GM stock is off its high, but just got big validation for its EV and AV progress from Morgan Stanley. Is General Motors stock a buy?
Here's a game many would like to play how to make a billion bucks in a month? And nine investors just pulled it off with GameStop stock.
Let’s talk portfolio defense. After last week’s social flash mob market manipulation, that’s a topic that should not be ignored. Now, this is not to say that the markets are collapsing. After 2% losses to close out last week’s Friday session, this week’s trading kicked off with a positive tone, as the S&P 500 rose 1.5% and the Nasdaq climbed 2%. The underlying bullish factors – a more stable political scene, steadily progressing COVID vaccination programs – are still in play, even if they are not quite as strong as investors had hoped. While increased volatility could stay with us for a while, it’s time to consider defensive stocks. And that will bring us to dividends. By providing a steady income stream, no matter what the market conditions, a reliable dividend stock provides a pad for your investment portfolio when the share stop appreciating. With this in mind, we’ve used the TipRanks database to pull up three dividend stocks yielding 8%. That’s not all they offer, however. Each of these stocks has scored enough praise from the Street to earn a “Strong Buy” consensus rating. New Residential Investment (NRZ) We’ll start by looking into the REIT sector, real estate investment trusts. These companies have long been known for dividends that are both high-yield and reliable – as a result of company compliance with tax rules, that require REITs to return a certain percentage of profits directly to shareholders. NRZ, a mid-size company with a market cap of $3.9 billion, holds a diverse portfolio of residential mortgages, original loans, and mortgage loan servicing rights. The company is based in New York City. NRZ holds a $20 billion investment portfolio, which has yielded $3.4 billion in dividends since the company’s inception. The portfolio has proven resilient in the face of the corona crisis, and after a difficult first quarter last year, NRZ saw rising gains in Q2 and Q3. The third quarter, the last reported, showed GAAP income of $77 million, or 19 cents per share. While down year-over-year, this EPS was a strong turnaround from the 21-cent loss reported in the prior quarter. The rising income has put NRZ in a position to increase the dividend. The Q3 payment was 15 cents per common share; the Q4 dividend was bumped up to 20 cents per common share. At this rate, the dividend annualizes to 80 cents and yields an impressive 8.5%. In another move to return profits to investors, the company announced in November that it had approved $100 million in stock repurchases. BTIG analyst Eric Hagen is impressed with New Residential – especially by the company’s sound balance sheet and liquidity. “[We] like the opportunity to potentially build some capital through retained earnings while maintaining a competitive payout. We think the dividend increase highlights the strengthening liquidity position the company sees itself having right now… we expect NRZ has been able to release capital as it's sourced roughly $1 billion of securitized debt for its MSR portfolio through two separate deals since September,” Hagen opined. In line with his comments, Hagen rates NRZ a Buy, and his $11 price target implies an upside of 17% for the year ahead. (To watch Hagen’s track record, click here) It’s not often that the analysts all agree on a stock, so when it does happen, take note. NRZ’s Strong Buy consensus rating is based on a unanimous 7 Buys. The stock’s $11.25 average price target suggests ~20% upside from the current share price of $9.44. (See NRZ stock analysis on TipRanks) Saratoga Investment Corporation (SAR) With the next stock, we move to the investment management sector. Saratoga specializes in mid-market debt, appreciation, and equity investments, and holds over $546 million in assets under management. Saratoga’s portfolio is wide ranging, and includes industrials, software, waste disposal, and home security, among others. Saratoga saw a slow – but steady – rebound from the corona crisis. The company’s revenues fell in 1Q20, and have been slowly increasing since. The fiscal Q3 report, released early in January, showed $14.3 million at the top line. In pre-tax adjusted terms, Saratoga’s net investment income of 50 cents per share beat the 