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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.

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.

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

17.09.2024

The After Mad-Tea-Party: Coming Soon

For me, it doesn’t matter at all, if the Fed’s rate cut cycle would actually start with a small 0.25% or a double 0.5% move this Wednesday’s night. The ratio of 0.25% supporters versus 0.5% adepts is changing rapidly, while Jerry the Hatter with his Tweedledees and Tweedledums are approaching faster to their appointed Mad Tea-Party. However, the after-party trajectory and economic foundations are much more important, than a precise Sept 18 temperature of their tea.

Indeed, FedWatch Tool today shows that only 7% of futures traders on CME believe in three consecutive 0.25% steps before the end of the year. Meanwhile, more than 40% are betting for a 1.25% rate cut in total at September, November plus December meetings, as nearly 20% (a giant number in this context) supports the idea of moving the current rate range of 5.25%-5.50% to 3.75%-4.00%. A 1.5% difference is the way which could be related mentally only with an emergency case like sharp jumps in unemployment or much deeper decrease of ISM services activity index, which now looks so high and safe at this height.

Well, the S&P 500 broad barometer of Wall Street is now an inch away from its 5,650 launching pad for more strength. But the majority of a bullish camp is seemingly a sort of positive doomsters, always and secretly or openly believing in a worse scenario but seeking for cheaper money to invest in market giants. An easy thing to understand, based on objective FedWatch data patterns. And no more strange, as the crowd is following such a scenario of protecting money from troubles for many months.

Is it a realistic approach? As a matter of facts, again, the National Federation of Independent Business (NFIB) just said a week ago, 37% of small enterprises in the U.S. faced historically low levels of income because of too high costs on personnel, materials, energy, lower volumes of physical sales and elevated interest rates altogether. This is even more than 35% of sufferers at the pandemic bottom in 2020. A clear evidence of non-O.K. scenario, which is perfect for the market’s growth, if this belief is based on large and quick rate cut hopes, isn’t it?

The only thing here that I personally do not believe in a 0.5%+0.5%+0.5%=1,5% path of the Fed. Therefore, I would not bet even a penny for this brave version. However, I am ready to bet a few pounds on further climbing of the S&P 500 to new peaks like 5,850 or even higher. And if you ask me why, my answer would be that I believe in the Fed’s Hatter Jerry Powell’s capacity to take more thick and poker-faced rabbits from his Mad Hat. They will feed us with their “soft landing” fairy tales, which would be far from reality, but will please the other camp of O.K.-scenario betters, led by big fund guys from The Bank of America, City etc. Thus, the “ultra-left” wing of recession believers who are betting for a 1.5% rate cut before Christmas time comes, and the “right” wing of “soft-landers”, will join together in their efforts to push the Wall Street higher and to bring me money. If you now ask for my opinion, then now I agree with both sides, ha-ha ))) as both of them are going to make me more or less relaxed two or three months with my bullish stakes on giant stocks, ETFs and indexes. And so, I love those good people from both camps with all sincerity of my independent heart.

US500

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/

17.09.2024

BNB Is Struggling ahead of CZ Release

Binance Coin (BNB) is losing 3.7% to $541.54 this week, underperforming a broader market. Bitcoin (BTC) is losing 0.7% to $59,064. But from a broader perspective BNB performance is seen positive. The token rose by 2.05 in September and is close to its highs during the last six months.

BNB is traded between $500 and $600 after detention of ex Binance CEO Changpeng Zhao, aka CZ in May. Only strong market movements pushed prices outside this range. His sentence will end on September 29. Some crypto enthusiasts believe that this is a positive signal for the BNB, while others see risks of further lawsuits against CZ and new losses for the Binance network.

BNBUSD

MetadoroIn-house analytics

17.09.2024

Apple & Its Suppliers Lose 2% to 7% of Their Market Values

Analysts at TF International Securities Group, headquartered in Hong Kong and offering a broad range of investment-related services, freshly sent a cautious note to its customers on weaker demand for the newest iPhone 16 Pro series. This highlighted the fragility of the whole segment so that Apple itself immediately slipped by nearly 2.8% in only one trading session on September 16, while iPhone components' suppliers as well as biggest assembler plants owners fell off and hurt even more badly.

Here are a few examples. Qorvo (QRVO), a 9.5 billion manufacturer of products for wireless, wired, and power markets, dropped by 6.68% to its 3-month lows. A smaller Cirrus Logic (CRUS) that specializes in analog and audio digital signal processing integrated circuits initially lost more than 10% intraday but later recovered to only a 6% shortage compared to the previous week's closing price. Skyworks Solutions (SWKS) hit the brake lights after wasting 5% of its nearly 15 billion of market caps to retest its price lows for August. Apple's bigger partners were more moderate in their price response to the news, yet Micron Technology (MU) lost another 4.4% in addition to its 40% correction since mid-June, when Taiwan Semiconductors (TSM) and Broadcom (AVGO) quite reluctantly shown smaller 2% decline from their high attitudes.

TF International Securities estimate said that pre-orders for the iPhone 16 totalled about 37 million units in the first weekend after the release, as much as 12.7% lower from the iPhone 15 level in the same period of its launching in 2023. The growing competition in China has been cited, of course, but also complemented by the current unavailability of Apple Intelligence feature for the iPhone 16 Pro, a major option which supposes to ignite iPhone fans' determination to buy the gadget.

The clarifying remark in the TF International Securities report was that "given the staggered launch of both Apple Intelligence across geographies and AI features... the mix data set is logical – Pro Max is modestly weaker vs. iPhone 15, Pro models are doing fairly well notably in China where they are competing with Huawei's new Mate X product". Beside this, iPhone 16 Pro demand will be potentially better in the U.S and U.K. as Apple Intelligence features are going to be more quickly available there. Higher sales may be finally achieved but delayed in other parts of the world, even though the whole iPhone 16 cycle could be successful further.

When strongly bullish positioning in Broadcom is hardly in jeopardy, Apple itself and its inner business circle may temporarily fall out of the crowd's favour. No one has cancelled a commonly used "buying dips" strategy for these stocks, especially concerning Apple, but it may be postponed at least for one or two weeks. A gradual rise in iPhone sales is rather expected as Apple Intelligence would be available for a rising number of its potential users. If so, $250+ target area for Apple stock is still on the table, but touching support levels between $200 and $210 before that is highly likely. Shares of other listed smaller firms may also face short-term challenges this autumn.

AAPL

Rafael Quintana Martinez

17.09.2024

The Yen Is Losing Momentum

The USDJPY has been on a notable decline, falling by 4.4% so far in September after experiencing a 2.4% drop in August. This downtrend has brought the pair to its lowest levels since July 2023. Historically, USDJPY has tended to rise in September, making this year's performance an anomaly. However, the pair has recently broken through the resistance of its downtrend, which could signal a potential for recovery.

From a technical perspective, the ideal zone for opening long trades is around the 139.000-141.000 range, where a strong support level lies. If this support holds, the pair could potentially rebound toward an upside target of 150.000-152.000, representing a possible gain of 7.0-8.0%.

USDJPY