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300 | 17,049 | 2023-02-19 00:00:00 UTC | 5 Top Stocks With Magnificent Share-Repurchase Track Records | AAPL | https://www.nasdaq.com/articles/5-top-stocks-with-magnificent-share-repurchase-track-records | null | null | Share buybacks, when executed well, can be a powerful way for stocks to generate value for their investors.
Often, when a business buys its stock as part of a share repurchase program, it lowers the number of shares outstanding. While dilution through stock-based compensation or stock offerings can impede this, a steadily declining share count offers the potential for more-substantial returns.
If a company buys back 20% of its shares, its earnings per share (EPS) increase by 25%; if it lowers its count by half, EPS doubles.
Five companies riding the power of this increasing EPS are Apple (NASDAQ: AAPL), Kroger (NYSE: KR), O'Reilly Automotive (NASDAQ: ORLY), Murphy USA (NYSE: MUSA), and Lowe's Companies (NYSE: LOW).
Data by YCharts.
Along with these steadily declining share counts, here's what makes these five top stocks fantastic candidates for investors to buy and hold forever.
1. Apple
Apple has not only repurchased 20% of its shares over the last five years, but also dropped its count by 40% over the last 10. Fueled by this lower share total, Apple's EPS rose by 294% in the last decade, compared to its sales increase of 129% over the same time.
A few prognosticators seem to think Apple's fortress showed a few cracks as sales dropped 5% in the first quarter of 2023, but its high-margin services segment grew by 6%. That segment -- made up of advertising, AppleCare, cloud services, digital content, and payment services -- should continue to thrive as Apple's ecosystem becomes further integrated into its 2 billion users' lives.
Best yet, the company's 58% return on invested capital (ROIC) ranks as the ninth best in the S&P 500 index. Measuring profitability compared to debt and equity, high ROIC generators tend to outperform, making Apple's buyback track record look even more enticing.
2. Kroger
Kroger has postponed new buybacks, waiting for approval on its proposed $25 billion deal for fellow grocer Albertsons (NYSE: ACI). But its 31% decrease in shares since 2013 is still impressive. Already saddled with $11 billion in long-term debt compared to $2 billion in cash, management wants to build its cash balance before it becomes further indebted with the merger.
Whether the deal is approved or not, Kroger's history of returning cash to shareholders should keep it on savvy investors' radars. Besides its repurchases, the company has raised its dividend (now yielding 2.4%) for 19 consecutive years -- and only uses 23% of its earnings to fund these payouts.
Posting 7% same-store sales growth (minus fuel) and 13% adjusted EPS growth in the third quarter, Kroger saw digital sales and private-label brands lead the way, each increasing by 10%. The grocer will never be mistaken as a growth company, but its EPS has nearly tripled over the last decade, while its dividend jumped 238%.
Kroger is down 30% from its 52-week highs, and now trades with a low 5.8 ratio of enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization).
Data by YCharts.
This low valuation and the company's incredible cash returns to shareholders mean investors could be getting a discount on this steady stock as the market weighs the uncertainty surrounding its mega-merger.
3. O'Reilly Automotive
After lowering its share count by 44% across the last decade, car parts distributor O'Reilly and its 5,900 stores could be the most aggressive repurchaser on this list. The company has bypassed a dividend in favor of returning all of its cash to shareholders with buybacks and has grown its EPS by a stunning 574% since 2013.
With 59% of its sales from do-it-yourself (DIY) purchasers, the company boomed during the lockdown as its customers kept busy maintaining their cars at home. The remaining 41% of its sales comes from its professional unit (delivering parts to mechanics), which restarted its double-digit growth once the pandemic waned.
O'Reilly aims to add 180 to 190 stores in 2023 as it expands geographically, with new distribution centers in Puerto Rico and Mexico.
These incredible cash returns to shareholders are combined with the eighth-highest ROIC in the S&P 500 index, so look for O'Reilly to continue outpacing the market.
4. Murphy USA
Following its spinoff from Murphy Oil in 2013, convenience store operator Murphy USA has eliminated 53% of its total shares outstanding. It is recognizable thanks to its 1,150 kiosk stores located near Walmart locations across the U.S., but it is turning its attention to growing its own independent shops.
It now has over 500 stand-alone, larger-format stores running under the Murphy Express and QuickChek brands, and it is expanding its food and beverage operations.
The company initiated a dividend in late 2020 and now pays a yield of 0.5%, which only uses a minuscule 5% of its net income. This low payout ratio leaves abundant room for future dividend increases while simultaneously allowing for continued share repurchases.
Murphy USA trades at an EV-to-EBITDA ratio of just 6.4 -- despite posting a total return of 600% since its debut on the stock market -- and is a premiere example of investing in simplicity.
5. Lowe's
The last in our group, Lowe's, has removed 44% of its share count since 2013 -- boosting EPS by almost 500% over the same time. Making this feat even more impressive is Lowe's 59 years of consecutive increases for its dividend, which now yields 1.9%.
Focusing on its total home strategy, the company emphasizes its professional sales, installation offerings, and omnichannel experience at each store. DIY and pro sales account for a 50-50 split in the $1 trillion overall home improvement market, but the pro side only accounts for 26% of Lowe's sales.
This difference leaves a long runway for growth, especially with its new pro rewards members spending three times more than their nonmember peers.
Lowe's trades at 19 times free cash flow. Its strong cash returns to shareholders and ROIC near 40% make it another excellent compounder to buy and hold forever.
10 stocks we like better than Apple
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Josh Kohn-Lindquist has positions in Apple, Lowe's Companies, and Murphy Usa. The Motley Fool has positions in and recommends Apple and Walmart. The Motley Fool recommends Lowe's Companies and Murphy Oil and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Five companies riding the power of this increasing EPS are Apple (NASDAQ: AAPL), Kroger (NYSE: KR), O'Reilly Automotive (NASDAQ: ORLY), Murphy USA (NYSE: MUSA), and Lowe's Companies (NYSE: LOW). Measuring profitability compared to debt and equity, high ROIC generators tend to outperform, making Apple's buyback track record look even more enticing. This low valuation and the company's incredible cash returns to shareholders mean investors could be getting a discount on this steady stock as the market weighs the uncertainty surrounding its mega-merger. | Five companies riding the power of this increasing EPS are Apple (NASDAQ: AAPL), Kroger (NYSE: KR), O'Reilly Automotive (NASDAQ: ORLY), Murphy USA (NYSE: MUSA), and Lowe's Companies (NYSE: LOW). Posting 7% same-store sales growth (minus fuel) and 13% adjusted EPS growth in the third quarter, Kroger saw digital sales and private-label brands lead the way, each increasing by 10%. The Motley Fool recommends Lowe's Companies and Murphy Oil and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Five companies riding the power of this increasing EPS are Apple (NASDAQ: AAPL), Kroger (NYSE: KR), O'Reilly Automotive (NASDAQ: ORLY), Murphy USA (NYSE: MUSA), and Lowe's Companies (NYSE: LOW). See the 10 stocks *Stock Advisor returns as of February 8, 2023 Josh Kohn-Lindquist has positions in Apple, Lowe's Companies, and Murphy Usa. The Motley Fool recommends Lowe's Companies and Murphy Oil and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Five companies riding the power of this increasing EPS are Apple (NASDAQ: AAPL), Kroger (NYSE: KR), O'Reilly Automotive (NASDAQ: ORLY), Murphy USA (NYSE: MUSA), and Lowe's Companies (NYSE: LOW). Often, when a business buys its stock as part of a share repurchase program, it lowers the number of shares outstanding. If a company buys back 20% of its shares, its earnings per share (EPS) increase by 25%; if it lowers its count by half, EPS doubles. | 4 |
301 | 17,052 | 2023-02-18 00:00:00 UTC | Best Stock to Buy: Amazon Stock vs. Alphabet Stock vs. Apple Stock | AAPL | https://www.nasdaq.com/articles/best-stock-to-buy%3A-amazon-stock-vs.-alphabet-stock-vs.-apple-stock | null | null | It's no surprise that investors are interested in buying Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Apple (NASDAQ: AAPL) stocks. These are three of the best companies in the world. This video will answer which stock is the better buy: Amazon, Alphabet, or Apple.
*Stock prices used were the afternoon prices of Feb. 16, 2023. The video was published on Feb. 18, 2023.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Parkev Tatevosian, CFA has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon.com, and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through fool.com/parkev, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | It's no surprise that investors are interested in buying Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Apple (NASDAQ: AAPL) stocks. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. | It's no surprise that investors are interested in buying Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Apple (NASDAQ: AAPL) stocks. The Motley Fool has positions in and recommends Alphabet, Amazon.com, and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | It's no surprise that investors are interested in buying Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Apple (NASDAQ: AAPL) stocks. See the 10 stocks *Stock Advisor returns as of February 8, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | It's no surprise that investors are interested in buying Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Apple (NASDAQ: AAPL) stocks. This video will answer which stock is the better buy: Amazon, Alphabet, or Apple. That's right -- they think these 10 stocks are even better buys. | 4 |
302 | 17,057 | 2023-02-17 00:00:00 UTC | Zacks Value Trader Highlights: Taiwan Semiconductor, Chevron, US Bancorp, Apple and Amazon | AAPL | https://www.nasdaq.com/articles/zacks-value-trader-highlights%3A-taiwan-semiconductor-chevron-us-bancorp-apple-and-amazon | null | null | For Immediate Release
Chicago, IL – February 17, 2023 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2055570/grading-berkshire-hathaways-q4-trades)
Grading Berkshire Hathaway's Q4 Trades
Welcome to Episode #317 of the Value Investor Podcast.
(0:15) - What Can We Learn From Berkshire Hathaways 13F?
(4:30) - Breaking Down Q4 Sells and Growing Positions: How Did They Perform?
(15:50) - What Was Berkshire Hathaway Buying With Their Cash Reserves?
(20:35) - Episode Roundup: TSM, USB, BK, BAC, CVX, AAPL, LPX, PARA
Podcast@Zacks.com
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The fourth quarter 2022 13-F filings are out and that means value investors get to see what stocks Warren Buffett, and Berkshire Hathaway, are buying, or selling. Many investors follow his trades to a "t" even going as far as replicating them.
But should you?
This filing had some surprising sales and few stock purchases, even though the stock market was still selling off, and many stocks were cheap on a valuation basis, and Berkshire was still sitting on a pile of cash.
What is Buffett waiting for? Is his lack of purchases a sign that he thinks stocks have further to sell-off? Or did he "miss" the bottom again, like he did in 2020's pandemic sell-off when he also didn't jump in to buy?
Let's look at 5 of the key buys and sales in Q4.
Berkshire Hathaway's Big Buys, and Sales, in the Fourth Quarter of 2022
1. Taiwan Semiconductor TSM
Berkshire Hathaway first bought a position in Taiwan Semiconductor in the third quarter of 2022 to much fanfare. It was a $4.2 billion position and the first semiconductor company to be in the portfolio for years.
But in the fourth quarter, just a few months later, Berkshire sold 86% of its Taiwan Semiconductor shares. It went from 60 million shares to just 8.3 million.
What happened to the infamous Buffett strategy of the best time to sell is never? Even worse, shares of Taiwan Semiconductor have rallied big in 2023, adding 24.5%.
Does this sale of Taiwan Semiconductor make any sense?
2. Chevron CVX
Berkshire Hathaway has gone all in on the energy companies over the last 2 years, buying billions of dollars of Chevron and Occidental Petroleum.
But in the fourth quarter of 2022, it sold 1%, or 2.4 million shares, of its Chevron position. This was also a head scratcher to many. What's the point of selling such a small position?
Is Buffett still a big believer in Chevron?
3. US Bancorp USB
Berkshire continues to sell shares of its regional banks. It first bought US Bancorp in the first quarter of 2006. But in the fourth quarter, it sold 91% of its shares.
US Bancorp is now just a 0.10% position in the Berkshire portfolio. Will it be completely eliminated in Q1 of this year?
US Bancorp shares are up 12.5% year-to-date, but over the last 5 years are down 11.7%. It's been tough owning the banks.
4. Apple AAPL
Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. But that didn't keep Berkshire from adding to its position in the fourth quarter as the Apple shares sold off.
Berkshire bought 333,856 shares of Apple in the fourth quarter, but it has 895 million shares so this is really a small buy. Why not buy more? Berkshire has plenty of cash to do so.
Does Apple remain the jewel in the Berkshire crown?
5. Amazon AMZN
Berkshire has a small position in Amazon that it bought in the first quarter of 2019. It has never sold, nor bought, any more shares.
But Amazon's shares fell 50% last year and are still down 35% over the last year even with 2023's rally.
Why not buy more, like Berkshire did with Apple, when they sold off? This has not been a good trade for Berkshire. From Mar 29, 2019 to Feb 15, 2023, the shares are up just 12.6% but, meanwhile, the S&P 500 was up 45.9% during the same time. And that's without the dividends included.
What's going on with the Amazon position?
What Else Do You Need to Know About Berkshire's Fourth Quarter Trades?
Listen to this week's podcast to find out.
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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (20:35) - Episode Roundup: TSM, USB, BK, BAC, CVX, AAPL, LPX, PARA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Apple AAPL Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report To read this article on Zacks.com click here. | (20:35) - Episode Roundup: TSM, USB, BK, BAC, CVX, AAPL, LPX, PARA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report To read this article on Zacks.com click here. Apple AAPL Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. | (20:35) - Episode Roundup: TSM, USB, BK, BAC, CVX, AAPL, LPX, PARA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report To read this article on Zacks.com click here. Apple AAPL Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. | (20:35) - Episode Roundup: TSM, USB, BK, BAC, CVX, AAPL, LPX, PARA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Apple AAPL Apple remains Berkshire's largest position in its equity portfolio, at 38.9% of the portfolio. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report U.S. Bancorp (USB) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report To read this article on Zacks.com click here. | 4 |
303 | 17,070 | 2023-02-16 00:00:00 UTC | US STOCKS-Wall St slides as inflation, jobless claims data fuel rate-hike angst | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-slides-as-inflation-jobless-claims-data-fuel-rate-hike-angst | null | null | By Johann M Cherian
Feb 16 (Reuters) - U.S. main stock indexes fell more than 1% on Thursday after stronger-than-expected inflation data and a fall in weekly jobless claims fed into fears that the Federal Reserve will keep raising interest rates to tame high prices.
A Labor Department report showed producer prices climbed 0.7% in January, more than the estimate for a 0.4% increase, highlighting persistent price pressures despite the tighter monetary policy.
Another set showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, offering more evidence of the economy's resilience.