47-cent forecast by 6%. They say that slow and steady wins the race, and Saratoga has shown investors a generally steady hand over the past year. The stock has rebounded 163% from its post-corona crash low last March. And the dividend, which the company cut back in CYQ2, has been raised twice since then. The current dividend, at 42 cents per common share, was declared last month for payment on February 10. The annualized payment of $1.68 gives a yield of 8.1%. Analyst Mickey Schleien, of Ladenburg Thalmann, takes a bullish view of Saratoga, writing, “We believe SAR's portfolio is relatively defensive with a focus on software, IT services, education services, and the CLO... SAR's CLO continues to be current and performing, and the company is seeking to refinance/upsize it which we believe could provide upside to our forecast." The analyst continued, "Our model anticipates SAR employing cash and SBA debentures to fund net portfolio growth. We believe the Board will continue to increase the dividend considering the portfolio's performance, the existence of undistributed taxable income, and the economic benefit of the Covid-19 vaccination program.” To this end, Schleien rates SAR a Buy along with a $25 price target. This figure implies a 20% upside from current levels. (To watch Schleien’s track record, click here) Wall Street’s analysts agree with Schleien on this stock – the 3 other reviews on record are Buys, and the analyst consensus rating is a Strong Buy. Saratoga’s shares are trading for $20.87, and carry an average price target of $25.50, suggesting an upside of 22% for the next 12 months. (See SAR stock analysis on TipRanks) Hercules Capital (HTGC) Last but not least is Hercules Capital, a venture capital company. Hercules offers financing support to small, early-stage client companies with scientific bent; Hercules’ clients are in life sciences, technology, and financial SaaS. Since getting started in 2003, Hercules has invested over $11 billion in more than 500 companies. The quality of Hercules’ portfolio is clear from the company’s recent performance. The stock has bounced back fully from the corona crisis of last winter, rebounding 140% from its low point reached last April. Earnings have also recovered; for the first nine months of 2020, HTGC posted net investment income of $115 million, or 11% higher than the same period of 2019. For dividend investors, the key point here is that the net investment income covered the distribution – in fact, it totaled 106% of the base distribution payout. The company was confident enough to boost the distribution with a 2-cent supplemental payment. The combined payout gives a $1.28 annualized payment per common share, and a yield of 8.7%. In another sign of confidence, Hercules completed a $100 million investment grade bond offering in November, raising capital for debt pay-downs, new investments, and corporate purposes. The bonds were offered in two tranches, each of $50 million, and the notes are due in March of 2026. Covering the stock for Piper Sandler, analyst Crispin Love sees plenty to love in HTGC. “We continue to believe that HTGC's focus on fast growing technology and life sciences companies sets the company up well in the current environment. In addition, Hercules is not dependent on a COVID recovery as it does not have investments in "at-risk" sectors. Hercules also has a strong liquidity position, which should allow the company to act quickly when it finds attractive investment opportunities,” Love commented. All of the above convinced Love to rate HTGC an Outperform (i.e. Buy). In addition to the call, he set a $16 price target, suggesting 9% upside potential. (To watch Love’s track record, click here) Recent share appreciation has pushed Hercules’ stock right up to the average price target of $15.21, leaving just ~4% upside from the trading price of $14.67. Wall Street doesn’t seem to mind, however, as the analyst consensus rating is a unanimous Strong Buy, based on 6 recent Buy-side reviews. (See HTGC 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.
Elon Musk spontaneously interviewed Robinhood CEO Vlad Tenev late Sunday evening, injecting himself into the fray of the retail investing frenzy that’s sent markets into a tailspin.
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The Dow Jones rallied as President Joe Biden got set to meet with Republicans over a stimulus plan. Microsoft stock gained as GameStop stock collapsed.
