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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.

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.

11.08.2022
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.

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.

Three Most Trusted Dividend Companies: JPMorgan Chase

JPM shares are trading 30% off their peak prices. Its net profit hit $9.7 billion in the last quarter compared with $8.6 billion in the previous one. Rising interest rates could significantly support its banking business, helping loans generate a decent amount of profit. The deposit margin in the Q3 2022 rose to 1.83% year-on-year from 1.29% a year before.

The Credit Adequacy Ratio (CAR), which indicates a bank’s available capital and it the most adequate measurement that represent all assets, including the risky ones, is rarely published. Instead, the Common Equity Tier 1 (CET1) capital is disclosed that is based only on common stocks, net surplus and other accrued revenues. CET1 should be above 4.5%, while JPM has it at 12.5% and it is going to be increased to 13% by the beginning of 2023. The bank is planning to resume active buy backs in 2023. JPM stocks dividend yield is at 3.6%, while P/E ratio is at 10, which is considered to be attractively low for such kind of assets.

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The Two Most Oversold Medical Cannabis Stocks: Canopy Growth

CGS stock prices are 9% off their peaks. But a looser tax regulation may boost business margins and some investors consider the moment to be appropriate to buy such stocks. According to federal regulations in the United States marijuana or cannabis with more than 0.3% THC is a Schedule 1 drug, the same as heroin, LSD, ecstasy and magic mushrooms. Cocaine and methamphetamine are considered less harmful and are put into the Schedule 2 group. This classification is seriously bounding any promotions of cannabis related products and hampering cannabis producers’ profits. The U.S. Federal law prevents any deduction of related costs, pushing the effective tax rate up to 90%. So, any loosening of taxation and a change of drug classification would greatly benefit cannabis producers.

Tilray reported revenues of Can$122.8 million and a negative gross margin of Can$1.3 million during the last quarter. So, there are no illusions that the majority of cannabis-related business are making a loss. However, potential profits after stocks lose most of their value may be huge even considering existing risks. CGS stocks are traded at $2.4, a price lastly seen in the summer of 2016, before the bubble emerged in this sector. The recovery of stock prices to the levels of early 2022 would mean stock prices up by 300%.

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The Two Most Oversold Medical Cannabis Stocks: Tilray

TLRY stocks are trading 95% off their peak prices. The return to these values recorded in March 2022 would mean a 200% profit. Tilray is one of the most popular companies in the cannabis sector among institutional and retail investors. But inflated expectations led to a bubble in the cannabis sector that burst in 2019. Since then, cannabis-related stocks have been sliding within the bearish trend. New federal government initiatives in the United States may seriously exhilarate the industry.

TLRY reported revenues up by 8% to $153.3 million for the recent quarter, with net losses at $65.7 million amid depreciation of inventories. The company has acquired the rival Alpria to reduce costs by $80 million by the end of 2023. The strategic merger with HEXO is close to being finalised. That would generate a positive free cash flow in 2023, according to Tilray’s management statement. Together with looser restrictions in the U.S. Tilray stocks may gain positive momentum.

1227
Top 3 Financial Stocks: Deutsche Bank

Deutsche Bank shares have dropped by 75% over the last six years. The largest German financial conglomerate lost ground after the debt crisis in the Eurozone when negative interest rates hit profit margins badly. Now, the situation is changing as the European Central Bank (ECB) may raise interest rates to 2% by the end of 2022. Deutsche Bank estimates that would bring an additional €700 million in 2022 and a further €2.5 billion in 2025. According to DB CFO’s estimates, the revenue may be generated between €26 billion and €27 billion.

ROTCE, or return on average tangible common shareholders’ equity ratio that is computed by dividing net earnings applicable to common shareholders by average monthly tangible common shareholders' equity, may hit 8% this year and 10% until2025. Rising interest rates led to an increase of deposits, even to a larger amount that was expected by the management in early 2022. If the target of increased deposits  is met over the coming years it may mean that DB share prices may more than double.

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