The IBD Live team discusses how to develop a weekend routine, including details on how and when to screen for stocks.
The IBD Live team discusses how to develop a weekend routine, including details on how and when to screen for stocks.
President-elect Joe Biden’s $1.9 trillion “rescue plan” released on Thursday calls for three key tax improvements for 2021 that would help Americans across the income spectrum.
Hexavest of Montreal slashed each of its positions in Apple, Intel, and Microsoft stock, and initiated a small position in electric-vehicle firm Nio in the fourth quarter.
With stocks such as Nio (NYSE:NIO) and Tesla (NASDAQ:TSLA) in the midst of seemingly undaunted ascents, electric vehicle ETFs are among the examples of thematic exchange traded funds stepping into the spotlight. For many investors, particularly those priced out of Tesla or those new to this space, electric vehicle ETFs make a lot of sense. The funds remove the need for investors to identify the best individual names, over diversity and many lack significant exposure to some of the more challenged EV stocks. Additionally, these thematic ETFs make for ideal plays on the Biden Administration’s renewable energy priorities, including the president-elect’s goal of building 550,000 EV charging stations over the next decade, which would reduce concerns about time in between charges, likely boosting EV demand in the process.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 9 Stocks That Investors Think Are the Next Amazon The new president probably won’t be able to put an EV in every driveway, at least not anytime soon, but this administration and Congress are viewed as hospitable to the auto industries electric evolution and that could benefit the following electric vehicle ETFs. Global X Autonomous & Electric Vehicles (NASDAQ:DRIV) KraneShares Electric Vehicles & Future Mobility ETF (NYSEARCA:KARS) SPDR Kensho Smart Mobility ETF (NYSEARCA:HAIL) iShares Self-Driving EV and Tech ETF (NYSEARCA:IDRV) Global X Lithium & Battery Technology ETF (NYSE:LIT) Electric Vehicle ETFs: Global X Autonomous & Electric Vehicles ETF (DRIV) Source: Grisha Bruev / Shutterstock.com Expense ratio: 0.68%, or $68 annually on a $10,000 investment The Global X Autonomous & Electric Vehicles ETF is reflective of the newness of the EV investing concept. DRIV turns three years old in April and is one of the oldest ETFs in this category. With $311.20 million in assets under management, it’s also one of the largest. DRIV holds 76 stocks, which is a fairly deep bench for an electric vehicle ETF and none of its holdings exceed a weight of 5.16%. Tesla and Nio are DRIV’s largest and third-largest holdings, respectively, combining for about 8% of the ETF’s roster. Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) are also found among the fund’s top 10 holdings. Exposure to those two traditional tech names is another indication of DRIV’s depth – the ETF features exposure to five sectors led by consumer cyclical and technology. DRIV is also geographically diverse as stocks from a roughly a dozen countries are represented in the fund. Positioned as an EV ETF, DRIV offers surprising depth into the broader renewable energy ecosystem and is a credible avenue for EV derivatives (think semiconductors). KraneShares Electric Vehicles & Future Mobility ETF (KARS) Source: Shutterstock Expense ratio: 0.72% KraneShares is usually known for its nifty lineup of China and emerging markets funds, but investors shouldn’t sleep on the KraneShares Electric Vehicles & Future Mobility ETF. KARS turns three years old next week and has $101.40 million, confirming there’s room for competition in the electric vehicle ETF arena. KARS tracks the Solactive Electric Vehicles and Future Mobility Index and similar to the aforementioned DRIV, the KraneShares fund goes beyond vehicle manufacturers to touch multiple corners of the EV landscape. In fact, Tesla isn’t a KARS component and five of its top 10 holdings, including Nvidia, are semiconductor equities. KARS capitalizes on KraneShares strong China competency as many of the ETF’s holdings, including Nio, are Chinese companies. That’s relevant to investors because the world’s