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24.11.2022

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.

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.

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.

MetadoroIn-house analytics

21.03.2024

Unaffordable Stocks to Be Sold At a Low Price: Chipotle Mexican Grill

Chipotle Mexican Grill Inc (CMG) seeks to attract more small investors by approving a 50-for-1 stock split. The burrito chain never did it before in its history, since it launched its IPO (initial public offering) in January 2006 at only $22 per share. Now, Chipotle Mexican Grill's stock price touched $3,000 per share on March 20, after nearly doubling its market value for the last 12 months. A spectacular success among other restaurant segment companies and large income for its faithful shareholders for many years, yet few private traders can handle such an expensive part for only one company in their portfolios, and so many just prefer to skip the CMG option. Who has extra $3,000 for Mexican food on a trading account? This is why the amount of those investors is much less compared to the number of rice bowl eaters and lovers of tacos. Chipotle's board is ready to fix the problem. This split would happen at the moment when the stock is "experiencing an all-time high driven by record revenues, profits, and growth," Jack Hartung, its CFO argued. He hopes the move would make CMG stock accessible to the chain's own employees and "a broader range of investors". Each CMG investor as of June 18, 2024 would get 49 additional shares for each share held. And the split shares for new attracted investors will be done after the Wall St closes on June 25, 2024. So, everybody would be able to purchase some stake in Chipotle Mexican Grill, starting from $60 or maybe a little more, depending on the post-split quotes of the company at that moment.

The Chipotle Mexican Grill stock was trading around $2,800 before the opening bell on March 19, when the split announcement came immediately sending the price to a new range between $2,900 and $3,000. CMG shares may continue to rally, especially after the split would be accomplished, to hit fresh record levels propelled by the current bullish sentiment. Such expectations are based on strong earnings due to a solid demand in more than 3,400 locations only across the United States. Chipotle Mexican Grill forecasted a 34.4% YoY growth for the current fiscal year and may become a top pick for growth investors at a low cost price soon. In early February 2024, CMG beat consensus numbers once again in both top and bottom lines, while projecting its full year comparable sales growth in the mid-single digit range.

A brief but eventful history. In 1993, the first Chipotle Mexican Grill opened in Denver, Colorado. In 1998, the first restaurant outside of Colorado started in Kansas. In the same year, McDonald's became a minority investor in the company to become Chipotle's largest investor by 2001. The business expanded to over 500 food points in 2005. In October 2006, McDonald's fully divested from Chipotle, as a part of a larger initiative to divest its non-core business restaurants. Ironically, some twenty years after this, Chipotle Mexican Grill shares may become a part of almost every investment portfolio.

CMG

Bash

21.03.2024

The Fed Tricked Us by Making Our Minds Even More Bullish

Encouraging verbal signs and interest rate path projections after the Federal Reserve meeting last night clearly provided greater support to the broad S&P 500 indicator than to its leading core consisting of the AI-related businesses. The S&P 500 just ended the regular session on March 20 by nearly 0.9% higher to close above 5,200 points for the first time ever and then added another 0.5% in the pre-market trading today, while most AI-leaders, including NVidia and AMD, stood in the vicinity of their previous heights. At the same time, even some stocks that were lagging behind in recent months like Tesla (+2.5%) or banking stocks cheered up more visibly. The Bank of America added 2% in one day, as an example. Several consumer discretionary stocks rose too. A very much understandable effect, as the AI core, or tech stocks at the bigger picture, represented a major group, which successfully climbed upstairs even without any doping help from central bankers. Meanwhile, most stocks need stronger pillars like lower borrowing costs and soft landing hopes to grow further. And so, the market has been granted that wish.

Surely, the Fed left its fund rates steady for the fifth time in a row, yet it mentioned three "planned" rate cuts before the end of 2024. The chair Powell said before that March was "too soon" to have "enough confidence" from incoming economic data to cut rates, but now most investing houses are betting for June. The Fed also saw more rate cuts to drop to 3.9% in 2025 and 3.1% in 2026. For me, they are using a kind of gaslighting tactic, as initially they pushed the market to suppose up to six rate cut moves this year. In fact, the Fed did zero moves, while inflation is trending up again, and so the Wall Street is now happy with only a suggestion of three rate cuts soon. This is not dovish yet is perceived as being dovish. That was a neat trick with our minds yet it worked well to make almost everybody keep bullish positions. This happens exactly when most households and business owners continue to suffer from too expensive credit money, yet this would not prevent mega caps and now broader markets to enjoy new peaks. Well, all of us will work with what we all have, still expecting the S&P 500 at 5,500 or so in few months. And I will buy and hold when others are buying and holding, why not?

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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/

21.03.2024

Ether is Recovering on Dovish Fed

Ethereum (ETH) faced a weekly decline of 2.8%, trading at $3535. However, the altcoin experienced a significant drop of 16.0% to $3054 earlier in the week, nearing crucial support levels at $3000. The decline coincided with broader market trends, as Bitcoin (BTC) also saw a 10.8% decrease to $60,817 on Wednesday.

The major contributing factor to the downward pressure on Ethereum was the news of the U.S. Securities and Exchange Commission (SEC) delaying the approval of a spot ETH-ETF, which was anticipated on May 23. This announcement added to the negative sentiment in the cryptocurrency market.

However, Ethereum saw a notable recovery after the Federal Reserve hinted at potential interest rate cuts in June, despite ongoing concerns about inflation. The Fed's assurance regarding monetary policy provided a sense of relief to investors, leading to a market-wide rebound.

With the Fed's announcement, Ethereum has an opportunity to regain momentum and potentially reach $4000 per coin if it can surpass the resistance level at $3500.

ETHUSD

Rafael Quintana Martinez

21.03.2024

Intel Sends Upside Signals

Intel Corp (INTC) stocks have experienced a significant decline of 16.6% to $42.0 per share since the beginning of 2024, presenting a challenging situation for its investors despite the prevailing AI mania that is expected to drive demand for computer chips. However, this downturn may present an opportunity for a potential recovery, especially as the stock has reached a support level within its uptrend.

Furthermore, rumors circulating about Intel potentially securing an $8.5 billion contract from the U.S. government to modernize its chip production facilities could serve as a positive catalyst for the company's stock.

Considering these factors, purchasing the stock within the $40.0-42.0 range with a target price of $50.0-52.0 per share appears to be a strategic move. Setting a stop-loss at $31.0 can help mitigate potential losses in case the stock does not perform as expected.

INTC