As coronavirus fears run rampant throughout the world, investors are turning to Wall Street titans for guidance, namely Ray Dalio. Founding hedge fund Bridgewater Associates in 1975, the firm now boasts $160 billion worth of assets under management, with Dalio alone estimated to be worth $18.7 billion.Dalio, who has looked at the impact of past pandemics and virus outbreaks on the market, called the current reaction to the coronavirus overblown, noting that the concerns “probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that...” He added, “It most likely will be something that in another year or two will be well beyond what everyone will be talking about.”While the billionaire does acknowledge that it’s difficult to gauge what the full extent of the virus will be, he argues that diversifying across currencies, asset classes and geographical regions could prove to be the best strategy. Additionally, Dalio believes investors should pay attention to issues related to wealth and political gaps, the emergence of China, technology and the environment that could emerge from the public health crisis.“What concerns me most if you did have a downturn -- we are now 11 years in expansion -- whether that’s one, two, three years forward, with the larger polarity that exists, the wealth gap and the political gap,” Dalio commented.Looking into Bridgewater’s basket of stocks, we’ve chosen three of the fund’s new holdings that TipRanks’ Stock Screener reveals as “strong buys." Not to mention each has a top Smart Score, at least an 8 out of 10. Let’s take a closer look and see what Wall Street analysts have to say.BlackRock Inc. (BLK)On Wall Street, BlackRock is known as one of the largest asset managers in the world. Pulling the trigger on BLK in the fourth quarter, Bridgewater purchased over 32,000 shares for $16.1 million.Following the company’s solid quarterly performance, several analysts also see the stock as a Buy. In Q4, BLK posted EPS of $8.34, well above the $7.66 consensus estimate. In addition, long-term inflows surpassed the Street’s $82 billion projection, landing at $99 billion or a 6.1% annualized pace. While higher opex led to an operating margin compression of 254 basis points to 43.5%, Morgan Stanley’s Michael Cyprys thinks the print was positive overall.“4Q19 results this morning demonstrate BLK's ability to continue delivering strong organic growth,” the four-star analyst explained. On top of this, he pointed out, “Debunking ‘too big to grow fears,’ BLK delivered 7%-plus organic asset growth for the full year 2019, which is an acceleration from 2.1%-plus organic growth in 2018 and 4.3%-plus average growth rate over last five years. Importantly, strong net new money growth translated into 5% organic base fee growth in 2019, better than the 2% growth in 2018.”Based on this report, Cyprys expects other analysts to make adjustments to their outlooks for 2020. “Higher AUM levels, better fee rate, and strong organic growth trajectory should support upward revisions to consensus EPS, despite higher core G&A expense guidance into 2020,” he noted.With the company also hoping to receive the board’s approval for a dividend increase, the deal is sealed for Cyprys. In line with his bullish take on the financial stock, he left both his Overweight rating and $603 price target unchanged. Should the target be met, a twelve-month gain of 7% could be in the cards. (To watch Cyprys’ track record, click here)In general, the rest of the Street is on the same page. With 7 Buys and 2 Holds received in the last three months, the consensus rating comes in as a Strong Buy. (See BlackRock stock analysis on TipRanks)Citigroup Inc. (C)Dalio’s second new position was in financial services giant Citigroup. In the fourth quarter, Bridgewater spent $36.1 million to acquire a stake in the company, or 452,049 shares to be exact.Weighing in on the company for Oppenheimer, five-star analyst Chris Kotowski points to its fourth quarter results as an encouraging sign. Even though there was a $0.25 discrete tax benefit, at $1.90, core underlying EPS still exceeded both the analyst’s estimate of $1.80 and the $1.81 Street forecast. In terms of revenue, Citigroup reported a beat, with the $18.4 billion figure representing a 7.3% year-over-year gain.It should be noted that growth and seasoning in the consumer portfolio drove a 15.2% year-over-year credit cost increase. However, Kotowski argues that this was widely expected, with the $2.2 billion total provision landing very close to his $2.1 billion prediction.When it comes to the fact that average shares dropped 9.8% year-over-year, reflecting a loss of 29% from the peak, the analyst commented, “Skeptics often tell us that ‘the market doesn't pay you for buybacks,’ but clearly this has