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(Bloomberg) -- Ken Griffin’s Citadel has once again found itself at the center of a WallStreetBets drama, this time over the firm’s holdings of silver.The precious metal has become a popular buying target for retail investors keen to inflict losses on hedge funds, after posts on WallStreetBets claimed the market was ripe for a short squeeze. Yet some members of the Reddit forum have responded with pleas to avoid the trade, saying Citadel stands to benefit as a major holder of the largest silver exchange-traded fund.“CITADEL IS THE 5TH LARGEST OWNER OF SLV,” one WallStreetBets user wrote on Sunday, referring to the iShares trust’s ticker symbol. “IT’S IMPERATIVE WE DO NOT ‘SQUEEZE’ IT.”Read more: Silver Spikes Past $30 as Retail Investors Swarm Biggest TargetCitadel Advisors LLC owned about 6 million shares of the iShares Silver Trust as of Sept. 30, equivalent to a 0.93% stake, data compiled by Bloomberg show.While these holdings may well be related to its role as one of the world’s largest market makers -- the firm also held shares in at least 17 other silver companies and ETFs -- the debate they have caused highlights that traders in the WallStreetBets forum are far from a homogeneous group.They stunned the world by banding together to fuel epic gains in heavily shorted stocks including GameStop Corp. In the past few days investors have been watching the metal’s rally for clues on the staying power of this David-vs-Goliath buying spree.Silver futures on the Comex jumped as much as 13% on Monday. That pushed prices above $30 an ounce to the highest level since 2013, but the gains are so far tiny relative to GameStop’s 16-fold surge since mid-January.A phone call to Citadel’s Chicago office outside regular business hours went unanswered. It’s unclear whether the firm’s holdings of iShares Silver Trust or other silver-related securities have changed since September -- given its market-making role, it is likely they would. Inflows into the iShares trust surged by a record $944 million on Friday as trading in the ETF soared.As well as being one of the biggest market makers, Citadel runs one of the largest hedge funds in the world. The firm drew the ire of the WallStreetBets crowd last month after it injected cash into hedge fund Melvin Capital, which lost about 53% in January after being hit by a short squeeze on shares including GameStop.Anger toward Citadel among WallStreetBets users only increased after Robinhood Markets imposed curbs on trading GameStop last week. Some alleged that Griffin, whose firm helps execute orders from Robinhood customers, might be behind an attempt to stamp out the rebellion of individual investors. Citadel and Robinhood both denied any involvement by the billionaire in the decision.(Updates with more market-making context.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Silver futures surged 10% this morning after Redditor retail investors shifted focus to the precious metal over the weekend.
Robinhood Co-founder and CEO Vladimir Tenev made a surprise appearance on Clubhouse early Monday with Tesla Inc (NASDAQ: TSLA) counterpart Elon Musk, who grilled him extensively on recent events. What Happened: Tenev said it had been a “surreal” week for him, in a reference to the Reddit investor-led short squeeze rally in the shares of Gamestop Corp (NYSE: GME), Nokia Oyj (NYSE: NOK), AMC Entertainment Holdings Inc (NYSE: AMC), Blackberry Ltd (NYSE: BB) and others. The brokerage head referred to these stocks as “meme stocks” throughout the broadcast where he appeared to clarify the events of the tumultuous week — when purchase of such stocks was restricted on the popular trading app. Tenev said the app experienced “unprecedented volume” and “load on the system.” He pointed out that the net buys increased exponentially. Robinhood was among the top apps on Apple Inc (NASDAQ: AAPL) and Alphabet Inc’s (NASDAQ: GOOGL) (NASDAQ: GOOG) respective app stores as of last week, Tenev noted. Detailing the sequence of events that led to the suspension of buying in the Reddit-fueled stocks, he said Robinhood received a demand for $3 billion from the National Securities Clearing Corporation in the wee hours of Thursday. NSCC provides clearing, settlement, risk management, and central counterparty services. The executive explained that Robinhood had to put up money for the NSCC based volatility and the concentration of securities but the formula behind the demand was not fully known to him. Why It Matters: The NSCC is not a government agency but is rather controlled by a consortium, as per Tenev. The executive said that on Monday’s opening, some of the “stringent limits” placed on the hot stocks will be removed. Tenev said that some limits would always be in place. “If someone decided to deposit $100 billion and trade in one stock that’s not gonna be possible.” “Citadel and other market makers were not involved in it,” said Tenet in reference to the trading restrictions. NSCC had lowered its deposit requirements to $1.4 billion after Robinhood reached out. After explanations were given on the restrictions, the clearinghouse dropped the deposit to $ 700 million. Tenev admitted that restricting trade was a “bad outcome for customers” but other brokers had also placed similar restrictions. In a lighter moment in the interview, Musk asked Tenev if he was being held hostage while handing out this explanation, to which the Robinhood CEO replied in negation, saying “thanks for asking.” Related Links: Robinhood Gets B Funding, Taps Credit Line As It Prepares To Resume Trading Of GameStop, Other Hot Stocks See more from BenzingaClick here for options trades from BenzingaElon Musk Talks Self-Driving, Batteries, Space, Neuralink, COVID-19 Vaccines, Bitcoin In Clubhouse AppearanceTesla, Charles Schwab — Stocks NYSRTS, One Of US' 10 Largest Pension Funds, Purchased In Q4© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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(Bloomberg) -- After absorbing a $20 billion hit, bears appear to have started covering their GameStop Corp. positions in earnest as the stock plunges.Short interest in the video-game retailer plummeted to 39% of free-floating shares, from 114% in mid-January, according to IHS Markit Ltd. data. Data from S3 Partners, another market intelligence firm, showed a similar pattern, with GameStop’s short sales having fallen to about 50% of its total stock available to trade, down from a high of roughly 140% reached earlier this year.GameStop sank 25% as of 12:50 p.m. in New York, after rallying 1,600% in January. Hordes of day traders piled into the shares after noticing the elevated short interest in hopes that buying would force shorts to cover, driving the price ever higher. Now the trend is reversing.While itself volatile, the short data is potentially an early sign that the short squeeze that propelled GameStop over 1,600% higher in January has progressed. Reddit day traders’ success igniting its shares evolved into a strategy of targeting the market’s most-hated companies, sending the likes of Koss Corp. and AMC Entertainment Holdings Inc. soaring as well. AMC added 7% Monday, while Koss plunged 40%.“Short squeezes can only last as long as there is a large short position in a stock. Once that dissipates, the situation changes completely,” said Matt Maley, chief market strategist at Miller Tabak & Co.Short sellers suffered a net loss of $80 billion in January, about one third of the total damage incurred for all of 2020, according to estimates from analytics firm Ortex. Hurt by bears backfiring, hedge funds last week were forced to slash their equity exposure at some of their fastest paces on record, prime brokerage data compiled by Goldman Sachs Group Inc. and Morgan Stanley showed.To be sure, discerning the motives and actions of short sellers in real time is a fraught exercise, particularly given the variety of information that exists tracking them. Certain views can be asserted around the present data, however.One is that the level of bearish bets, after staying largely unchanged for days, appears to have started falling around Thursday. That was also the day the Robinhood investing app imposed restrictions on new purchases in stocks including GameStop -- a fact that may sit uncomfortably with retail traders who believe Wall Street closed ranks against them.Thursday was, on the other hand, a moment of extreme volatility in the video-game retailer, a day in which its shares traded between $112.25 and $483. Swings like those are likely to have made any thesis on the stock -- short or long -- harder to manage. They also may have put fresh short bets -- ones taken in the first few days of last week -- into the money.Still, at 50% of shares outstanding, GameStop’s short rate remains elevated compared to most of the rest of the market and may have to fall further before the squeeze is over.“It signals that a short squeeze has begun in earnest and most probably will continue if GameStop’s stock price stays at these levels or rises more,” Ihor Dusaniwsky, managing director of predictive analysis at S3 Partners, said by email. “The short squeeze is over when the shorts that are left are comfortable with their positions and price expectations for GameStop.”January’s histrionics propelled the market’s most-hated shares to their best month ever, with an equal-weighted basket of the 50 most-shorted Russell 3000 Index stocks jumping over 40%. The most expensive-to-borrow U.S. equities outperformed the least costly by 29% in January -- also a record, according to a report from IHS Markit. Even with GameStop and AMC removed from the analysis, the return from expensive-to-borrow shares was still greater than 25%.“This moment is historically remarkable and, like so many financial time series, the returns for heavily shorted U.S. equities will likely be measured against the last 12 months for some time to come,” Sam Pierson, Director of Securities Finance at IHS Markit, wrote in a report Friday.(Updates with analysis from Ortex in sixth paragraph, short seller losses chart, prices)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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The GameStop trading frenzy doesn't appear to have extended itself into more traffic to the retailer's 5,000 plus stores.
