Big Hit Entertainment, the management label of hugely popular South Korean K-Pop group BTS, priced its initial public offering at the top of its range on Monday. Ciara Lee reoports
Big Hit Entertainment, the management label of hugely popular South Korean K-Pop group BTS, priced its initial public offering at the top of its range on Monday. Ciara Lee reoports
One San Francisco accountant finishes every client conversation with a discussion about what a Biden administration could mean for portfolios.
Buying an EV can be daunting, but a new report shows how worthwhile the investment can be.
Lee Kun-hee, who built Samsung Electronics into a global powerhouse in smartphones, semiconductors and televisions, died on Sunday after spending more than six years in hospital following a heart attack, the company said. Lee, who was 78, grew the Samsung Group into South Korea’s biggest conglomerate and became the country's richest person. "Lee is such a symbolic figure in South Korea's spectacular rise and how South Korea embraced globalisation, that his death will be remembered by so many Koreans," said Chung Sun-sup, chief executive of corporate researcher firm Chaebul.com.
While it’s a good idea to go through your portfolio at least once a quarter and evaluate how your stocks are doing, special circumstances dictate that you do it more scrupulously, and our present pandemic certainly counts. The markets are caught in limbo, awaiting another stimulus package after a massive run from late March through September. The biggest winners have been tech stocks, especially biotechs and pharmaceutical companies. Much of that hype initially centered on the race for a COVID-19 vaccine. But it then filtered through the entire industry, since many companies that were once small-time outsiders were launched into headliners with a cure.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Diagnostic companies, testing and healthcare equipment companies all started rising as well. But we’re in a different place now. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes Here are 7 unhealthy biotech stocks to sell before they sicken your portfolio: Galapagos NV (NASDAQ:GLPG) Heron Therapeutics (NASDAQ:HRTX) Ionis Pharmaceuticals (NASDAQ:IONS) REGENXBIO (NASDAQ:RGNX) Illumina (NASDAQ:ILMN) China Biologic Products (NASDAQ:CBPO) Ligand Pharmaceuticals (NASDAQ:LGND) For these biotech stocks, the ardor has cooled. While these aren’t terrible stocks, they’re stocks best exited before a correction hits or their momentum slows further. Unhealthy Biotech Stocks to Sell: Galapagos NV (GLPG) Source: Jarretera / Shutterstock.com Based in Belgium, this biotech focuses on small molecule and antibody therapies, aiming to discover novel drug targets. Last summer, Gilead Sciences (NASDAQ:GILD) announced it was investing around $5 billion in the company, which sent the stock flying. But the pandemic crushed the stock and just as it began climbing back, it was hit by news that its osteoarthritis drug in development with GILD failed FDA trials. Even with the cash infusion, this is a costly setback, as the company has to spend more on trials that may or may not get it approval. And it pushes back the possible launch date and increases its burn rate. Down 40% year to date, there’s still more downside risk. Heron Therapeutics (HRTX) Source: Shutterstock While only sporting a $1.4 billion market cap, this biotech has two drugs recently approved by the FDA (one of which is coming this week). Both drugs are antiemetics (drugs that reduce nausea and vomiting) to be used in conjunction with chemotherapy for cancer patients. But its biggest ace, still in trials in the U.S. and the E.U., is a non-addictive, non-opioid painkiller. Unfortunately, the opioid epidemic has been supplanted by the pandemic. So this boutique biotech has been pushed to the back burner. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes Down 34% year to date, if the market sells off, HRTX is going with it. Ionis Therapeutics (IONS) Source: Shutterstock There’s a novel approach in biotech called antisense therapeutics. It basically alters pieces of messenger RNA so when the body builds new DNA strands from that RNA, it can help mitigate certain diseases. IONS has been involved in antisense therapeutics since 1989. And it has two drugs available in the U.S. and one in the E.U. All work to help people with rare diseases better manage their symptoms. The massive chemical conglomerate Bayer (OTCMKTS:BAYRY) is a partner and just recently took over development and production of an IONS clotting drug. IONS is down 23% year to date and there’s nothing, good or bad, that is going to move the stock anytime soon. REGENXBIO (RGNX) Source: Shutterstock Boasting a $1 billion market cap, RGNX has a number of partnerships with leading drug makers to use its gene therapy solutions for a variety of different pathologies. One of the drugs it worked on with Novartis (NYSE:NVS) was lucrative enough that RGNX didn’t have to look for cash for other projects by issuing more stock. Unfortunately, a big impending payment from NVS looks like it has been pushed further into the future due to an FDA ruling. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes The stock is down 33% year to date, and absent any other big news from its partners, is likely to hang fire at best. Illumina (ILMN) Source: Shutterstock This major gene sequencing company should be going gangbusters here. And it was doing pretty well after the March market dive. But in late September it announced it was re-buying cancer-screening start-up, Grail for $8 billion. Grail had been a division of ILMN a few years ago and it was spun off with big-name investors Bill Gates and Jeff Bezos buying in. ILMN stock got hammered on the announcement because many of the industry analysts couldn’t understand why it buy Grail back, since its leading product puts ILMN in direct competition with some of its other customers that are working on similar technologies. The stock has regained some of that value, but it’s still not clear how it’s going to move forward with this major purpose. Down 4% year to date, there’s as much risk as promise here, and it’s expensive. China Biologic Products (CBPO) Source: Shutterstock As the race for a vaccine or cure for COVID-19 continues around the globe, there are other diseases that still need attention as well. That’s where CBPO comes in. It has a portfolio of plasma-based drugs for the treatment of everything from tetanus and rabies to hepatitis B. The problem is, the pandemic has changed the priorities of both patients and healthcare professionals. And that has meant some conditions don’t rise to the level of attention they did before the pandemic. This can be seen in CBPO’s second-quarter earnings. Sales were off, while income and profits also lagged. And earnings missed consensus. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes While the stock is only off 2% year to date, it may be stuck here for a while. Ligand Pharmaceuticals (LGND) Source: Casimiro PT / Shutterstock.com LGND is a R&D contracting firm for biotech and pharmaceutical companies. It develops drug candidates and then it partners with a firm that will take it through trials and market it. This means LGND doesn’t bear the costs and risks associated with bringing a drug to market and the drug company doesn’t have to invest on an in-house R&D staff and facilities. LGND makes its money off negotiated royalty payments from its partners. Currently, LGND is receiving royalties from 9 different drugs on the market now. But the pandemic has shifted resources for its customer base, putting LGND in a tough spot. That’s best illustrated by the fact that 63% of its stock is now in short positions. The stock is already down 20% year to date. On the date of publication, Louis Navellier has no long positions in any of the stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (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 Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post 7 Unhealthy Biotech Stocks To Sell Before They Sicken Your Portfolio appeared first on InvestorPlace.
Former Vice President Biden has a detailed proposal that involves raising taxes on people with taxable income of more than $400,000—essentially targeting the top 1%. President Trump wants to keep the tax cuts that went into effect in 2018, which largely benefited top earners.
Get the most from your retirement savings in these affordable places outside the U.S.
When GoodRx (NASDAQ:GDRX) stock debuted in September, its price immediately leaped 60%, peaking at $57 in early October. Regular investors couldn’t have bought shares at any reasonable value, so I wrote GDRX stock off as “yet another high-priced 2020 IPO.” Source: II.studio / Shutterstock.com Shares, however, have since declined to a more reasonable $52. At this price, it’s time to take a serious look into this game-changing company. That’s because, in April, the federal agency responsible for Medicare changed its guidelines on telemedicine reimbursements. With insurers now required to cover remote doctor visits at parity, the floodgates for telehealth companies like GoodRx have finally opened. And with its high-growth strategy and proven executive team, GoodRx is in pole position to become the next Amazon of healthcare.InvestorPlace - Stock Market News, Stock Advice & Trading Tips GoodRx Stock: From Pharmacy to Telehealth As I’ve emphasized before, investments with 1,000% potential returns need three key things: A growing market. A proven product or management team. A catalyst that tells us, “why now?” The fourth qualification — price — is also essential, but depends more on market size. Miss one of them, and you end up with either 1) a well-run but slow-growing company or 2) a high-potential firm that goes nowhere. Fortunately for investors, GoodRx hits all three qualifications for a 1,000% returner. The company was founded in 2011 by former Facebook (NASDAQ:FB) engineers, and its flagship product, an online prescription price comparison tool, already has almost 5 million monthly users. The firm is highly profitable, and its telehealth marketplace opened at just the right moment in history. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes So, for those who are tired of high-priced, money-losing IPOs, here’s why GoodRx stock looks different. Reason No. 1: CMS Gives GoodRx Stock A Real Catalyst With new technologies, people should always ask: “Why now?” That’s because innovations often need the right environment to grow. Video sharing sites like ShareYourWorld.com (founded in 1997) wouldn’t have worked until high-speed broadband came around in the mid-2000s. And in medicine, mail-order pharmacies and telehealth companies have been around for years. Pharmacy benefit management (PBM) company Catamaran had a large mail service pharmacy, which UnitedHealth (NYSE:UNH) eventually bought in 2015 for $12.8 billion. Teladoc (NYSE:TDOC), a telemedicine company, has been around since 2002. Yet, telehealth still makes up just 1.5% of the healthcare market. And that’s why catalysts are so crucial to high-growth companies like GoodRx. Covid-19 Creates a Catalyst In April, the