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Chinese internet companies grow their users bases and their ability to monetize them, could result in rapid revenue and earnings growth.
Updates from Twitter: Product Development, Audience, and India(Continued from Prior Part)Twitter price target lowered to $20Twitter (TWTR) stock is currently trading in the $33 range. But it may not take long before the share price tumbles to $20,
January BAML Survey: Fund Managers Bearish, but No Recession Yet(Continued from Prior Part)US dollar ahead of FAANG and BAT stocks For the second straight month, the so-called FAANG and BAT stocks—US stocks Facebook (FB), Apple (AAPL), Amazon
What to Expect from Alphabet’s Q4 Results(Continued from Prior Part)Diversifying revenue sourcesAmid increasing competition for advertising dollars, there is growing pressure on Google to diversify its revenue sources. In the third quarter of
If you are currently a shareholder in SINA Corporation (NASDAQ:SINA), or considering investing in the stock, you need to examine how the business generates cash, and how it is reinvested. Read More...
What to Expect from Alphabet’s Q4 Results(Continued from Prior Part)Telkom Kenya is using Loon’s technologyAs Alphabet (GOOGL) gears up to release its results for the fourth quarter of 2018, the company is about to start booking revenue from its
Shares of Chinese internet stocks are trading higher in Tuesday's session, after the Chinese government said it would cut taxes and ramp up infrastructure investments in an effort to stimulate the economy. Shares of Qutoutiao Inc. , a Chinese viral-content site, are up more than 5% in morning trading, and shares of Bilibili Inc. , which runs a video-sharing platform, are up 3.2%. Baidu Inc. shares are also heading higher, up nearly 3%. Alibaba Group Holding Ltd. shares are up 1.8% in Tuesday trading, a day after the company's president, Michael Evans, said at a retail conference that he thinks the future of China "looks very good, notwithstanding some troubling headwinds." The KraneShares China Internet ETF is also up 1.8% Tuesday. The ETF has dropped 7.8% over the the past three months, as the S&P 500 has fallen 5.5%.
Alphabet Updates: Lawsuits, EU Expansion, Malta, and Verily(Continued from Prior Part)Malta decides to strike out on its ownProjects that leave Alphabet’s (GOOGL) X experimental factory have mostly gone on to become standalone companies within the
Alphabet Updates: Lawsuits, EU Expansion, Malta, and Verily(Continued from Prior Part)Google dominates European search market An adviser to the European Union’s top court has recommended that search engines shouldn’t be forced to apply the
Why Autohome Is Down 13% TodayAutohome Chinese online automobile content provider Autohome’s (ATHM) stock is known to be highly volatile. In December, the stock fell 5% after surging 13.8% in the previous month. Nonetheless, it managed to end 2018 with solid 24.7% gains. Investors’ high expectations for the company’s growth potential due
Alphabet Updates: Lawsuits, EU Expansion, Malta, and VerilyExecutives accused of workplace misconductAccording to Reuters, two shareholder lawsuits were recently brought up against Alphabet’s (GOOGL) board of directors. The lawsuits accuse the board of covering up sexual misconduct claims against certain former Alphabet executives. The
Calling the past few months challenging ones for owners of Weibo (NASDAQ:WB) stock is a considerable understatement. They've been miserable. Weibo stock price has been more than cut in half since February's high, and while a broad rout of most high-profile Chinese stocks like Alibaba Group Holding (NYSE:BABA) and Baidu (NASDAQ:BIDU) was the driving force of the selloff, that's of little solace to owners of Weibo stock. Some green shoots are starting to push through for many Chinese names, however. And, with solid fundamentals already (or still) in place for the company, Weibo stock looks better positioned than any of its peers to lead the recovery effort. InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 A-Rated Stocks the Smart Money Is Piling Into But there's one huge technical hurdle ahead for WB stock that will make or break the budding rebound. ### What's Weibo? WB is often called the Twitter (NYSE:TWTR) of China, and though the characterization isn't off-base, it's not entirely complete. With more bells, whistles and opportunities to personalize user interfaces than Twitter, Weibo is also a great deal like Facebook (NASDAQ:FB). Arguably, Weibo is a hybrid of the Western world's two most popular social-networking sites. And, much like Facebook and Twitter, the young-ish platform is experiencing tremendous revenue and profit growth. Last quarter's top line grew 48% year-over-year, to $409 million, and its user base expanded by 19%. Both figures extended long-standing uptrends that analysts believe will persist for the foreseeable future. The upward revenue and earnings trajectory, however, have done little to prevent the decline of Weibo stock price. Blame nervous investors. More driven by presumption than facts at the time, investors feared that new tariffs imposed by President Trump on China would cause the country's already-fragile economy to outright implode. It did end up running into