"You're seeing the inflation numbers continue to be higher than expected and not really showing disinflation and now the expectations are that the Fed is likely to take rates higher and be more aggressive going forward," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance at Charlotte, North Carolina.
"You're also seeing the job market still very strong as well, with claims coming in less than expected."
After a torrid 2022, the main stock indexes have climbed this year on the back of upbeat earnings and expectations that the U.S. central bank will switch to smaller rate hikes.
However, signs of a resilient economy and an acceleration in January consumer prices have recently raised concerns among traders that the Fed may not hit pause on its hawkish policies anytime soon, with hopes of rate cuts later this year receding further.
The Fed is seen pushing the benchmark rate above the 5% mark by May and keeping it above those levels till the year-end. 0#FEDWATCH
At 10:09 a.m. ET, the Dow Jones Industrial Average .DJI was down 383.90 points, or 1.12%, at 33,744.15, the S&P 500 .SPX was down 46.70 points, or 1.13%, at 4,100.90, and the Nasdaq Composite .IXIC was down 136.01 points, or 1.13%, at 11,934.59.
All the 11 major S&P 500 sectors posted losses of more than 1%, with the real estate .SPLRCR leading the declines.
Adding to the downbeat mood, Cleveland Fed President Loretta Mester said inflation remains too high and noted that she was open to raising rates by more than what her colleagues wanted at the last monetary policy meeting.
Traders will also scrutinize remarks from other Fed officials, including St. Louis Fed President James Bullard, to assess the central bank's tone on monetary policy.
Shares of high-growth stocks like Tesla TSLA.O, Nvidia NVDA.O, Alphabet GOOGL.O and Apple Inc AAPL.O fell between 0.8% and 2.7% as U.S. Treasury yields rose. US/
Cisco Systems Inc CSCO.O rose 5.1% to hit a nine-month high after the network gear maker raised its full-year earnings forecast.
Roku Inc ROKU.O soared 14.9% after the company forecast first-quarter revenue above Wall Street estimates.
Shopify Inc SHOP.N sank 15.8% after the Canadian ecommerce company forecast slowing revenue growth for the current quarter despite price hikes and new product launches.
Declining issues outnumbered advancers for a 5.76-to-1 ratio on the NYSE and 2.82-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and one new lows, while the Nasdaq recorded 28 new highs and 22 new lows.
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Sriraj Kalluvila)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Shares of high-growth stocks like Tesla TSLA.O, Nvidia NVDA.O, Alphabet GOOGL.O and Apple Inc AAPL.O fell between 0.8% and 2.7% as U.S. Treasury yields rose. By Johann M Cherian Feb 16 (Reuters) - U.S. main stock indexes fell more than 1% on Thursday after stronger-than-expected inflation data and a fall in weekly jobless claims fed into fears that the Federal Reserve will keep raising interest rates to tame high prices. However, signs of a resilient economy and an acceleration in January consumer prices have recently raised concerns among traders that the Fed may not hit pause on its hawkish policies anytime soon, with hopes of rate cuts later this year receding further. | Shares of high-growth stocks like Tesla TSLA.O, Nvidia NVDA.O, Alphabet GOOGL.O and Apple Inc AAPL.O fell between 0.8% and 2.7% as U.S. Treasury yields rose. By Johann M Cherian Feb 16 (Reuters) - U.S. main stock indexes fell more than 1% on Thursday after stronger-than-expected inflation data and a fall in weekly jobless claims fed into fears that the Federal Reserve will keep raising interest rates to tame high prices. After a torrid 2022, the main stock indexes have climbed this year on the back of upbeat earnings and expectations that the U.S. central bank will switch to smaller rate hikes. | Shares of high-growth stocks like Tesla TSLA.O, Nvidia NVDA.O, Alphabet GOOGL.O and Apple Inc AAPL.O fell between 0.8% and 2.7% as U.S. Treasury yields rose. By Johann M Cherian Feb 16 (Reuters) - U.S. main stock indexes fell more than 1% on Thursday after stronger-than-expected inflation data and a fall in weekly jobless claims fed into fears that the Federal Reserve will keep raising interest rates to tame high prices. "You're seeing the inflation numbers continue to be higher than expected and not really showing disinflation and now the expectations are that the Fed is likely to take rates higher and be more aggressive going forward," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance at Charlotte, North Carolina. | Shares of high-growth stocks like Tesla TSLA.O, Nvidia NVDA.O, Alphabet GOOGL.O and Apple Inc AAPL.O fell between 0.8% and 2.7% as U.S. Treasury yields rose. By Johann M Cherian Feb 16 (Reuters) - U.S. main stock indexes fell more than 1% on Thursday after stronger-than-expected inflation data and a fall in weekly jobless claims fed into fears that the Federal Reserve will keep raising interest rates to tame high prices. A Labor Department report showed producer prices climbed 0.7% in January, more than the estimate for a 0.4% increase, highlighting persistent price pressures despite the tighter monetary policy. | 1 |
304 | 17,089 | 2023-02-15 00:00:00 UTC | Norwegian payment app Vipps takes on Apple, wants EU antitrust action | AAPL | https://www.nasdaq.com/articles/norwegian-payment-app-vipps-takes-on-apple-wants-eu-antitrust-action | null | null | By Foo Yun Chee
BRUSSELS, Feb 15 (Reuters) - Norwegian mobile payment app Vipps wants European Union (EU) antitrust regulators to force Apple AAPL.O to allow access to its tap and go technology without any restrictions so that other companies can be more competitive, Vipps Chief Executive Rune Garborg said.
Garborg's comments came a day after Apple made a last ditch bid to convince EU antitrust regulators that it does not block rivals' access to its technology used for mobile wallets at a closed hearing. Vipps was a third party at the hearing.
Vipps, owned by a consortium of Norwegian banks and which merged with Danish peer MobilePay last year, said the issue is critical because of Apple's popularity in the Nordics and the increasing use of mobile payments, which is powered by near field communication (NFC) technology.
"This is really important for us. Seventy-eight percent of card transactions in Norway are done through terminals. It is why NFC is so important especially among young people," Garborg told Reuters.
"Apple is only sharing NFC with banks, which have to pay for installing their cards in Apple Pay. But for us as a wallet, we don't have open access to NFC," he said.
Vipps said NFC access would increase the geographical reach of its mobile wallet, make it easier to innovate products and better enable cross-border transactions.
Apple had no immediate comment. The company has previously said that Apple Pay is one of many options available to European consumers and which has ensured equal access to its technology.
Vipps said it tried several alternatives to NFC but found them cumbersome and not competitive.
(Reporting by Foo Yun Chee; Editing by Josie Kao)
((foo.yunchee@thomsonreuters.com; +32 2 287 6844; Reuters Messaging: foo.yunchee.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Foo Yun Chee BRUSSELS, Feb 15 (Reuters) - Norwegian mobile payment app Vipps wants European Union (EU) antitrust regulators to force Apple AAPL.O to allow access to its tap and go technology without any restrictions so that other companies can be more competitive, Vipps Chief Executive Rune Garborg said. Garborg's comments came a day after Apple made a last ditch bid to convince EU antitrust regulators that it does not block rivals' access to its technology used for mobile wallets at a closed hearing. Vipps, owned by a consortium of Norwegian banks and which merged with Danish peer MobilePay last year, said the issue is critical because of Apple's popularity in the Nordics and the increasing use of mobile payments, which is powered by near field communication (NFC) technology. | By Foo Yun Chee BRUSSELS, Feb 15 (Reuters) - Norwegian mobile payment app Vipps wants European Union (EU) antitrust regulators to force Apple AAPL.O to allow access to its tap and go technology without any restrictions so that other companies can be more competitive, Vipps Chief Executive Rune Garborg said. Garborg's comments came a day after Apple made a last ditch bid to convince EU antitrust regulators that it does not block rivals' access to its technology used for mobile wallets at a closed hearing. (Reporting by Foo Yun Chee; Editing by Josie Kao) ((foo.yunchee@thomsonreuters.com; +32 2 287 6844; Reuters Messaging: foo.yunchee.thomsonreuters.com@reuters.net)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Foo Yun Chee BRUSSELS, Feb 15 (Reuters) - Norwegian mobile payment app Vipps wants European Union (EU) antitrust regulators to force Apple AAPL.O to allow access to its tap and go technology without any restrictions so that other companies can be more competitive, Vipps Chief Executive Rune Garborg said. Garborg's comments came a day after Apple made a last ditch bid to convince EU antitrust regulators that it does not block rivals' access to its technology used for mobile wallets at a closed hearing. Vipps, owned by a consortium of Norwegian banks and which merged with Danish peer MobilePay last year, said the issue is critical because of Apple's popularity in the Nordics and the increasing use of mobile payments, which is powered by near field communication (NFC) technology. | By Foo Yun Chee BRUSSELS, Feb 15 (Reuters) - Norwegian mobile payment app Vipps wants European Union (EU) antitrust regulators to force Apple AAPL.O to allow access to its tap and go technology without any restrictions so that other companies can be more competitive, Vipps Chief Executive Rune Garborg said. Garborg's comments came a day after Apple made a last ditch bid to convince EU antitrust regulators that it does not block rivals' access to its technology used for mobile wallets at a closed hearing. "Apple is only sharing NFC with banks, which have to pay for installing their cards in Apple Pay. | 1 |
305 | 17,097 | 2023-02-14 00:00:00 UTC | Notable Tuesday Option Activity: CHPT, AAPL, SNOW | AAPL | https://www.nasdaq.com/articles/notable-tuesday-option-activity%3A-chpt-aapl-snow | null | null | Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in ChargePoint Holdings Inc (Symbol: CHPT), where a total volume of 98,358 contracts has been traded thus far today, a contract volume which is representative of approximately 9.8 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 103% of CHPT's average daily trading volume over the past month, of 9.5 million shares. Particularly high volume was seen for the $12 strike call option expiring February 17, 2023, with 27,252 contracts trading so far today, representing approximately 2.7 million underlying shares of CHPT. Below is a chart showing CHPT's trailing twelve month trading history, with the $12 strike highlighted in orange:
Apple Inc (Symbol: AAPL) options are showing a volume of 719,906 contracts thus far today. That number of contracts represents approximately 72.0 million underlying shares, working out to a sizeable 97% of AAPL's average daily trading volume over the past month, of 74.2 million shares. Especially high volume was seen for the $150 strike put option expiring February 17, 2023, with 68,070 contracts trading so far today, representing approximately 6.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange:
And Snowflake Inc (Symbol: SNOW) saw options trading volume of 50,194 contracts, representing approximately 5.0 million underlying shares or approximately 92.8% of SNOW's average daily trading volume over the past month, of 5.4 million shares. Especially high volume was seen for the $180 strike call option expiring February 17, 2023, with 3,729 contracts trading so far today, representing approximately 372,900 underlying shares of SNOW. Below is a chart showing SNOW's trailing twelve month trading history, with the $180 strike highlighted in orange:
For the various different available expirations for CHPT options, AAPL options, or SNOW options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
Shipping Dividend Stocks
HYEM shares outstanding history
Nautilus Past Earnings
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $150 strike put option expiring February 17, 2023, with 68,070 contracts trading so far today, representing approximately 6.8 million underlying shares of AAPL. Below is a chart showing CHPT's trailing twelve month trading history, with the $12 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 719,906 contracts thus far today. That number of contracts represents approximately 72.0 million underlying shares, working out to a sizeable 97% of AAPL's average daily trading volume over the past month, of 74.2 million shares. | Below is a chart showing CHPT's trailing twelve month trading history, with the $12 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 719,906 contracts thus far today. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: And Snowflake Inc (Symbol: SNOW) saw options trading volume of 50,194 contracts, representing approximately 5.0 million underlying shares or approximately 92.8% of SNOW's average daily trading volume over the past month, of 5.4 million shares. That number of contracts represents approximately 72.0 million underlying shares, working out to a sizeable 97% of AAPL's average daily trading volume over the past month, of 74.2 million shares. | That number of contracts represents approximately 72.0 million underlying shares, working out to a sizeable 97% of AAPL's average daily trading volume over the past month, of 74.2 million shares. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: And Snowflake Inc (Symbol: SNOW) saw options trading volume of 50,194 contracts, representing approximately 5.0 million underlying shares or approximately 92.8% of SNOW's average daily trading volume over the past month, of 5.4 million shares. Below is a chart showing CHPT's trailing twelve month trading history, with the $12 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 719,906 contracts thus far today. | Especially high volume was seen for the $150 strike put option expiring February 17, 2023, with 68,070 contracts trading so far today, representing approximately 6.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: And Snowflake Inc (Symbol: SNOW) saw options trading volume of 50,194 contracts, representing approximately 5.0 million underlying shares or approximately 92.8% of SNOW's average daily trading volume over the past month, of 5.4 million shares. Below is a chart showing CHPT's trailing twelve month trading history, with the $12 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 719,906 contracts thus far today. | 2 |
306 | 17,122 | 2023-02-13 00:00:00 UTC | US STOCKS-Nasdaq set for higher open as megacaps rise | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-set-for-higher-open-as-megacaps-rise | null | null | (For a Reuters live blog on U.S., UK and European stock markets, click [LIVE/] or type LIVE/ in a news window.)
*
Meta climbs on report of more layoffs
*
Fidelity National slumps on payments business spinoff
*
Novavax rises on report of U.S. government vaccine deal
*
Futures: Nasdaq up 0.33%, S&P up 0.09%, Dow flat
(Adds comment; updates prices, details)
By Johann M Cherian
Feb 13 (Reuters) - The Nasdaq index was set to open higher on Monday as beaten-down megacap growth stocks gained, while Meta Platforms climbed on reports of fresh layoffs.
Apple Inc , Amazon.com Inc , Alphabet Inc , Tesla Inc and Microsoft Corp added between 0.1% and 1.1% before the bell.
"(Investors) have been holding back during the regime of rate hikes because they believed it would kill the growth of technology type stocks," said Peter Andersen, founder of Andersen Capital Management.
Andersen added that the Fed is now signaling that its near the end of its tightening cycle, which could provide an added boost to such high-growth firms.
All U.S. indexes clocked their worst declines last year since the financial crisis of 2008, led by a 33% slump in the tech-heavy Nasdaq , on fears that the Federal Reserve would tip the economy into a recession with its hawkish monetary policy.
While money markets are expecting rates to peak at 5.2% in July, a resilient labor market has lifted hopes of a milder-than-expected recession.
Meanwhile, Meta rose 2.2% on reports over the weekend that the Facebook parent is preparing to announce a fresh round of job cuts.
At 8:49 a.m. ET, Dow e-minis were down 14 points, or 0.04%, S&P 500 e-minis were up 3.5 points, or 0.09%, and Nasdaq 100 e-minis were up 40.5 points, or 0.33%.