Stock futures traded higher Monday morning, recovering some losses after last week’s selloff.
(Bloomberg) -- Last year’s gains in Tesla Inc. are far from over as the company consolidates its leadership position in the EV industry in multi-trillion dollar markets, one Wall Street analyst said on Monday.Piper Sandler’s Alexander Potter more than doubled his price target on the electric vehicle maker to $1,200 from $515, the latest in a string of similar moves by several analysts, who expect the Elon Musk-led company to grow aggressively. Potter’s target is now the highest among the more than 40 analysts who cover the stock, according to Bloomberg data.“With Tesla’s target industries still embracing outdated business models, it may be decades before this company runs out of new opportunities to pursue,” Potter wrote in a note to clients. The analyst maintained his buy-equivalent rating on the stock.After rising more than 8-fold in 2020, Tesla shares are up another 15% so far in 2021 after reporting strong delivery numbers for the fourth quarter. However, the shares pared some of its best gains after profit for the period disappointed and the company refrained from providing a specific delivery guidance for 2021.The stock rose as much as 4% to $825.17 in New York on Monday.Analysts have yet to catch up with the rapid gains in Tesla shares over the past 12 months, with the average price target on the stock still far below the levels at which the shares are currently trading. Moreover, opinions among analysts about how much Tesla’s stock should be worth -- with Potter’s $1,200 at one end and J.P. Morgan analyst Ryan Brinkman’s $135 target on the other -- vary widely.The surge in Tesla’s share price led investors to hunt for smaller EV players and startups, at a time when the sector also benefited from a growing acceptance among analysts and others that electric cars will dominate the automotive industry, with governments around the world announcing policies to encourage the phasing out of gas-fueled cars.Potter expects Tesla to deliver 894,000 vehicles in 2021, eventually increasing to more than 9 million units in 2030, making it among the top-3 automakers globally. The analyst also expects to see a steady ramp up in the adoption of Tesla’s full self-driving (FSD) software starting in 2030, with more than half of all Tesla owners using the FSD package by the end of 2040.(Updates stock move in fourth paragraph, adds context in fifth and a chart.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Shares of the two television content companies sagged early in the pandemic but have since wiped out those losses and are higher than they were before Covid-19 arrived. Discovery+ launched on Jan. 4 and ViacomCBS will launch Paramount+, an expanded version of their CBS All-Access service, on March 4. Citi analyst on Monday cut his ratings on ViacomCBS (ticker: VIAC) and Discovery (DISCA) to Neutral from Buy, although with higher target prices.
Commodities are starting to revive after a 10-year bear market. Natural resources like energy, metals, and agriculture look set for an extended run, and investors should get on board. The recovery in commodity prices, Goldman Sachs analysts say, “will actually be the beginning of a much longer structural bull market” that could rival that of the 1970s, when gold rose 25-fold, and the mid to late 2000s, when oil peaked at over $140 a barrel.
Alibaba stock is an IBD Long-Term Leader with outstanding fundamentals, but does that make the China bellwether a buy right now?
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