a headwind, but it turned out to be manageable. And Weibo, whose appeal has been enhanced by its relative newness, has been able to grow regardless of China's macro environment. Investors' misperceptions about China in general and Weibo stock in particular are beginning to be corrected. But WB stock needs one more good shove to kick off what should become a self-sustaining rally. That catalyst is well within reach. ### The Chart of WB Stock Price The chart of Weibo stock, at first glance, appears to be ugly. WB stock price peaked near $140 in February, and by October, it was trading near $53. Since then, however, subtle but important bullish clues have materialized. One of them is the development of a horizontal support level just above $53, which has led to the first higher lows in nearly a year. That horizontal floor has also allowed Weibo stock to punch through a pair of falling resistance lines that had pushed the shares lower for at least part of the multi-month setback. There's one more ceiling to clear, however, before the tide turns more in favor of the WB stock price than not. That is the 100-day moving average (depicted by the purple line on the chart below), which stamped out the breakout effort that emerged in early December. That thrust didn't start in the best of circumstances. At the time, the stock market was poised to embark on a major correction, and China's future was still in question. The majority of China's most familiar stocks were far from ready to recover, leaving Weibo at a major disadvantage. Never even mind the big gap left behind by an overheated, one-day gain of Weibo stock. Matters have changed dramatically since then, setting the stage for what could be a dramatic rebound rally of WB stock that may well lead other Chinese names out of similar funks. ### One Final Word on Weibo Stock While not overwhelmingly bearish towards WB stock, the financial advice and news industry hasn't exactly been fond of Weibo lately. Morgan Stanley downgraded WB stock on Tuesday, and though no scathing commentaries have been penned about the company in recent weeks, few have been bullish either. Take it all with a grain of salt. News coverage has been more reactive than proactive in recent weeks, with analysts and the media chasing trends rather than leading or causing them. To that end, if Weibo stock can just push past its technical hump, don't be surprised to then see the headlines about it take a decidedly more optimistic tone. That, of course, will fan any bullish flames if and when they materialize. Weibo stock just has to clear that 100-day moving average line first. As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Key Emerging-Market Stocks to Buy for Contrarian Investors * 7 Stocks at Risk of the Global Smartphone Slowdown * 7 Pharmaceutical Stocks That Just Raised Prices This Year Compare Brokers The post Weibo Stock Looks Poised to Lead a Rebound of Chinese Equities appeared first on InvestorPlace.
Are President Trump and the US Losing the Trade War with China? ## The market After seeing a massive sell-off in the fourth quarter of 2018, the broader market has managed to remain in positive territory in January so far. Investors’ high expectations resulting from US-China trade talks and the Fed’s more dovish tone could be driving these gains. Last week, the S&P 500 Index (SPY), the NASDAQ Composite Index (QQQ), and the Dow Jones Industrial Average rose 2.5%, 3.5%, and 2.4%, respectively. However, these indexes are in negative territory today. Let’s take a look. ## China’s surplus with the United States According to a recent Reuters report, “China’s trade surplus with the United States rose to $323.32 billion last year, the highest on record going back to 2006.” The amount was based on a customs data calculation done by Reuters, and it was 17.2% higher than China’s trade surplus of $275.81 billion with the United States in 2017. The report also added that China’s exports to the United States had registered an 11.3% year-over-year increase in 2018, while its imports had inched up 0.7% in the year. ## Trump’s trade war In the last couple of quarters, US-China trade relations have seen several ups and downs. The trade war between the world’s two largest economies, which was triggered by President Donald Trump, has taken a toll on investors’ sentiments. Large US companies General Motors (GM), Ford Motor Company (F), Apple (AAPL), and Tesla (TSLA) have warned investors about the negative impact of the trade war on their businesses. Earlier this month, Apple cut its fiscal 2019 first-quarter guidance, citing weakening Chinese sales due to China’s economic slowdown. The company also cited the US-China trade war as one of the reasons for its slowing sales in China. The trade war doesn’t seem to have benefited either China or the United States so far. Investors will likely remain on the lookout for any positive updates on US-China trade relations. In the fourth quarter of 2018, US companies General Motors, Ford, Apple, Netflix (NFLX), Microsoft (MSFT), Amazon (AMZN), and Qualcomm (QCOM) fell ~0.7%, 17.3%, 30.1%, 28.5%, 11.2%, 25.0%, and 21.0%, respectively. During the same quarter, Chinese companies Alibaba (BABA), Baidu (BIDU), and NIO (NIO) fell 16.8%, 30.6%, and 8.7%, respectively.