Defense firms such as Boeing Co , Raytheon Technologies Corp , Lockheed Martin Corp and L3harris Technologies Inc added between 0.2% and 0.8%.
Novavax Inc added 1.8% after the U.S. government agreed to buy 1.5 million more doses of its COVID-19 vaccine.
Fidelity National Information Services Inc plunged 14.6% following its decision to spin off its merchant payments business.
Markets now await January inflation on Tuesday and retail sales data later in the week to reassess their bets on the central bank's monetary policy path.
(Reporting by Johann M Cherian in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila) ((johann.mcherian@thomsonreuters.com;)) Keywords: USA STOCKS/ (UPDATE 1)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | All U.S. indexes clocked their worst declines last year since the financial crisis of 2008, led by a 33% slump in the tech-heavy Nasdaq , on fears that the Federal Reserve would tip the economy into a recession with its hawkish monetary policy. Meanwhile, Meta rose 2.2% on reports over the weekend that the Facebook parent is preparing to announce a fresh round of job cuts. Markets now await January inflation on Tuesday and retail sales data later in the week to reassess their bets on the central bank's monetary policy path. | * Meta climbs on report of more layoffs * Fidelity National slumps on payments business spinoff * Novavax rises on report of U.S. government vaccine deal * Futures: Nasdaq up 0.33%, S&P up 0.09%, Dow flat (Adds comment; updates prices, details) By Johann M Cherian Feb 13 (Reuters) - The Nasdaq index was set to open higher on Monday as beaten-down megacap growth stocks gained, while Meta Platforms climbed on reports of fresh layoffs. "(Investors) have been holding back during the regime of rate hikes because they believed it would kill the growth of technology type stocks," said Peter Andersen, founder of Andersen Capital Management. ET, Dow e-minis were down 14 points, or 0.04%, S&P 500 e-minis were up 3.5 points, or 0.09%, and Nasdaq 100 e-minis were up 40.5 points, or 0.33%. | * Meta climbs on report of more layoffs * Fidelity National slumps on payments business spinoff * Novavax rises on report of U.S. government vaccine deal * Futures: Nasdaq up 0.33%, S&P up 0.09%, Dow flat (Adds comment; updates prices, details) By Johann M Cherian Feb 13 (Reuters) - The Nasdaq index was set to open higher on Monday as beaten-down megacap growth stocks gained, while Meta Platforms climbed on reports of fresh layoffs. "(Investors) have been holding back during the regime of rate hikes because they believed it would kill the growth of technology type stocks," said Peter Andersen, founder of Andersen Capital Management. Defense firms such as Boeing Co , Raytheon Technologies Corp , Lockheed Martin Corp and L3harris Technologies Inc added between 0.2% and 0.8%. | (For a Reuters live blog on U.S., UK and European stock markets, click [LIVE/] or type LIVE/ in a news window.) * Meta climbs on report of more layoffs * Fidelity National slumps on payments business spinoff * Novavax rises on report of U.S. government vaccine deal * Futures: Nasdaq up 0.33%, S&P up 0.09%, Dow flat (Adds comment; updates prices, details) By Johann M Cherian Feb 13 (Reuters) - The Nasdaq index was set to open higher on Monday as beaten-down megacap growth stocks gained, while Meta Platforms climbed on reports of fresh layoffs. Defense firms such as Boeing Co , Raytheon Technologies Corp , Lockheed Martin Corp and L3harris Technologies Inc added between 0.2% and 0.8%. | null |
307 | 17,127 | 2023-02-12 00:00:00 UTC | 3 5G Stocks to Buy for the Future of Connectivity | AAPL | https://www.nasdaq.com/articles/3-5g-stocks-to-buy-for-the-future-of-connectivity | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Fifth-generation (5G) wireless is here and has quickly become the dominant network on which the world’s electronic devices run, from smartphones to tablets and laptop computers. According to Contrive Datum Insights, which covers the industry, the global 5G market is expected to grow at a compound annual growth rate of nearly 50% and reach nearly $200 billion by 2030. Companies around the world are racing to upgrade their consumer electronic devices so that they run on 5G networks at the same time that other companies are enhancing the infrastructure needed to power those networks. It all adds up to a red-hot-growth market for investors to take advantage of. Here are three 5G stocks to buy for the future of connectivity.
QCOM Qualcomm $131
AMT American Tower $217
AVGO Broadcom $599
5G Stocks to Buy: Qualcomm (QCOM)
Source: Akshdeep Kaur Raked / Shutterstock.com
Based in San Diego, Qualcomm (NASDAQ:QCOM) makes the semiconductors and software that are critical to 5G networks and the mobile phones that run on them. The company forms a major part of America’s wireless backbone. And its technology has never been more in demand than now. That helps to explain why QCOM stock is up over 20% so far in 2023.
But even with this year’s sharp increase, QCOM stock still has a moderate price-earnings ratio of 12.5, which is low for a tech company of Qualcomm’s size. And the stock pays a quarterly dividend yield of 2.3%, which is high for a tech stock.
Qualcomm is facing a cyclical slowdown right now in mobile-phone sales, and it continues to grapple with supply-chain constraints. As a result, the company reported disappointing earnings recently, with its revenue falling 12% year-over-year to $9.46 billion, and its net income declining 27% to $2.68 billion or $2.37 per share. But over the long term, QCOM stock will remain a reliable winner and one of the best ways for investors to play the 5G boom.
American Tower (AMT)
Source: Shutterstock
Speaking of companies whose infrastructure is critical to 5G networks, how about Boston-based American Tower (NYSE:AMT)? A real estate investment trust (REIT), American Tower owns and operates the towers on which 5G signals are broadcast, not only in the U.S. but all over the world, from Latin America to Europe and Asia. Currently, the company owns and operates more than 200,000 communications sites globally, including more than 40,000 towers and sites in the U.S. and neighboring Canada.
AMT stock has performed well over the past few years and has a track record of consistently generating higher returns than the market.
This year, the stock is up 2.6%, and it is down 7% over the past year. The stock is a little pricey with a P/E ratio of 34.4, but it does offer shareholders a chunky quarterly dividend yield of 2.7%. In fact, American Tower has raised its dividend for 44 straight quarters, increasing the quarterly payout by 643% over an 11-year period.
Broadcom (AVGO)
Source: Sasima / Shutterstock.com
Another semiconductor and microchip company whose products are important components of broadband and wireless networks is California-based Broadcom (NASDAQ:AVGO). A going concern since 1961, Broadcom tends to get less attention in the business press than some newer semiconductor companies. However, AVGO has performed well over the long term for shareholders who have stuck with the company.
In 2023, AVGO stock is up 7%. The stock has gained 16% over the past 12-months, when many of its peers’ share prices fell more than 30%.
Like the other names on this list, Broadcom has a high quarterly dividend yield, as its yield is now 3.10%. Its P/E ratio looks decent at 22.8, indicating that Broadcom’s stock is not overvalued at its current levels.
AVGO stock did retreat recently on reports that Apple (NASDAQ:AAPL) plans to stop using its chips in favor of its own semiconductors and microchips. But not to worry; Broadcom will adapt and be just fine over the long haul.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
The post 3 5G Stocks to Buy for the Future of Connectivity appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AVGO stock did retreat recently on reports that Apple (NASDAQ:AAPL) plans to stop using its chips in favor of its own semiconductors and microchips. On the date of publication, Joel Baglole held a long position in AAPL. According to Contrive Datum Insights, which covers the industry, the global 5G market is expected to grow at a compound annual growth rate of nearly 50% and reach nearly $200 billion by 2030. | AVGO stock did retreat recently on reports that Apple (NASDAQ:AAPL) plans to stop using its chips in favor of its own semiconductors and microchips. On the date of publication, Joel Baglole held a long position in AAPL. QCOM Qualcomm $131 AMT American Tower $217 AVGO Broadcom $599 5G Stocks to Buy: Qualcomm (QCOM) Source: Akshdeep Kaur Raked / Shutterstock.com Based in San Diego, Qualcomm (NASDAQ:QCOM) makes the semiconductors and software that are critical to 5G networks and the mobile phones that run on them. | AVGO stock did retreat recently on reports that Apple (NASDAQ:AAPL) plans to stop using its chips in favor of its own semiconductors and microchips. On the date of publication, Joel Baglole held a long position in AAPL. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Fifth-generation (5G) wireless is here and has quickly become the dominant network on which the world’s electronic devices run, from smartphones to tablets and laptop computers. | AVGO stock did retreat recently on reports that Apple (NASDAQ:AAPL) plans to stop using its chips in favor of its own semiconductors and microchips. On the date of publication, Joel Baglole held a long position in AAPL. QCOM Qualcomm $131 AMT American Tower $217 AVGO Broadcom $599 5G Stocks to Buy: Qualcomm (QCOM) Source: Akshdeep Kaur Raked / Shutterstock.com Based in San Diego, Qualcomm (NASDAQ:QCOM) makes the semiconductors and software that are critical to 5G networks and the mobile phones that run on them. | null |
308 | 17,132 | 2023-02-11 00:00:00 UTC | Up 14% in 2023, Is It Safe to Invest in the Nasdaq Right Now? | AAPL | https://www.nasdaq.com/articles/up-14-in-2023-is-it-safe-to-invest-in-the-nasdaq-right-now | null | null | It has been quite the start to the year for the Nasdaq 100, as it is up 14%. That run-up might scare some investors away from the index, but they should look deeper than the headline numbers.
It can be useful to see how much room the highest-weighted companies in the index have to run before judging if it is worth owning. So let's look inside the Nasdaq 100 to see if it's still a buy after its incredible start to 2023.
Most of the leading components are still down more than the entire index
Although the Nasdaq 100 started off hot, it has only returned to a level last seen in September 2022. In fact, it's still down 24% from its all-time high. This makes it a consideration for investors, but the companies inside also look attractive.
The top 10 highest-weighted companies in the index make up an impressive 53.2%, but many are still off their all-time highs.
RANK COMPANY INDEX WEIGHTING PERCENT OFF ALL-TIME HIGH
1 Apple 12.2% (16.7%)
2 Microsoft 11.8% (22.7%)
3 Amazon 6.5% (47.3%)
4 Nvidia 4.1% (32.9%)
5 Alphabet (C Class Shares) 3.9% (37.4%)
6 Alphabet (A Class Shares) 3.9% (37.2%)
7 Tesla 3.7% (48.9%)
8 Meta Platforms 3.3% (53.3%)
9 Broadcom 1.9% (11%)
10 PepsiCo 1.9% (7.3%)
Source: Slickcharts and YCharts.
With those 10 stocks (representing nine companies due to Alphabet's split-class share structure) making up more than half the index -- and all but PepsiCo, Broadcom, and Apple down more than the overall index -- then I'd say the Nasdaq 100 has a lot of room to run.
But some stocks within this index likely have a greater ability to rebound than the index itself. Here are three I think can do just that.
A few stocks have strong potential to outperform in 2023
Of those top 10 companies, I'd keep an eye on Amazon, Alphabet, and Tesla. It's not that the others can't have a good 2023; it's just that the environment is better for these three to excel and outperform the index.
Amazon's stock took a dive as the effects of the pandemic's e-commerce boost wore off, which exposed the company's overinvestment in its resources. Now, Amazon is fixing its mistakes and trying to return to positive free cash flow (FCF) by laying off workers, cutting programs, and making other cost-saving moves.
The company has already made great strides, cutting its cash burn from $26 billion in the second quarter to $11.6 billion in the fourth. The stock now trades at its lowest price-to-sales valuation since 2015, leaving it plenty of upside.
Alphabet's fall coincided with the economy slowing, as its clients curtailed their ad spending. With nearly 80% of total revenue coming from advertising sources, that's a problem.
However, as investors continue to see positive economic indicators, this revenue stream could open up again by the end of the year, giving Alphabet an explosive upside. And its cloud computing segment, Google Cloud, performed the best out of all the cloud providers, up 32% year over year while getting closer to profitability.
The stock is also at its lowest price-to-FCF valuation in a decade. Investors should be taking a look at this giant.
GOOG price-to-FCF data by YCharts.
Tesla is the stock with the most upside in the top 10. The electric vehicle (EV) maker recently cut prices to increase its competitiveness, but management still believes it can maintain a 20% gross margin (one of the best in the industry) across its production. It's slated to produce around 1.8 million EVs in 2023, compared to 1.37 million in 2022.
Of course, valuation will always be an argument with Tesla, but with the stock trading for 54 times earnings, it's at least in the ballpark of a more reasonably valued stock, although it's still very expensive.
The Nasdaq 100 still has a lot of room to run in 2023, and investors shouldn't be afraid of establishing a position in it. Furthermore, the tech-focused companies within it should also make for an excellent long-term investment.
But if you're looking for more significant upside than the broader index offers, Amazon, Alphabet, and Tesla make for smart individual investments that could outperform in 2023 and beyond.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet, Amazon.com, Invesco Qqq Trust, Series 1, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Now, Amazon is fixing its mistakes and trying to return to positive free cash flow (FCF) by laying off workers, cutting programs, and making other cost-saving moves. However, as investors continue to see positive economic indicators, this revenue stream could open up again by the end of the year, giving Alphabet an explosive upside. The electric vehicle (EV) maker recently cut prices to increase its competitiveness, but management still believes it can maintain a 20% gross margin (one of the best in the industry) across its production. | 1 Apple 12.2% (16.7%) 2 Microsoft 11.8% (22.7%) 3 Amazon 6.5% (47.3%) 4 Nvidia 4.1% (32.9%) 5 Alphabet (C Class Shares) 3.9% (37.4%) 6 Alphabet (A Class Shares) 3.9% (37.2%) 7 Tesla 3.7% (48.9%) 8 Meta Platforms 3.3% (53.3%) 9 Broadcom 1.9% (11%) 10 PepsiCo 1.9% (7.3%) Source: Slickcharts and YCharts. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. | 1 Apple 12.2% (16.7%) 2 Microsoft 11.8% (22.7%) 3 Amazon 6.5% (47.3%) 4 Nvidia 4.1% (32.9%) 5 Alphabet (C Class Shares) 3.9% (37.4%) 6 Alphabet (A Class Shares) 3.9% (37.2%) 7 Tesla 3.7% (48.9%) 8 Meta Platforms 3.3% (53.3%) 9 Broadcom 1.9% (11%) 10 PepsiCo 1.9% (7.3%) Source: Slickcharts and YCharts. With those 10 stocks (representing nine companies due to Alphabet's split-class share structure) making up more than half the index -- and all but PepsiCo, Broadcom, and Apple down more than the overall index -- then I'd say the Nasdaq 100 has a lot of room to run. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. | It has been quite the start to the year for the Nasdaq 100, as it is up 14%. The top 10 highest-weighted companies in the index make up an impressive 53.2%, but many are still off their all-time highs. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. | null |
309 | 17,141 | 2023-02-10 00:00:00 UTC | These 3 Companies Generate Serious Cash | AAPL | https://www.nasdaq.com/articles/these-3-companies-generate-serious-cash | null | null | Scouting for stocks can sometimes be tiring, especially with so many options out there. However, one common metric investors love to focus on is free cash flow.
