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24.11.2022

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.

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.

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.

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.

MetadoroIn-house analytics

02.05.2024

Amazon Still Serves as a Beacon for Others

Shares of Amazon.com initially went down when having crossed over the halfway point of last week to touch a two-month dips around $166.5, battered by a slight shock from a double-digit corrective move of Meta Platforms. But this did not last long. Markets' belief in the power of sales on Amazon is strong enough for the price to bounce back above $175 the next trading session. An enthusiastic crowd proved right when making the E-commerce giant soaring once again, as its quarterly numbers clearly surpassed experts estimates on the night of May 1.

Some persistent losses of the S&P 500 broad indicator to follow the Federal Reserve's unchanged rate decision, as the central bankers rather downplayed chances for more rare hikes, partially prevented further gains after Amazon's quick re-test of the uncharted territory above $185 per share. Yet, the prospects look rosy, especially as Amazon Web Services (AWS), a growing cloud segment, added 17% on an annual basis to reach $25 billion in revenue. This topped consensus forecasts of about 14.5% to 15% growth. The sales of AWS for the whole year are now running at more than $100 billion, contributing more and more to the company's delivery business. "The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI [artificial intelligence] capabilities is reaccelerating AWS’s growth rate," the company commented on the results.

All in all, Amazon.com announced its quarterly EPS (equity per share) of $0.98 on revenue of $143.31 billion, against average expectations of $0.84 on revenue of $142.65 billion. For the next quarter, Amazon CEOs suggested sales figures in the range between $144 billion and $149 billion. Even though consensus on Wall Street were betting at nearly $150 billion, this did not stop the bullish bias. Such estimates mean 7% to 11% YoY, being higher than $143 billion in Q1. Operating income is supposed to range between $10 billion and $14 billion, compared with $7.7 billion in Q2 2023. an analyst pool 12-month price target for Amazon is still above $215 per share, which means another 20% upside. Thus, no one among large investment houses expect a solid price adjustment for Amazon before the market reaches this area. Amazon's solid performance is also a bright beacon for other mega caps on Wall Street.

This spring was not the best time for the “Magnificent Seven” stocks, yet the last three quarters showed very healthy margin expansion opportunities, happily used by Amazon. The operating cash flow jumped by 82% YoY, while free cash flows spiked to $50 billion from an outflow of $3.3 billion, allowing to make bigger investments into generative AI. These financial results were achieved despite a pre-tax valuation loss of $2 billion from Amazon’s investment in Rivian Automotive vs a similar kind of loss of just $500 million in the same season of 2023. Customer experiences and businesses are changing because of this, so Amazon CEO Andy Jassy sees "considerable momentum on the AI front, where we’ve accumulated a multi-billion-dollar revenue run rate already”. However, "we don’t spend the capital without very clear signals that we can monetize it this way. We remain very bullish on AWS,” he added. That's why our own estimated target lies between $230 and $250 per share, or even 7% to 16% above the strong consensus pool target of large investment houses.

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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/

27.04.2024

Maker Seen Strong above $3000

Maker (MKR) has experienced a 2.7% decline this week, falling to $2885 amidst negative trends in the broader cryptocurrency market. Bitcoin (BTC) similarly dropped by 3.0% to $62,800 during the same period.

MKR currently faces two key support levels located around the $3000 mark: a horizontal support level and the support of the ascending channel. Maker project developers are also delivering positive fundamental factors. Spark, a Maker SubDAO-built DeFi infrastructure, has injected $100 million in new DAI liquidity through Morpho Blue, Morpho’s lending protocol. This initiative enables users to leverage efficient positions backed by MakerDAO, borrowing Ethena’s stablecoins, USDe and sUSDe. As investors require MKR to obtain DAI stablecoin, the demand for MKR is anticipated to rise.

Considering both technical and fundamental factors, MKR could potentially reach $3500. However, this scenario is contingent upon BTC maintaining a value above $60,000 per coin.

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Bash

26.04.2024

Google and Microsoft Waived Mega Cap Fears

Abundant upward moves of Microsoft (by nearly +4.5% to fully offset the previous day's 2.5% decline on Meta's 15% slump) and Google-parent Alphabet shares (by more than 11% to hit new all-time highs) in extended hours trading after long-awaited quarterly reports of the two giant companies on April 25, as well as a rapid rebound of the S&P broad market indicator from under a round figure of 5,000 points with a high closing price at 5,087.30 the same night, compellingly prove my general assumption. The bullish direction remains intact on Wall Street, unaffected by impacts of individually overbought large businesses' strong falls in market value, which including the recent double-digit drop in Meta Platforms, a 7% decline of Caterpillar and a 8% drop in IBM as a few of most striking examples. I should be happy that my analysis allowed me to avoid adding those temporary losers to my portfolio, as most rapidly declining stocks showed some weakness in their forward guidance or big investment houses just took their chance to latch on to their growing cost expenses or their performance in separate segments like it happened with a consulting part of IBM business, as it was considered not strong enough compared to the company's revenue and profit in its major hardware and computing divisions. In fact, Microsoft's CFO Amy Hood also admitted that capital expenditures would increase "materially" to help meet demand for its generative AI offerings, yet nobody cared of these kind of additional expenses as Microsoft is a producer of Chat GPT-like technologies to sell it to others, and not mostly the AI consumer, as it mostly happens in the case of Meta. This produces a big difference for the market's interpretation, so that Meta is falling, while Microsoft is growing on the same story of growth in expenses, as one may say.

All in all, some stocks are going down, but most stocks and Wall Street flagships are going up. And this is purely a normally mixed behaviour of various assets that used to accompany any reporting season, rather than global changes in the markets. With this belief, I am sure, most people in the crowd would continue to calmly and thoughtfully build further investment plans for May and summer months, while only paying closer attention to the details of particular reports' perception by the expert community and using a selective approach when forming and changing in their portfolios' composition. In this contest, the only thing, which is important in dealing with any investment strategies is not to be engaged in a "wholesale" approach of buying everything that can move, but better continue to rely on financial and technical analysis, as well as common sense and former investing experience, taking into account also the readiness of the market's majority for certain movements of specific companies at the moment.

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Rafael Quintana Martinez

26.04.2024

OMG is Rushing towards $0.500

OMG Network (OMG) experienced a 5.3% decline to $0.650 this week, marking the fourth consecutive day of retreat in prices. This trend raises the likelihood of the token testing the support level at $0.500. The first instance of this test occurred two weeks ago amid geopolitical tensions in the Middle East. Despite a slight recovery after this initial drop, the token has struggled to regain momentum, particularly as Bitcoin (BTC) declined by 0.7% over the same period. If the leading cryptocurrency fails to recover, OMG may face further downward pressure, potentially breaching the $0.500 support level.

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