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28.12.2022

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.

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: 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.

Bash

04.10.2024

AMD's "Oktoberfest" Is Coming

A two-month bounce in AMD stocks continues. Many investment houses supposed that the second most important AI chip name after NVIDIA has been over-corrected, and so it proved. Price dips below $122 in early August were followed by a strong recovery to the area of post-covid highs around $165. Yet, my feeling is this is far from the end of AMD's bullish journey this year. The firm's long-awaited “Advancing AI” event is scheduled on October 10. It may prompt the Wall Street crowd to increase its positioning, first on positive expectations, and later on robust presentations of the firm. As a matter of pure facts, the same kind of public event organised by AMD on December 6 led to its stock price gains of almost 20% within one month and as much as 80% within three months, when it briefly renewed historical peaks at $227.30. NVIDIA's clear dominance over 85%+ in AI accelerators' market share is undisputable, yet AMD is occupying up to 7% in this hyping segment and at least 20% share in consumer and game graphic processing units. The company's roadmap updates in AI and cloud developments would be in focus in the course of the event. Any hints on useful know-hows and possible increase of sales in these two markets could become a great asset for further AMD rallying. The analyst consensus here is just above $5 billion in 2024, but with a potential to double to nearly $10 billion in 2025, and to $12.8 billion being on the table for 2026. The Bank of America estimates that AMD would be able to secure over 10% of the AI market share within the next two years. The forecast is based on prospects in open-source software, networking (infinity fabric), added by recent corporate acquisitions like ZT Systems and Silo AI. AMD’s MI300, its pivotal AI product, may bring $5 billion in the year, Barclays said in mid-summer, putting its price target for AMD to $180. Barclays noted that MI300 sales already jumped from initial $2 billion to over $4 billion for 2024, with $9 billion projections for 2025.

Globally stagnating demand on personal computers and, therefore, on central processing units (CPUs) may slow the speed of the non-AI related part of AMD business. However, I personally would bet on a re-test of $195 per share at least. I told you in April that AMD was ready for a recovery from below $160 per share that time to above $200 once again, and it soared to above $187 in just three months. The next stage of winning back for AMD may have a higher potential if its AI "Oktoberfest" would be successful. Broadcom (AVGO) is trying to compete with AMD in cheaper production of some competitive products. This IT giant is also one of the major favourites in my stock portfolio.

AMD

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/

04.10.2024

Maker Could Recover towards $2000

Maker (MKR) is down by 12.5% this week, trading at $1,447, underperforming the broader crypto market, where Bitcoin (BTC) has lost 6.4%, now priced at $61,300.

Despite this short-term decline, Maker continues to show promising long-term potential with ongoing development and expansion plans. The project is undergoing a major rebranding, and Grayscale's introduction of the MakerDAO Trust in August indicates increasing institutional demand for Maker’s products.

From a technical perspective, MKR has been forming a falling wedge pattern since April 4, which often signals an upcoming bullish reversal. With this in mind, a strong rebound could be on the horizon, potentially pushing the token towards the $2,000 mark and possibly breaking through the downtrend’s resistance.

MKRUSD

MetadoroIn-house analytics

03.10.2024

Markets Got Used to New Heights in Home Repair Stores

We have already covered the on-going rally in the U.S. leading chains of home improvement stores, such as The Home Depot and Lowe's Companies. So, based on the Christmas quarter financial results released in late February 2024, our baseline scenario was waiting for fresh record peaks above $263 per share of Lowe's and a step-by-step recovery of HD's market price from its correction in April to May, so that we expected its slow ascent to $350 again, while keeping in mind upper levels like $400 for the mid-term. The two challenges were properly embraced by the investing crowd and transformed into achieving the targets.

However, stronger than expected quarterly earnings of both rivals in August and technical moves on charts afterwards hinted at more than we could initially supposed. So, it seems that now is still a right time at least to hold both stocks or maybe even add some additional volumes to buy positions, with possible price goals around $295 to $300 for Lowe's and at least $10 to $15 higher than $420 per share of HD. In case of Lowe's, the cumulative effect after the Q2 report allowed its shareholders to enter a higher space for the company's market cap. What is important, the stock is still feeling comfortable around fresh all-time highs for more than two weeks. This is enough time to validate investors' readiness to remain loyal to further purchasing the stock at small retracement within new ranges. Thus, the chances for a serious drawdown of the asset were fading as soon as markets got used to a new height. The same kind of a breakthrough journey for HD is yet to come, but it would hardly miss it.

After September 18, the growth of both consumer staples and consumer discretionary segments was about three times faster than the general climb in the Wall Street indexes, including techs. It is generally believed that launching monetary easing cycles has the most beneficial effect just on this type of business, allowing retail chains to optimize their costs and at the same time freeing up a little more money available on customers' credit cards.

In Q2, Lowe's business profit expansion accelerated further to $4.1 per share vs $3.06 in Q1 and $1.77 in the Christmas quarter. The current numbers are still lower than $4.56 in August 2023 and $4.67 in the same period of 2022, as inflated costs affected the whole sector, with Lowe's being no exception. However, the rate of profit recovery QoQ is so remarkable, the company's own projections for its gross revenue dynamics allow investors to continue marching on the bullish side. Oppenheimer financial advisors now reward Lowe's with an Outperform rating, suggesting possible growth faster than the market, with their target adjusted to $305. Maybe this goal is a little too high, and so we are addicted to somewhat moderated targets an inch below $300 where the Lowe's market value may reach the next saturation plateau.

As to The Home Depot, a decisive assault on historical peaks detected at the very end of 2021 may be related to surpassing consensus forecasts for the next November 12 report. According to Refinitiv, Wall Street pool of analysts agree with a potential income number of only $3.63 per share, on revenue of $39.2 billion. For comparison, in the previous report on August 13, The Home Depot delivered $4.67 per share on record revenue of $43.18 billion. It may be difficult to repeat such an achievement two times in a row, but the indications for the current quarter may not be as lower as the consensus expectations. Again, the outlook before the end of 2024 may be positively influenced by the store chain's own forecasts for the Christmas season, which are usually encouraging. If markets still tend to buy on expectations to sell later on fact checking. And so, the rally has extra time to become even more solid. As a result of this psychological aspect, reaching next peaking levels could be delayed until early months of 2025.

LOW

Rafael Quintana Martinez

03.10.2024

OMG Is Struggling to Hold above $0.25

OMG Network (OMG) is down 20.3% this week, trading at $0.2440. While this decline may appear steep compared to Bitcoin's (BTC) 7.0% retracement, it is somewhat deceptive, as even minor price movements for OMG can seem significant due to its volatility. The token is currently holding firm at the critical support level of $0.2500, but if this support breaks, it could lead to a deeper decline.

Unfortunately, only a positive shift in market sentiment could help stabilise the token. Given current conditions, this outlook remains uncertain, leaving OMG in a precarious position.

OMGUSD