Still, what is free cash flow?
Free cash flow is the total cash a company holds onto after paying for operating costs and capital expenditures.
It speaks volumes about a company’s financial health, but in what way?
A healthy free cash flow provides more growth opportunities, a higher potential for share buybacks, stable dividend payouts, and the ability to wipe out any debt with ease.
Three companies – Apple AAPL, Exxon Mobil XOM, and Visa V – boast strong cash-generating abilities. Below is a chart illustrating the year-to-date performance of all three, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Exxon Mobil
Exxon Mobil is a U.S.-based oil and gas entity, one of the world's largest publicly traded energy companies.
Rising energy prices have benefited the company significantly; XOM generated $17.1 billion in free cash flow throughout its latest quarter, growing an impressive 30% year-over-year.
Image Source: Zacks Investment Research
In addition, the company rewards its shareholders via its annual dividend, currently yielding a solid 3.2% paired with a sustainable payout ratio sitting at 26% of its earnings.
Image Source: Zacks Investment Research
Apple
We’ve all become familiar with Apple, the mega-cap technology giant that’s been a portfolio staple for some time now.
The company generated an impressive $30.2 billion in free cash flow throughout its latest quarter, growing 45% sequentially.
Image Source: Zacks Investment Research
In addition, AAPL shares currently trade at a 24.9X forward earnings multiple, below the steep highs of 31.3X in 2022 and modestly above the Zacks Computer and Technology sector average.
Image Source: Zacks Investment Research
Visa
A multinational financial services company, Visa facilitates electronic funds transfers through Visa-branded debit, credit, and prepaid cards.
In the company’s latest release on January 26th, Visa reported free cash flow of nearly $4 billion, slipping marginally year-over-year in the face of a harsh economic environment.
Image Source: Zacks Investment Research
While the company’s 0.8% annual dividend is below the Zacks Finance sector average, Visa’s 15.3% five-year annualized dividend growth rate helps to pick up the slack in a big way.
Image Source: Zacks Investment Research
In addition, Visa has an impressive earnings track record, exceeding earnings and revenue estimates in 12 consecutive quarters.
Just in its latest release, the company registered a nearly 9% EPS beat and reported revenue 3.4% above expectations. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Bottom Line
Companies with strong cash-generating abilities are well-established and carry highly-successful business operations, undoubtedly perks that any investor looks for.
And all three companies above – Apple AAPL, Exxon Mobil XOM, and Visa V – have little issue generating cash.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Three companies – Apple AAPL, Exxon Mobil XOM, and Visa V – boast strong cash-generating abilities. Image Source: Zacks Investment Research In addition, AAPL shares currently trade at a 24.9X forward earnings multiple, below the steep highs of 31.3X in 2022 and modestly above the Zacks Computer and Technology sector average. And all three companies above – Apple AAPL, Exxon Mobil XOM, and Visa V – have little issue generating cash. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Visa Inc. (V) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report To read this article on Zacks.com click here. Three companies – Apple AAPL, Exxon Mobil XOM, and Visa V – boast strong cash-generating abilities. Image Source: Zacks Investment Research In addition, AAPL shares currently trade at a 24.9X forward earnings multiple, below the steep highs of 31.3X in 2022 and modestly above the Zacks Computer and Technology sector average. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Visa Inc. (V) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report To read this article on Zacks.com click here. Three companies – Apple AAPL, Exxon Mobil XOM, and Visa V – boast strong cash-generating abilities. Image Source: Zacks Investment Research In addition, AAPL shares currently trade at a 24.9X forward earnings multiple, below the steep highs of 31.3X in 2022 and modestly above the Zacks Computer and Technology sector average. | Three companies – Apple AAPL, Exxon Mobil XOM, and Visa V – boast strong cash-generating abilities. Image Source: Zacks Investment Research In addition, AAPL shares currently trade at a 24.9X forward earnings multiple, below the steep highs of 31.3X in 2022 and modestly above the Zacks Computer and Technology sector average. And all three companies above – Apple AAPL, Exxon Mobil XOM, and Visa V – have little issue generating cash. | null |
310 | 17,149 | 2023-02-09 00:00:00 UTC | 2 Excellent Stocks to Buy in 2023 and Never Sell | AAPL | https://www.nasdaq.com/articles/2-excellent-stocks-to-buy-in-2023-and-never-sell | null | null | There are many advantages to holding stocks for a long time -- think five years or more. First, doing so allows the power of compounding to work its magic. Second, in some countries like the U.S., there are tax advantages associated with it. Of course, none of that means much unless investors buy shares in outstanding companies that can deliver excellent returns over long periods.
And with the right corporations, it might even be worth remaining a shareholder for life. That said, let's consider two companies that are great "forever" candidates: Pfizer (NYSE: PFE) and Apple (NASDAQ: AAPL).
1. Pfizer
In 2022, Pfizer recorded $100.3 billion in total revenue, representing a 23% year-over-year increase and an all-time annual high for the drugmaker. Pfizer can thank its coronavirus products, Comirnaty and Paxlovid, for this performance. However, we are no longer in a state of emergency, and Pfizer's coronavirus sales will drop starting this year, leading to a massive decline in total revenue.
For its fiscal 2023, Pfizer expects revenue in the neighborhood of $69 billion. That shouldn't trouble investors. In 2020, the last year before it started recording sales of its coronavirus vaccine, the pharma giant's top line was $41.9 billion. So the company should keep delivering results above its pre-pandemic levels. Pfizer expects non-coronavirus revenue of $70 billion to $84 billion by 2030.
That's because Pfizer is on the verge of significantly rejuvenating and expanding its lineup. Over the next 18 months, the company expects 19 new approvals or label expansions for key products. There should be at least 10 brand-new approvals for the company in this period. They will likely include a potential respiratory syncytial virus vaccine that could be the first of its kind, and a medicine for alopecia.
But Pfizer won't stop there. The company is looking to pour even more money into research and development (R&D), with a plan to increase R&D spending by at least 8.7% year over year in 2023, bringing its total to between $12.4 billion and $13.4 billion. Over the long run, that should allow the company to develop newer and more effective drugs while it continues to grow its revenue and earnings.
In addition, Pfizer is a solid dividend stock. The company has raised its payouts by a respectable 20.6% in the past five years while it boasts a modest cash payout ratio of 38.2%, giving it ample room for many more dividend increases. Pfizer looks like a solid "forever" stock with the dividends it offers, its track record of innovation, and its long-term growth potential.
2. Apple
Apple failed to impress investors with its latest update for its fiscal 2023's first quarter, which ended on Dec. 31. The company's revenue dropped by 5% year over year to $117.2 billion. On the bottom line, the tech giant's net earnings per share dropped to $1.88, down from $2.10 reported in the comparable period of the previous fiscal year. No doubt, economic problems contributed to Apple's poor performance.
But there is some good news, too. Apple reported that it now has an installed base of more than 2 billion users across its active devices. That's a massive ecosystem that arguably represents the company's future. As things stand, Apple's services segment still accounts for a relatively small fraction of its total revenue. The company's service revenue rose 6.4% year over year to $20.8 billion in its first quarter.
But that could change as it finds new ways to monetize these users. Apple could do so by ramping up its fintech ambitions, among other potential avenues. But what's important is that although it has developed and marketed innovative hardware devices, the company's future doesn't just depend on its ability to continue selling its iPhone. The great thing about Apple's services segment is that it's hard to leave the company's ecosystem.
Apple's devices boast many useful interconnected features that provide an incentive to buy and keep a suite of Apple products as opposed to purchasing an Android phone that cannot interact with an iOS tablet the way an iPhone can. Also, switching to a competing operating system requires transferring media files, a tedious task no one wants to do. Apple's high switching costs partly explain why it has continued to grow its user base.
Further, the company's services unit typically records much better margins than its hardware business. In my view, Apple has only scratched the surface of the market available to it when it comes to monetizing its ecosystem. This opportunity will allow it to generate solid and growing revenue, earnings, and margins for a long time. That's why the company remains a solid stock even at a market capitalization above $2 trillion.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Pfizer. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That said, let's consider two companies that are great "forever" candidates: Pfizer (NYSE: PFE) and Apple (NASDAQ: AAPL). However, we are no longer in a state of emergency, and Pfizer's coronavirus sales will drop starting this year, leading to a massive decline in total revenue. On the bottom line, the tech giant's net earnings per share dropped to $1.88, down from $2.10 reported in the comparable period of the previous fiscal year. | That said, let's consider two companies that are great "forever" candidates: Pfizer (NYSE: PFE) and Apple (NASDAQ: AAPL). Pfizer In 2022, Pfizer recorded $100.3 billion in total revenue, representing a 23% year-over-year increase and an all-time annual high for the drugmaker. But what's important is that although it has developed and marketed innovative hardware devices, the company's future doesn't just depend on its ability to continue selling its iPhone. | That said, let's consider two companies that are great "forever" candidates: Pfizer (NYSE: PFE) and Apple (NASDAQ: AAPL). The company is looking to pour even more money into research and development (R&D), with a plan to increase R&D spending by at least 8.7% year over year in 2023, bringing its total to between $12.4 billion and $13.4 billion. The company's revenue dropped by 5% year over year to $117.2 billion. | That said, let's consider two companies that are great "forever" candidates: Pfizer (NYSE: PFE) and Apple (NASDAQ: AAPL). The company's service revenue rose 6.4% year over year to $20.8 billion in its first quarter. That's why the company remains a solid stock even at a market capitalization above $2 trillion. | 2 |
311 | 17,165 | 2023-02-08 00:00:00 UTC | The Best Stocks to Buy to Profit From AI’s ‘iPhone Moment’ | AAPL | https://www.nasdaq.com/articles/the-best-stocks-to-buy-to-profit-from-ais-iphone-moment | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Welcome, folks, as we get ready for another installment of our weekly Hypergrowth Investing podcast, where we discuss all things investing, such as electric vehicles (EVs), automation and so much more. But this week, we’re doing a deep-dive into the topic of the year: artificial intelligence (AI).
We’ve said it before. AI will change everything about everything, just like the internet, the computer, fire – even the wheel – changed everything about everything. The AI Revolution is here, and we think it’ll move forward at lightning speed over the next few years. So let’s unpack it, understand it, and find ways to profit from AI stocks.
Broadly speaking, artificial intelligence is technology that uses data to learn and improve over time without the need for human intervention or oversight. But the topic is amorphous – AI isn’t one thing. There’s conversational AI, like OpenAI’s ChatGPT and Alphabet’s (GOOG, GOOGL) Bard. We’ve had more ubiquitous low-level voice AI in things like Siri, Alexa, and Google Assistant. And what about services like Spotify (SPOT)? That platform uses machine-learning algorithms to track songs users enjoy in order to recommend new music. We have robotics, automated software, self-driving cars… the list goes on. AI can be manifested in so many ways; and that’s why investors are so excited about it.
But why is that hype happening right now? ChatGPT. In short, artificial intelligence is having its ‘iPhone Moment.’ When Apple (AAPL) released the first iPhone, the internet had been around for many years. But it wasn’t until that breakthrough consumer product – with robust technological power literally in the palms of our hands – that we exploded into the internet era.
Now innovations like ChatGPT are arriving at a time when the world is producing exponential amounts of data, which is essential for AI development. And the volume of daily data creation is only going to explode higher from here.
We’ve arrived at a new era, folks. And it’s time to embrace this AI Revolution to score generational gains.
So Which AI Stocks Should You Buy?
With that, let’s get to the million-dollar question: What are the best AI stocks to buy right now?
Well, the simplest, most straight-forward way to play AI is to buy Big Tech stocks. We’re talking Microsoft (MSFT), Alphabet, Amazon (AMZN), Apple, and Meta (META). These behemoths have access to all of the world’s data – trillions of social, consumer interest, location, and usage data points. Plus, they have and continue to attract world-class engineering and tech professionals through enormous salaries and stock compensation packages. Talent + data = robust AI.
Big Tech has been heavily investing in artificial intelligence for years, and now they will unleash all that tech to the world, fueling this revolution’s fire. Recently, their stocks have been making substantial comebacks from multi-year lows. These are rallies you want to buy into.
In truth, since they have sole access to the world’s data, Big Tech will rule the day when it comes to AI. So, when looking to invest in startups, be very selective. Find the companies innovating in the space and carving out a competitive niche for themselves. Otherwise, they’ll be crushed as this revolution propels the entire world into the future.
Watch our full episode of Hypergrowth Investing to hear the entire bull case for AI stocks, quantitative investing, housing stocks, and much more.
On the date of publication, Seth Kuczinski did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The post The Best Stocks to Buy to Profit From AI’s ‘iPhone Moment’ appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In short, artificial intelligence is having its ‘iPhone Moment.’ When Apple (AAPL) released the first iPhone, the internet had been around for many years. Broadly speaking, artificial intelligence is technology that uses data to learn and improve over time without the need for human intervention or oversight. But it wasn’t until that breakthrough consumer product – with robust technological power literally in the palms of our hands – that we exploded into the internet era. | In short, artificial intelligence is having its ‘iPhone Moment.’ When Apple (AAPL) released the first iPhone, the internet had been around for many years. But this week, we’re doing a deep-dive into the topic of the year: artificial intelligence (AI). So let’s unpack it, understand it, and find ways to profit from AI stocks. | In short, artificial intelligence is having its ‘iPhone Moment.’ When Apple (AAPL) released the first iPhone, the internet had been around for many years. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Welcome, folks, as we get ready for another installment of our weekly Hypergrowth Investing podcast, where we discuss all things investing, such as electric vehicles (EVs), automation and so much more. So Which AI Stocks Should You Buy? | In short, artificial intelligence is having its ‘iPhone Moment.’ When Apple (AAPL) released the first iPhone, the internet had been around for many years. Now innovations like ChatGPT are arriving at a time when the world is producing exponential amounts of data, which is essential for AI development. So Which AI Stocks Should You Buy? | null |
312 | 17,191 | 2023-02-07 00:00:00 UTC | Will Apple Learn From Meta's Virtual Reality Mistakes? | AAPL | https://www.nasdaq.com/articles/will-apple-learn-from-metas-virtual-reality-mistakes | null | null | Apple (NASDAQ: AAPL) posted a weaker-than-expected earnings report on Feb. 2, which it largely attributed to supply chain disruptions for the iPhone 14 and its sluggish sales of Macs and Apple Watches. The company offset some of those declines with the growth of its services business.