Centers for Medicare & Medicaid Services (CMS) created a flurry of new reimbursement regulations to allow doctors and patients to stay home. Under Section 1135 waivers, healthcare providers can now provide virtually all non-physical services online. That includes everything from new patient visits to wheelchair management training. And where Medicare goes, the rest of insurance follows. As private insurers realign billing practices to mirror Medicare, investors should expect both supply and demand of telehealth medicine to skyrocket. And that’s where GoodRx comes in. Reason No. 2: GoodRx and a Growing Market Today, GoodRx earns money from its prescription drug price comparison website. Users can search for the cheapest drug providers, and GoodRx receives a commission from PBMs for the referral. It’s an extremely lucrative business (earning the company eye-popping 36% margins in 2019) and growing revenues at 50% per year. Independently, GoodRx might be worth $20 billion in that space. Then something even more interesting happened. In April 2019, the company acquired telehealth company HeyDoctor, and in March 2020, it launched the GoodRx Telehealth marketplace. These additions couldn’t have come at a better time. In 2018, Americans spent $335 billion on prescription drugs, according to the CMS. And a large portion is still covered by insurance, reducing the usefulness of GoodRx’s price comparison tool. On the other hand, physician services took in $564 billion, which makes it a far broader market for telehealth. And that doesn’t include possible telehealth applications, in-home healthcare ($102 billion annual spend), other personal care ($552 billion) or nursing care ($168 billion). If GoodRx can turn its highly efficient marketing funnel toward acquiring telehealth customers, the company could become worth multiples of its current valuation. Reason No. 3: Strong Product, Strong Management The numbers paint a flattering picture of the online health company. GoodRx has been profitable since 2016, an impressive feat for a fast-growing software company. It’s consistently kept R&D and administrative spending under control, using just 3.7% of revenues on overhead costs. And its share-based compensation of just $3.7 million in 2019 also indicates a focus on shareholder value. Recent IPO Snowflake (NYSE:SNOW), by comparison, awarded $78.3 million in share-based compensation in 2020, despite generating just 68% of GoodRx’s revenue and negative profits. And what about its actual product? App reviews are overwhelmingly positive, with users applauding the company over their prescription drug savings. GoodRx needs excellent customer experiences to keep its pipeline of referrals up. What’s GoodRx Stock Worth? Here’s where investors should rightly worry. The company’s monthly users dropped from 5 million in March to 4.2 million in April when the coronavirus pandemic took hold. Though users have steadily climbed back to 4.9 million, it’s a reminder that GoodRx must fight for repeat customers. (Mail-order pharmacies, on the other hand, generate endless income streams from chronic prescriptions). There are also other concerns: Single-payer healthcare reform could instantly sink the GoodRx pharmacy franchise — users would no longer have a reason to price-compare drugs. A stronger competitor could also derail the online healthcare firm’s growth. And that makes GoodRx challenging to value. A traditional two-stage DCF model that grows revenues to $9 billion by 2030 pegs the company at a $34 billion enterprise value, or $92 per share. That’s an 84% upside. However, raising the discount rate (a measure of risk) to 11% drops fair enterprise value to $20.2 billion, or $52 per share. A more aggressive approach might use a venture-capital (VC) method of market sizing. It’s less precise but gives better insight into untapped markets. Currently, analysts expect the global telehealth industry to grow 23.4% annually through 2026. Suppose we assume that U.S. telehealth grows faster at 55% (thanks to the CMS rule change). That suggests a $142 billion market by 2026, or 2.5% of total healthcare spending. If GoodRx receives a 12% “take rate” and obtains a 30% market share, it would earn $5.1 billion from telehealth revenues alone. Adding another $4 billion from pharmacy services and a 8x price-sales (PS) multiple puts value at $72.8 billion, or almost $200 per share. All this means that GoodRx still has a lot to prove. Even though it hits all three “high-growth” company points, we won’t know for years if it’s the next successful Amazon or the next failing Overstock (NASDAQ:OSTK). But until then, it could be worthwhile to make a small wager. Because in the world of high-growth investing, it just takes one winner to make your portfolio shine. On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tom Yeung, CFA, is a registered investment advisor on a mission to bring simplicity to the world of investing. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Why GoodRx Stock Is Now a Screaming ‘BUY’ appeared first on InvestorPlace.
This week’s marquee earnings and economic data reports will mostly take place later in the week, with the majority of the FAANG stocks reporting after market close on Thursday.
Harry Markopolos is the former derivatives professional turned independent financial fraud investigator who uncovered the $65 billion Bernie Madoff Ponzi scheme, only to be ignored by the SEC for over nine years. A vocal critic of the US regulator, Harry now has the audit world and insurance industry in his sights as the next big financial frauds yet to come to light.