greatly enhanced the company's long term earnings and dividend paying capacity. While we suspect this year's $18 billion of repurchases was a peak, we see $16 billion in 2020 and $12 billion in 2021.” If these repurchases play out, by year end 2021, another 15%-plus shrinkage in the share count would be realized.That being said, Kotowski believes that the upward trend for return on average tangible common stockholder's equity (ROTCE) is especially promising. “Excluding various gains and tax benefits in both years, we would put the "core" ROTCE at ~11.2% for the year, up from 10.5% in 2018 and 8.9% in 2017. Thus, the trend remains up and to the right, which is in our view the main thing that drives bank stocks,” he stated.All of the above factors prompted the Oppenheimer analyst to maintain an Outperform call and $124 price target. This conveys Kotowski’s confidence in Citigroup’s ability to climb 57% higher in the next twelve months. (To watch Kotowski’s track record, click here)What do other analysts think about Citigroup’s long-term growth prospects? As it turns out, the rest of the Street is generally bullish, with its Strong Buy consensus rating breaking down into 10 Buys vs 3 Holds. Not to mention the $94.82 average price target brings the upside potential to 21%. (See Citigroup stock analysis on TipRanks)CarMax Inc. (KMX)Bridgewater also snapped up shares of CarMax, the largest used car retailer in the U.S. The famous hedge fund added a position of 60,342 shares, valued at $5.3 million. Out on Wall Street, analysts are also excited about KMX.After hosting members of the company’s management team, Morgan Stanley’s Armintas Sinkevicius remains optimistic about its long-term growth narrative. During the meeting, management said the omni-channel experience rollout has already been successful, and there has been little core business disruption. In the future, the company will continue to seek out opportunities from efficiencies at the Customer Experience Centers and strengthen customer interaction.Based on this Sinkevicius commented, “We are constructive on the ability of Carvana and KMX to disrupt the used car dealership model, but find the profitability, free cash flow, and valuation at KMX to be significantly more attractive.” To this end, the analyst sided with the bulls, keeping the rating as Overweight. At $112, the price target implies shares could surge 13% in the next twelve months. (To watch Sinkevicius’ track record, click here)Meanwhile, RBC Capital analyst Scot Ciccarelli cites KMX’s recent $50 million investment in Edmunds, a research site that offers in-depth reviews of new vehicles, insights and helps shoppers progress through the entire car purchasing process, as being the source of his bullish thesis. He argues that this move is low-risk and possibly high-reward as KMX could use Edmunds’ reviews on its own website.“Further, if Edmunds and their ‘millions of customers a month’ were to provide direct links to CarMax inventory, this should also generate a substantial number of new online sales leads – which CarMax can now accommodate because of their growing omni-channel capabilities. Third, CarMax may be able to learn what the ‘value algorithms’ are searching for in their grading scale and may be able to work towards improving their third party value rankings,” Ciccarelli added. It makes sense, then, that the five-star analyst reiterated his bulllish call and $108 price target. (To watch Ciccarelli’s track record, click here)Looking at the consensus breakdown, a majority of Wall Street analysts also have high hopes for the used car retailer. With 8 Buys and 2 Holds, the word on the Street is that KMX is a Strong Buy. Additionally, the $106.88 average price target indicates that a possible twelve-month gain of 8% could be in store. (See CarMax stock analysis on TipRanks)
Democratic presidential candidate Mike Bloomberg unveiled a plan on Tuesday to crack down on Wall Street.
Walmart announced fourth-quarter earnings that missed expectations, and said coronavirus could hurt first-quarter earnings per share.
Research shows that switching 401(k)s to after-tax contributions would boost tax returns in the short term, but leave retirees worse off.
Household wealth compared to income is near a record high. Unemployment is near a record low. So why is the savings rate so high?
During the California gold rush, many miners went bankrupt. Most investors recognize that the gold rush is on in 5G and artificial intelligence. The picks and shovels for the present-day gold rushes are semiconductors.
Renaissance Technologies, added more than 3 million shares of Tesla to its holdings in the fourth quarter of last year, as the electric-vehicle maker’s shares catapulted higher, according to public filings.
