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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.

Stocks to Pick Up in Early August: AMD

AMD is joining the AI rally after its CEO Lisa Su announced a launch of an artificial-intelligence hardware chip that would be able to compete with Nvidia, by the fourth quarter 2023. Its share price already gained 2.8% on the first day of August, plus opened the next trading session on Wall Street nearly 1.5% higher, following the company's clear forward guidance for the end of the year.

“Our AI engagements increased by more than seven times in the [second] quarter as multiple customers initiated or expanded programs supporting future deployments of Instinct accelerators at scale,” she said.

The rally of AI-bound stocks is to be continued. The trend-setting NVIDIA chipmaker’s stocks climbed by more than 52% since May 25, when it broadcasted highly ambitious plans of increasing production power amid rapidly growing demand. Besides some more or less new start-ups, other large semiconductor companies are specialized on other parts of the field, as most of their chips are not fit for fast big data calculations and other purposes related to ChatGPT, etc., which may supposedly generate the best possible profit on various applications. AMD production is exactly what the AI industry needs, even though AMD with its less than $200 billion of market caps is not as big as NVIDIA, which costs more than $1.15 trillion.

A surprising act of U.S. credit rating downgrade by Fitch agency has send AMD stock into correction from its newly minted high above $119.5 per share to the area below $113 or some deeper, which may give investors a better chance to buy.

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Stocks to Pick Up in Early August: Shopify

A cloud-based, multi-channel e-commerce platform designed for selling production of small and medium-sized businesses. It also helps merchants and their potential customers in finding each other in physical retail locations and social media storefronts. Shopify stocks were granted with a series of upgrades in July. For example, MoffettNathanson rewarded the company to Outperform rating position from Market Perform, with a price target of $76.00.

Company’s stock prices gained by 2.8% to $67.45 during the next trading week after the upgrade decision. It was reportedly based on "early signs of an enterprise inflection, including growing traction from system integrators, higher web traffic for Shopify Plus, as well as new executive hires", which may help Shopify in sales.

The market caps for Shopify nearly doubled after last Christmas, yet it is still 38.2% compared to post-pandemic rally highs of November 2021. Shopify is estimated to deliver Q2 2023 EPS at $0.07 and $1.63 billion for revenues, compared to $0.01 of EPS on $1.5 billion delivered during the first three month of 2023. So, any higher values may give a golden opportunity to buy, as much space would be still available upside as a mid-term potential.

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Stocks to Pick Up in Early August: Qualcomm

A San Diego-based chipmaker, which is essential to sales of smartphones using its Snapdragon family of processors, including a wide range of Huawei, Samsung, Xiaomi and Blackberry's line-ups, could surprise relatively low investor expectations from its quarterly earnings numbers on August 2. Nominally, the market pools are expecting $1.81 of equity per share (EPS) on $8.5 billion of revenue against $2.15 of EPS on $9.27 billion in the first quarter of 2023.

The first argument why the numbers should be estimated higher is that Qualcomm's Taiwanese partner MediaTek Inc expanded its revenue exactly on a quarterly basis, adding more positive forward guidance for the next three months as well. Besides, another gadget supplier Amphenol (APH) posted better-than-feared sales in Q2, with this electronic connector maker expecting its mobile handset income may increase at a "more robust pace and at an above seasonal level".

The market niche for gadgets is full of troubles as many global consumers postpone buying new durable goods items due to limited income. Handset producers had to come up with better offers to attract people. Smartphone shipments dropped by nearly 13% vs recent peaking values all over the world, according to research firm Canalys. Manufacturers accumulated excessive quantities of chips in storage. Yet, things are seemingly changing for the better.

 

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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/
SNX May Resume Its Upside Shortly

Synthetix prices stopped rolling back at $2.47, as the coin lost 14% in few days. The interest to the coin is moderate as its developers launched Synthetix V3 on the mainnet. Further network’s plans to make pools permissionless could be encouraging for liquidity providers, potentially leading to further growth. The launch of Infinex derivatives exchange looks promising as SNX prices surged by 65% to $3.30 per coin. The coin might be somewhat overheated recently, but the recent rollback might be a technical correction. Prices may test the $3.00 resistance once again after this correction will be over.

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