(AMD)’ third-quarter earnings report, set to arrive Tuesday after the closing bell, comes at an interesting moment for the semiconductor industry. The Wall Street Journal reported that (AMD) (ticker: AMD) plans to aggressively expand its operations through a potential acquisition of (XLNX) (XLNX). Meanwhile, its largest rival (INTC) has been struggling to continue to produce the advanced manufacturing technology necessary to make superior semiconductors.
The stock market could go either way, along with leaders such as Microsoft and Tesla. It's peak earnings week as elections loom and coronavirus cases surge.
Dutch pension giant PGGM doubled its investment in PayPal stock, and bought Cisco and Activision shares in the third quarter. It cut back on Qualcomm stock.
Hardware is becoming software, so investors are dumping hardware. At the same time, software is moving to the world of the cloud. These trends undeniably shape what tech stocks you should be buying. Most computer chip companies today are “fab-less,” based not on manufacturing, but designs written in software. That is why Nvidia (NASDAQ:NVDA) today is worth more than Intel (NASDAQ:INTC). At the same time, open-source software is replacing proprietary software, especially in the clouds, where the money is made. That is why Facebook (NASDAQ:FB) is worth more than Oracle (NYSE:ORCL).InvestorPlace - Stock Market News, Stock Advice & Trading Tips What does this mean for companies in the business of making computer hardware? It means they need to find new paths to profit. And that also means software names are the best tech stocks to buy. The biggest hardware makers are aware of this. The hope investors have for them is they can execute and return to prominence. Until they do, however, their growth and valuations will lag the market. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes For now, keep an eye on these six tech stocks as they pivot to the software world: International Business Machines (NYSE:IBM) Dell Technologies (NYSE:DELL) Cisco Systems (NASDAQ:CSCO) Nokia (NYSE:NOK) Ericsson (NASDAQ:ERIC) Workhorse (NASDAQ:WKHS) Tech Stocks: International Business Machines (IBM) Source: JHVEPhoto / Shutterstock.com Former IBM CEO Virginia Rometty missed the cloud. Under her watch, IBM went from being the world’s unquestioned technology leader to a laggard. Facebook is now worth over six times more. IBM has recognized its mistake. Rometty gave up the CEO chair in April to Arvind Krishna, who was running its cloud operations. He named Jim Whitehurst from Red Hat, the leading open source company in the world, as president. Since Krishna took over, however IBM stock has barely budged. Despite the cloud experience of its new leaders, IBM remains a hardware company. Its primary profit center remains its Z Series mainframes, and the proprietary software that runs on them. After delivering new versions in the second quarter, systems sales jumped 69%, year over year, to $1.9 billion, and profits rose 4.3%. But that profit center has been milked dry. Getting rid of older workers just drained its talent pool, and put the government’s eyes on it. It will take tricky financial engineering for IBM to find the cash flow needed to compete. It could sell the hardware units to private equity, spin out Red Hat, or spin its cloud operations into a REIT, as companies like Equinix (NASDAQ:EQIX) have done. For now, IBM says it’s focusing on “hybrid cloud.” Here, enterprises retain their own data centers built to cloud standards, then arbitrage larger public clouds like those of Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT). It’s also pushing its quantum computing efforts, although they won’t contribute to profit for years. Dell Technologies (DELL) Source: Jonathan Weiss / Shutterstock.com Dell Technologies is even bigger than International Business Machines and even more undervalued. The story starts in 2016, when Dell bought EMC, which controlled VMware (NYSE:VMW), for $67 billion. Four years later, $45 billion of the debt remains on Dell’s books. That means the “enterprise value” of Dell, including its debt, is $95 billion. The same calculation, applied to IBM, leads to an enterprise value of $165 billion, on revenue of $77 billion. VMware and IBM’s Red Hat are valuable because they offer virtualization and other cloud infrastructure software. It’s the kind of franchise the market often values at 10 times revenue. VMware had sales of about $11 billion for its fiscal 2020. Here is the problem. Because of the funky corporate structure, it is hard to value Dell. What is it really worth without its massive stake in VMware? The answer is to break Dell up again. Analysts think both companies would be worth more separate. Dell had fiscal 2020 net income of $4.6 billion. VMware could be worth $15-$20 per share more, nearly $10 billion. VMware CEO Pat Gelsinger says VMware could tie up with more hardware vendors if it were independent. Selling VMware would also bring Dell enough cash to retire its debt and compete more closely against Hewlett Packard Enterprise (NYSE:HPE). HPE is currently killing it in “hyperconverged” hardware, a key data center market, and now matches it in server market share. A spinoff is planned, with Dell and hedge fund partner Silver Lake maintaining a majority stake. The big issue? The move will not raise cash to pay down debt. Moreover, the split wouldn’t happen until September 2021. Even so, analysts call this a big win that will unlock Dell’s value in hardware, where many of its products are considered leaders. Take it all together, and a patient investor should do well buying Dell here. But you’re buying financial engineering, not the real kind. Tech Stocks: Cisco (CSCO) Source: Sundry Photography / Shutterstock.com Cisco Systems has been adrift ever since Chuck Robbins became CEO in 2015 Robbins’ strategy has