However, during the conference call, Apple didn't mention its long-awaited mixed-reality headset, which will likely launch this year. Many investors expect the device to diversify Apple's top line away from the iPhone -- which accounted for 56% of its sales in its latest quarter -- and enable it to challenge Meta (NASDAQ: META) in the nascent virtual reality market.
Image source: Getty Images.
But can Apple successfully expand into the VR market when Meta has only taken a few expensive baby steps over the past few years? Let's review what we know about Apple's headset and whether Apple will learn from Meta's mistakes.
What do we know about Apple's VR headset?
Apple has already rolled out augmented reality (AR) and virtual reality (VR) tools for iOS and iPadOS developers over the past few years. Its ARKit enables developers to access the depth-sensing cameras and sensors on iPhones and iPads to create AR apps, while its newer RealityKit adds more game-oriented features (like input control and multiplayer features) to those apps.
Those building blocks should make it easier for developers to create fully immersive AR apps for Apple's brand-new headset -- reportedly called the "Reality Pro" -- and run a new operating system called xrOS. Unlike Meta's Quest VR headsets that enclose their users in computer-generated environments, the Reality Pro is expected to be a mixed-reality device that can switch between AR mode, which digitally augments a user's surroundings, and full VR mode. It also, purportedly, can be used as an external display for Macs and will rely entirely on hand gestures instead of physical controllers.
Therefore, Apple's Reality Pro sounds more similar to Microsoft's (NASDAQ: MSFT) HoloLens -- which costs about $3,500 and is used for niche enterprise purposes -- than Meta's consumer-facing Quest headsets, which start at $399 (Quest 2) and top out at $1,500 (Quest Pro). However, Apple's Reality Pro could cost $3,000, even though it will presumably be aimed at mainstream consumers. Apple still has plenty of pricing power, but that would make the Reality Pro twice as expensive as its highest-end iPhone 14 Pro and nearly match the price of its top-tier M1 Max MacBook Pro.
Will Apple learn from Meta's mistakes?
Apple's AR and VR strategies will likely differ from Meta's. Meta is selling its VR headsets at a loss to tether more users to its metaverse playground, Horizon Worlds. Unfortunately, that strategy doesn't seem sustainable.
Last June, Meta claimed it had sold nearly 15 million Quest 2 headsets worldwide. But as of last October, Horizon Worlds only hosted about 200,000 monthly users, or 1% of its headset buyers, according to leaked internal documents obtained by The Wall Street Journal. Meta's Reality Labs segment, which houses its VR hardware and software, racked up a staggering operating loss of $13.7 billion in 2022 while only generating $2.2 billion in revenues.
Apple doesn't sell its hardware as loss leaders, so the rumored $3,000 price tag for the Reality Pro should easily cover its production and marketing costs. Unlike Meta, Apple probably won't recklessly burn billions of dollars on its headset.
Apple also probably won't build a massive first-party metaverse platform like Horizon Worlds to host its users. Instead, it will likely encourage its ARKit and RealityKit developers either to create new xrOS apps or roll out new mixed-reality features for its existing services, like Apple TV+, Apple Music, Apple Arcade, and Apple Fitness+.
Apple ended its latest quarter with a whopping 935 million paid subscribers across all its services, giving it a tremendous audience for introducing its new headset-oriented features. Meta ended 2022 with 3.74 billion people monthly using its family of apps (Facebook, Messenger, Instagram, and WhatsApp), but it hasn't figured out how to break down those silos and pull those social media users into its virtual reality ecosystem yet.
Apple could disrupt the VR and AR markets
Apple didn't invent the first MP3 player, smartphone, tablet computer, or smartwatch, but it disrupted those markets with the iPod, iPhone, iPad, and Apple Watch, respectively, by learning from the mistakes of earlier movers. If it's following the same playbook with the Reality Pro headset, it could eventually disrupt the fledgling VR and AR markets.
Meta clearly made a lot of mistakes in its quest to conquer those markets first, and I believe Apple will learn from those blunders as it tries to build a more sustainable and profitable mixed-reality business. If that happens, Apple can finally expand its hardware business away from the iPhone while supporting a new ecosystem of mixed-reality applications.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun has positions in Apple and Meta Platforms. The Motley Fool has positions in and recommends Apple, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) posted a weaker-than-expected earnings report on Feb. 2, which it largely attributed to supply chain disruptions for the iPhone 14 and its sluggish sales of Macs and Apple Watches. Apple doesn't sell its hardware as loss leaders, so the rumored $3,000 price tag for the Reality Pro should easily cover its production and marketing costs. Apple ended its latest quarter with a whopping 935 million paid subscribers across all its services, giving it a tremendous audience for introducing its new headset-oriented features. | Apple (NASDAQ: AAPL) posted a weaker-than-expected earnings report on Feb. 2, which it largely attributed to supply chain disruptions for the iPhone 14 and its sluggish sales of Macs and Apple Watches. Those building blocks should make it easier for developers to create fully immersive AR apps for Apple's brand-new headset -- reportedly called the "Reality Pro" -- and run a new operating system called xrOS. Apple also probably won't build a massive first-party metaverse platform like Horizon Worlds to host its users. | Apple (NASDAQ: AAPL) posted a weaker-than-expected earnings report on Feb. 2, which it largely attributed to supply chain disruptions for the iPhone 14 and its sluggish sales of Macs and Apple Watches. Let's review what we know about Apple's headset and whether Apple will learn from Meta's mistakes. Instead, it will likely encourage its ARKit and RealityKit developers either to create new xrOS apps or roll out new mixed-reality features for its existing services, like Apple TV+, Apple Music, Apple Arcade, and Apple Fitness+. | Apple (NASDAQ: AAPL) posted a weaker-than-expected earnings report on Feb. 2, which it largely attributed to supply chain disruptions for the iPhone 14 and its sluggish sales of Macs and Apple Watches. What do we know about Apple's VR headset? Therefore, Apple's Reality Pro sounds more similar to Microsoft's (NASDAQ: MSFT) HoloLens -- which costs about $3,500 and is used for niche enterprise purposes -- than Meta's consumer-facing Quest headsets, which start at $399 (Quest 2) and top out at $1,500 (Quest Pro). | null |
313 | 17,210 | 2023-02-06 00:00:00 UTC | Here’s the Silver Lining with Snap Stock Earnings Collapse | AAPL | https://www.nasdaq.com/articles/heres-the-silver-lining-with-snap-stock-earnings-collapse | null | null | Social media platform Snap Inc. (NYSE: SNAP) stock took a (-15%) dive on its fiscal Q4 2022 earnings release. Its report had few optimistic highlights as it continues to suffer from the slump in global digital advertising. Its average revenue per user (ARPU) continues to slide from the year-ago period despite rising daily active users (DAUs). Like Roblox Co. (NASDAQ: RBLX), Snapchat is seeing more traffic but less spending.
Bulls argue that the growing MAU sets up the ARPU to snap back quicker on a larger scale when the digital advertising market rebounds. Snap also remains the cheapest large-scale publicly traded social media platform next to social commerce platform Pinterest Inc. (NASDAQ: PINS) for a potential acquisition since 90% of 13 to 24 year old are active users. The potential for a federal TikTok ban or a ban from app stores is another catalyst for a significant price spike in shares.
Growth Engine Backfiring
On Jan. 31, 2022, Snap released its fiscal fourth-quarter 2022 results for the quarter ending Dec 2022. The Company reported an adjusted earnings-per-share (EPS) profit of $0.14, excluding non-recurring items, versus consensus analyst estimates of $0.12, beating estimates by $0.09.
Adjusted EBITDA fell (31%) to $212 million and 16% margin. Revenues rose 0.1% year-over-year (YOY) to $1.3 billion, missing analyst estimates of $1.31 billion. DAUs rose 17% YoY and 4% quarter-over-quarter (QoQ) to 375 million. DAUs rose sequentially YoY in North America, Europe, and the rest of the world.
Time spent watching Spotlight rose 10% YoY, and 17 content providers had more than 50 million global viewers each. Snapchat+ hit over $2 million subscribers. An average of 250 million Snapchat users use augmented reality (AR) daily. The Company will continue investing in AR's future to expand its leadership position.
More DAU Growth by Less ARPU Breakdown
While Europe and the rest of the world are experiencing the fastest growth compared to North America, the ARPU is $2.90 versus $0.80 and $0.40 in Europe and the rest of the world, respectively. The DAUs in North America was 100 million, up 3% YoY with an ARPU of $2.90, down (-7%) YoY. Europe saw 92 million DAUs, up 12% YoY, and an ARPU of $0.80. In the rest of the world (ROW), Snapchat saw 183 million users, up 31% YoY with an ARPU of $0.40.
Erasing the Bar
Rather than cutting guidance, Snap opted not to provide revenue or EBITDA guidance altogether for fiscal Q1 2023 based on an uncertain economic climate. It did note that its Q1 2024 internal forecast is for revenues to fall between (-10%) to (-2%) in the quarter. This didn’t help investor sentiment and caused shares to sink on the news.
CEO Comments
Snap CEO Even Spiegel said, "We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.” In the conference call, he explained that they focused on three strategic priorities.
These are to grow its community, deepen engagement with its products, and accelerate and diversify topline growth while continuing to invest in augmented reality. He did note the rapid deceleration in digital advertising growth. The Company had a tough year impacted by competition, platform policy changes, and macroeconomic headwinds.
Stock-Based Compensation
The Company continues to dilute shareholders with its stock-based compensation as share bonus expense was $451 million in the quarter, nearly 35% of total revenues. On the flip side, many of those expenses are related to sharing grants issued at $70 per share, which would overstate the expenses under GAAP reporting. However, the Company offset the dilution with its $500 million stock buyback program.
Senator Asks Apple and Google to Ban TikTok App
On Feb. 2, 2023, Colorado Senator Michael Bennett took to a big step forward by writing a formal letter to both Tim Cook, CEO of Apple Inc. (NASDAQ: AAPL), and Sundar Pichai, CEO of Alphabet Inc. (NASDAQ: GOOGL) owned Google to ban the TikTok app from its app stores. He cited data privacy and national security concerns. He noted that TikTok is the third-most used social media app in the U.S., with 61 percent of Americans ages 12 to 34 using TikTok.
The average users spend 80 minutes daily on the app, more than Meta Platforms Inc. (NASDAQ: META), Facebook, and Instagram combined. He stated that Chinese law mandates companies like its parent ByteDance to "support, assist, and cooperate with state intelligence work." ByteDance has had a history of aggressive data collection practices.
This could lead to the weaponizing of the app to influence its users. He noted that 27 state governments had passed full or partial bans on the app. He concluded his letter, "Given these grave and growing concerns, I ask that you remove TikTok from your respective app stores immediately." Both Companies have yet to respond. A federal TikTok ban or removal from the two dominant app stores could increase Snap shares.
Livermore Cylinder Pattern
Despite the adverse reaction to its Q4 2022 earnings, SNAP shares bottomed out at $9.85 and rebounded sharply off that level. The weekly market structure low (MSL) trigger at $8.96 was left intact. SNAP bounced back up through the weekly 20-period exponential moving average (EMA) support at $10.73.
The weekly stochastic continued its rising higher. More notably, SNAP formed a rare bullish Livermore cylinder pattern, named after the iconic stock trader Jesse Livermore. A Livermore cylinder is an accumulation pattern where prices chop back and forth between rising, widening, and non-parallel trendlines as the volume increases.
This zig-zag action continues until the price eventually explodes through the upper trendline to new swing highs. Pullback supports sit at $10.47, $9.85, $9.34, $8.96 weekly MSL trigger, and $8.52.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Senator Asks Apple and Google to Ban TikTok App On Feb. 2, 2023, Colorado Senator Michael Bennett took to a big step forward by writing a formal letter to both Tim Cook, CEO of Apple Inc. (NASDAQ: AAPL), and Sundar Pichai, CEO of Alphabet Inc. (NASDAQ: GOOGL) owned Google to ban the TikTok app from its app stores. Bulls argue that the growing MAU sets up the ARPU to snap back quicker on a larger scale when the digital advertising market rebounds. These are to grow its community, deepen engagement with its products, and accelerate and diversify topline growth while continuing to invest in augmented reality. | Senator Asks Apple and Google to Ban TikTok App On Feb. 2, 2023, Colorado Senator Michael Bennett took to a big step forward by writing a formal letter to both Tim Cook, CEO of Apple Inc. (NASDAQ: AAPL), and Sundar Pichai, CEO of Alphabet Inc. (NASDAQ: GOOGL) owned Google to ban the TikTok app from its app stores. An average of 250 million Snapchat users use augmented reality (AR) daily. Stock-Based Compensation The Company continues to dilute shareholders with its stock-based compensation as share bonus expense was $451 million in the quarter, nearly 35% of total revenues. | Senator Asks Apple and Google to Ban TikTok App On Feb. 2, 2023, Colorado Senator Michael Bennett took to a big step forward by writing a formal letter to both Tim Cook, CEO of Apple Inc. (NASDAQ: AAPL), and Sundar Pichai, CEO of Alphabet Inc. (NASDAQ: GOOGL) owned Google to ban the TikTok app from its app stores. CEO Comments Snap CEO Even Spiegel said, "We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.” In the conference call, he explained that they focused on three strategic priorities. Stock-Based Compensation The Company continues to dilute shareholders with its stock-based compensation as share bonus expense was $451 million in the quarter, nearly 35% of total revenues. | Senator Asks Apple and Google to Ban TikTok App On Feb. 2, 2023, Colorado Senator Michael Bennett took to a big step forward by writing a formal letter to both Tim Cook, CEO of Apple Inc. (NASDAQ: AAPL), and Sundar Pichai, CEO of Alphabet Inc. (NASDAQ: GOOGL) owned Google to ban the TikTok app from its app stores. Social media platform Snap Inc. (NYSE: SNAP) stock took a (-15%) dive on its fiscal Q4 2022 earnings release. Europe saw 92 million DAUs, up 12% YoY, and an ARPU of $0.80. | null |
314 | 17,223 | 2023-02-05 00:00:00 UTC | Foxconn's January sales surge as China COVID disruption shaken off | AAPL | https://www.nasdaq.com/articles/foxconns-january-sales-surge-as-china-covid-disruption-shaken-off | null | null | Adds details
TAIPEI, Feb 5 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker and major iPhone assembler for Apple Inc AAPL.O, said on Sunday its revenue in January jumped 48.2% year-on-year, as it shook off COVID disruptions in China.