(Bloomberg) -- Intel Corp. is in talks to sell a unit that makes chips for home internet access gear to MaxLinear Inc., according to people familiar with the matter.No final decision has been made and Intel could keep the connected home division, the people said, asking not to be named because the matter is private. It’s not clear how much the potential deal is worth.A representative for Santa Clara, California-based Intel declined to comment. MaxLinear didn’t respond to requests for comment.Intel, the world’s largest chipmaker, is looking at reducing its footprint in areas where it isn’t competitive, Chief Executive Officer Bob Swan has said. The company sold its smartphone modem business to Apple Inc. in a $1 billion deal last year. Swan has pointed to the money-losing memory business as an area where he might look for a partnership.MaxLinear, based in Carlsbad, California, provides broadband and networking semiconductors. Its shares fell 4.3% to $17.57 at 12:14 p.m. in New York trading Tuesday, giving the company a market value of about $1.3 billion.Intel’s connected home business makes chips that enable WiFi and manage data traffic for consumers. The chips provide wireless connections in home routers and gateways. Competitors include Broadcom Inc. and Qualcomm Inc.Throughout its history, Intel has created units that push new technologies as a way to further its central processor unit.The connected home initiative is part of an attempt to make sure Intel’s computing chips find their way into the increasing number of smart gadgets being used in households.To contact the reporters on this story: Liana Baker in New York at email@example.com;Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Liana Baker at email@example.com, ;Alistair Barr at firstname.lastname@example.org, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Netflix stock climbed to its highest level since July 2018 on Tuesday amid investor enthusiasm for the internet television network's international growth. The stock broke out of a cup base.
It's the future that matters, right? And so, it pays to know where analysts are aggressively bumping up profit forecasts with some top S&P; 500 stocks.
When Kristin and Thomas Schmitt took out a mortgage and bought a house last summer, the German couple's dream looked as if it was coming true. Two months later, they learned that the tire factory where both work would be shut down early next year. A malaise in Germany's mighty automobile industry, caused by weaker demand from abroad, stricter emission rules and electrification, is starting to leave a wider mark on Europe's largest economy by pushing up unemployment, eroding job security and hitting pay.
(Bloomberg) -- Legendary investor Warren Buffett’s Berkshire Hathaway Inc. just gave its blessing to the $4.6 trillion exchange-traded fund market -- at least in one of its pension plans.Berkshire added to the Vanguard S&P 500 ETF, ticker VOO, and SPDR S&P 500 ETF Trust, known as SPY, in the final quarter of 2019, according to a regulatory filing. The relatively small investments, which totaled $25 million across both funds, are Berkshire’s only publicly disclosed ETF holdings in its most recent quarterly 13F filing. The investments are in a pension plan, according to Buffett’s assistant, Debbie Bosanek.Buffett, whose Berkshire holds a record $128 billion in cash and U.S. Treasury bills, has been questioned before about why he didn’t put the firm’s unused cash into an index fund. The 89-year-old investor said last year at his annual shareholder meeting that he thinks Berkshire should have some cash available to quickly deploy if the chance to strike a big acquisition arises, even though he’d rather own an index fund than U.S. Treasury bills. He argued back in 2007 that he thought Berkshire’s stock picks could do better than the S&P 500 Index. Berkshire’s set to release its annual letter to shareholders on Saturday.The fourth-quarter addition is arguably the “ultimate endorsement” for ETFs and their different usages, according to Bloomberg Intelligence’s Eric Balchunas. Large institutions will often park money in ETFs to keep exposure to the market while minimizing cash drag in their portfolios, he said -- which is likely what Berkshire has started to do with its record cash pile.“They use it almost as a temporary parking spot, and I think the liquidity is what they’re attracted to,” Balchunas said.In that scenario, ETFs are essentially being used as an alternative for derivatives contracts, Balchunas said. He estimates that this manner of institutional usage accounts for roughly 5% to 10% of ETF assets.Climbing Cash PileBerkshire has accumulated a more than $71 billion stake in Apple Inc. in recent years and purchased stock in Kroger Co. and Biogen Inc. during the last three months of 2019.Still, Berkshire’s failed to find a massive acquisition of a company to keep growing the conglomerate in recent years. That’s weighed on Berkshire stock with the Class A shares increasing nearly 11% last year, short of the almost 29% gain in the S&P 500 during the same period.In the meantime, Berkshire is likely using these ETFs as a liquidity way-station of sorts, according to Todd Rosenbluth, CFRA Research’s New York-based director of ETF research.“SPY and VOO provide institutional investors the ability to stay in the market, while keeping their options open as they seek out individual stocks,” Rosenbluth said.To contact the reporters on this story: Katherine Greifeld in New York at email@example.com;Katherine Chiglinsky in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, ;Michael J. Moore at firstname.lastname@example.org, Rita Nazareth, Dave LiedtkaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Virgin Galactic Holdings Inc <SPCE.N> shares surged 24% on Tuesday, extending a rally since early December to over 400% and evoking a warning from an analyst who likes the space tourism company but warns it has become overbought. Shares of the company backed by billionaire Richard Branson have taken off in popularity among individual investors in recent sessions, nearly displacing Tesla Inc <TSLA.O>, another favorite among non-professional investors. Virgin Galactic was the third most traded stock on Fidelity's online brokerage in recent sessions, with two thirds of clients buying shares, rather than selling.