been to shift Cisco’s revenue from expensive networking gear to software subscriptions. It’s not working. The revenue today is the same as it was in 2016. Profits have been uneven. Still, the stock’s low price has analysts pounding the table for it, calling it cheap and undervalued. But that’s not how tech stocks work. When a company stops growing, it starts dying. A small cut tells the sharks to feed. Cisco has made a half-dozen security acquisitions since Robbins took over, and 11 acquisitions since the start of 2019. But it’s not solving the problem. The number of bugs hitting Cisco software is increasing. Some impact key products like its high-end switches. BabbleLabs is one of these recent deals, bought to improve its videoconferencing experience. But that only serves to underline Cisco’s weakness. Cisco practically invented videoconferencing. But when the pandemic hit, Zoom Video (NASDAQ:ZM) became a verb. Cisco is now worth only 15% more than Zoom, which came public in April 2019 and covers just one of Cisco’s product niches. Competitors can smell blood in the water. Hewlett Packard Enterprise finished its acquisition of Silver Peak, a software-defined networking company that will be part of its Aruba unit. The move accelerates the shift of networking from a product to a service. It increases the pressure on Cisco. Nokia (NOK) Source: RistoH / Shutterstock.com The move of hardware to software, and of software becoming open source, has also hit the telecom equipment market hard. Nokia lost its niche in cell phones, bought into the equipment market, and is now seeing its lead there threatened. Part of the threat comes from China’s Huawei, which can make equipment for less and has been making inroads into the carrier market as a result. Nokia’s response is to support OpenRAN, a common set of interfaces for Radio Access Networks. Nokia has been using OpenRAN support mainly to compete with Huawei and its Scandinavian rival, Ericsson. It says a complete set of OpenRAN interfaces will be available next year. The hope now is that small, OpenRAN companies can be bought out, or parts of the emerging standards held back. That would let Nokia limit competition while still claiming openness. A short price war, initiated by the larger vendors, could quickly finish off the OpenRAN folks, analysts believe. But there’s another threat. Microsoft has already bought Affirmed Networks and Metaswitch, making its bid for an OpenRAN company look likely. Facebook is backing the Telecom Infra Project, the consortium that created OpenRAN. Open source, in other words, is coming. Will Nokia be able to main relevance among tech stocks? Tech Stocks: Ericsson (ERIC) Source: rafapress / Shutterstock.com While Nokia has been beating a drum for OpenRAN, rival Ericsson has been dismissing the threat. Ericsson is copying the strategy of Qualcomm (NASDAQ:QCOM), which has patents, copyrights and trademarks for all modem buyers to take its licenses. Importantly, these licenses come at a cost that makes rivals uncompetitive. But Qualcomm fought a bitter five-year legal war on three continents to achieve its dominance. Ericsson lacks that time, and it lacks that money. Ericsson insists that OpenRAN has security issues. It has already made its own equipment fully compliant with existing security and encryption standards. It has introduced an integrated packet core firewall to boost security further. This also increases its proprietary advantage. What might settle the dispute between open source and proprietary would be for Ericsson to buy Nokia. Rumors of such a deal were floated in February. President Donald Trump has been pushing for more control over the 5G equipment market, even suggesting Cisco Systems should buy one of the two Scandinavian companies. All this is leading to a new technology, Cloud RAN. This idea should dominate the new market for managed services, which is growing rapidly. What is this? The idea is to run radio networks according to what are called “cloud principles.” Ericsson is already pushing its own proprietary framework for this “journey.” Workhorse (WKHS) Source: rblfmr / Shutterstock.com Tesla (NASDAQ:TSLA) became the most valuable car company in the world by proving that cars represent technology, not manufacturing. This has spurred interest in other electric car companies like Workhorse. Since late June, WKHS stock has skyrocketed. Why? The reason is a U.S. Postal Service contract, which Workhorse has yet to win, for 140,000 electric mail trucks. Workhorse is one of three finalists. Its C1000 design features a light body with 1,000 cubic feet of storage, and a short range that recharges overnight. There is more than hype involved here. Workhorse’s first vans have traveled 8.5 million miles. It’s been in this niche for a decade. The trouble is its batteries are not yet competitive with gasoline engines. At the present price of $300 per kilowatt hour, a battery-powered van costs $30,000 to make. If Workhorse wins the postal contract, and if other last-mile companies follow suit, WKHS stock will be a big winner. But that’s a lot of ifs. This makes Workhorse less an investment than a speculation. Don’t bet any money on this stock you can’t afford to lose. There’s reason to speculate. It’s probable that, over the next decade, electric vehicles will take over the market. It’s likely that, in last-mile delivery, with a limited number of players, this can happen quickly. Contracts offered at scale are always valuable, and often profitable. But there is a lot of wishful thinking going on here. If the niche Workhorse is focused on proves out, why won’t Tesla just take it? At the time of publication, Dana Blankenhorn held long positions in AMZN, NVDA and MSFT. Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post 6 Tech Stocks Every Investor Should Watch appeared first on InvestorPlace.