second-largest economy is the biggest EV market. SPDR Kensho Smart Mobility ETF (HAIL) Source: xiaorui / Shutterstock.com Expense ratio: 0.45% The SPDR Kensho Smart Mobility ETF isn’t a dedicated electric vehicle fund. Rather, it’s a broad based play that’s arguably the most futuristic transportation ETF on the market. Looking for old guard airlines, freight haulers and railroad operators? Look elsewhere because HAIL delivers transportation’s tomorrow today. The underlying benchmark, the S&P Kensho Smart Transportation Index, provides exposure to “the areas of autonomous and connected vehicle technology, drones and drone technologies used for commercial and civilian applications, and advanced transportation tracking and transport optimization systems,” according to State Street. Home to 59 stocks, HAIL offers an expansive lineup that features EV manufacturers, such as Nio and Tesla, charging station operators, auto parts makers and semiconductor producers. Overall, more than 20 industry groups are represented in this SPDR ETF and its 0.45% expense ratio is among the lowest in the category. iShares Self-Driving EV and Tech ETF (IDRV) Source: pio3 / Shutterstock.com Expense ratio: 0.47% The iShares Self-Driving EV and Tech ETF follows the FactSet Global Autonomous Driving and Electric Vehicle Index and is one of the more basic EV ETFs on the market, but that’s not a slight because the iShares fund is higher by 67.4% over the past year, IDRV’s roster makes for an easy comp with the aforementioned DRIV as the iShares fund features allocations to Tesla and Nio as well as Apple and Nvidia. However, the rivals aren’t mirror images of each other because the Global X fund sharply outperformed its iShares competitor over the past year while IDRV offers a much lower fee. IDRV offers a bit more depth with 100 components, but the bottom line in this mini rivalry is that investors shouldn’t not hold both ETFs at the same time because there’s too much overlap. Global X Lithium & Battery Tech ETF (LIT) Source: Lightboxx/ShutterStock.com Expense ratio: 0.75% The Global X Lithium & Battery Tech ETF was an EV ETF before there were real EV ETFs, which is to say the $2.63 billion four-star rated fund turned 10 years old last July. At that age, it’s also fair to say LIT is one of the pioneers of the thematic ETF movement. LIT’s success attributable to several factors, not the least of which are early adopters’ willingness to bet on increased demand and Global X seeing past near-sighted critics that, a decade ago, call LIT too focused a fund to gain widespread acceptance. These days, LIT ranks as one of the premier avenues for accessing the “ingredients” side of the EV story and the fund is higher by 158% over the past year – a stellar showing considering Tesla isn’t even 6% of the fund’s weight. “At a high level, the industry’s ecosystem starts upstream with lithium miners that extract the metal from the earth,” according to Global X research. “These raw materials then move into the chemical conversion process to produce lithium carbonate or lithium hydroxide. Battery producers combine carbonate or hydroxide with materials to form a cathode and an anode, together forming an individual battery cell. Thousands of cells may be combined to create a battery pack for an EV.” On the date of publication, Todd Shriber did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Todd Shriber has been an InvestorPlace contributor since 2014. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 5 Electric Vehicle ETFs Getting a Big Biden Boost appeared first on InvestorPlace.
New retirees are like recent college graduates — they’re on their own after years of the same routine, and they have to find a new path to follow. This type of retiree ventures into the unknown, taking on a new job they’ve never done before.
Most financial markets will be closed for the celebration of the civil rights leader's life, the first one since protests over the killing of George Floyd touched off massive protests across the nation.
Congressional leaders plan to get "right to work" on it. How soon could you get the cash?
If you haven't heard about the saver's credit, you'll want to get up to speed.
