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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.

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.

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.

MetadoroIn-house analytics

27.08.2024

Life-Giving Moisture from the Fed

Small caps actually benefited the most from the Federal Reserve’s (Fed) Chair Jerome Powell verbal signals last Friday. Newswires all cheered with one voice echoing his “time has come” voice for the monetary policy to be adjusted, as well as financial Chef cook’s “the direction of travel is clear” complement, even though the main dish has been sauced with “depending on incoming data, the evolving outlook and the balance of risks” remarks concerning the point of timing and pace. Everybody feels these cooling condiments as just empty courtesies to avoid saying “yes, we will do it” loudly up front.

“We don't seek or welcome further labor market cooling,” Powell noted to smooth potential negative effects from the spicy 818,000 downward revision in US annual jobs statistics, the largest update since 2009. All in all, the broad Wall Street’s S&P 500 barometer failed to reset its all-time highs so far. Some leading megacaps like Microsoft or NVidia also stepped back from direct attempts of jumping above their historical peaks, which we do not consider as a bad luck. Background demand on bellwethers is so strong and stable, especially following the tech retracement in early August, that it’s now O.K. to see it is not influenced much with interest rate matters. This is just one more proof that the investing crowd loves AI-related stocks not only for the pure fact some people may have access to cheaper excessive money.

Fed Chair speech could not change much in the script for market leaders. Besides, megacaps quotes are high enough already in terms of the ever-lasting uptrend, while cash in both Dollars and Euros is still burning everybody’s hands. What happens when people are looking for alternatives, and the monetary climate hints to become one or two degrees more comfortable for businesses soon? The plan of making rates lower may cure smaller companies’ struggling against heightened costs in supply chains and cost-conscious customers.

With the U.S. central bankers seemingly ready to start cutting interest rates, iShares Russell 2000 ETF (IWM), being an indicator of broader hopes of skipping recession, climbed from nearly $215 to above $221 on the agenda, which added as much as 2.8% to its more than 2% gains on expectations one week before to contribute to the small caps index’ 10% recovery from its local lows of August. The pace of its current move is looking so good. Purchasing the deeper slice of Wall Street companies, in the form of the Russell 2000 index or its 10-times-cheaper and more affordable ETF shares, now is a smarter option compared to more bets on rising the S&P500 above 5,800. An extra step up in the S&P 500 may give another 5% or 7%, but the next stage of rising in the Russell 2000 may give 15% or even more, when targeting at potential updates in all-time highs between 250 and 260 points, in terms of the IWM tool.

IWM

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/

26.08.2024

Coin 98 Is Increasing Upside Momentum

Coin 98 (CNE) is experiencing a 3.0% decline, bringing its price down to $0.1335 on Monday. The drop was even more significant earlier in the day when prices reached $0.1301. This pullback could be viewed as a moderate correction following CNE's 7.2% surge last Friday, which was driven by a broader rally in the cryptocurrency market.

The recent rally was spurred by Federal Reserve Chair Jerome Powell's announcement at the Jackson Hole symposium, where he signaled the beginning of an interest rate cut cycle. This dovish monetary policy is particularly important for the crypto market, as lower interest rates typically encourage higher-risk investments. Investors are currently pausing to assess the changing market conditions. Once the market digests these developments, CNE prices could resume their upward trajectory, potentially reaching $0.1500.

CNEUSD

Rafael Quintana Martinez

23.08.2024

Ripple Is Likely to Consolidate with a Potential Upside before October

Ripple (XRP) is experiencing a notable rise of 5.2% this week, reaching $0.6000, which is twice the gain of the broader market. In comparison, Bitcoin (BTC) has seen a 2.6% increase, bringing its price to $61,000. This positive movement in altcoin prices follows a significant legal development on August 7, when Judge Analisa Torres ruled that Ripple must pay a $125 million fine, a much smaller penalty than what the U.S. Securities and Exchange Commission (SEC) had originally demanded.

In addition to the reduced fine, the judge also prohibited Ripple from selling XRP to institutional investors, marking an intermediate victory for the company. The SEC has 60 days, until October 7, to file an appeal. If the SEC does not file an appeal, Ripple’s victory could become final. Until then, XRP prices are expected to consolidate within an ascending triangle pattern, which often signals the potential for further upside movement.

XRPUSD

Bash

22.08.2024

Last Spikes in Target Share Price

The first time when I brought my humble attention to Target stock was my birthday party. My brother-in-law presented a T-shirt with a painting of a white bear and a star in the sky above the beast, accompanied by a “Golden State California” pride slogan. It still serves me to symbolize a cheap style of sweet home comfort, but also perfect resilience to all kinds of winds, for more than 18 months. When asked where he got this piece of simple beauty, he said his sister just sent a package with “made in USA” gifts, and this particular thing was purchased for $19.99 in some store named Target.

I was curious enough to google and tried to find out what this Target is. Various sources described it as probably the second largest chain of stores in the middle between the consumer discretionary and the discount segment of North American retailers. As an investor, I became immediately intrigued by a self-imposed investigation why Target stock was not a part of my portfolio to join successful Walmart and Lowe’s or a problematic but recovering Macy’s, and I quickly found a solid reason with its clearly troubled price dynamics. It happened so that Target was so shining investment to gain as much as possible in the corona time. However, in 2022 and 2023, it has been “weighted, measured and found wanting”, if you know what I mean.

The overvalued stock ultimately dropped from above $250 to nearly $100, and it was abandoned there for many months, as Target’s profit margin was squeezed between Scylla of elevated supply chain expenses and Charybdis of cost-conscious consumers. Thus, I almost abandoned any plans of investing some of my free cash into Target, but now it looks like an advantageous time to revisit the idea.

Target stock is soaring now. Supported by strong Q2 results, it spiked from nearly $145 to $167.20 at a short-lived intraday peak on August 21. The price retraced to a little more adequate range between $157 and $160, and so it can be called attractive, as it is less than 10% higher on solid fundamentals, also offering a nearly 10% discount against its newly minted, and hopefully temporary peaks.

Financial performance of Target did not decline in July, with both June and July were stronger than May, based on promotional activities and strategic planning, its CEOs commented after the chain announced quarterly earnings per share of $2.57 on sales of $25.45 bln vs $2.19 on $25.2 bln in consensus bets of Wall Street analysts, after $2.03 on $24.5 bln in Q1 and $1.8 of EPS on $24.8 in the same season of 2023, with comparable sales rising by 2% YoY.

And, what is more important, I am not alone in my current investment desires. UBS adjusted its outlook on Target by raising its price target to $200 from the previous $185 and keeping a Buy rating on the stock, citing “a surge in customer traffic, robust gross margin improvements, and an uptick in other income, attributed partly to a double-digit increase in advertising revenue”. Meanwhile, the Bank of America raised its price target to $195, which belongs to almost the same technical area. Target’s estimated EPS for the fiscal year of 2025 has been shifted from $9.45 to $9.70. A rather pessimistic RBC Capital also increased its price target for Target from $174 to $177, with an Outperform rating and potential revenue growth of 0.4% and 1.5% for fiscal years 2024 and 2025, respectively. Wells Fargo revised its target to $180 from $160, which is not so bad as well. Evercore ISI raised its target for Target to $160 only, reflecting a global slowdown in the e-commerce sector, but saying that Target's EPS may approach $9.50 in 2024 and $10.50 in 2025.

TGT