Raymond James: 2 Chip Giants to Buy Now (And 1 to Avoid)

Semiconductors are one of the modern world’s essential industries, making possible so much of what we rely on or take for granted: internet access, high-speed computers with high-speed memory, even the thermostats that control our air conditioning – there isn’t much, tech-wise, that doesn’t use semiconductor chips. The global semiconductor chip market was valued at over $513 billion in 2019, and despite the worst the pandemic could do, the chip sector rose to $726 billion in 2020. It’s a market based on a near-limitless customer base; it’s estimated that 2.5 billion people own at least one smartphone. That’s 1 in 3 of the total world population, enough to ensure that demand for semiconductor chips will never slacken. And with that background, Raymond James analyst Chris Caso sees two chip giant poised to make gains this year – but one that investors should avoid. Let's take a closer look. Advanced Micro Devices (AMD) The first chip stock we’ll look at, AMD, is consistently ranked among the top 20 largest chip makers – by sales – globally. The company held the fifteenth spot last year, with $9.76 billion in total revenues. That top line was up 45% from 2019, when AMD was ranked eighteenth. AMD’s position in the industry is based on its high-quality products, including microprocessors, motherboard chipsets, and graphics processors. AMD’s Ryzen Mobile 4000 chip was the first 7nm x86 processor on the market. The chip company showed a solid second half in 2020, with revenues in Q3 and Q4 rapidly recovering the 1H20 dip and rising above 2019 level. Earnings in Q4 skyrocketed, growing from Q3’s 32 cents per share to an impressive $1.45 per share. For all of 2020, earnings came in at $2.06, compared to 30 cents for 2019. The strong second half pushed the full-year revenue to a company record, on the strength of expanding demand in the PC, gaming, and data center markets. AMD’s prospects have attracted Raymond James’ Chris Caso, who compares the company favorably to competitor Intel. “We are using the pullback since the start of the year to get involved with AMD, which we expect to be a secular winner due to what we believe to be a durable technical advantage vs. Intel. We think the stock’s pullback has been driven by improved sentiment that Intel will solve their manufacturing challenges, which will reverse AMD’s successes. We’re taking the other side of that view," the 5-star analyst noted. Caso continued, "Nowthat Intel has committed to internal manufacturing, we think it’s unlikely that Intel ever regains a transistor advantage vs. AMD, and the current roadmaps ensure an advantage for AMD/TSMC through at least 2024. In the meantime, we think Street numbers are too low for both server and consoles, putting our base case 2022 EPS estimate of $2.81 12% ahead of the Street, with an upside case to about $3.00." In line with this outlook, Caso initiated coverage of AMD with an Outperform (i.e. Buy) rating, and $100 price target to suggest a 23% one-year upside potential. (To watch Caso’s track record, click here) The Raymond James view is no bullish outlier; AMD has 13 positive reviews on record. These are partly balanced by 5 Holds and 1 Sell, making the analyst consensus rating a Moderate Buy. The share are selling for $81.11, and their $104.44 average price target implies an upside of ~29% for the next 12 months. (See AMD stock analysis on TipRanks) Nvidia Corporation (NVDA) Next up, Nvidia, is another of the chip industry’s giants. Like AMD, Nvidia is slowly rising in the rankings; going by total sales, the company was rated number 10 in 2019 – and number 8 in 2020. Nvidia’s sales last year totaled more than $16 billion, a gain of 53% year-over-year. Nvidia rode to its success on the combination of memory chips – which have a strong market in the data center segment – and graphics processors – which are popular among both hardcore gamers and professional graphic designers. For the most recent quarter, Q4 of fiscal 2021, ending on December 31, Nvidia reported $5 billion in revenue, a company record, and a 61% gain from the year before. EPS rose from $1.53 in the prior Q4 to $2.31 in the current print, a gain of 51%. Full year numbers were strong; the $16.68 billion at the top line was a record, and the EPS, at $6.90, was 53% higher than the previous year. Company management noted the strength of the data center segment, but also pointed out that Nvidia has a growing AI business. The company makes between 5% and 10% of its total sales in the automotive market, and more than half of that is AI-related, in the autonomous vehicle niche. Raymond James’ Chris Caso notes this, too, in his report upgrading his stance on NVDA. “Our call is not really new, as we’ve been positive on NVDA for some time. Our call rather is meant to express our conviction in both the short and long term. In the short term, we think NVDA results will be more dependent on supply than demand given widespread shortages – and we do expect incremental supply as the year progresses…. Our longer term