Investors chasing possible vaccine stocks might be puzzled by the market’s treatment of Pfizer (NASDAQ:PFE) and wondering why Pfizer stock isn’t trading higher. Source: Manuel Esteban / Shutterstock.com After all, the New York-based multinational pharmaceutical giant (and its German partner) gained prominence in the battle against the novel coronavirus with an innovative vaccine that apparently delivers impressive protection against Covid-19. This success fueled hope around the world the pandemic can be contained. Boy howdy, shouldn’t that send a company’s soaring?InvestorPlace - Stock Market News, Stock Advice & Trading Tips 9 Stocks That Investors Think Are the Next Amazon Perhaps, but the market – and those who use it – evaluate a stock’s value via a complicate assessment. This review incorporates many factors, primarily the strength of a company’s financial fundamentals. Other factors include demand for products and consumer support. Pfizer Stock at a Glance PFE rose over the course of last year. Most likely, traders “priced in” that performance some time ago. Generally, the market has a forward-looking perspective. This outlook can be disrupted, but those effects tend to brief. To me, Pfizer stock is more a candidate for slow-and-steady status than spectacular surges. The market already rewarded the stock for its vaccine success. Continued success over the course of this year will almost certainly buoy PFE shares. This will make it easier for the stock to climb on the back of other good news. Pfizer stock is attractive to investors with a long view because of its development pipeline. The company is focused on generating new products to replace revenue from older medicines. Pfizer has taken steps to move older medicines to other companies. This demonstrates its commitment to stay streamlined and nimble. Pfizer’s Covid-19 vaccine is a prime example. Pfizer did not invent the vaccine. Rather, it was a process by BioNTech (NASDAQ:BNTX), a small German-based biotech company, that forms the basis of the anti-Covid drug. Officials of the German company approached Pfizer about partnering to bring it to market. By being nimble, Pfizer was able to quickly form the partnership and, together with BioNTech, deliver the important vaccine. This is impressive because Pfizer is a massive company. Its 2019 drug sales revenue totaled $51.8 billion. The consistency of Pfizer stock is shown by its 52-week trading range. PFE topped the last year at $43.08 per share. But its low point was $27.88, which is far better than many popular stocks. The company’s market cap is about $206.7 billion and its price-earnings ratio about 24. Its dividend is 4.2%. A Long-Term Play As I wrote earlier, Pfizer stock is an excellent candidate for a long-term portfolio. That is, the investor not drawn by quick pops and drops but rather solid performance over years versus months or even days. I am not alone in this assessment. My InvestorPlace colleague Larry Ramer recently said the equity won’t soar but it fits the bill for conservative long-term investors. In his article on Jan. 7, Ramer cited the company’s development program and admirable dividend: I stand by my belief that Pfizer stock is unlikely to get a further, meaningful lift from the vaccine for the coronavirus… As a result, I remain convinced that short-term investors and those looking for a relatively fast growth should not buy the shares. For conservative, long-term investors and those looking for dividend income, Pfizer, however, looks like an excellent buy. Income investors will appreciate that Pfizer has raised its payout several times and that is expected to continue. Also, the company has promising new drugs in development and none slated to sunset for several years. The Bottom Line Pfizer stock was favored by many investors before its success with a coronavirus vaccine. The company nurtures its drug development program but also is ready for deals with others to bring products to consumers. And remember, its relationship with BioNTech isn’t limited to the Covid-19 vaccine but includes other products as well. Combined with a hearty dividend of about 4.2%, Pfizer stock is a buy for investors seeking a solid pharma firm. On the date of publication, Larry Sullivan did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C. and began writing for InvestorPlace in 2020. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post Why Pfizer Is a Long-Term Investorâs Friend appeared first on InvestorPlace.
Biden stimulus buzz may be waning, as the market rally had a healthy pullback. So did Tesla. Qualcomm and JPMorgan are near buy points.
At 8.6% interest on its savings accounts, crypto fintech platform BlockFi is offering an interesting option for savers disappointed with low rates.
At a time when millions of people are strapped for money and counting on their income tax refund or a stimulus check, they’ll have to wait a little longer before they can file their taxes. Feb. 12 marks the first date the Internal Revenue Service will start accepting and processing returns. Tax season started Jan. 27 last year.
Q.: To lessen the death tax on my estate, if I put my Roth IRA in an irrevocable trust now and after my spouse and I die four years later, do my children afterward have six years or 10 years to invest all the money before they must dispose of the Roth money from the trust under the new rules of the 2019 SECURE Act? A.: John, you cannot put a Roth IRA in a trust while you are alive. You can move the assets in the Roth IRA out of the Roth IRA and then put those assets into the trust but trusts can only own Roth IRAs as Inherited Roth IRAs.
