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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.

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.

15.09.2022

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.

08.12.2022

To The Moon Stocks: Toyota

Toyota stocks are trading 20% off their peaks. The company has made a strategic target hybrid, electric and hydrogen vehicles manufacturing. EV makers are now experiencing some issues with the production of batteries. So, prices on new electric vehicles rose sharply. Car makers and battery producers are working together to increase production, but this is not a one time story and may have an effect in a few years.

Electric vehicles are considered to be rather luxury cars, but they are even more expensive now. Tesla has recently raised its prices for some models by $6,000. Whatever the case, EV production is expensive and prices start at $50,000 per car. Hybrids are more affordable as it may cost around $30,000 for Toyota’s popular RAV4 model, while the same model with the combustion engine would cost $27,500. But the Hybrid version can make up to 51% more miles and leave a significantly lower carbon footprint.

Humanity is moving toward electric transport, but now they are considered to be more of a status vehicle. So, hybrids will be in demand for now and that would allow Toyota to raise its revenues along with improving electric vehicle technology.

Toyota has EV / EDITDA ratio at 11.8 while Tesla has it at the sky-high level of 32 with the same comparable business margins. So, TM stocks are a long term perspective bet.

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.

MetadoroIn-house analytics

30.06.2022

Industrial Design and Tourism: Carnival

Carnival is one of the largest cruise operators with a fleet over 100 vessels. Its stocks are traded 65% off 2021 peak prices. The company suffered much from COVID-19 restriction when its ships had to be anchored while paying huge maintenance fees. The recent Q1 2022 financial report of the company may not be ideal, but it has demonstrated a steady gradual return to the prepandemic numbers.

Carnival has reported that 91% of its vessels’ capacities are booked for June, according to the financial Q2 2022 report. More reservations are being made for the months to come. Revenue soared by 50% year-on-year to $2.4 billion. However, Carnival finances are looking fragile as it became cash flow positive only with clients’ deposits that were made in reservations. The overall amount of such clients’ deposits topped $5.1 billion. In comparison, the amount of the deposits for Q1 2019 was at $5.8 billion.

Carnival is going to restore 100% of its capacity use in the near term, and the long-term perspectives are seen to be very promising. The number of reservations for the second half of 2022 outpaced 2019 comparable level. Short-term cruises are looking much more promising now, and the company may surprise investors if more vessels are made operational.

The return to the target price of $20 per share in the middle-term seems to be realistic.

CCL

1289

MetadoroIn-house analytics

30.06.2022

Industrial Design and Tourism: Autodesk

Autodesk is mostly associated with industrial design. The company has been developing industrial design solutions for many years. Professional schools are educating students on Autodesk software products. The company has successfully adopted to the modern realities and introduced the subscription payment business model. This move has made its services readily available. It has become accessible to those who would not allow for one-time license fees for a long period of time.

The demand for the company’s products is sustainable, business margins are improving, while net cash flows allow for the buy-back of its own shares. The company conducted a $464 million buy-back in the financial Q1 2022. This is certainly not enough for stock prices to grow at the same pace as its younger peers. This is more a value stock that may help to survive in turbulent times. The return to $250 per share is expected, but no super profit should be considered.

The company’s revenues grew 18% year-on year to $1.17 billion for the Q1 2022. The major business segment Architecture, Engineering, and Construction that is responsible for 45% of the total revenues has reported that it signed its second largest ever enterprise agreement with an infrastructure company. A new product Bridge has been launched targeting the subcontractor audience. The suspension of the company’s operations in Russia would cost $115 million per year, but it has caused minor damage to the company as it has almost $5 billion annual revenues.

The operational margin grew to 34%, and operational profit went up by 42% year-on-year to $397 million in the Q1 2022. Free cash flows rose by 34% year-on-year to $422 million.

ADSK

1330

MetadoroIn-house analytics

23.06.2022

Value Stocks would help us to Survive a Possible Recession: HP Inc.

HPQ stocks have lost 15% since the beginning of 2022, much better that younger and popular tech companies that lost 40-50% over the same period. More interesting, this year became the first in the company’s history when its stock yield outperformed its peers. The most attractive for HP is its financial performance as its forward P/E ratio was at 8.6, which is much better than other companies . Shareholders are getting regular dividends with the annual dividend yield at 2.7%. So, why are HP stock prices dropping?

The main generator of money is the personal computer business. The sales of personal computers dropped by 17% year-on-year in the Q2 2022. However, the revenue from this segment rose by 9% year-on-year to $11.5 billion thanks to cutting costs and rising retail prices on personal computers. Corporates are buying more computers and boosting the demand by 18% year-on-year, while sales to individuals dropped by 6%.

Printers are responsible only for one third of the company’s revenues and 50% of its profit. This segment has been contracting for some years and the last quarter was not an exclusion as revenues dropped by 7% year-on-year to $5 billion. This drop may continue as more companies are no longer conducting their business practices on paper. Moreover, public presentations are getting more digital as they are delivered and distributed online. This is worrying considering the high margin of the segment.

HP stocks may not perform to the upside aggressively as they are more appropriate to shelter turbulent times. HP operational profit is almost the same compared to Q2 2021 - $1.444 billion compared to $1.443 billion, while the operational margin is down to 8.8% compared to 9.1% last year as printer sales are dropping. The company continues its buyback operations in Q2 2022 when it spent around $1 billion to purchase 27.4 million of its own stocks. These efforts cannot last long considering rising stock prices and declining profits. Thus, HP stocks are unlikely to beat peaks reached at the beginning of this year.

HPQ

1132

MetadoroIn-house analytics

23.06.2022

Value Stocks would help us to Survive a Possible Recession: Oracle

Oracle is one of the important players in the technology sector. Its shares have lost 25% since the beginning of 2022. Its business is much more stable and cannot grow by double digits as some other younger peers in the sector. However, the company’s efforts towards developing cloud-based solutions are strong and stable financial results are prompting elevated demand for ORCL stocks as a safe haven asset.

The company has a diversified product portfolio from software to the management of financial activities, sales, and supply chains to infrastructure solutions like Oracle Autonomous Database. The company is on its way to transforming its business model to cloud-based solutions on the subscription basis.

The financial Q4 2022 that ended May 31 showed that cloud segment revenues rose by 19% year-on-year to $2.9 billion. Some businesses have performed even better. Fusion Cloud posted revenues up by 20% as the company is taking over in the health information technology sphere beating its peers like Kronos, Workday and SAP. Management is pushing up the development of the data management system MySQL that processes transactions seven times faster than same solution AWS Aurora from Amazon.

Oracle corporation management is expecting 2022 operational margin at 45-46%, that is very much above other software corporations and most importantly above the prepandemic level of Oracle itself when the operational margin reached 44%. The company pays regular dividends. It has also launched a buyback program to get its shares back at discount prices now. During the last four quarters Oracle has spent more than $16 billion for buybacks and may continue to spend money on this as its stock prices are going down.

The mid-term target price for ORCL stock at $78 is intact.

ORCL

1117

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11.08.2022

Perspective Peers of Ethereum: Avalanche

AVAUSD

2421

11.01.2023