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26.04.2023

Diversification Inside Tech Sector: Taiwan Semiconductor

TMS is the most valuable semiconductor producer in the world. Its stock went down by 40% during the recent market correction, and rebounded slightly after a strong Q1 2023 earnings report. The company reported an operational margin at 45.5% as production of 5 nm and 7 nm chips is increasing. The company continues to generate profit despite decreasing demand for personal computers after surging during the pandemic in 2020-2021. Its financials are looking much stronger than its major peer Intel. In the worst-case scenario TSM’s operational margin is expected to decline to 40%, while Intel is expected to deliver a 39% operational margin with a negative net cash flow in Q1 2023. Taiwan Semiconductor is planning to spent between $32 billion to $36 billion on CAPEX this year, while Intel has cut CAPEX to $20 billion despite being 30% co-funded by the U.S. government. On the negative side, the company is quite vulnerable to geopolitical risks as tensions between China and Taiwan are mounting. Although, it is hard to believe that Beijing will take the island by force, these threats could not be discounted. China is building its image as a global peacemaker while promoting its roadmap to establish peace between Russia and Ukraine, and the recent China-brokered agreement between Iran and Saudi Arabia. Economic ambitions of China are also a major hurdle for a military solution of the long-lasting conflict as the destruction of the chip production facilities of TSM will make such military operations pointless in the economic sense. In other words, TSM stocks may interest very optimistic investors that are seeking extra profit amid recovering demand for chips in the second half of` 2023.

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.

11.08.2022

Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12^th 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.

04.08.2022

Ethereum’s Most Important Update

ETH is a native token for the Ethereum blockchain and is one of the two most reliable digital assets in the market along with Bitcoin. Ethereum is the first platform that became a hub for thousands of blockchain apps and other digital solutions. The recovery of ETH prices to November 2021 peaks at $4,900 would bring investors 190% profit.

Second layer solutions (Layer2) were introduced to improve stability and effectiveness of the Ethereum blockchain. These are blockchain network add-ons that are added on top of the primary blockchain. The most popular add-ons are Arbitrum, Loopring, Immutable X, and Polygon that have recently partnered with Meta (Facebook owner). In other words, the Ethereum blockchain network has a much broader use than the native blockchain itself.

Ethereum developers promise to release a new Proof-of-Stake (PoS) consensus protocol in late 2022. This protocol will allow miners to stake tokens to a special deposit to mine blocks. Some networks within the Ethereum blockchain have moved to PoS protocol this summer, while others are expected to move to this protocol in the middle of September. This move will allow for the increase of processing capacity of the network to almost 100,000 transactions a second from the existing 30 transactions and lower commissions. This would also allow for ETH to switch to the deflation model when coins are algorithmically burned, while some coins would be removed from circulation as they would be blocked by staking - more than 13 million ETH or 10% of overall coins in circulation are blocked by staking. The problem is that coins are blocked for a long period of time and cannot be sold or exchanged for fiat currency.

16.06.2022

Not Every Tech Stocks are Equally Strong: SAP

SAP stocks have lost 30% since the beginning of 2022. The German tech company develops enterprise software and solutions to manage business operations. For example, one of its services can be used to manage all business travel financial activities and related spending. In other words, it is quite a routine company with a stable and strong cash flow. Once SAP software is installed on a corporate level it is hard to do without it as it is deeply integrated into the business core processes. Moreover, SAP is restructuring its business model around its subscription base and this will allow for cash flows to be even more predictable and balanced through the financial year. Such a model is in favourable to Wall Streel investors.

The war in Ukraine has a 300-million-euro negative effect on SAP business, and it is only a marginal 1% of the overall revenue base for the company, while its dominance in the ERP segment is secure. The revenues added 11% year-on-year to 7.08 euros in Q1 2022. The revenues grew by 6% in Q4 2021.