BlackBerry Limited (BB) is somewhat of an enigma in the investment world, full of great promise but at the same time, it has let shareholders down time and again. The company is armed with a huge patent portfolio, and offers several cutting-edge products in cybersecurity, Internet-of-Things (IoT), and automotive technology. What’s more, shares have surged 32% in the last two sessions after BlackBerry announced that it has sold 90 smartphone technology patents to Huawei, as part of its shift away from the mobile phone space. But while BlackBerry gushes with potential, it also disappoints quarter after quarter. In the most recent quarter, BlackBerry missed on revenue and GAAP EPS. Most concerning were the drop in revenue, down 20% year-over-year, and the sizeable increase in GAAP operating loss of $127 million, up from the $29 million loss one year ago. To be fair, some of the performance issues were pandemic-related, particularly with regards to the auto sector where plant shutdowns have translated to fewer automobile deliveries, and hence, lower QNX licensing fees. However, the company’s revenue has been shrinking for several years before the pandemic. The five-year growth rate for example is -20.8%. Company Transformation The story is not all bad. Glimmers of hope are emerging in what may yet shape up to be a multi-year turnaround story that started in 2013, the year that John Chen took the reigns of BlackBerry as CEO. At that time, BlackBerry was a $6 billion Titanic, immersed in red ink after hitting an iceberg called the Apple iPhone. After taking charge, John Chen proceeded to monetize the company’s patent portfolio, and transform the mobile phone manufacturer into a much more modest $1 billion software company. The transformation has taken place over several years, with half a dozen acquisitions along the way, including Cylance, Good, and AtHoc. These companies have been assimilated and worked into BlackBerry's product streams, but also have resulted in a significant write down of goodwill, including $500 million earlier in 2020. BlackBerry has at least stabilized its financial situation, and now has positive free cash flow and adjusted EBITDA. That said, the turmoil surrounding the company has affected its stock price and resulted in an attractive valuation. BlackBerry also boasts some promising technologies that could lead to strong revenue growth down the road. This may be a great time to invest in BlackBerry. Valuation Metrics BlackBerry’s low valuation should come as no surprise given its past troubles. The company has superior metrics versus the software industry on a number of fronts, summarized in the table below. MetricBlackBerryIndustryPrice/Sales Ratio5.8511.31Price/Book Ratio3.0711.44Gross Margin74.2%70.9%Operating Margin-9.2%-23.6%Current Ratio2.271.57Total Debt/Equity0.330.55 Metrics such as price/sales and price/book ratio suggest that BlackBerry is quite undervalued, with a strong likelihood that the stock will outperform once the company’s future potential is recognized by the market. It is not at all unreasonable to expect a 2x - 3x stock price increase from its current level. BlackBerry IVY BlackBerry’s recent announcement regarding its strategic alliance with Amazon Web Services (AWS) may be enough to kick-start the company’s stock price. The exclusive partnership provides instant credibility along with a ‘Big Data’ mindset to vehicle data, resulting in unlimited potential for third-party applications in areas such as car insurance, maintenance, EV charging, and connected vehicles. The AWS platform gives BlackBerry IVY cloud-connectivity, scalability, and a global reach. This initiative will provide BlackBerry with a new source of recurring revenue in the automotive market, where it already has software installed in over 175 million cars. Spark Suite Apart from BlackBerry IVY, there are several other promising technologies emerging from BlackBerry, including Spark Suite, which combines Endpoint Management with Endpoint Security, a logical step in the evolution of mobile devices. Spark Suite provides Zero Trust, an emerging concept in