conviction is driven by the fact that NVDA has more shots on goal than anyone else in our coverage, and their success in AI has earned them a permanent seat at the table in both hyperscale and enterprise compute,” Caso opined. Caso bumps his stance up from Outperform to Strong Buy, and sets a price target of $750. At current levels, this indicates room for a 17% one-year upside. NVDA’s strong share appreciation over the past 12 months (115%) has pushed the stock price close to the average price target. Shares are selling for $614.47, with an average target of $670.20 suggesting room for 9% growth. Nonetheless, the stock holds a Strong Buy consensus rating based on 22 Buys and 4 Hold given in recent weeks. (See NVDA stock analysis on TipRanks) Intel Corporation (INTC) The third stock we’re looking at, Intel, is the one that Raymond James says to avoid. This may seem counterintuitive; Intel is, by sales, the world’s largest semiconductor chip maker, with more than $77 billion in annual revenue last year and a leading position in a $720+ billion market. So why does Caso advise caution here? “Intel’s stock has risen of late due to optimism that new leadership from their very capable new CEO will allow them to turn around their manufacturing issues and return to their former dominance. Our Underperform rating reflects not just the risk that Intel won’t reach that goal, but also the pain they will likely endure in pursuit of that goal in terms of capex, lost market share, and a shifting landscape in datacenter that will make the industry less dependent on Intel," Caso explained. The analyst added, "In addition, we’re concerned that demand in the PC market, on which Intel remains highly dependent, has been significantly pulled forward due to the pandemic, and expect an eventual mean reversion – which may unfortunately occur just as Intel needs to ramp investment.” Caso, as noted, rates INTC an Underperform (i.e. Sell), and does not put a price target on it. All in all, the market’s current view on INTC is a mixed bag, indicating uncertainty as to its prospects. The stock has a Hold analyst consensus rating based on 12 Buys, 10 Holds, and 8 Sells. Meanwhile, the $67.68 price target suggests a modest upside potential of nearly 6%. (See INTC stock analysis on TipRanks) To find good chip ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Around 100 People Control DOGE's Entire $46B Market: Report

Dogecoin (CRYPTO: DOGE) has been hard to ignore lately, as the meme-based cryptocurrency rose to become the sixth-largest with over $46 billion in market cap. What Happened: With 7,000% year-to-date returns and considerable outperformance against several top cryptocurrencies, DOGE’s appeal to retail investors has steadily been on the rise. However, several crypto influencers and traders have cautioned against going “all-in” on DOGE, citing concerns of a few large holders controlling the majority of its supply. See also: How to Buy DOGE Over 65% of Dogecoins are distributed among just 98 wallets across the world, while the single largest wallet holds 28% of all Dogecoins. In fact, just five wallets control 40% of the coin’s supply. Essentially, around 100 people control the entire $46 billion DOGE market. “The scam is simple - Hold on to Dogecoin till there is enough traction after it multiplies, dump all coins and cash out - Become instant billionaires,” said Akand Sitra of cryptocurrency risk management platform TRM Labs. Why It Matters: Sitra’s analysis of DOGE’s supply distribution was possible due to the nature of blockchain transactions, which are available for anyone to see on the open distributed ledger. Some on-chain analytics of the top DOGE holders led experts to believe that the cryptocurrency’s supply is concentrated among just a few holders. “The Dogecoin bubble will burst by the end of this year, easily,” said Sitra. Other traders in the space echoed this sentiment, calling it the reason why they will never be in DOGE “no matter the gains.” Why I'm not in $DOGE and will never be no matter the gains. https://t.co/jFVU2yQf03 — QuartzHands (@NFTiepie) April 19, 2021 At press time, DOGE was trading at $0.3976, up 32% overnight and 394% in the past seven days. DOGE holders were preparing for April 20, where a large group of retail traders has predicted the coin will touch $0.69. See Also: Dogecoin Creator Defends Meme Crypto's Supply: Doesn't 'Matter For Price' Image: Ivan Radic via Flickr See more from BenzingaClick here for options trades from BenzingaDeFi Blue Chip Season? Here's What Cryptos Coinbase Employees Are Buying Right NowInvestors In Disbelief As DOGE Becomes Top 5 Crypto With B Market Cap© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  Bitcoin Plunges, Taking Other Cryptocurrencies With It

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ARK Invest Stocks To Buy And Watch: 6 Stocks That Cathie Wood's ARK ETFs Own; Coinbase And Tesla Tumble

Cathie Wood's ARK Invest ETFs are some of the hottest ETFs after 2020's huge gains. Five ARK Invest stocks to buy and watch include Coinbase and Tesla.

