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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 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.

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: 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.

B
Amazon Is Better Than Apple, version 2.0

Among the great and powerful mega caps, or the so-called “Magnificent Seven” stocks, now I consider only Apple and Tesla as temporarily weaker parts of this unbroken seat belt while driving along a good investment autobahn. I will not repeat myself by speaking once again about Tesla's current weakening momentum. And I already wrote a few words on Google with an idea to pick it up soon but sometime later. What now looks most stable are uptrends in Microsoft, NVIDIA and Amazon.

As to the latest news and its impact on Apple dynamics, the market's negative response (-3.5%) after the bell on Thursday on its nominally 3.8% better-than-expected and ever-highest profit number was a bright example. The shareholders are clearly concerned with sliding iPhone sales in China. This gave the Cupertino nerds only $20.82 billion vs $23.53 billion in preliminary forecasts on Reuters. It was so pathetic, watching how Tim Cook complained about China as "the most competitive smartphone market in the world", which "hasn't changed". Yet, the share of his company on this market has changed, i.e. it continued to decline. By the way, the market value of Chinese manufacturers is also falling, so that is probably not the right moment to invest into the segment at all.

Meanwhile, Amazon already began looking more solid and stronger than Apple. Shares of Amazon soared by 8% to fresh multi-month highs, at the same day when Apple sank.

Amazon reported "a record-breaking Holiday shopping season" with $1.00 EPS against $0.80 expected (beating consensus by 25%), plus its own solid Q1 projection with a supposed sales range of $138 billion to $143.5 billion, rather in line with market bets on $142 billion. The e-platform success was better than Amazon Web Service cloud's contribution. ven now at $170 per share, there is a remaining discount in Amazon shares compared to its all-time highs above $188 in 2021. Still looks good for mid-term positioning! With a possible targeting at $200 or so.

When Meta jumps by double-digits, from below $400 to $450, in one leap - that's so cool. Yet, in the case of Meta, I am not so confident that Meta is able to extend the gains.

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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/
CoinCodex Could not be Right with Chiliz up by 165%

Chiliz (CHZ) has experienced a decline of 3.5% to $0.1009 this week. Prices hit a notable low of $0.0970 on Wednesday but managed to recover overnight. Despite the absence of significant news supporting the altcoin, the network reported a milestone transaction of 10 million on January 17. While this might not be a groundbreaking development, investors welcomed the round figure, leading to a 23.0% surge in prices to $0.1117 the following day. CoinCodex's accurate forecast of $0.1124 by January 21 added to the positive sentiment. The next projected target is $0.2691, expected to be reached by February 16. However, achieving a 165% upside to this target seems unlikely. A more realistic goal would be reaching the nearest resistance at $0.1250 by then, which would be a commendable accomplishment.

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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/
Buying Pfizer to Hold by the End of 2024

Pfizer (PFE) stocks have been in decline for the past two years, offering the opportunity to acquire them at a 50% discount compared to peak prices. They are currently trading even below the lows observed in 2013. Without delving into the merits or drawbacks of Pfizer vaccines, I find it noteworthy that stock prices have reached a support level at $25.00-28.00, where significant investor interest has been evident. While I'm not overly concerned about achieving new all-time highs this year, I do identify another formidable resistance level at $40.00-50.00 per share. This presents a potential return of approximately 60%. Seizing this opportunity, I plan to invest in Pfizer stocks at their current prices.

30
B
A Golden Opportunity in AMD and Mondelez

I felt quite reasonable to go ahead with fresh purchases of AMD and Mondelez stocks at nearly 5% and 3.5% discounted prices, respectively. The Wall Street crowd's negative response to the set of very convincing quarterly numbers gave many traders this chance which I considered as a golden opportunity, especially in case of the AMD rally, which I do not expect to be halted for too long. As for Google, I am planning to do the same trick, but a little later. I don't believe ad sales is a horror story, but some part of the crowd may believe and prefer to watch on the sidelines. Again, let's not forget that I still have a lot of Google stocks bought from a $125-127 area.

AMD dropped in today's pre-market to $162.66, which formed a 9.6% price gap vs its all-time highs above $180. However, the profit in Q4 gave $0.77 per share, exactly in line with expert consensus (which did not allow it to produce any wow effects), yet it was 10% up to the previous AMD own record number. In terms of quarterly revenue, the company announced $6.2 billion vs 6.13 billion of consensus estimates, not a big surplus in this context, but actually meaning a 10.7% YoY. If this is disappointing, then what could be called inspiration?

A supposedly sad fact was only that AMD expect next quarter's revenue at $5.4 billion, up or down by $300 million, compared with analysts' average estimate of $5.73 billion. However, I prefer the company's own forecasts rather than expert heightened estimates, which may be sometimes not that accurate. Other AMD announcements still sound great, like a supposed supply of AI chips "well above" $2 billion in 2024, compared to last quarter's AI chip sales of $400 million. AMD forecast is Q1 2024 margin of about 52%, compared with the expert estimates of about 51.7%. "Demand for our high-performance data centre product portfolio continues to accelerate, to deliver strong annual growth in what is an incredibly exciting time as AI re-shapes virtually every part of the computing market," AMD CEO Lisa Su commented, and these are all direct evidences of the segment's strength from the second largest AI chip maker of the world in the AI epoch. I see only fringe concerns on the other scale.

Besides, I preferred to use a chance to buy shares of Mondelez (MDLZ) chocolate monster factory, as soon as the market gave me a good entering price below $74.5 per share in the first minutes after the open bell. That was not because I like honey and almond Toblerone and Belvita cookies (though, this is true), but due to actually strong quarterly numbers. A partial drop in the so-called "organic" sales means in practice only that 5% less of some goods from the enormous line-up of Mondelez goodies were sold for 7% higher price. That's not so bad, in terms of logistics, if the company managed to make more money from less chocolate bars or crackers sold. I don't think that people addicted to those cookies or chocolate (to the extent that your humble servant is addicted) would ruin their breakfast mood for the whole day to save mere pennies. Bet, they will not do it. I still see the target price of at least around $78.5 or even $80 for Mondelez, which may give me from 5% to 7.5% on invested capital.

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