cybersecurity that is becoming a necessity for enterprises as mobile devices such as wearables become the norm within the workplace. In addition to IVY and Spark Suite, BlackBerry has several other more mature product offerings including QNX, BlackBerry AtHoc, and BlackBerry SecuSUITE. While not as exciting as BlackBerry's recent initiatives, they provide a steady and increasing revenue stream. Wall Street’s Take From Wall Street analysts, BlackBerry earns a Hold analyst consensus based on 3 Hold ratings. Additionally, the average price target of $8 puts the downside potential at 18.7%. (See BlackBerry stock analysis on TipRanks) Summary and Conclusions BlackBerry has had a turbulent past, downsizing from a $6 billion hardware company into a $1 billion software company over the last seven years. Revenue was down 20% year-over-year in the latest quarter, but much of the poor performance can be attributed to the soft auto sector resulting from the pandemic. QNX licensing fees and royalties will pick up as the global economy improves. Despite several years of disappointing results, the company has stabilized its financial situation and appears to be positioned to capitalize on several leading-edge technology ventures, including its exclusive partnership with AWS and enterprise mobility management and security. Given the very low valuation, this could be an ideal time to invest in BlackBerry. Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
* Benzinga has examined the prospects for many investor favorite stocks over the past week. * The week's bullish calls included the electric vehicle leader and a recovering retailer. * A ride-sharing company and a semiconductor maker were among the bearish calls.As the fourth-quarter earnings reporting season got underway last week, the major U.S. indexes lost a little ground. The Dow Jones industrial average concluded the week down about 1%, and the S&P 500 and Nasdaq retreated a little more.Of course, much of the attention during the week was focused on the political drama in Washington, D.C. The U.S. president became the first ever to be impeached twice, after the prior week's chaos at the U.S. Capitol. Social media pulled the plug on the president and others who fomented the insurrection. The outgoing president also kept up the pressure on China, while the incoming president laid out a huge pandemic and economic recovery program.In corporate news, the U.S. Securities and Exchange Commission opened a probe into a petroleum giant, a semiconductor leader announced management changes, a casino owner and Republican megadonor passed away, and the Detroit Auto Show was canceled.Through it all, Benzinga continued to examine the prospects for many of the stocks most popular with investors. Here are a few of this past week's most bullish and bearish posts that are worth another look.Bulls Tesla Inc (NASDAQ: TSLA) is not an auto company but rather a disruptive technology company. So says Shivdeep Dhaliwal's "Tesla Reaching T Valuation In 2 Years? Here's What Inspires Daniel Ives' Optimistic Target." Are U.S. political developments bullish for the Elon Musk-led company?Priya Nigam's "Marathon Oil Gets Upgrade Due To Higher Oil Prices, More Cash Return To Shareholders" is focused on how Marathon Oil Corporation (NYSE: MRO) is likely to generate around $2 billion over the next couple of years.In Jayson Derrick's "Baird Upgrades Walgreens Boots, Expects Turnaround Of 'Train Wreck' Performance," see the several catalysts that could help turn around specialty retailer Walgreens Boots Alliance Inc (NASDAQ: WBA)."Nvidia's Comprehensive Involvement In Gaming Market Continues Strong Demand: Rosenblatt" by Shanthi Rexaline examines how the competitive position of NVIDIA Corporation (NASDAQ: NVDA) in the gaming GPU market will only get better.In "Cantor Analyst Raises Aphria And Tilray Price Targets Amid Merger," Jelena Martinovic discusses why the impending merger with Tilray Inc. (NASDAQ: TLRY) has overshadowed the recent disappointing quarterly results from Aphria Inc. (NASDAQ: APHA).For additional bullish calls of the past week, also have a look at