Revenue in January reached a record high, at T$660.4 billion ($22 billion), with operations returning to normal and shipments increasing at its Zhengzhou campus in China, a centre for iPhone production, the company said in a statement.
Compared to the previous month, revenue was up 4.93% with smart consumer electronics products, which includes smartphones, and computing products showing strong double-digit growth, it said.
Production of iPhones faced disruption ahead of Christmas and January's Lunar New Year holidays, after curbs to control COVID-19 prompted thousands of workers to leave Foxconn's factory lines in Zhengzhou.
Analysts say Foxconn assembles around 70% of iPhones, and the Zhengzhou plant produces the majority of its premium models including the iPhone 14 Pro.
"Based on market consensus for first quarter 2023, January revenue came in slightly ahead. The outlook for the first quarter will likely reach market expectation," Foxconn said without elaborating.
Analysts expect first-quarter revenue to grow by around 4% year-on-year, according to Refinitiv.
Foxconn shares have slid 0.3% so far this year, underperforming the broader Taiwan market .TWII which is up 10.4%.
The company reports fourth quarter earnings, where it will also elaborate on its outlook, on March 15.
(Reporting by Ben Blanchard and Meg Shen; Additional reporting by Yimou Lee; Editing by Lincoln Feast.)
((ben.blanchard@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adds details TAIPEI, Feb 5 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker and major iPhone assembler for Apple Inc AAPL.O, said on Sunday its revenue in January jumped 48.2% year-on-year, as it shook off COVID disruptions in China. Revenue in January reached a record high, at T$660.4 billion ($22 billion), with operations returning to normal and shipments increasing at its Zhengzhou campus in China, a centre for iPhone production, the company said in a statement. Production of iPhones faced disruption ahead of Christmas and January's Lunar New Year holidays, after curbs to control COVID-19 prompted thousands of workers to leave Foxconn's factory lines in Zhengzhou. | Adds details TAIPEI, Feb 5 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker and major iPhone assembler for Apple Inc AAPL.O, said on Sunday its revenue in January jumped 48.2% year-on-year, as it shook off COVID disruptions in China. Production of iPhones faced disruption ahead of Christmas and January's Lunar New Year holidays, after curbs to control COVID-19 prompted thousands of workers to leave Foxconn's factory lines in Zhengzhou. The outlook for the first quarter will likely reach market expectation," Foxconn said without elaborating. | Adds details TAIPEI, Feb 5 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker and major iPhone assembler for Apple Inc AAPL.O, said on Sunday its revenue in January jumped 48.2% year-on-year, as it shook off COVID disruptions in China. Revenue in January reached a record high, at T$660.4 billion ($22 billion), with operations returning to normal and shipments increasing at its Zhengzhou campus in China, a centre for iPhone production, the company said in a statement. Production of iPhones faced disruption ahead of Christmas and January's Lunar New Year holidays, after curbs to control COVID-19 prompted thousands of workers to leave Foxconn's factory lines in Zhengzhou. | Adds details TAIPEI, Feb 5 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker and major iPhone assembler for Apple Inc AAPL.O, said on Sunday its revenue in January jumped 48.2% year-on-year, as it shook off COVID disruptions in China. The outlook for the first quarter will likely reach market expectation," Foxconn said without elaborating. The company reports fourth quarter earnings, where it will also elaborate on its outlook, on March 15. | null |
315 | 17,224 | 2023-02-04 00:00:00 UTC | Apple (AAPL) Declares $0.23 Dividend | AAPL | https://www.nasdaq.com/articles/apple-aapl-declares-%240.23-dividend | null | null | Apple said on February 2, 2023 that its board of directors declared a regular quarterly dividend of $0.23 per share ($0.92 annualized). Shareholders of record as of February 10, 2023 will receive the payment on February 16, 2023. Previously, the company paid $0.17 per share.
At the current share price of $154.50 / share, the stock's dividend yield is 0.60%. Looking back five years and taking a sample every week, the average dividend yield has been 1.01%, the lowest has been 0.48%, and the highest has been 1.99%. The standard deviation of yields is 0.43 (n=236).
The current dividend yield is 0.97 standard deviations below the historical average.
Additionally, the company's dividend payout ratio is 0.15. The payout ratio tells us how much of a company's income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company's income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend - not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.
The company's 3-Year dividend growth rate is 0.19%, demonstrating that it has increased its dividend over time.
Analyst Price Forecast Suggests 13.99% Upside
As of February 4, 2023, the average one-year price target for Apple is $176.12. The forecasts range from a low of $123.22 to a high of $224.70. The average price target represents an increase of 13.99% from its latest reported closing price of $154.50.
The projected annual revenue for Apple is $413,641MM, an increase of 4.90%. The projected annual EPS is $6.36, an increase of 3.42%.
For more in-depth coverage of Apple, view the free, crowd-sourced company research report on Finpedia.
Fund Sentiment
There are 6229 funds or institutions reporting positions in Apple. This is an increase of 76 owner(s) or 1.24%.
Average portfolio weight of all funds dedicated to US:AAPL is 3.6925%, a decrease of 2.1095%. Total shares owned by institutions increased in the last three months by 0.42% to 10,120,804K shares.
What are large shareholders doing?
Berkshire Hathaway holds 894,802,319 shares representing 5.65% ownership of the company. No change in the last quarter.
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 455,109,365 shares representing 2.87% ownership of the company. In it's prior filing, the firm reported owning 452,796,750 shares, representing an increase of 0.51%. The firm increased its portfolio allocation in AAPL by 5.91% over the last quarter.
VFINX - Vanguard 500 Index Fund Investor Shares holds 342,453,760 shares representing 2.16% ownership of the company. In it's prior filing, the firm reported owning 340,333,473 shares, representing an increase of 0.62%. The firm increased its portfolio allocation in AAPL by 5.18% over the last quarter.
Geode Capital Management holds 279,758,518 shares representing 1.77% ownership of the company. In it's prior filing, the firm reported owning 278,256,192 shares, representing an increase of 0.54%. The firm increased its portfolio allocation in AAPL by 5.31% over the last quarter.
Price T Rowe Associates holds 224,863,541 shares representing 1.42% ownership of the company. In it's prior filing, the firm reported owning 237,910,783 shares, representing a decrease of 5.80%. The firm increased its portfolio allocation in AAPL by 24.45% over the last quarter.
Apple Background Information
(This description is provided by the company.)
Apple Inc. is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services. It is considered one of the Big Five companies in the U.S. information technology industry, along with Amazon, Google, Microsoft, and Facebook. Its hardware products include the iPhone smartphone, the iPad tablet computer, the Mac personal computer, the iPod portable media player, the Apple Watch smartwatch, the Apple TV digital media player, the AirPods wireless earbuds, the AirPods Max headphones, and the HomePod smart speaker line. Apple's software includes iOS, iPadOS, macOS, watchOS, and tvOS operating systems, the iTunes media player, the Safari web browser, the Shazam music identifier, and the iLife and iWork creativity and productivity suites, as well as professional applications like Final Cut Pro X, Logic Pro, and Xcode. Its online services include the iTunes Store, the iOS App Store, Mac App Store, Apple Arcade, Apple Music, Apple TV+, iMessage, and iCloud. Other services include Apple Store, Genius Bar, AppleCare, Apple Pay, Apple Pay Cash, and Apple Card. Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to develop and sell Wozniak's Apple I personal computer, though Wayne sold his share back within 12 days. It was incorporated as Apple Computer, Inc., in January 1977, and sales of its computers, including the Apple I and Apple II, grew quickly.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Average portfolio weight of all funds dedicated to US:AAPL is 3.6925%, a decrease of 2.1095%. The firm increased its portfolio allocation in AAPL by 5.91% over the last quarter. The firm increased its portfolio allocation in AAPL by 5.18% over the last quarter. | Average portfolio weight of all funds dedicated to US:AAPL is 3.6925%, a decrease of 2.1095%. The firm increased its portfolio allocation in AAPL by 5.91% over the last quarter. The firm increased its portfolio allocation in AAPL by 5.18% over the last quarter. | Average portfolio weight of all funds dedicated to US:AAPL is 3.6925%, a decrease of 2.1095%. The firm increased its portfolio allocation in AAPL by 5.91% over the last quarter. The firm increased its portfolio allocation in AAPL by 5.18% over the last quarter. | Average portfolio weight of all funds dedicated to US:AAPL is 3.6925%, a decrease of 2.1095%. The firm increased its portfolio allocation in AAPL by 5.91% over the last quarter. The firm increased its portfolio allocation in AAPL by 5.18% over the last quarter. | 4 |
316 | 17,230 | 2023-02-03 00:00:00 UTC | US STOCKS-Wall Street ends down after stunning jobs growth raises Fed questions | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-ends-down-after-stunning-jobs-growth-raises-fed-questions-0 | null | null | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Nasdaq posts 5th straight weekly gain
U.S. reports blowout job data; unemployment lowest since 1969
Megapcap earnings reactions: Apple up; Amazon, Alphabet slump
Ford Motor drops on downbeat outlook
Indexes down: Dow 0.38%, S&P 1.04%, Nasdaq 1.59%
Updates with further market data
By Lewis Krauskopf, Shreyashi Sanyal and Johann M Cherian
Feb 3 (Reuters) - Major U.S. stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports.
The S&P 500 still posted a gain for the week, which included a string of major market events, and stood not far from five-month highs. The Nasdaq tallied its fifth straight weekly rise, its longest such streak since late 2021.
U.S. job growth accelerated sharply in January, with nonfarm payrolls surging by 517,000 jobs, well above an estimate of 185,000. The unemployment rate hit a more than 53-1/2-year low of 3.4%.
In another sign of economic strength, U.S. services industry activity rebounded strongly in January.
Investors have been balancing hopeful signs that the economy could avoid a feared recession against concerns about how long the Fed will keep interest rates high to rein in inflation. The S&P 500 gained earlier this week after comments that were more dovish than expected from Fed Chair Jerome Powell, who acknowledged progress in the fight against inflation.
The jobs report "was an incredible surprise and it raises a lot of questions about what the Fed is going to do next,” said Kristina Hooper, chiefglobal marketstrategist at Invesco. “What I think is causing some of the volatility is markets trying to make sense of how the Fed will perceive this.”
The Dow Jones Industrial Average .DJI fell 127.93 points, or 0.38%, to 33,926.01, the S&P 500 .SPX lost 43.28 points, or 1.04%, to 4,136.48 and the Nasdaq Composite .IXIC dropped 193.86 points, or 1.59%, to 12,006.96.
For the week, the S&P 500 rose 1.6%, the Dow slipped 0.15%, and the Nasdaq gained 3.3%.
Wall Street's main indexes have had a solid start to the year as tech and other stocks that struggled in 2022 have rebounded, fueled by hopes that the Fed's rate hikes would soon end and the economy might be able to navigate a soft landing.
“So many things were trading at bargain-basement prices three, four months ago," said Eric Kuby, chief investment officer at North Star Investment Management Corp. "That has gone away... I think we are in a fair game now.”
Shares of AppleAAPL.O, the largest U.S. company by market value, rose 2.4%. The company forecast that revenue would fall for a second quarter in a row but that iPhone sales were likely to improve as production had returned to normal in China.
Shares of AmazonAMZN.O slumped 8.4% as the company said operating profit could fall to zero in the current quarter as savings from layoffs do not make up for the financial impact of consumers and cloud customers clamping down on spending.
AlphabetGOOGL.O shares dropped 2.7% after the Google parent posted fourth-quarter profit and sales short of Wall Street expectations.
In other corporate news, Ford MotorF.N shares slid 7.6% after the automaker predicted a difficult year ahead.
Declining issues outnumbered advancing ones on the NYSE by a 2.82-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and one new low; the Nasdaq Composite recorded 127 new highs and 16 new lows.
About 12.8 billion shares changed hands in U.S. exchanges, compared with the 11.9 billion daily average over the last 20 sessions.
(Reporting by Lewis Krauskopf in New York, Shreyashi Sanyal and Johann M Cherian; Additional reporting by Shubham Batra; Editing by Sriraj Kalluvila, Maju Samuel and Cynthia Osterman)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I think we are in a fair game now.” Shares of AppleAAPL.O, the largest U.S. company by market value, rose 2.4%. Investors have been balancing hopeful signs that the economy could avoid a feared recession against concerns about how long the Fed will keep interest rates high to rein in inflation. Wall Street's main indexes have had a solid start to the year as tech and other stocks that struggled in 2022 have rebounded, fueled by hopes that the Fed's rate hikes would soon end and the economy might be able to navigate a soft landing. | I think we are in a fair game now.” Shares of AppleAAPL.O, the largest U.S. company by market value, rose 2.4%. Nasdaq posts 5th straight weekly gain U.S. reports blowout job data; unemployment lowest since 1969 Megapcap earnings reactions: Apple up; Amazon, Alphabet slump Ford Motor drops on downbeat outlook Indexes down: Dow 0.38%, S&P 1.04%, Nasdaq 1.59% Updates with further market data By Lewis Krauskopf, Shreyashi Sanyal and Johann M Cherian Feb 3 (Reuters) - Major U.S. stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports. “What I think is causing some of the volatility is markets trying to make sense of how the Fed will perceive this.” The Dow Jones Industrial Average .DJI fell 127.93 points, or 0.38%, to 33,926.01, the S&P 500 .SPX lost 43.28 points, or 1.04%, to 4,136.48 and the Nasdaq Composite .IXIC dropped 193.86 points, or 1.59%, to 12,006.96. | I think we are in a fair game now.” Shares of AppleAAPL.O, the largest U.S. company by market value, rose 2.4%. Nasdaq posts 5th straight weekly gain U.S. reports blowout job data; unemployment lowest since 1969 Megapcap earnings reactions: Apple up; Amazon, Alphabet slump Ford Motor drops on downbeat outlook Indexes down: Dow 0.38%, S&P 1.04%, Nasdaq 1.59% Updates with further market data By Lewis Krauskopf, Shreyashi Sanyal and Johann M Cherian Feb 3 (Reuters) - Major U.S. stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports. “What I think is causing some of the volatility is markets trying to make sense of how the Fed will perceive this.” The Dow Jones Industrial Average .DJI fell 127.93 points, or 0.38%, to 33,926.01, the S&P 500 .SPX lost 43.28 points, or 1.04%, to 4,136.48 and the Nasdaq Composite .IXIC dropped 193.86 points, or 1.59%, to 12,006.96. | I think we are in a fair game now.” Shares of AppleAAPL.O, the largest U.S. company by market value, rose 2.4%. Nasdaq posts 5th straight weekly gain U.S. reports blowout job data; unemployment lowest since 1969 Megapcap earnings reactions: Apple up; Amazon, Alphabet slump Ford Motor drops on downbeat outlook Indexes down: Dow 0.38%, S&P 1.04%, Nasdaq 1.59% Updates with further market data By Lewis Krauskopf, Shreyashi Sanyal and Johann M Cherian Feb 3 (Reuters) - Major U.S. stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports. For the week, the S&P 500 rose 1.6%, the Dow slipped 0.15%, and the Nasdaq gained 3.3%. | null |
317 | 17,282 | 2023-02-02 00:00:00 UTC | Apple's lower iPhone sales drive first profit miss since 2016 | AAPL | https://www.nasdaq.com/articles/apples-lower-iphone-sales-drive-first-profit-miss-since-2016 | null | null | (Adds stock move)
By Stephen Nellis
Feb 2 (Reuters) - Apple Inc on Thursday reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after COVID lockdowns in China disrupted production of the company's biggest seller. Shares of Apple fell 5% after publication of the results. Apple sales fell 5% to $117.2 billion and were down in every part of the world in the quarter. Sales from each product category dropped, except for gains in services and iPads. Earnings per share were $1.88, Apple's first miss of Wall Street's profits expectations since 2016.