The company has made some successful M&A deals, acquiring Qualtrics, a cloud-based subscription software platform, that delivered +48% revenue in Q1 2022. This company had a gross margin above 90% in 2021 while SAP’s gross margin was at 70% for the same year.

SAP management promised to triple its cloud-based business by 2025, and boost revenues to 22 billion euros, while operational profit is forecasted to grow by 40% from the current 8.4 billion euros. This is a very extensive growth for the company that has a high P/E ratio at 17. The company may not perform very high growth rates as its younger tech sector peers, but it may certainly recover to new all-time highs in the long-term perspective. However, the sector may require several quarters to recover, and the recovery would be headed by such reliable companies as SAP with a low risk profile.

Bash

17.01.2025

Synthetic Graphite Helps GM to Stay in the Race

Here are just two pieces of news which came this week, motivating me to buy a stake in General Motors. The first and foremost thing that knocked on my news feed was an announcement that GM signed a deal with Norway's Vianode firm, which is now going to provide the vehicle maker with graphite anode materials. Regular delivery is necessary for GM to succeed in making enough quantities of its own modern electric batteries. The Ultium Cells joint venture between GM and LG Energy Solution will produce the EV batteries. What is important is that it is a multi-year effective, from 2027 through to 2033.

The project will not only help to advance GM battery technology to drive greater value to its customers, according to GM's senior vice president Mr Jeff Morrison, but it could also make a quite resilient supply chain through GM for other North-American EV makers. The point is that the entire Western ecosystem depends upon the import of critical graphite-based minerals, while China continues to control nearly 95% of the world's supply of natural graphite. However, Vianode will supply its alternative synthetic graphite. Its plant could be located in either the U. S. or Canada, close to GM facilities. Their plans are to produce 80,000 tons of synthetic graphite per year, which would be enough to supply 1.5 million electric cars. Vianode now has its first production plant in Norway. Besides, synthetic graphite reportedly has a 90% lower CO2 footprint than conventional graphite materials used in the industry, with the production process also scaling up easier compared to a normal mining. The situation will give GM a good chance to compete with Tesla as the undisputed American EV leader, joining the global race for cheaper Chinese competitors, as Chinese EVs would probably face Trump's tariff barriers eventually.

Another news was that the U.S. NHTSA regulator, an abbreviation for The National Highway Traffic Safety Administration, closed its probe into GM Cruise self-driving vehicles over pedestrian risks. Concerns and the probe since October 2023 were all about the extent to which GM-produced Cruise robotaxis are taking sufficient precautions after five incidents involving a collision between a Cruise vehicle and a pedestrian, including three that involved injuries. When ending its investigation, NHTSA cited Cruise's November 2023 recall and GM's decision to cease Cruise operations, so that GM was ending its money-losing robotaxi development, with no funding work on self-driving robotaxis after investing more than $10 billion since 2016. It is quite clear that Tesla, which has received the necessary permits, is technologically stronger and is going to develop its robotaxi muscles, will dominate the robotaxi market. However, cutting losses by GM is probably not bad news for GM, following a $500,000 fine because of submitting a report, officially recognized as a false one, in order to influence a federal investigation in November.

Tesla certainly remains the market's favourite, and one of my own favourites as well in 2025 in terms of growing its market share and Elon Musk's political clout. However, GM shares could also climb gradually toward the $60s on the back of the listed news.

