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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.

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: 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.

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: 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.

Bash

02.05.2024

Qualcomm Is Winning Its Own Game

Another favourite of mine, which I first bought in early autumn of 2023, has backed both the reputation and value of my asset portfolio today. Qualcomm (QCOM) is a smartphone wireless chip-making firm. It covers the entire range of popular devices, including Apple and Samsung, and its share price soared by nearly 8.5% immediately after the opening bell this Thursday, May 2. Qualcomm's sales to Chinese producers reportedly added 40% in the last two quarters, which the company also feels is a sure sign of recovery in that market. Its Q1 financial results were mostly in line with expert projections. Revenue numbers grew by 1.2% only YoY to reach $9.39 billion, with EPS at $2.44 per share, a 13.5% better compared to Q1 2023. Yet, Qualcomm CEOs see next quarter revenue and EPS at $9.2 billion and $2.25 per share, exceeding consensus estimates of $9.05 billion and $2.17 per share, according to LSEG data. Again, this was the second consecutive quarter of growing higher, while a typical upcycle for semiconductor stocks usually lasts more than eight quarters.

"AI is driving a lot of silicon content in those devices because of the expected computational capability to run those models... users want to buy a more capable phone that can run AI," chief executive at Qualcomm, Cristiano Amon, said during a conference call. Asian customers are shifting more to premium phones. A competitive headwind from Huawei, which recently launched its 5G smartphone using Huawei's own especially designed chip, produced by Huawei's subsidiary HiSilicon, may take its share. However, the whole market is growing, especially in the more capable devices' segments where Qualcomm gets most of its money. Qualcomm's thesis for the growing recovery in China does not directly extend to iPhones, with more signs of recovery among Android customers like Oppo and Vivo. Internet of things, as well as autonomous driving, computing powers in data centers, machine learning also needs 5G technologies, which are common for Qualcomm production.

Apple report is coming tonight, and some experts raised concerns for possibly lower sales, just because of rising competition from Huawei and other locals. That's why I did not buy Apple stock in recent months, but I was sure on a more balanced bet on Qualcomm. Its income is less dependent on a particular brand, but it becomes stronger from prolonged co-operation with Apple as well, as Apple is going to use Qualcomm-designed Snapdragon® 5G modem systems for Apple devices at least until 2026. We will see the condition of Apple stock very soon, having a chance to re-estimate Apple stock price prospects. As to Qualcomm, it is already winning its own game.

QCOM

Bash

02.05.2024

I Am Buying More Starbucks Here and Now

At least, I was obviously wrong with my assessment of Starbucks' stocks. The technical path of the coffee house's price went much worse than it could be expected a couple of months ago. Since it performed a fast route from a $90+ area to above $100 per share in early November, I felt as if the best moment to invest passed by. Yet, the stock was treading water near the same price range and even lower for quite a long time after that. Finally, quarterly numbers in after-hours trading on April 30 re-shaped the disposition to temporarily bearish, derailing previous attempts to recover and sending the stock below $75.

A 15.88% drop in one day happened amidst weaker sales and profit numbers during the last quarter, also marked by a decrease in customer visits. Same-store sales were down by 4% YoY globally, and were down by double digits on the Chinese market, citing dampening demand in North America and China, which was the worst thing one could imagine. Equity per share (EPS) amounted to $0.68 only vs consensus of $0.80 (a 15.2% of supposed money inflows was missing). Besides, gross marginality per sold unit was 25.6%, down from 26.2% a year ago, and free cash flow lessened to $629.9 million, down 64.8% from the previous quarter.

The bright side of the bigger picture for me is the growing number of new store locations to reach 38,951 before the end of the quarter, as much as 2,317 higher than 12 months ago. Of course, that was the reason for growing expenses, which did not return quickly, yet are promising to bring more money back even if the business marginality would remain relatively low for a while. I am sure that this globally renowned chain of coffee houses, with a nearly $100 billion of market caps, perfectly knows what it is doing when opening new stores in Asia. It should not be an instant coffee effect, but a far-reaching invigorating contribution to a long history of the company, which successfully taught millions of Americans of drinking proper coffee drinks as they were designed and created in Europe, instead of enjoying a poor excuse for a coffee in fast food points. Now, they are teaching this to their Chinese and broader Asian audience as well. A retreat by value-oriented customers and other forms of consumer weakness, when more families prefer eating at home, as well as unfavourable weather conditions in the US, come and go. Yet the coffee empire remains all penetrating amid competitive pressure.

Not too much time will pass and the current price of $75 per share of Starbucks would be perceived as a blessing, though the price may use this short-lived opportunity to test even lower levels. After all, the price briefly dropped below $70 in May 2022 and reached almost $50 in the covid year of 2020. Many of those who abandoned lost opportunities to buy Starbucks in between $50 and $70, being feared by a fleeting moment, would be biting their elbows later when the price surfaced to above $100 again. Taught by various kinds of experience, I began to add more to my buy positions in Starbucks here and now.

SBUX

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/

02.05.2024

Cardano is Trying to Recover

Cardano (ADA) has experienced a decline of 3.0% this week, currently trading at $0.4530. This downturn comes after the token attempted to recover from a significant loss, dropping by 10.1% to $0.4180 on May 1st. In its effort to regain traction, ADA is aiming to re-enter the ascending channel established since October 19, 2023. However, achieving this goal requires prices to surpass the $0.4600-0.4700 range.

Investor sentiment remains cautiously optimistic, as there has been observed increased activity among whales accumulating ADA tokens. Over the past 8 days, there has been a daily average of $13.84 billion in large transactions, suggesting the potential for a forthcoming rally in ADA prices.

ADAUSD

105

Rafael Quintana Martinez

02.05.2024

DAX is Ready to Be Sold

The German DAX stock index reached a historic milestone on April 2, soaring to an all-time high of 18,638 points. However, it subsequently entered a corrective phase, experiencing a decline of 6.3% to 17,450 points by April 19, marking its lowest level since February 27. Despite this setback, the benchmark has managed to partially recover from its losses and encounter resistance within the confines of an ascending channel.

The recent rebound has underscored the resilience of the index, albeit with indications of limited upside potential. As the index encountered resistance, it demonstrated its strength, suggesting that further significant gains may be constrained. Currently, the resistance level has been adjusted to 18,850 points, while the support zone lies within the range of 16,000 to 16,500 points, serving as a noteworthy downside target.

In light of these developments, setting a stop-loss between 19,000 and 20,300 points could be prudent, with a preference for higher levels to mitigate the impact of unexpected volatility.

GER40