Analysts had expected sales of $121.1 billion and profits of $1.94 per share, according to IBES data from Refinitiv. Apple Chief Executive Tim Cook told Reuters that the production disruptions that plagued Apple's key quarter were now over.
During its fiscal first quarter ended Dec. 31, Apple faced a wave of challenges that left Wall Street expecting lower sales. Chief among those were supply chain pressures when COVID lockdowns at a production facility in Zhengzhou, China, slowed production of iPhone 14 Pro and Pro Max devices, both premium priced models that would traditionally help drive Apple's margins higher.
In an interview with Reuters, Cook said that production disruptions "lasted through most of December" but that "production is now back where we want it to be." Cook said the lockdowns in China created a dual challenge where both supply and demand were constrained, with greater China sales falling 7% to $23.9 billion.
"When things started to reopen in December (in China), we did see an increase in traffic to our stores as compared to November and an increase in demand as December rolled around," Cook told Reuters.
The strong U.S. dollar also hurt Apple, which derives more than half its sales from outside the Americas, but the effect was less than anticipated as the dollar eased from last year's highs. Apple had warned investors that such foreign-exchange issues would put a 10% on drag on sales but said on Thursday that the actual effect was 8%.
"I would point out that 8% is still a very severe headwind," Cook told Reuters. "I wouldn't want to underestimate that. We would have grown on a constant currency basis."
On top of supply chain problems for the iPhone, Wall Street analysts had expected iPhone sales to fall this year as part of a larger pattern in which the iPhone 14 family released last year sells more slowly after two straight years of strong sales of iPhone 12 and 13 models. Apple said iPhone sales were $65.8 billion, down 8% from the year before and below analyst estimates of $68.3 billion.
The company's services segment, which includes content businesses such as Apple TV+ and software business like the App Store, rose 6% to $20.8 billion in revenue, compared with analyst expectations of $20.7 billion, according to Refinitiv data.
Cook told Reuters that the company now has a base of 2 billion active devices, up from 1.8 billion a year ago. The company now has 935 million paid subscriptions, up from 900 million the quarter before, and that services sales set a record in several markets, including China, he said.
Sales of the company's Mac computers, which had boomed during the wave of working from home during the pandemic, declined 29% year over year to $7.7 billion, compared with expectations of $9.6 billion, according to Refinitiv data. Apple executives had warned last year that Mac sales were likely to decline year over year because the previous year's results included a burst of sales associated with the release of new MacBook Pro computers with Apple's house-designed processors.
Sales of the iPad, which also saw a pandemic-related boost, grew 30% to $9.4 billion, compared with analyst expectations of $7.8 billion, according to Refinitiv data. The wearable and accessories segment, which includes the Apple Watch and AirPods, fell 8% to $13.5 billion compared with analyst estimates of $15.2 billion, according to Refinitiv data.
Cook told Reuters the iPad's strong performance stemmed from the launch of new models and the absence of supply constraints that had hindered sales of the device a year earlier.
Apple investors are waiting to see whether the company dives into new markets this year. Technology publication The Information has reported that Apple plans to launch a mixed-reality headset that could retail for around $3,000 this year and is also working on a more affordable follow-up device.
Apple is one of the few large technology firms that has not announced major layoffs, though its ranks never grew as rapidly as that of its peers. In late 2022 it said it had 164,000 employees, up less than 20% from its 2019 headcount. By contrast, other companies such as Meta Platforms Inc , which is laying off about 11,000 employees, had roughly doubled its headcount between 2019 and 2022.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Stephen Nellis in San Francisco; Additional reporting by Akash Sriram in Bengaluru; Editing by Peter Henderson and Lisa Shumaker) ((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;)) Keywords: APPLE RESULTS/ (UPDATE 1, PIX)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | During its fiscal first quarter ended Dec. 31, Apple faced a wave of challenges that left Wall Street expecting lower sales. Cook told Reuters the iPad's strong performance stemmed from the launch of new models and the absence of supply constraints that had hindered sales of the device a year earlier. Technology publication The Information has reported that Apple plans to launch a mixed-reality headset that could retail for around $3,000 this year and is also working on a more affordable follow-up device. | (Adds stock move) By Stephen Nellis Feb 2 (Reuters) - Apple Inc on Thursday reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after COVID lockdowns in China disrupted production of the company's biggest seller. On top of supply chain problems for the iPhone, Wall Street analysts had expected iPhone sales to fall this year as part of a larger pattern in which the iPhone 14 family released last year sells more slowly after two straight years of strong sales of iPhone 12 and 13 models. Apple executives had warned last year that Mac sales were likely to decline year over year because the previous year's results included a burst of sales associated with the release of new MacBook Pro computers with Apple's house-designed processors. | (Adds stock move) By Stephen Nellis Feb 2 (Reuters) - Apple Inc on Thursday reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after COVID lockdowns in China disrupted production of the company's biggest seller. On top of supply chain problems for the iPhone, Wall Street analysts had expected iPhone sales to fall this year as part of a larger pattern in which the iPhone 14 family released last year sells more slowly after two straight years of strong sales of iPhone 12 and 13 models. Apple executives had warned last year that Mac sales were likely to decline year over year because the previous year's results included a burst of sales associated with the release of new MacBook Pro computers with Apple's house-designed processors. | (Adds stock move) By Stephen Nellis Feb 2 (Reuters) - Apple Inc on Thursday reported sales and profits that missed Wall Street expectations driven by weak iPhone sales after COVID lockdowns in China disrupted production of the company's biggest seller. In an interview with Reuters, Cook said that production disruptions "lasted through most of December" but that "production is now back where we want it to be." Sales of the company's Mac computers, which had boomed during the wave of working from home during the pandemic, declined 29% year over year to $7.7 billion, compared with expectations of $9.6 billion, according to Refinitiv data. | null |
318 | 17,315 | 2023-02-01 00:00:00 UTC | Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-ishares-esg-aware-msci-usa-etf-esgu-a-strong-etf-right-now-5 | null | null | Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $20.04 billion, making it the largest ETF in the Style Box - All Cap Growth. ESGU seeks to match the performance of the MSCI USA ESG Focus Index before fees and expenses.
The MSCI USA Extended ESG Focus Index comprises of U.S. companies that have positive environmental, social and governance characteristics while exhibiting risk and return characteristics similar to those of the parent index.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 28% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.85% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 21.26% of total assets under management.
Performance and Risk
The ETF has added roughly 6.48% so far this year and is down about -9.69% in the last one year (as of 02/01/2023). In the past 52-week period, it has traded between $79.22 and $103.63.
The fund has a beta of 1.02 and standard deviation of 25.77% for the trailing three-year period. With about 313 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares ESG Aware MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index. Vanguard ESG U.S. Stock ETF has $6.11 billion in assets, iShares ESG Aware MSCI EAFE ETF has $7.23 billion. ESGV has an expense ratio of 0.09% and ESGD charges 0.20%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.85% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Click to get this free report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports To read this article on Zacks.com click here. Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. | Click to get this free report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.85% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. | Click to get this free report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.85% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.85% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Click to get this free report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports To read this article on Zacks.com click here. Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market. | null |
319 | 17,338 | 2023-01-31 00:00:00 UTC | Tesla & Supercharged Electric Vehicle ETFs in Focus | AAPL | https://www.nasdaq.com/articles/tesla-supercharged-electric-vehicle-etfs-in-focus | null | null | Tesla’s TSLA stock surged about 33% last week after the company posted strong results and is now up more than 50% this month. CEO Elon Musk was optimistic about the outlook and said the company could produce 2 million cars this year.
Earlier this month, the EV giant slashed prices on some of its models and Ford Motor F announced price cuts on its electric Mustang Mach-E yesterday, stepping up price wars in the EV market.
Tesla controls about 65% of the US EV market and remains years ahead of competitors, with vastly higher profit margins. EV start-ups like Rivian Automotive RIVN and Lucid Group LCID may not report profits any time soon.
Lucid had soared last week on unconfirmed rumors that the company could be acquired by Saudi Arabia Public Investment Fund.
Annual EV sales are expected to increase from around 10 million in 2022 to more than 20 million by 2025 and over 60 million by 2035, per Rho Motion.
The Inflation Reduction Act and the Infrastructure Investment and Jobs Act aim to boost EV development and adoption through billions of dollars in funding.
To learn about the Global X Autonomous & Electric Vehicles ETF DRIV, the iShares Self-Driving EV and Tech ETF IDRV and the KraneShares Electric Vehicles and Future Mobility Index ETF KARS, please watch the short video above.
In addition to popular EV stocks, NVIDIA NVDA, Apple AAPL and Microsoft MSFT are among the top holdings in these ETFs.
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Ford Motor Company (F) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports
Tesla, Inc. (TSLA) : Free Stock Analysis Report
KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports
iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports
Lucid Group, Inc. (LCID) : Free Stock Analysis Report
Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In addition to popular EV stocks, NVIDIA NVDA, Apple AAPL and Microsoft MSFT are among the top holdings in these ETFs. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports Tesla, Inc. (TSLA) : Free Stock Analysis Report KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report To read this article on Zacks.com click here. Tesla controls about 65% of the US EV market and remains years ahead of competitors, with vastly higher profit margins. | In addition to popular EV stocks, NVIDIA NVDA, Apple AAPL and Microsoft MSFT are among the top holdings in these ETFs. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports Tesla, Inc. (TSLA) : Free Stock Analysis Report KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report To read this article on Zacks.com click here. To learn about the Global X Autonomous & Electric Vehicles ETF DRIV, the iShares Self-Driving EV and Tech ETF IDRV and the KraneShares Electric Vehicles and Future Mobility Index ETF KARS, please watch the short video above. | Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports Tesla, Inc. (TSLA) : Free Stock Analysis Report KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report To read this article on Zacks.com click here. In addition to popular EV stocks, NVIDIA NVDA, Apple AAPL and Microsoft MSFT are among the top holdings in these ETFs. Earlier this month, the EV giant slashed prices on some of its models and Ford Motor F announced price cuts on its electric Mustang Mach-E yesterday, stepping up price wars in the EV market. | Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Global X Autonomous & Electric Vehicles ETF (DRIV): ETF Research Reports Tesla, Inc. (TSLA) : Free Stock Analysis Report KraneShares Electric Vehicles and Future Mobility Index ETF (KARS): ETF Research Reports iShares Self-Driving EV and Tech ETF (IDRV): ETF Research Reports Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report To read this article on Zacks.com click here. In addition to popular EV stocks, NVIDIA NVDA, Apple AAPL and Microsoft MSFT are among the top holdings in these ETFs. Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. | null |
320 | 17,358 | 2023-01-30 00:00:00 UTC | US STOCKS-Nasdaq falls as megacaps drop ahead of earnings, Fed meet in focus | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-falls-as-megacaps-drop-ahead-of-earnings-fed-meet-in-focus-0 | null | null | By Shreyashi Sanyal and Johann M Cherian
Jan 30 (Reuters) - The tech-focused Nasdaq fell more than 1% on Monday as megacap growth stocks including Apple, Amazon and Alphabet fell ahead of their earnings reports this week, while investors awaited the U.S. Federal Reserve's rate-setting meeting.
The central bank is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, followed by Fed Chair Jerome Powell's speech, which will be scrutinized for any signs of further increases.
"How strong of a language he (Powell) uses is what it's going to come down to," said Andre Bakhos, president at Ingenium Analytics LLC in Bernardsville, New Jersey.
This will likely be the smallest rate increase since the Fed kicked off its tightening cycle 10 months ago with a 25 bps hike, with financial markets pricing in a final rate hike in March.
Money markets now see rates peaking at 4.9% in June, still below the 5% level expected by Fed policymakers. 0#FEDWATCH
After a slew of layoffs by large-cap tech and financial firms through the month, investors will now keep an eye on the Labor Department's January nonfarm payrolls data expected on Friday.
A total of 107 S&P 500 firms are expected to report quarterly results in the busiest week of the earnings season, including heavyweight growth companies Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms Inc META.O, each down between 1% to 2%.
Analysts expect S&P 500 earnings for the fourth quarter to decline 3%, compared with a 1.6% drop expected at the beginning of the year, according to Refinitiv data.
Wall Street is expected to end the month higher, with the Nasdaq .IXIC and the S&P 500 Growth index .IGX recouping more than half their monthly losses from December. The S&P 500 index .SPX is set for the best start to the year since 2019.
Tighter monetary policies have stood in the way of growth firms expanding their businesses, which have also been pressured for much of last year by high Treasury yields.
Bakhos said that the decline in growth stocks on Monday could be due to some profit-taking, noting that earnings from these companies could be less dire than what most expect.
The European Central Bank and the Bank of England are also seen raising interest rates later in the week.
Johnson & JohnsonJNJ.N slipped 3% on the dismissal of a bankruptcy petition filed by its LTL Management unit by the 3rd U.S. Circuit Court of Appeals.
American Express Co AXP.Nrose 2.7% after several brokerages raised price targets on the stock on its strong full-year forecast.
Declining issues outnumbered advancers for a 1.70-to-1 ratio on the NYSE and for a 1.66-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new lows, while the Nasdaq recorded 46 new highs and 13 new lows.