the following: * Study: Investors Say Tesla, Apple And Microsoft Were 2020's Top Stocks * Why KeyBanc Is Bullish On These 4 Casino StocksBears A Japanese tech investment giant has trimmed its stake in Uber Technologies Inc (NYSE: UBER), according to "SoftBank Dumps B Worth Of Uber Shares After Stock's Rally" by Aditya Raghunath. See how much of the stake in the ride-sharing company remains and whether it is still the largest investment in the firm's portfolio.Shanthi Rexaline's "Why Intel's CEO Transition Is A Negative For AMD: Analyst" argues that the "blue sky" scenario for Advanced Micro Devices, Inc. (NASDAQ: AMD) may start to crumble as its rival gets back on its feet. How much are AMD's share gains in servers likely to moderate?In Chris Katje's "Palantir Vulnerable With Valuation And Lockup Concerns, Citi Says," see whether shares of software company Palantir Technologies Inc (NYSE: PLTR) have run too far. Plus, a large share lockup expires around the same time as the upcoming earnings report."JPMorgan Says Hydrogen Stock Plug Power Trades At 'Steep Price,' Downgrades FuelCell Energy" by Jayson Derrick shows why the "compelling" path to $1.2 billion in sales by 2024 for Plug Power Inc (NASDAQ: PLUG) did not impress one top analyst.For more bearish takes, be sure to check out these posts: * Why Investment Strategist Ed Yardeni Is Worried About A Tech Stocks, Bitcoin-Led Market Meltdown * 'You're A Fool' Who Will 'Lose Everything' If You Take On Debt To Invest In Crypto, Mark Cuban Says * How Did Retail Perform During The Holidays?At the time of this writing, the author had no position in the mentioned equities.Photo Courtesy of PixabayKeep up with all the latest breaking news and trading ideas by following Benzinga on Twitter.See more from Benzinga * Click here for options trades from Benzinga * Barron's Picks And Pans: Dividend Aristocrats, Alibaba, GameStop, Walmart And More * Notable Insider Buys Of The Past Week: Howard Hughes, Party City, Perrigo And More(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Andrew LeftCitron Research's Andrew Left criticized insurance company Lemonade Inc (NYSE: LMND) on Friday, saying its stock multiple is based on empty marketing tactics.The Lemonade Bear Case: In a Twitter live video, Left dismissed Lemonade Inc's claims of bringing new technology to the insurance industry, saying the company's technology is no different from insurers like Progressive Corp. (NYSE: PGR) or State Farm."They've been lying to their customers and their shareholders," said the noted short seller.The company has not responded to a request for comment.Not An ESG Company: He also blasted Lemonade's claims of being a "social good" company as an easy marketing ploy.Left said Lemonade is taking advantage of younger investors' interest in supporting companies that have a positive social impact, like Tesla Inc (NASDAQ: TSLA)."It's playing on the millennial investors," he said, adding that the company has a higher multiple than Zoom Video Communications (NASDAQ: ZM), Uber Technologies Inc (NYSE: UBER) or Tesla Inc (NASDAQ: TSLA).Lemonade insiders have sold $400 million in the past six months but gave just $1 million to charity last year, he said.Left said the Securities and Exchange Commission and the Federal Trade Commission should look more closely at companies that make claims of being socially responsible.Price Action: Shares of Lemonade ended Friday's trading down 6.79% at $147.74 on Friday. Left's video posted to Twitter at 11:30 a.m.Related Link: XL Fleet Spikes On CEO's CNBC Plug, Citron's Long CallSee more from Benzinga * Click here for options trades from Benzinga * Hillman Group In Talks With Tilman Fertitta SPAC: Bloomberg * 6 Sports SPACs To Consider For Your Investing Playbook(C) 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The debate around canceling student debt has been front and center in the wake of the presidential election, and President-elect Biden should provide substantial cancellation on his first day in office.
Among the Dow Jones stocks, Apple and Microsoft are among the top stocks to buy and watch in January 2021.
