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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

06.03.2024

CrowdStrike Is Shining More Than Ever

We were absolutely correct when supposing that a 13% to 15% of price adjustment may be enough for a very fast mobilisation of dip buyers in businesses like CrowdStrike (CRWD). A sharp fall of Palo Alto Networks (PANW) last month temporarily pulled Crowdstrike in its wake, exactly to the expected depth. Yet, only two weeks later, the stock reached its new all-time high above $370 per share, after soaring by nearly 25% in March 6 pre-market trading. This is about $100 per share, or 35% higher, compared to the intraday low on February 21, which reflects an amazing recovery, partially on hopes ahead of the company's quarterly release on late night of March 5 and additionally, and much stronger, soon after strong numbers and 2024 projections were published.

The cybersecurity firm's financial results and guidance were so impressive that it pushed up even some CrowdStrike peers like Fortinet (FTNT, +3.5% before the opening bell on March 6) and previously unlucky Palo Alto (PANW). As to CrowdStrike (CRWD) itself, it revealed a 33% increase in YoY revenue, including a 27% growth in the so-called net new Annual Recurring Revenue (ARR), a 25% rise in operating margin and a high 33% level of free cash flow. EPS (equity per share) and total sales key metrics reached $0.95 (doubled vs the data published in March 2023) and $845 million (compared to $637 million one year ago). CrowdStrike has an ambitious goal of approaching $10 billion in ARR over the next few years, which looks quite achievable as demand for comprehensive cybersecurity solutions is growing.

Great contributions of the company's Falcon Platform, due to its ease of deployment, ability to encourage the adoption of additional modules, its strong performance in non-endpoint solutions, such as cloud security - a go-to-market strategy with customer reach from large enterprises to small and medium-sized businesses, in other words - made this success real. Collaborations with Dell (DELL), which recently raised its market value by more than 30%, was noted by several analyst groups like Rosenblatt and Stifel to keep their Buy ratings for the stock even at current levels. On the intrinsically AI-centric market, some of them shifted their price target for CrowdStrike to $400 and above. We totally agree with them, yet even feel this approach as being rather conservative, to set our target for 2024 to $450 at least.

CRWD

MetadoroIn-house analytics

06.03.2024

Apple Is Seen Underweight

The share price of the iPhone maker plunged below $170 this week. It happened for the first time since late October large-scale correction on Wall Street. However, the major difference is that major market drops took place in autumn, when Apple stock was among flagships and drivers of last year's broad rally. Therefore, the value of Apple quickly recovered during the following month to $190+ in mid-November. Now Apple rather looks as the weakest link in the Magnificent Seven megacaps. In 2024, Apple share price lost nearly 11.5% compared to a more than 7% growth of the S&P 500, from below 4,800 to above 5,100 points. The last straw in this sadly bearish cocktail for Apple was a confirmation by Counterpoint Research on March 5 that iPhone sales in the key Chinese market lost about 24% in the first six weeks of the year. Of course, this may partially reflect a normal negative drop after the Christmas sales peak, yet sales volumes decreased against same season numbers of 2023, which cannot be explained as temporary or random effect. The problem is deeper, as domestic rivals from China are stepping on the heels of Tim Cook and Co. Another reason is that the whole China smartphone market reportedly fell 7% YoY, with double-digit declines in six weeks not only for Apple, but also for some other vendors including OPPO (-29%) and vivo (-15%). With its blockbuster Mate 60 series, Huawei added 64% in terms of 2024 vs 2023 unit sales growth in the same period. Apple's share in China's smartphone market declined from 19% to 16% YoY.

The market crowd is feared this may lead to falling margins soon, even despite participation of Apple in the AI global race and new features like Apple Vision Pro devices with its magical 3D applications but at too expensive prices. The retail tag of the headset is about $3,500, which most consumers can't handle, only dream. The recent story when Apple discontinued its electric car project did not make the company look more attractive as well, at least in the eyes of most investors, so that Morgan Stanley analysts was probably the only one which characterised it as "a positive development", citing a chance to cut ineffective costs.

Our baseline scenario is based on the growing risk of Apple stock falling through the thin ice around $165 multi-month lows first, with a high probability to touch a $150+ area and a potential wave of recovery later when the dust settles. The company currently looks Underweight.

AAPL

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/

06.03.2024

IOTA is Targeting $0.4000

IOTA (IOT) experienced a 6.0% rise to $0.3420 this week, showing a robust performance despite a 21% slump to $0.2679 on Tuesday. The altcoin appears to be benefiting from the rally in Bitcoin (BTC). Bitcoin reached a new all-time high at $69,340 per coin, but quickly retraced by 13.0% to $59,665. IOTA mirrored this movement but with a more significant swing, rising by 13.0% to $0.3840 before a subsequent 30.0% decline.

While IOTA's movements may not precisely mirror Bitcoin's fluctuations, it highlights the potential for true altcoins like IOTA to continue their upward trajectory even without direct support from the major cryptocurrency. If IOTA can breach the resistance at $0.3500, it may pave the way for further gains toward $0.4000.

IOTUSD

Bash

05.03.2024

Wall St Is on a Tear with AMD, TGT, Gold Rise, and Tesla Drops

There is nothing particularly new on markets so far this week. Wall Street has been on a tear for eight weeks in a row, since the beginning of 2024, so that the S&P 500 broad indicator is consolidating little lower after making another record high above 5,100. My personal stakes continue to increase in value, geared by the endless AI agenda. Even a possible effect of temporary pause of growth in the vicinity of new highs could be considered as something very natural, if it turns out that way. The culmination of Q4 earnings season has passed and the probably unsurprising Fed decision is only in mid-March.

Among specific market movers after the opening bell this Tuesday, only Tesla (TSLA) dropped by nearly 3% following the announcement from the electric vehicle world leader that its shipments of China-made cars slipped to a 14-month low. Tesla's Gigafactory near Berlin halts work, and it was left without power after a suspected arson attack, which led to an electricity pylon ablaze. Meanwhile, local media published a letter from a far-left activist organisation that pretended to claim responsibility for this strange action. "These are either the dumbest eco-terrorists on Earth or they're puppets of those who don't have good environmental goals," Tesla mastermind Elon Musk said on X, adding that stopping production of electric vehicles, rather than fossil fuel vehicles, is "extreme dumm". Anyway, I have repeatedly warned that I prefer staying away from Tesla investment for the nearest months, due to rather suppressed demand for its vehicles now. Therefore, I am undisturbed by another dive in Tesla stock price.

My favourite AMD is trading well above $200 per share, which I had in mind a long time ago, and this may be not the end of this bullish game with stakes in the world's second largest producer of AI chips.

Target Corporation (TGT) reported income that topped consensus poll estimates. This shows another healthy move in the retail segment, so that Target is now trading more than 12% higher compared to the previous day close. I did not invest in Target, as there was a lot of volatility in Target prices recently, yet this may help my stakes in Walmart (WMT) and other consumer staples to jump. This story also inspires more confidence in the broader market.

Gold are rising, mostly in sync with stock market growth, but this process is not too fast, which is also a sign that the situation is more or less normal. Slow and steady return to early December levels above the $2,150/oz landmark in the nearest months, including possible spikes higher, looks as my baseline scenario amid the crawling uptrend in the U.S. and European stocks, while further direction for EUR/USD and other reserve currencies is not yet clear.

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