1107

MetadoroIn-house analytics

16.01.2025

Delta Is Taking Off To Update Its Highs

Delta Air Lines stock rose markedly by low double digits in the first ten days of the new year. The U.S. carrier has served more than 200 million customers in 2024, when it was also recognized by J.D. Power, a leading American data analytics and consumer intelligence company, for being No. 1 in First/Business and Premium Economy Passenger Satisfaction. Travelers became more willing to spend extra money for swanky seats when meeting a high level of service. Delta is just positioning itself as the nation's premium airline. And what's more important, its Christmas quarter's earnings reportedly surpassed average analyst pool projections. Driven by stronger travel demand, smart financial management and capacity discipline, Delta business provided last three-months' profit of $1.85 per share vs $1.28 at the same period one year ago, compared to $1.75 in consensus estimates. On January 10, the airline industry leader put its future profit levels within a range between $0.70 and $1 per share in the current quarter through the end of March, while analyst expectations were focused on $0.77 cents, according to data compiled by LSEG. The starting months of each year always perform worse. It is clear that all carriers made losses in the Covid years of 2020-2022, but Delta profits only recovered into a range from $0.25 to $0.45 in the first quarter of 2023 and 2024, respectively, but Q1 profit numbers varied from $0.75 to $0.96 even in the three blessed years before the pandemic. Delta added that it is forecasting annual earnings in excess of $7.35 a share, which would be the highest in its 100-year history, based on its planned revenue growth of 7% to 9% in the March quarter from a year ago. The announcement could be compared to an adjusted profit of $6.16 a share in 2024. The company happily breaks through ticket prices' rising effects, almost undisturbed by a reduction in airline seats in the domestic market, which was peculiar for most carriers. Thus, new expectations created a fertile ground for setting new price records, even though price movements on Delta charts look most convincing among its other American rivals.

By the way, Citigroup analysts freshly updated their outlook on Delta Air Lines shares to raise their price target to $80 from the previous $77, vs the actual range around $65 per share where the stock just came after a reasonable market correction from last week's and all-time highs. Citigroup said it has included factors like higher revenue per available seat mile, projections of slightly lower fuel prices, increased taxation, a minor rise in share count, and the incorporation of fourth-quarter 2024 results into their financial model, which has projected Delta's profit at $7.49 per share in 2024 and $8.72 in 2025. Delta shares are Buy-rated at Citi, and we agree with their positive estimates in general, while keeping in mind even better price goals somewhere between $82.5 and $85.

DAL

1325

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/

16.01.2025

Loopring Is Struggling to Surpass $0.2000

Loopring (LRC) is up 4.4% this week, trading at $0.1910, though it lags behind the broader cryptocurrency market, where Bitcoin (BTC) has risen by 5.2% to $99,300. Most of LRC's gains occurred on Wednesday following the release of December inflation data in the United States. Core inflation came in unexpectedly lower than both forecasts and the November reading, sparking optimism in the market.

The softer inflation data boosted market sentiment, increasing bets on a quarter-point interest rate cut by the Federal Reserve in March to 27.0%. This encouraged investors to increase their exposure to risky assets, including cryptocurrencies like LRC.

Despite recent gains, LRC remains under pressure, having fallen below the key support level at $0.2000 earlier in the month, with prices briefly heading toward $0.1000. The recovery to near $0.2000 suggests improving momentum, and further upside may be possible if Bitcoin maintains its upward trajectory.

LRCUSD

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Rafael Quintana Martinez

15.01.2025

Dogecoin Celebration Rally Could Be Overstated

Dogecoin (DOGE) is up 6.3% this week, trading at $0.3560, significantly outperforming the broader cryptocurrency market, where Bitcoin (BTC) is up 2.9% to $96,990. DOGE has emerged as the best-performing cryptocurrency among the top 10 by market capitalisation.

The rally in DOGE is driven by an improving macroeconomic outlook in the United States, bolstered by speculations that the new U.S. administration will adopt a gradual approach to tariff increases. Adding to the excitement, Dogecoin’s high-profile ambassador, Elon Musk, is reportedly gaining access to U.S. President Donald Trump ahead of his inauguration, further fuelling optimism around the memecoin.

Speculations that Dogecoin may become the currency for the X platform (formerly Twitter) payment system have also supported the rally. Investors have purchased approximately $570 million worth of DOGE over the last six days, reflecting heightened interest in the token.

From a technical perspective, DOGE needs to break above the $0.4000 resistance level to sustain its upward momentum. A successful move above this level could set the stage for a rally towards $0.5000, solidifying its position as a top-performing cryptocurrency.

DOGUSD

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