The cup-with-handle chart pattern is to serious investors what the single is to a baseball fan. It's the starting point for scoring runs.
Key Questions as Facebook Gets Ready to Report Q4 Results (Continued from Prior Part) ## A $24 billion repurchase authorization As Facebook (FB) prepares to report its earnings for the fourth quarter of 2018, we note that the company last month boosted its share repurchase program by an additional $9.0 billion. The increase brings the company’s repurchase authorization since 2017 to $24 billion, considering that in April 2018 Facebook added $9.0 billion to its repurchase program, which already had a $6.0 billion authorization. Facebook had $3.5 billion remaining in its previous repurchase authorization at the end of September 2018, according to the company’s regulatory filing. Therefore, the latest addition means that Facebook now has $12.5 billion in its repurchase program. ## Companies have lined up fat repurchase programs Besides Facebook, other Internet companies that have lined up fat repurchase programs include Google parent Alphabet (GOOGL), Alibaba (BABA), and eBay (EBAY). In February last year, Alphabet announced an $8.6 billion repurchase program, and Alibaba is in the process of implementing its $6.0 billion two-year repurchase program. eBay had $4.7 billion remaining in its existing repurchase authorization at the end of September. JD.com (JD) recently announced a $1.0 billion repurchase program expiring in 2020. ## Repurchasing 86 million shares With $12.5 billion and the stock trading in the $145 range, Facebook could repurchase more than 86 million shares, or 3.0% of its outstanding shares. Since repurchases reduce the number of shares in circulation, they can lead to companies posting higher earnings per share without actually growing profits. Continue to Next Part Browse this series on Market Realist: * Part 1 - Did Facebook’s Revenue Continue to Grow in Q4? * Part 2 - Did Facebook’s Profitability Improve in Q4? * Part 3 - How Facebook’s Advertising Base Is Trending
reiterated that PCs containing CPUs relying on its delayed 10-nanometer (10nm) manufacturing process will be available in volume during the 2019 holiday season. The company also signaled that the 10nm CPUs arriving this year, which are based on a new microarchitecture called Ice Lake, will target thin-and-light notebooks and convertibles. For its part, just before CES, AMD unveiled second-gen Ryzen Mobile notebook processors that rely on a 12nm manufacturing process.
Could NIO’s Car Deliveries Improve This Year? (Continued from Prior Part) ## Strong car deliveries last year Previously, we reviewed NIO’s (NIO) car deliveries last year and how they could boost investors’ expectations for 2019. Let’s now look at analysts’ recommendations for its stock. ## Analysts’ recommendations Of the 11 Reuters-surveyed analysts covering NIO on January 10, ~36% recommended “buy,” ~55% recommended “hold,” and ~9% recommended “sell.” Their 12-month consensus target price of $7.98 for NIO was 19.8% higher than its January 10 price of $6.66. On November 19, Citron Research recommended “buy” for NIO and set its price target at $12, which implies a huge 53.1% upside to NIO’s Monday closing price of $7.84. In its report, Citron wrote, “Compelling Product and strong management combined with absurd short interest makes NIO the worst way to bet against China.” Citron also interviewed many NIO ES8 owners for their feedback and “to test the strength of the brand.” These interviewees, who had previously owned cars by luxury brands such as Porsche, Lexus, and Audi, had highly positive feedback on the ES8. NIO, founded in 2014, is fairly a new automaker (XLY). As of January 10, it had a market cap of $6.8 billion, compared with Tesla’s (TSLA) $59.2 billion. Chinese companies Alibaba (BABA) and Baidu (BIDU) had market caps of $393.2 billion and $58.7 billion, respectively. Browse this series on Market Realist: * Part 1 - How NIO Stock Is Faring after Solid December Car Deliveries * Part 2 - NIO’s Car Deliveries: Could This Year Be More Successful?