One of the major investing themes coming out of 2020 is the soaring price of bitcoin (CCC:BTC). However, the cryptocurrency slid as much as 21% over a two-day period to as low as $32,389. Since the start of the novel coronavirus pandemic, it’s the biggest two-day drop, wiping off nearly $140 billion in total market capitalization. Source: Shutterstock In a nutshell, investors reacted to the stronger dollar and growing political uncertainty. The cryptocurrency is still up roughly 89% on a trailing one-month basis. Nevertheless, the drop did send shivers down the spines of investors. Peaks and valleys will always be part and parcel of investing in bitcoin. But I believe this is just a momentary blip, and normal service will resume soon enough. Covid-19 is surging once again in Asia, and the impeachment of President Donald Trump is jolting the markets. The strengthening of the dollar and higher bond yields are also an important contributing factor in the fall in bitcoin prices.InvestorPlace - Stock Market News, Stock Advice & Trading Tips However, all these factors are temporary in nature. In the long run, bitcoin will continue to climb higher. Financial institutions are increasingly allowing users to buy, store, and sell cryptocurrencies. That’s why in a recent Bloomberg Crypto monthly report, analysts are predicting that bitcoin could more than double from its current value in 2021. Bitcoin Finally Gaining Widespread Acceptance The recent surge in bitcoin prices is due to multiple factors. A weaker dollar, economic optimism, big-ticket investment banks backing the scarce digital currency against inflation, and a weakening U.S. dollar are some reasons. However, I believe the biggest contributor is higher institutional interest. 9 Stocks That Investors Think Are the Next Amazon Square (NYSE:SQ), Paypal (NASDAQ:PYPL), Nvidia (NASDAQ:NVDA), and CME Group (NASDAQ:CME) all provide exposure to the cryptocurrency to their users. All of these companies are large diversified conglomerates. Therefore it’s hard to pinpoint how much money these companies are making through bitcoin. However, considering the surge in its price, it will be a significant contributor to the bottom line looking ahead. Just as an example, Square’s Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020. This was up approximately 11x and 15x year-over-year, respectively. Pantera Capital research shows PayPal and Square are securing all the new bitcoin added to the market daily. That’s great news, particularly for PayPal users. The online payments system provider allows its customers to buy, hold and sell cryptocurrencies such as bitcoin and ethereum for as little as $1. Similarly, a range of mid- or high-end graphics cards from Advanced Micro Devices (NASDAQ:AMD) is selling out, leading to a shortage in the markets. It’s mainly due to cryptocurrency miners purchasing them in bulk to build machines to mine bitcoin and similar cryptocurrencies. CME Group, which is the biggest largest financial derivatives exchange, also offers bitcoin futures contracts. Up until Dec 16, 2020, 8,560 CME Bitcoin futures contracts – equal to roughly 42,800 bitcoin – traded on average each day. Simultaneously, the institutional interest keeps increasing. The number of large open interest holders reached a record of 110 in December. Here to Stay We have been here before. Dizzying highs and lows are not a new phenomenon for bitcoin. However, the cryptocurrency is now finally gaining institutional support, which eluded it for a long time. The pandemic certainly helped. During the widespread lockdowns, online commerce and payments ballooned, increasing interest in digital currencies exponentially. Bitcoin was always volatile. But the past year has shown that every asset class can become wobbly in an uncertain environment. It was always regarded as an interesting store of value due to the ultimate ceiling of 21 million and the difficulties in mining it. But its wider acceptance is bringing a sense of credibility and stability that was hitherto missing. For me, that is what makes it an interesting asset to hold, despite the risks that come with it. The prospect of central banks issuing their own digital currencies will always be there. However, now that financial institutions as large as BlackRock (NYSE:BLK) are warming up to it, the future looks very bright for bitcoin. On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post Bitcoin Crash Is Excellent Opportunity to Buy the Dip appeared first on InvestorPlace.
Some left-for-dead penny stocks are now billion-dollar companies, thanks to the rally in the S&P 500 and other indexes.