With the pedal to the metal, electric vehicle stocks show no signs of slowing. In fact, most could see far more upside including Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), and most notably, Workhorse Group (NASDAQ:WKHS) and WKHS stock. Source: Photo from WorkHorse.com The last time I weighed in on the stock, I said, “While the shares won’t explode overnight, I strongly believe that they could double. I said the same thing as the stock traded at $17.03 before it ran to nearly $31 a share.” Granted, the stock recently pulled back after the U.S. Postal Service delayed its contract decision, but there’s still opportunity here. Remember, just because the contract was delayed doesn’t mean Workhorse Group is out of the running.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The WKHS stock could still run higher again on the anticipation of a coming decision. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes After all, the postal service is still in desperate need of upgrading its ancient fleet of vehicles. And Workhorse Group is still in the running. From here, I strongly believe the WKHS stock could rally back to nearly $31 a share again soon. Workhorse Could See All or Part of the USPS Award I also wouldn’t get too wound up over the recent downgrade from Roth Capital’s Craig Irwin. He recently downgraded WKHS stock from a buy to a hold, with a target cut to $27. While the contract was delayed, it’s a temporary setback. Weakness in the stock is a buy opportunity, in my opinion. And sure, according to the postal service, as quoted by Barron’s said, “Due to the current Covid-19 pandemic and its impact on Postal Service and supplier operations, an award(s) is currently planned for the production phase by the end of the calendar year.” But, as noted by Barron’s contributor Al Root, “The potential addition of an “s” to award is significant. It raises the possibility of multiple winners. That’s good for Workhorse’s business because it raises the odds of success.” In addition, while it’s not a certainty Workhorse will win the postal service contract, investors can still make money on the stock on the anticipatory momentum. For example, buy now and simply wait for the momentum to build up ahead of the contract date. Electric Vehicle Boom Shows No Signs of Slowing Tesla just blew earnings out of the water, with hopes of selling half a million EVs this year. EPS of 76 cents was well above expectations for 57 cents. Revenue of $8.77 billion was above estimates for $8.36 billion. That’s only creating even more excitement over EV stocks. Helping, General Motors (NYSE:GM) just announced it would invest $2.2 billion in U.S. manufacturing to increase EV production. Better, governments around the world are forcing millions into EVs. In the U.S. for example, California Gov. Gavin Newsom signed an executive order that will ban the sale of gas-powered passenger cars in the state starting in 2035. That’s further fuel for the EV boom. In short, the electric vehicle boom has only started. With it, we could see further upside in related stocks like Workhorse Group easily. This is another reason to buy WKSH stock on weakness. Most Analysts Still Seem to Like WKHS Stock Over the last month, Oppenheimer analyst Colin Rusch said WKHS stock was a leader in last-mile deliveries. He has a price target of $23. And, as I noted on Sept. 25, “Cowen analyst Jeffrey Osborne is impressed by WKHS stock. “The [second half production] ramp remains on track and management continues to target [making] 300 [to] 400 vehicles by the end of the year. After a tough few quarters, we see greener pastures ahead.” While I don’t expect the stock to explode overnight, I still believe we could see $31 again soon. The postal service contract is still on the table. It was only delayed, not canceled. Use recent weakness as an opportunity to buy. On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Workhorse Group Is a Buy Even with the USPS Contract Delay appeared first on InvestorPlace.
Dad was thrifty enough to retire in his 50s. Mom’s nest egg was mostly retirement accounts and index funds. Now they’re buying and selling hot stocks in pursuit of quick profits.
Mortgage rates dipped to another all-time low in the week ending 22nd October. Expect COVID-19 and U.S politics to continue to influence in the week.