Key Questions as Facebook Gets Ready to Report Q4 Results (Continued from Prior Part) ## Joining forces on AI chips Facebook (FB) and Intel (INTC) have teamed up to create a type of artificial intelligence chip that could help drive broader adoption of artificial intelligence (or AI) technology. The companies are putting final touches on the new AI chip, which they hope to release in the second half of the year, Reuters reported. As MIT Technology Review reported, Facebook applies AI technology in a wide range of areas including translating posts into different languages and catching prohibited content in its ongoing war on hate speech and fake news. According to the report, the new AI chip being built jointly with Intel could help Facebook recognize some cost-savings in its AI-related operations. ## Opportunity to reduce costs Facebook’s costs have been soaring as the company invests more on content moderation to prevent abuse of its services. Facebook incurred $7.9 billion in operating expenses in the third quarter of 2018, representing an increase of 53% YoY. Operating expenses jumped 27% YoY at Google parent Alphabet (GOOGL) and 14% YoY at Twitter (TWTR) in the third quarter. Yelp (YELP) and Baidu (BIDU) reported 7.0% and 26.6% YoY increases in operating expenses, respectively, in the third quarter. Facebook is scheduled to report its fourth-quarter results on January 30. ## Facebook expanding into AI-heavy areas The collaboration with Intel on building AI chip comes as Facebook is seeking to expand into AI-heavy product areas such as virtual-reality headsets and smart speaker devices. Facebook launched a smart speaker called Portal in October last year with the product going on sale in November at a price ranging between $200 and $350. Continue to Next Part Browse this series on Market Realist: * Part 1 - Did Facebook’s Revenue Continue to Grow in Q4? * Part 2 - Did Facebook’s Profitability Improve in Q4? * Part 3 - How Facebook’s Advertising Base Is Trending
Could NIO’s Car Deliveries Improve This Year? (Continued from Prior Part) ## NIO Previously, we discussed NIO’s (NIO) strong car delivery data for December. Let’s now look at the company’s performance last year and what this year may bring. ## Key achievements last year In last year’s third quarter, NIO guided for fourth-quarter car deliveries of 6,700–7,000 units. By delivering 7,980 cars last quarter, the company exceeded the upper range of its guidance by 14.0%. In the third quarter, NIO delivered 3,268 units. The Chinese automaker currently produces just one vehicle, the ES8—an SUV (sports utility vehicle), like Tesla’s (TSLA) Model X. NIO launched the ES8, its first mass-production electric vehicle, in December 2017, and began its deliveries last June. The company delivered 11,348 ES8s last year, beating its guidance of 10,000 vehicles by 13.4%. ## ES6 plans On NIO Day in Shanghai on December 15, NIO launched its second mass-market electric car, the ES6. The ES6 is a five-seater SUV, whereas the ES8 is a seven-seater. The company claims the ES6 base model delivers ~255 miles from a single charge, and the high-end variant delivers ~317 miles. Standard versions of NIO’s ES6 start at 358,000 Chinese yuan (or ~$51,900) and performance versions start at 398,000 yuan (or ~$57,700). The company has started taking orders for ES6s and expected deliveries to start this June. As the company now needs to focus on mass-producing two vehicles, this year could be more challenging, though last year’s strong ES8 production paints a positive picture. In last year’s fourth quarter, NIO stock fell 8.7%, while US peer (XLY) Tesla rose 25.7%. Chinese stocks Alibaba (BABA) and Baidu (BIDU) fell 16.8% and 30.6%, respectively. Continue to Next Part Browse this series on Market Realist: * Part 1 - How NIO Stock Is Faring after Solid December Car Deliveries * Part 3 - What Analysts Recommend for NIO Stock