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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.

11.08.2022
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.

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.

Three Stocks Thought to Climb in April 2022: Nvidia

Shares of this giant computer systems design company, which is also a world leader in graphic processor supplies, are trading with a 20% discount compared to their record peaks of $346.47 in November 2021. Market actions were clearly running ahead of the unfolding of the story at some point amid a global shortage of chips, which created a panic demand. During this time its shares fell below $210 for a few months, providing a good opportunity for a mid-term rally. 

The tailwind blowing with the continuing deficit of chips and rampant inflation worldwide pushed Nvidia shares by 40% above $280. Yet, the price still looks rather attractive. Acceleration of the uptrend was supported by the news that Nvidia and its Intel rival announced their common production plans. Jensen Huang, the chief executive of Nvidia, made a statement that his company is going to use Intel's industrial facilities to source more of Nvidia's designed chips. Intel CEO Pat Gelsinger commented soon after that his company is "thrilled for their interest in using our foundry capabilities", while adding that he had "no particular timeline" but Intel had "ongoing discussions" with Nvidia. The point is that Intel did not manage to distribute more Intel chips over the last two or three years and after this time it then decided to diversify its business by launching the so-called "foundry" projects. Nvidia does not want to miss this opportunity for its global expansion. 

"They're interested in us using their foundries. We're very interested in exploring it," Jensen Huang responded later. He even removed some scepticism about his company's willingness to make Nvidia technology explicit to competitors by saying that "Intel has known our secrets for years" because Nvidia has already been partnering with many companies including Intel, and so "trusting and working with industry partners is key" for Nvidia management. Some organisational aspects and technical details, including mutual coordination of supplies, may still take quite a long time, but that could benefit shares of both companies. The announcement of the co-operation with Intel pushed Nvidia stocks up by almost 10% the next day. However, in April these shares have a good potential to become as hot as they were in March.

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Three Stocks to Consider in April 2022: Alcoa

Market prices of aluminium futures rolled down from its March 7 highs by more than 12%. However, that peak was updated recently and was seen to be closer to a similar price pattern last autumn when short-term downward movements stopped within three weeks and the rally resumed in December. Mining companies and distributors in the commodity sector, fortunately, are far from being a linear function of the current changes in market prices of commodities but they are certainly taking advantage of persisting high prices. 

The revenue of Alcoa for the Q4 2021 accounted for $3.34 billion. Its earnings of $2.5 per share is beating not only the average Wall Street expert forecasts of $1.93 but is also three times higher compared to Q1 2021, setting Alcoa’s all-time record. The next report is going to be released on April 14, which may increase investment appetites. 

Alcoa shares have already set fresh price records twice in March, exceeding the January peak levels by 150%. However, the company that produces bauxite, alumina, and which globally distributes aluminium products  may receive additional advantages from further fragmentation of the world's metal market after sanctions against Russia have definitely disrupted regular supplies and which are prompting spot and futures prices to rise. 

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Three Stocks Thought to Climb in April 2022: Archer-Daniels-Midland

London wheat futures (LWBc1) rose to £307.50 per tonne by March 31. This is more than 35% higher than £226.5 recorded a couple of days before the start of military conflict in Ukraine. By the beginning of April wheat contracts were about 61.5% higher than in the same season a year ago. Barley was up by almost 44% during March 2022, while U.S. Corn Futures were almost a quarter more expensive than at the beginning of January. 

In some parts of the world there are food shortages due to crop failures and supply disruptions following the corona crisis. Top level politicians, including speakers of the French agriculture ministry and U.S. President Joe Biden, are referring to this as direct consequences of war as well as consequences of economic and financial sanctions that were placed on Russia. Russia and Ukraine together account for up to a quarter of global wheat exports and almost a fifth of all corn deliveries, as well as 12% of the total calories supplied to the world market, according to Bloomberg. These two countries produce grain at lower prices than North America and Europe. In recent days, Russian authorities have also been actively discussing options like selling resources for national currency or even only to "friendly countries". 

Anyway, even if food prices did partially stabilise, they probably remain high. One of the largest agricultural originations and processing companies, Archer-Daniels-Midland may further benefit from the situation. It offers sustainable nutrition for humans and animals, and it is also engaged in developing energy and bio-based alternatives. Big money may continue to lift the stock even though the ADM price is almost 40% higher compared to pre-Christmas dates. It could easily become the next hot stock. The company's cap now exceeds $50 billion, but it may become even higher before the release of the next quarterly report scheduled for May 3. ADM sales and earnings are growing at double-digit rates, as its one-year sales growth rate was 32.4%, and three-year equity per share (EPS) growth rate was above 19%. Nearly 9% of the short-term correction of the ADM shares which were priced down on March 25-29 have already met active demand, causing quotes to quickly recover more than half of the correction losses.

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Top-7 Anti-crisis Stocks at Wall Street: Walmart

The chains of discount stores in the United States like Walmart or Target look to be immune to inflation surges or even may win in consumers' attention when the prices are going up all over the country. Consumer inflation almost reached the level of 8% year-on-year in March. Financial regulators are not in a hurry to act decisively against it. Until recently, the Federal Reserve considered inflation as a transitional phenomenon. In such conditions, many households tend to save their money by visiting stores where they have a chance to buy cheaper. During the pandemic, Walmart has increased the number of its customers by offering free deliveries and a smart loyalty program. This process is only going faster in the face of rising retail prices for food and convenience goods. 

Walmart's financial report on February 17 revealed an all-time record sales of more than $150 billion in the history of this chain of stores, plus an increase in net profit compared to the previous quarter and only a slight decrease in profit compared to the first half of 2021. A solid report helped Walmart stocks to gain almost 8% in the following four weeks, but the peak values of 2021 are still about 6% higher. So these stocks could be characterized as potential value stocks with at least enough free space above the current price to previous records. And with a tailwind, such kinds of stocks could be a rather stable anti-inflation instrument for investors. 

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