To say that the new Form 1040-SR closely mirrors the 2019 version of the “regular” Form 1040 is an understatement. * Instructions for both the new Form 1040-SR and the 2019 version of the regular Form 1040 are included in the same document (TAX YEAR 2019 1040 and 1040-SR INSTRUCTIONS). For both the new Form 1040-SR and the 2019 version of the regular Form 1040, IRA distributions and income from pensions and annuities are reported on separate lines on page 1 of the forms.
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
It’s virtually certain the stock market over the next decade will not come anywhere close to equaling its historical total return of 6.9% annualized above inflation. The reason for this confidence: There are only a few ways in which the stock market can grow faster than the overall economy, and none of them appears likely. According to the Congressional Budget Office, real GDP in the U.S. is projected to grow at a 1.7% annualized pace through 2030.
Shares of Virgin Galactic Holdings Inc. shot up 11% in active premarket trading Tuesday, after a shareholder disclosed a relatively large stake in the spaceships builder. The stock is on track to set another record high at the open, and to stretch its win streak to seven sessions. The stock, which has run up 55% over the past six sessions, has closed at a record the past five sessions. Park West Asset Management LLC disclosed late Friday that it was the beneficial owner of 4.25 million shares of Virgin Galactic, or 2.1% of the shares outstanding, which would make Park West the seventh largest shareholder, according to FactSet data, up from a prior ranking as 13th. Virgin Galactic had said last week that its VSS Unity spaceship has completed its relocation to Spaceport America in New Mexico, which enables the company to engage in the final stages of its flight test program. The stock has tripled (up 200.9%) over the past three months through Friday, while the S&P 500 has gained 8.3%.
A reorganization is coming to Google Cloud, marking another change occurring under CEO Thomas Kurian as it fights for dominance against the likes of Microsoft Corp. and Amazon.com Inc. As first reported by the Wall Street Journal, Google Cloud — a division of Alphabet Inc.-owned Google Inc. — will make a series of job cuts as it restructures. It did not specify how many employees would be affected, though CNBC reports that it would be fewer than 50. “We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated.” Ray Wang, founder of Silicon Valley-based Constellation Research Inc., told the Wall Street Journal that the layoffs are likely part of a shift toward services for large enterprise companies: “Dealing with large enterprises is different than (small businesses) and consumers,” he said.
Shares of Tesla Inc. shot back above $850 Tuesday before paring gains, after Bernstein analyst Toni Sacconaghi nearly doubled his price target, saying he didn’t see any negative catalysts on the horizon for a stock that wasn’t especially expensive.
British Columbia Investment Management, which manages the province’s public assets, dramatically increased its holdings in those stocks in the last quarter of 2019.
Nvidia is back on firm footing after reporting a strong fourth quarter and guidance. The chipmaker Nvidia continues to ooze free cash flow, and given its rock-solid balance sheet may soon consider increasing its shareholder returns via dividends or repurchases. Nvidia's fourth-quarter results were everything shareholders could have a wished for and more.
AbbVie stock initially fell on its $63 billion plan to buy Botox-maker Allergan, which helps the pharmaceutical company diversify as Humira patents expire. So, is ABBV stock a buy right now?
What is a dividend and which companies have the best-yielding dividends? Read on for a primer on how best to approach this method of investing.
Canopy Growth Corp.’s U.S.-listed shares rose Monday, extending gains made Friday after the Canadian cannabis company surprised investors with better-than-expected earnings.