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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.

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.

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.

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.

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/

25.09.2024

Harmony Could Hit the Resistance at $0.020 in October

Harmony (ONE) is up by 7.8% this week, trading at $0.0150, outpacing the broader market where Bitcoin (BTC) has gained just 1.4% to reach $63,600. Harmony's price has surged by 28.0% in September, now approaching a key resistance level at $0.0150. This marks the second attempt to break through this level after a failed effort in late August, which saw the token retreat to a support level at $0.0100.

This time, Harmony appears to have a stronger chance of surpassing the resistance, with momentum supported by positive sentiment in the crypto market and the rising prices of Bitcoin. If successful, Harmony could target its next upside level at $0.0200.

ONEUSD

MetadoroIn-house analytics

25.09.2024

AI Impressions for Restaurateurs, their Guests... and Investors

As a proof of investors' hopes in a travel industry's better future, the share price of Booking Holdings Inc. updated its all-time high at $4177.. Its rival AirBnb in the segment of longer-term rental and experience business was suffering from lower number of stays in its own forecast estimates in early August, now struggling to recover from a painful price drop that time. Many expect consumer spending revival on lightweight borrowing costs not only in the West but also in China and some other Asian countries, and so competitors contributed to a remarkable Booking.com progress. However, the largest operator of travel aggregators and metasearch engines is always marching one or two steps ahead of them.

Among other bullish drivers, a promising partnership with PolyAI, a pioneer company in voice solutions based on artificial intelligence features for customer service should be noted. OpenTable, which is an online restaurant-reservation app and part of Booking Holdings $140 billion empire for nearly ten years, expanded to cover more than 60,000 eating places in more than 80 countries to fill 1.7 billion seats a year. This allows city residents and travellers to enable and book the perfect restaurant for every possible occasion. And now their life would become even easier or more comfortable, while OpenTable is getting a good opportunity to collect higher gross proceeds because PolyAI and OpenTable just announced their relationships on September 23. Good news unsurprisingly boosted the market value of BKNG literally the next Wall Street morning.

The state-of-the-art technology of a guest-led voice assistant to choose excellent locations for the particular day, time and purpose also helps location owners to answer various questions, gain visibility in customer trends, deliver on-brand experiences and take reservations, of course, saving a lot of staff time and material resources. This integration of OpenTable with PolyAI's will help restaurateurs to face growing cost and tax challenges while also providing their hospitality even off premise.

In the latest survey conducted by the National Restaurant Association, 62% of dinner places admitted they did not have enough employees to support existing demand. Restaurant chains also said they might routinely miss between 30% to 60% of phone calls to their front of house, according to PolyAI investigation, including the calls outside of normal operating hours. Now most of them would not miss revenue opportunities. Built-in language technologies are also important. PolyAI said its smart automation solutions provide numerous iterations of voice assistants to cater to the unique needs of multi-location and multi-brand portfolios for large diners' chains.

For Q2 2024, Booking Holdings reported a 7% YoY increase in both room nights and revenue, with its stock value exceeding a 35% increase for the last 12 months. An additional growth segment is unlikely to affect the next earnings, which is scheduled for October 30, but in a year or so, it may well improve the overall financial pattern, which helps to maintain the optimistic mood for three to four reporting periods ahead. The next target price area is supposedly located at $4,500 per share.

BKNG

Bash

25.09.2024

Euro Wants to Climb At 1.13 Or Even 1.15

A fairly expected slide of business activity indications in the Euro area this Monday only temporarily upset the booming trend on EURUSD relaunched from the recent correction lows around 1.10 (on Sept 11), and now aiming to reset annual highs. Even a usually more healthy services PMI (purchasing managers' index) fell from 52.9 to 50.5, notably below all forecasts in the Reuters poll which predicted only a modest decline to 52.1 on average. Manufacturing PMI dropped to 44.8 points, being just a few steps from approaching a post-pandemic dip once again, led by a deepening decline in German and French plants. It was a kind of returning into severe reality after a short-lived Olympics boost in August. However, markets don't care much about economic matters, as the speculative crowd is much more interested in interest rates differences.

Although the EU data could suppose more policy easing by the European Central Bank (ECB) to make the Euro currency weaker, and the ECB was the first large central bank to cut rates by a small 0.25% in June and then by larger 0.5% in September, most bets are still considering the US Federal Reserve as a ringleader of all global dovish flapping in monetary policy. FedWatch tools show a nearly 50% probability of a 0.75% additional total rate cut in November and December, while 33% more believe in a 1% rate cut in two doses altogether.

U.S. consumer confidence reading on Tuesday gave a warning, as the Conference Board reported this key indicator of potential future spending at 98.7 vs the forecasted number of 103.9, with the previous indication was at 105.6. Potentially decreased consumer spending is a bad driver for the overall economic performance, yet this could be a solid argument for more softening moves by the Fed. Good for stock indices, but the same story may grab the US Dollar index by the throat to place it under the 100.0 water line to sink it there. Market feels that no other currency would undergo reputation losses and suffer as much as the Greenback from further cutting interest rates too fast.

This is the actual reason why gold futures are aiming already at $2,700 to $2,800 at least, the British Pound is approaching 1.35 for the first time since early 2022. The British Pound is moving up more easily due to the refusal of the Bank of England to lower borrowing costs this month to follow the example of the ECB and the Fed. And even the Canadian Dollar showed its fastest daily growth for the last 10 months on September 24, despite three small interest rate cuts since the beginning of summer. Only the Yen is staying away from the common action, as the Bank of Japan disappointed currency traders' audience by refraining from raising its record high but still very low 0.25% interest rate. Paradoxically, and along with the Japanese Yen, the US Dollar now transforms into another sweet object of carry trade speculations.

As a result, the EURUSD is hardly going to stop at testing 1.13 soon, as markets may rather see a high potential of retesting 1.1495 (February 2022 high) after so quickly entering into the taste of trying its teeth on nearest technical resistance areas. Moreover, 1.15 is seemingly a natural border of a middle range for the pair, if we look at the charts for 2016-2017 and for the very beginning of the pandemic volatility in 2020, while the higher strong resistance lies only at 1.2350.

EURUSD

Rafael Quintana Martinez

24.09.2024

Loopring Is Going for a Rally

Loopring (LRC) has gained 6.0% this week, rising to $0.1274, outperforming Bitcoin (BTC), which saw a modest 1.2% increase to $63,461. The most significant development is that Loopring has broken out of its descending channel, which began in mid-July, and is now trading above key support at $0.1000. Its trading range has become notably tighter, reminiscent of a similar pattern in September-October 2023. Back then, prices surged by 55.0%, eventually rising 129.0% over the course of ten weeks.

Currently, the narrow trading range has persisted for 22 days, compared to 30 days last year. This suggests that Loopring might be gearing up for another rally. While it may not replicate the previous 129.0% rise, a jump of 70.0-75.0% to $0.2000 seems achievable.

LRCUSD