The utility sector comprises companies that provide essential products and services, including water, electricity, natural gas, sewage, and other services. The sustained demand for these services has helped utility stocks generate stable earnings. Due to the reliability of earnings, these companies can effectively payout dividends at significantly higher average yields. Hence, the unmatched combination of income generation and profitability makes utility stocks an excellent low-risk option for investors. This year, the utility stocks represented by the Utilities Select Sector SPDR ETF (NYSEARCA:XLU), have underperformed the broader market. The S&P 500 index grew 6% since the beginning of the year, while the Utilities ETF fell by nearly 2%.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 7 Airline Stocks to Buy on Pelosi Stimulus Hopes Tech stocks have ruled the roost this year, but utility stocks’ importance in a well-rounded portfolio cannot be denied either. Therefore, let’s look at three utility stocks that remained resilient despite the effects of the pandemic. American Water Works (NYSE:AWK) AES Corporation (NYSE:AES) NextEra Energy (NYSE:NEE) Utility Stocks: American Water Works (AWK) Source: Shutterstock American Water Works provides regulated water and wastewater services to homeowners and the military. It is currently the largest water and wastewater utility company in the U.S. Additionally, it also makes money using specific market-based activities. It remained resilient in the face of the pandemic, as AWK stock grew 13.7% relative to the S&P 500. It recently reported its solid second-quarter results. Earnings per share (EPS) for six months ended June 30 was at $1.65, roughly 5.8% compared to the prior-year period. Income from its regulated business was $177 million, compared to $156 million in the same period last year. Additionally, income from market-based activities also increased by $2 million. Despite the slowdown in water usage in the country, the increase in prices has helped offset revenues’ impact. Moreover, the directors announced a quarterly cash dividend payment of 55 cents per share. Hence, the dividend growth rate for the past year for the company is around 10%. American Water Works expects to grow its EPS and dividends at a compound annual growth rate (CAGR) between 7% to 10% from 2019 to 2024. NextEra Energy (NEE) Source: madamF / Shutterstock.com NextEra Energy is the most valuable energy company in terms of market capitalization in the U.S. It runs regulated electric utilities in Florida and a nonregulated energy business operating natural gas and renewable energy projects. Additionally, it boasts one of the most robust financial profiles in the sector, with the highest credit ratings among businesses of its kind. NEE stock’s 12-month return relative to the S&P 500 is at a healthy 19.3%. The company reported its second-quarter results back in July, which was weighed down by the pandemic. The adjusted EPS for the quarter was at $2.61, surpassing expectations by 4.4%. However, revenues were down 15.4%. Revenues across all its segments lagged behind consensus estimates. Nevertheless, the company’s earnings are expected to grow at a CAGR of 6% to 8% per year through 2021. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes Its financial strength continues to impress as cash and cash equivalents were up 268% crossing the $1 billion mark. Moreover, the company plans to increase its dividend by approximately 10% per year through 2022. AES Corporation (AES) Source: zhao jiankang / Shutterstock.com AES is one of the largest electric utility companies in the U.S. operating in multiple nations. It has one of the most diversified portfolios of distribution and electricity generation businesses. Additionally, it is among the top electric utility companies leading the charge towards renewable energy. AES stock’s 12-month return relative to the S&P 500 is at a solid 10.9%. The pandemic weighed down the company’s second-quarter results. Adjusted EPS was down 3.8% to 25 cents while revenues dropped 11.3%. Despite the slowdown, the management feels that market demand is better than their expectations, and collections are in line with historical levels. The company expects a 7% to 9% average growth rate for its business through to 2022. AES is betting heavily on the green revolution and hopes to generate less than 10% of its electricity from coal by 2030. It is aggressively retiring its coal plants and remains focused on increasing its renewable plants. On the date of publication, Muslim Farooque 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 Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post 3 Utility Stocks With Tried-and-True Gains appeared first on InvestorPlace.
Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side. Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on five names. While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
(Bloomberg) -- Cenovus Energy Inc. agreed to buy Husky Energy Inc. in an all-stock deal valuing Husky at about C$3.8 billion ($2.9 billion), creating Canada’s third-largest oil and natural gas producer.The deal promises to combine two of the largest players in Canada’s oil sands at a time that valuations have crumbled in the sector. Even before this year’s oil-price slump, Alberta was grappling with severe pipeline bottlenecks that limited exports. Husky’s shares are down about 84% over the past five years, while Cenovus has dropped 74%.Cenovus will own 61% of the new company, while Husky will hold a 39% stake. Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings, the main shareholder in Husky, will own about 27%, according to a company presentation.The new company is expecting C$1.2 billion in cost and capital synergies, the statement said. Husky shareholders will receive 0.7845 of a Cenovus share and 0.0651 of a Cenovus share purchase warrant in exchange for each Husky common share, representing a 21% premium excluding warrants, it said.The combination is valued at C$23.6 billion when debt is included, according to the statement. The deal gives Husky an enterprise value of approximately C$10.2 billion.A Big DealThe deal is the largest in the Canadian oil industry since Husky’s abortive C$2.75 billion hostile takeover bid for MEG Energy Corp. Husky abandoned that proposed transaction in January 2019 after failing to win enough shareholder support.After the merger, the company will have about C$12 billion in net debt and C$8.5 billion in committed credit facilities from a broad banking syndicate, the presentation showed.The newly combined company is expected to break even in 2021 at a West Texas Intermediate crude price of US$36 a barrel. It will continue to operate as Cenovus Energy with its headquarters remaining in Calgary. The transaction has been approved by the boards of both companies and is expected to close in next year’s first quarter.The tie-up also follows a recent flurry of oil and gas deals south of the border that’s shaking up the U.S. shale industry. Just last week, ConocoPhillips agreed to buy Concho Resources Inc. for $9.7 billion takeover and Pioneer Natural Resources Co. agreed to acquire Parsley Energy Inc. for $4.5 billion. EQT Corp., the biggest producer of U.S. natural gas, is also seeking to acquire rival CNX Resources Corp., people familiar with the matter said last week.(Updates with more detail throughout. A previous version was corrected to reflect some prices were in Canadian dollars.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Apple’s (NASDAQ:AAPL) iPhone event on Oct. 13 has made many investors more interested in the shares of companies that are involved in the 5G space. One such name is Nokia stock. Source: RistoH / Shutterstock.com Recent research by Nokia and Nokia Bell Labs determined that “5G-enabled industries have the potential to add $8 trillion to global GDP by 2030, as COVID-19 accelerates medium and long-term digital investment and value creation… Companies at an advanced level of 5G adoption were the only group to experience a net increase in productivity (+10%) following COVID-19, and the only group able to maintain or increase customer engagement during the pandemic.” The report continues, “across 8 economies – Australia, Germany, Finland, Japan, Saudi Arabia, South Korea, the UK and the US – 50% of companies are at the midway level on 5G readiness, between initial planning, trials and deployment, compared to just 7% that are classed as 5G mature.”InvestorPlace - Stock Market News, Stock Advice & Trading Tips Now investors may wonder if they should buy the shares of Nokia, one of the companies that is leading the global deployment of 5G networks. The company is expected to report earnings at the end of October. Between now and then, Nokia stock may be choppy, especially given the increased volatility levels of the stock market during this busy earnings season. However, long-term investors may regard dips by Nokia as a good opportunity to buy its shares. Here’s why. Nokia’s Q2 Results Finland-based Nokia makes telecom-grade networking equipment. In 2013, it sold its fading mobile-phone business to Microsoft (NASDAQ:MSFT). Then management changed course, re-positioning the company as a networking firm, and, more recently, as a 5G-equipment business. 7 Airline Stocks to Buy on Pelosi Stimulus Hopes The company released its Q2 results in late July. Last quarter, Nokia’s sales dropped 11% year-over-year to 5.09 billion euros. On the other hand, its profit, excluding certain items, came in at 316 million euros, compared to 258 million euros during the same period a year earlier. Investors were pleased with Nokia’s cash flow and profitability. Over the past several quarters, Nokia has been increasing its large-scale capital investments, particularly in 5G networking. Its most important clients are communication service providers. The company has signed several important deals to introduce 5G networks in a number of countries. For instance, in late September, it signed a major 5G equipment agreement with BT (OTCMKTS:BTGOF), the U.K.’s biggest telecom company. In October, Verizon Communications (NYSE:VZ) announced it had chosen Nokia to provide private 5G networks outside the U.S., mainly in Europe and the Asia-Pacific. NASA has also recently selected Nokia as a partner to build the first LTE/4G communications system on the moon. Analysts believe that, going forward, the proliferation of 5G technology will likely drive Nokia’s growth. Their median price target on Nokia stock is $5.27. The shares’ forward price-earnings and price-sales ratios stand at 12.94 and 0.89, respectively. More value investors may begin to buy the shares. The Bottom Line on Nokia Stock In recent quarters, Nokia’s management has put more emphasis on getting 5G contracts. Its recent 5G wins have shown that those efforts are beginning to pay off. I believe that Nokia stock price will likely go over $5 in the coming weeks, and it could possibly go even higher than that. Therefore, long-term investors should consider buying it around its current levels. Meanwhile, the company could even become a takeover target. Alternatively, those investors who are interested in 5G names but do not want to buy the stock may consider purchasing the shares of an exchange-traded fund (ETF) that owns the company. Examples of such funds include the Defiance 5G Next Gen Connectivity ETF (NYSE:FIVG), the First Trust IndXX NextG ETF (NASDAQ:NXTG), and the Defiance Quantum ETF (NYSE:QTUM). On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. She also publishes educational articles on long-term investing. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Long-Term Investors Can Consider Investing in Nokia appeared first on InvestorPlace.