BoJ will make changes to its monetary policy. This means that we do not expect a strong change in the Dollar-Yen exchange rate.

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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/
Brent Oil Prices are Seen Rise Towards $89

Oil prices have been declining since March 2022 from $133 per barrel of the Brent crude benchmark to $70 per barrel. Prices slowed down in mid-March 2023, and accelerated in early April after the Organisation of the Petroleum Exporting Countries and their allies, known as OPEC+, decided to set additional production cuts by more than 1.6 million bpd. Prices have closed the gap at $80 per barrel, and are likely to move higher towards the $89 technical resistance. Anyway, prices are now locked between the wide range of $80-89 per barrel. Long trades could be opened considering the RSI oscillator with a period of 14 readings on the H4 timeframe chart. Use overbought and oversold signals as good opportunities to buy, take profit, and open a short trade for Brent crude.

 

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The Rally is Unavoidable: Shopify

Shopify stock prices are far from their highs despite the increase of 30%since the beginning of 2023. The E-commerce platform business is now far from being in top form considering muted consumer activity. The situation could be called the worst, and any positive developments may boost its stock prices. Gross Merchandise Value (GMV) is at $200 billion a year with Shopify, which is around a third of the same volumes at Walmart. Revenues to GMV ratio grew by 17% to 2.85%. Shopify earnings are expected to rise by 19% in 2023. The firm is working hard to improve clients’ loyalty via Shopify Capital, a cash advance product for merchants, and also Shopify Payments, a service that allows merchants to accept payments without requiring a third-party payment gateway, which is very popular among off-line stores, and some other services like tax calculators. Staples and Heinz are among the clients of Shopify. The number of Shopify services is growing, and they are spreading beyond the on-line segment. This is very likely to raise Shopify stock prices in the future.  

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The Rally is Unavoidable: Roku

Roku is the hardware company that manufactures digital media players and provides access to streaming media content. Its shares lost 90% of their peak prices. The firm was initially part of the streaming giant Netflix with which it had incorporated some digital media player producers in order to avoid competition with Apple TV and other streaming peers. But later Roku became an independent company that offered smart TVs built-in Roku functionality.  The major source of revenues is advertising. The ad market was very weak in 2022, hampered by geopolitical tensions. But it is now recovering, fueling hopes that ad revenues will improve soon. Anyway, advertising revenues are unlikely to contract any further so no major impact on stock prices is expected. Thus, future guidance is of paramount importance.  The company’s management expects earnings to return to a positive territory in 2024 with EBITDA margin to go up to 10% (the company delivered EBITDA margin at 17% as the highest on record). These developments will certainly boost stock prices, as margins play the most important role for investors after revenues are expected to rise by 10% in 2023, which is less than in 2020-2021.  

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