Over the past 12 months, investor optimism toward electric and autonomous vehicles has expanded from manufacturers to suppliers. Among those suppliers, Luminar Technologies (NASDAQ:LAZR) stock has perhaps the most intriguing story. Source: Olivier Le Moal / Shutterstock.com To be sure, LAZR stock isn’t cheap. At a current price of $31, Luminar has a market capitalization over $10 billion. It’s certainly fair to ask if the stock should trade above $30 given that Luminar was willing to execute a merger at a price of $10 per share less than a year ago. That said, this has not been a market where valuation concerns have been paramount. That’s been doubly true for auto-tech names. Many companies that, like Luminar, went public via SPACs (special purpose acquisition companies) have seen their share prices move just as far, if not farther, from the merger price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips From here, those valuation concerns shouldn’t be ignored. But investors who still see upside in the sector should have LAZR stock on their watchlist. The Case for LAZR Stock Autonomous vehicles are on the way. They may not arrive as fast as some believe, but they will arrive at some point. 9 Stocks That Investors Think Are the Next Amazon When that day comes, Luminar seems well-positioned to capitalize. The company is an early leader in lidar (light detection and ranging) technology. Most importantly, as management has detailed in the past, Luminar has a big edge: it’s built its system from the ground up. That’s a big competitive differentiator in the space. A lot of newer, supposedly high-tech companies, whether in autonomous or electric vehicles, have proven themselves to be not much more than assemblers. Nikola (NASDAQ:NKLA) has proven to be an example. That intellectual property gives Luminar an important head start — and prevents rivals from catching up. With 50 commercial partners already, including a number of OEMs (original equipment manufacturers), Luminar might well have the best chance of being the industry leader over the long haul. It’s not just autonomous vehicles, either. ADAS (advanced driver-assistance systems) represent a reasonably large market in the meantime. Right now, Luminar estimates its total addressable market at about $4 billion. According to the merger presentation, by 2030, thanks to ‘robotaxis,’, commercial vehicles, and ADAS, the company believes its total addressable market will reach $150 billion. Solid share of that market will make the current $10 billion market capitalization likely look cheap in retrospect. What Goes Wrong As always, there are risks. One key question is whether lidar indeed is the right technology. Certainly, OEM partners seem to think so. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) unit Waymo has focused on the technology as well, even selling its own lidar sensors. But not everyone in the autonomous space agrees. The most notable dissenter is Tesla (NASDAQ:TSLA). Tesla chief executive officer Elon Musk famously said at his company’s 2019 Autonomy Day that “lidar is doomed.” For now, Musk essentially is on an island. But TSLA bulls, or simply those investors who believe in Musk’s genius, might want to look beyond LAZR stock. At the least, Luminar is highly unlikely to have Tesla as a customer any time soon, if ever. If lidar indeed is the future, there’s the competitive environment to consider. Again, Luminar does seem like the early leader, but there is no shortage of rivals. Waymo and General Motors (NYSE:GM) unit Cruise will have their say. Velodyne Lidar (NASDAQ:VLDR) just raised capital through its own SPAC merger. In the start-up world, there are “too many lidar companies,” as Wired put it a year ago. The rewards in LAZR stock could be enormous if lidar indeed is the right technology and if Luminar indeed becomes the industry leader. Neither is guaranteed. The Valuation Question Finally, there’s the question of how much of the potential reward has been eaten up by the stock’s 200%-plus rally since November. LAZR stock isn’t cheap. Indeed, using projections from the merger presentation, LAZR trades at nearly 30x estimated EBITDA (earnings before interest, taxes, depreciation and amortization) for 2025. Those projections hardly look conservative, with Luminar expecting revenue to rise 575% just between 2023 and 2025. If Luminar meets its projections, no doubt LAZR stock rises. But that’s true of just about every stock in the market. Some skepticism is warranted. As a result, it wouldn’t be surprising to see a further pullback in LAZR, which already has retreated from December highs above $45. That said, the valuation can work if the story plays out. It’s a bit too simplistic to argue that small market share can lead to big returns — because it’s not easy to get even small market share. But, back of the envelope, 10% market share at 2030 suggests revenue of $15 billion. Forty percent margins (equivalent to those projected in 2025) would get EBITDA to $6 billion. Again, that’s easier said than done. Competition may lead to sharply lower prices and sharply lower margins. Luminar may never gain much share at all. But in that back-of-the-envelope model, Luminar probably has a market capitalization exceeding $100 billion — which puts LAZR stock above $300. Few stocks have that kind of potential. On the date of publication, Vince Martin did not have (either directly or indirectly) any positions in the securities mentioned in this article. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post If You Trust Growth Stocks, Luminar Is Worth a Nibble appeared first on InvestorPlace.