3 “Strong Buy” Dividend Stocks Yielding Around 7%

These past 12 months have seen the S&P 500 return its best performance ever – an 80% gain as of the end of March. But are the good times wrapping up? Some historical data would suggest that the bulls will keep running. Since 1950, the market has seen 9 sustained, year-long runs with a rolling return of 30% or better on the S&P 500. These periods have seen an average one-year gain of 40% (the median has been 34%) – and none of these bull markets has ever ended in its second year. But investors should not expect the same sky-high returns in the coming 12 months as they have just seen in the last, according to Callie Cox, a senior investment strategist at Ally Invest. "[I]t's typical for the bull market to lose a little bit of steam going into year two... Expectations start rising and makes it harder for the market to… beat everybody's expectations. And that leaves a greater chance for disappointment. And to be clear, again, we're not calling for doom and gloom. We just think the market is due for a breather up in the next quarter or two," Cox opined. For investors focused on returns, the prospect of a lower sustained gain in share appreciation will naturally prompt a look at dividend stocks. Reliable, high-yield dividend payers offer a second income stream, to complement the share appreciation and ensure a solid return for investors. With this in mind, we used the TipRanks' database to pinpoint three stocks that meet a profile: a Strong Buy rating from Wall Street’s analysts and a dividend yield around 7%. Trinity Capital (TRIN) We’ll start with Trinity Capital, a venture debt company that makes capital available to start-ups. Trinity’s investment portfolio totals $494 million, spread over 96 companies. The company entered the public markets earlier this year, closing its IPO early in February. The opening saw 8.48 million shares become available for trading, and raised over $105 million after expenses. In its 4Q20 report – the company’s first quarterly report as a public entity, covering the last quarter as a private firm – Trinity showed net investment income of $5.3 million, with a per-share income of 29 cents. This was more than enough to fund the dividend, paid in December at 27 cents per share. Since then, Trinity has declared its 1Q21 dividend, raising the payment by a penny to 28 cents per common share. Trinity has a announced a policy of paying between 90% and 100% of taxable quarterly income in the dividend. At the current rate, the payment annualizes to $1.12 per share, and gives a yield of 7.6%. This is significantly higher than the average yield of 1.78% found among peers in the financial sector. In his note on the stock, Compass Point analyst Casey Alexander states his belief that Trinity has a clear path toward profitable returns. “TRIN operates within the attractive, growing venture debt ecosystem. As such we expect strong net portfolio growth followed by improved NII and increasing dividend distributions, with potential upside from equity/warrant investments,” Alexander noted. To this end, Alexander rates TRIN a Buy, and his $16.75 price target implies an upside of ~14% for the next 12 months. (To watch Alexander’s track record, click here) This newly public stock has already picked up 5 analyst reviews – and those break down to 4 Buys and 1 Hold, for a Strong Buy consensus rating. Trinity shares are selling for $14.74; their $16.46 average price target suggests the stock has ~12% upside potential. (See TRIN stock analysis on TipRanks) Energy Transfer LP (ET) With our second stock, Energy Transfer, we move into the energy midstream universe. Midstream is the necessary sector connecting hydrocarbon exploration and production with the end markets; midstreamers control the transport networks that move oil and gas products. ET has a network of assets in 38 states, which link three major oil and gas regions: North Dakota, Appalachia, and Texas-Oklahoma-Louisiana. The company’s assets include pipelines, terminals, and storage facilities for both crude oil and natural gas products. The big news for Energy Transfer, in recent weeks, comes from two sources. First, on April 9, reports came out that that the US Army Corps of Engineers is not likely to recommend shutting down the Dakota Access Pipeline (DAPL). This project, when complete, will move oil from Alberta’s oil sands region across the US to the Gulf Coast; the Biden Administration wants to shut it down for environmental reasons, but the industry is fighting to keep it. And second, two largest shareholders of Enable Midstream have approved a proposed merger, by which ET will acquire Enable. The merger is projected to be worth $7 billion. Earlier this year, Energy Transfer reported 4Q20 EPS of 19 cents per share, on income of $509 million. While down year-over-year from the 38 cent EPS reported in 4Q19, the recent result was a strong turnaround from the 29-cent net loss reported in Q3. The company’s income is supporting the current dividend of 15.25 cents per common share. This annualizes to 61 cents, and give a yield of 7.7%. The company has paid out a dividend every quarter since Q2 of 2006. Covering this stock for Credit Suisse, analyst Spiro Dounis writes: “We updated our model to reflect a mid-2021 completion of the Enable Midstream acquisition. We view the deal as accretive and see additional potential upside resulting from operational/commercial synergies. ET highlighted potential synergies around both ENBL’s natural gas and NGL assets, noting that gas synergies could be realized fairly quickly while NGL opportunities are more long-term as legacy contracts roll. Upwards of ~$100mm of NGL uplift over the next several years doesn’t appear unreasonable, in our view.” Dounis also notes that the main risk to the company arises from DAPL, which may still be shut down by the Biden Administration. Even so, he rates the stock an Outperform (i.e. Buy), with an $11 price target indicating a 39% one-year upside. (To watch Dounis’s track record, click here) Wall Street’s analysts can be a contentious lot – but when they agree on a stock, it’s a positive sign for investors to take note. That’s the case here, as all of the recent reviews on ET are Buys, making the consensus rating a unanimous Strong Buy. The analysts have given an average price target of $11.60, indicating ~47% upside from the current share price of $7.94. (See ET stock analysis on TipRanks) Oaktree Specialty Lending (OCSL) Last but not least is Oaktree Specialty Lending. This company is one of many specialty finance providers, making loans and credit available in the mid-market segment, to smaller firms that would otherwise have difficulty accessing capital. Last month, Oaktree Specialty Lending completed a merger with Oaktree Strategic Income Corporation (OCSI). The combined company, using OCSL’s name, has more than $2.2 billion in assets. Oaktree’s investment portfolio totals more than $1.7 billion, primarily in first and second liens, which make up 85% of the company’s investment allocations. Oaktree finished 2020 with its fiscal first quarter, ending December 31. In that quarter, the company increased its dividend payment by 9%, to 12 cents per share, or 48 cents per share annualized. At this rate, the dividend yields 7.25% -- and marks the third quarter in a row of a dividend increase. Oaktree has kept up reliable dividend payments for more than three years. Among the bulls is Kyle Joseph, a 5-star analyst with Jefferies, who puts a Buy rating and an $8 price target on this stock. His target implies room for 20% upside potential in the next 12 months. (To watch Joseph’s track record, click here) “OCSL's conservative strategy in recent years has ultimately paid off, as the BDC is deploying dry powder into higher-yielding investments. Credit performance remained solid through the MRQ, while fundamentals are encouraging… We believe the BDC has sufficient liquidity to support near-term opportunities and believe the company is positioned to take advantage of the recent economic volatility, which was particularly highlighted by the recent 9% increase in the quarterly distribution... In the longer term, we believe OCSL represents an attractive investment,” Joseph wrote. Overall, OCSL has received 3 recent Buy reviews, making the analyst consensus rating a Strong Buy. The stock is currently trading at $6.66 and its average price target of $7.33 indicates ~10% upside from that level. (See OCSL stock analysis on TipRanks) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.