(Reporting by Shreyashi Sanyal and Johann M Cherian in Bengaluru Editing by Vinay Dwivedi and Anil D'Silva)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A total of 107 S&P 500 firms are expected to report quarterly results in the busiest week of the earnings season, including heavyweight growth companies Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms Inc META.O, each down between 1% to 2%. 0#FEDWATCH After a slew of layoffs by large-cap tech and financial firms through the month, investors will now keep an eye on the Labor Department's January nonfarm payrolls data expected on Friday. Tighter monetary policies have stood in the way of growth firms expanding their businesses, which have also been pressured for much of last year by high Treasury yields. | A total of 107 S&P 500 firms are expected to report quarterly results in the busiest week of the earnings season, including heavyweight growth companies Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms Inc META.O, each down between 1% to 2%. By Shreyashi Sanyal and Johann M Cherian Jan 30 (Reuters) - The tech-focused Nasdaq fell more than 1% on Monday as megacap growth stocks including Apple, Amazon and Alphabet fell ahead of their earnings reports this week, while investors awaited the U.S. Federal Reserve's rate-setting meeting. The central bank is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, followed by Fed Chair Jerome Powell's speech, which will be scrutinized for any signs of further increases. | A total of 107 S&P 500 firms are expected to report quarterly results in the busiest week of the earnings season, including heavyweight growth companies Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms Inc META.O, each down between 1% to 2%. By Shreyashi Sanyal and Johann M Cherian Jan 30 (Reuters) - The tech-focused Nasdaq fell more than 1% on Monday as megacap growth stocks including Apple, Amazon and Alphabet fell ahead of their earnings reports this week, while investors awaited the U.S. Federal Reserve's rate-setting meeting. The central bank is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, followed by Fed Chair Jerome Powell's speech, which will be scrutinized for any signs of further increases. | A total of 107 S&P 500 firms are expected to report quarterly results in the busiest week of the earnings season, including heavyweight growth companies Apple Inc AAPL.O, Amazon.com Inc AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms Inc META.O, each down between 1% to 2%. By Shreyashi Sanyal and Johann M Cherian Jan 30 (Reuters) - The tech-focused Nasdaq fell more than 1% on Monday as megacap growth stocks including Apple, Amazon and Alphabet fell ahead of their earnings reports this week, while investors awaited the U.S. Federal Reserve's rate-setting meeting. The central bank is seen hiking the Fed funds rate by 25 basis points (bps) at the end of its two-day policy meeting on Wednesday, followed by Fed Chair Jerome Powell's speech, which will be scrutinized for any signs of further increases. | null |
321 | 17,395 | 2023-01-29 00:00:00 UTC | Japan's Nikkei tracks Wall Street higher, U.S. events in focus | AAPL | https://www.nasdaq.com/articles/japans-nikkei-tracks-wall-street-higher-u.s.-events-in-focus | null | null | TOKYO, Jan 30 (Reuters) - Japan's Nikkei index rose on Monday, tracking Wall Street's climb in the previous session, although the gains were capped by caution ahead of the Federal Reserve's meeting and domestic corporate earnings announcements.
The Nikkei share average .N225 was up 0.33% at 27,473.75 by the midday break, while the broader Topix .TOPX inched 0.14% higher at 1,985.42.
The week is filled with market-moving cues, so investors are being more cautious, said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
"I am unsure if this (upbeat) momentum will continue this week. Investors are cautious and could sell stocks to book profits ahead of the Fed meeting, U.S. employment data as well as domestic corporate results."
Wall Street rose on Friday, marking the end of a rocky week in which economic data and corporate earnings guidance hinted at softening demand but also economic resiliency ahead of the U.S. Federal Open Market Committee (FOMC) this week. .N
A string of high profile earnings reports are on tap globally, notably from Apple Inc AAPL.O, Amazon.com AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms META.O, among others.
Investors are also reacting to Japanese corporate outlook as the earnings season reaches its peak this week.
Fanuc 6954.T jumped 4.25% after the robot maker raised its annual operating profit outlook and announced a 5-for-1 stock split.
Shin-Etsu Chemical 4063.T, up 4.48%, posted a fourth straight session of gains as the silicon wafter maker raised its annual operating profit outlook.
Japanese semiconductor equipment makers showed muted reaction to news that Washington had made progress towards a deal to curb exports of some advanced chip-making equipment to China with several governments.
Tokyo Electron 8035.T rose 0.54% and Advantest 6857.T inched up 0.21%, while Nikon 7731.T rose 0.48%.
(Reporting by Junko Fujita; editing by Uttaresh.V)
((junko.fujita@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | .N A string of high profile earnings reports are on tap globally, notably from Apple Inc AAPL.O, Amazon.com AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms META.O, among others. TOKYO, Jan 30 (Reuters) - Japan's Nikkei index rose on Monday, tracking Wall Street's climb in the previous session, although the gains were capped by caution ahead of the Federal Reserve's meeting and domestic corporate earnings announcements. Investors are cautious and could sell stocks to book profits ahead of the Fed meeting, U.S. employment data as well as domestic corporate results." | .N A string of high profile earnings reports are on tap globally, notably from Apple Inc AAPL.O, Amazon.com AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms META.O, among others. TOKYO, Jan 30 (Reuters) - Japan's Nikkei index rose on Monday, tracking Wall Street's climb in the previous session, although the gains were capped by caution ahead of the Federal Reserve's meeting and domestic corporate earnings announcements. Fanuc 6954.T jumped 4.25% after the robot maker raised its annual operating profit outlook and announced a 5-for-1 stock split. | .N A string of high profile earnings reports are on tap globally, notably from Apple Inc AAPL.O, Amazon.com AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms META.O, among others. TOKYO, Jan 30 (Reuters) - Japan's Nikkei index rose on Monday, tracking Wall Street's climb in the previous session, although the gains were capped by caution ahead of the Federal Reserve's meeting and domestic corporate earnings announcements. Wall Street rose on Friday, marking the end of a rocky week in which economic data and corporate earnings guidance hinted at softening demand but also economic resiliency ahead of the U.S. Federal Open Market Committee (FOMC) this week. | .N A string of high profile earnings reports are on tap globally, notably from Apple Inc AAPL.O, Amazon.com AMZN.O, Alphabet Inc GOOGL.O and Meta Platforms META.O, among others. TOKYO, Jan 30 (Reuters) - Japan's Nikkei index rose on Monday, tracking Wall Street's climb in the previous session, although the gains were capped by caution ahead of the Federal Reserve's meeting and domestic corporate earnings announcements. The Nikkei share average .N225 was up 0.33% at 27,473.75 by the midday break, while the broader Topix .TOPX inched 0.14% higher at 1,985.42. | null |
322 | 17,397 | 2023-01-28 00:00:00 UTC | What's Going on With REITs? An Investors Guide | AAPL | https://www.nasdaq.com/articles/whats-going-on-with-reits-an-investors-guide | null | null | In this podcast, Motley Fool analyst Deidre Woollard and Motley Fool contributor Matt Frankel discuss:
How REITs differ from stocks.
Publicly traded REITs vs. private REITs.
One office REIT that's evolving.
Ways to spot a yield trap.
REITs benefiting from e-commerce trends.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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Matt Frankel: The whole premise of a REIT is that it's not economical for all of these businesses to own their own real estate. It's not economical for companies like Walgreens to own the buildings they operate in, which creates an opportunity for companies like Realty Income. There's a whole bunch of examples like that where it just doesn't make sense to own your own real estate. That's one thing that I think the market's really overlooking when it comes to data centers.
Chris Hill: I'm Chris Hill and that's Motley Fool contributor Matt Frankel. Despite a down market, some real estate trends aren't going away. That's part of what Deidre Woollard and Matt discuss in this episode, along with the fundamentals of REITs, how to spot a yield trap, and investment ideas in warehousing, retail, and a couple of ETFs.
Deidre Woollard: Not a great year for REITs in 2022. The FTSE, the all-equity REIT number for the year, that came in at a negative 24.95%. That's not great. It's below the S&P, it's below the Dow. Not as bad as the Nasdaq, tech had a worse year than REITs, but 2021, REITs were total rockstars. Usually, REITs are the steady part of my portfolio. What's the story here? What's the volatility? Why did this happen this way?
Matt Frankel: You're right in the sense that REITs usually aren't so volatile, but you have to remember that neither are interest rates. Interest rates have been particularly volatile this year. Usually REITs move a whole lot slower than they have over the past year. It's really rare for, say, the mortgage rate to double in a single year. REITs are very rate-sensitive instruments. They're designed to pay out steady income, and income-focused investments generally are very sensitive to changes in yields. When you think about it this way, if the 10-year Treasury is paying 2%, a REIT index fund that's paying 4% seems pretty appealing to income investors.
But if the 10-year Treasury that's risk-free is paying 4%, all of a sudden, a 4% yield from a REIT fund might not seem that appealing. In order for REITs to keep up with the market, rates have to rise, the yields have to rise, and because yield and price have an inverse relationship, it generally puts a lot of pressure on REIT prices, and that's really what we saw in 2022. It wasn't that the businesses were doing poorly, we didn't see massive amounts of tenants not paying their rent, we didn't see a lot of vacancies, if anything, REITs business-wise did better than they had been. But it's really a function of just the yield environment and what it does to income investments.
Deidre Woollard: Well, that's a really good point. Another thing about REITs is the impact of interest rates in terms of trying to keep buying new properties. Looking forward, do you think that we're going to see more mergers and acquisitions or more acquisitions in general? Is the cost of capital too high for REITs right now?
Matt Frankel: There's actually a lot to unpack in the cost of capital. When you think about it, there's two different ways that REITs generally fund their growth. Three, but the two main ways are by selling new shares, which I mentioned when yields rise, REIT prices go down, so it's less desirable to sell shares and dilute shareholders to raise money that way. Or they can take on debt, which as you mentioned, is at a much higher interest rate. Growth becomes a little more difficult in this environment. The third way is using some of the cash flow that you're not required to pay out as dividends in order to fund growth. That's usually a minor way to fund growth for REITs.
REITs with a lot of cash on their balance sheets going into this are in very good shape. That's where you're starting to see a lot, and you're starting to see a lot of private equity takeovers of REITs over the past year. Just some of our favorites, unfortunately, got taken out over the past year, American Campus Communities, STORE Capital is about to go private. These are going private because one, private equity investors or alternative asset managers are seeing a lot of demand for investments that aren't stocks right now, which isn't a big surprise because of what the market is doing, people are like, get me out of here, let's get into something that's a little more stable and predictable or at least that I don't have to look at the price every day.
You're seeing a lot of demand on the private equity side. You're seeing a lot of take-private transactions. As far as mergers and acquisitions, I could see it coming back a little bit in 2023, a lot of REITs are very financially strong. REITs that have A credit ratings can still borrow relatively cheaply, but as far as just the flurry of M&A and the flurry of debt issuance and rapid growth that we saw over the past decade or so, actually, I'm expecting muted growth in 2023.
Deidre Woollard: When you say muted growth, what does that also mean for the dividends? Because that's one thing that people are looking at with REITs. Obviously, you just talked about 2022 being not-so-great. Should we be looking for better dividend performance going forward?
Matt Frankel: Well, a lot of them raised their dividend significantly in 2020. Think of industrial REITs that are getting 30% more for the same leases than they were before the pandemic. They've passed some of that onto their shareholders. The general goal with REITs is you don't think of it in terms of a year-to-year dividend increase, you want your income to grow over time. The general goal when I invest in a REIT is that I want to see its dividend rise at an annualized rate of 4%-5% over the long run. That's what I aim for and I consider that to be strong dividend growth.
Remember, REITs have to pay out 90% of their taxable income, but there's a lot more to that than a lot of investors realize. This doesn't mean that if a REIT makes a dollar in profit per share, they have to pay out 90 cents of it. They have to pay out 90 cents of their taxable income, which can actually vary a lot from year to year. REITs have the tax deduction of depreciation, which in a lot of cases can chop their earnings in half for tax purposes, even though they're making a lot more money. But with that in mind, REITs are still making money. But I'm expecting, I hate to use the word muted again, but muted dividend increases this year. Because of that high cost of capital, it's putting a strain on growth.
If a REIT doesn't have to give a 5% dividend increase, if they can keep their streak alive with a 2% increase and satisfy the requirements to remain a REIT by handing out at least 90% of its taxable income, from a REIT's perspective, that's a way to retain some of its earnings and reinvest that in growth instead of diluting shareholders by issuing new shares or taking on more debt or things like that. I'm expecting REITs to raise their dividends just enough this year to keep their dividend streak alive, but nothing like the 10% dividend increases that you've seen in some recent years.
Deidre Woollard: That makes sense. I like the way you framed that, how it's a bit of a balancing act for REITs trying to keep all of those things equal and still deliver on what people expect, which is of course those steady dividend increases. I'm excited to talk about sectors with you, and especially I wanted to talk about office because I feel like you and I have had this conversation for so long and I love having it with you, but I want to take it in different direction this time. I want to talk about one of your favorite REITs, Empire State Realty Trust. For those of you who don't know, this is one of Matt's favorites. It owns the Empire State Building and a lot of other buildings, but it's doing something interesting that other office REITs are also doing which is getting into other sectors. If office isn't dead, but office is shifting, does it make sense for some of these bigger office REITs to look at differently, do they need to change up their property mix?
Matt Frankel: First of all, you hit the nail on the head with the office isn't dead, but it's different. You have to be a lot more selective than you used to. I would compare that to say the calls that the mall is dead five years ago. The mall wasn't dead, people just wanted to go to the good malls. You saw Simon Property Group is doing off-the-charts well, which we'll talk about later in the show. But the regional malls got hammered, even the decent quality regional malls got hammered. The same thing is starting to happen with offices. If there's something special about an office property, be it the location, the history like the Empire State Building, you're still seeing a lot of tenant demand for office space.
It would be nice if someone had been saying this all along, but employers are starting to realize that there is an element of productivity and collaboration that comes with being in person in the office. You're starting to see more and more of the companies that said they were going to be remote forever start to switch to you need to be in the office two days a week if it's practical, things like that. Office isn't dead, companies want office space. There's a big element of collaboration there. They have to be selective. But on the second point of should office REITs start to buy other things like you mentioned, Empire State and their apartments, it is a good time to do some, what I'd call opportunistic diversification.
At the time when Empire State bought its apartment buildings that you're referring to, a lot of people were saying that inner-city apartments were dead. No one's going to want to live and pay New York City prices if they don't have to live in the city because they can work remotely. From everything I can tell, just analyzing it, they got a deal for those properties. I think that diversification, especially when it's opportunistic like that, is a good thing. Office REITs should do what they're comfortable with. An office REIT, just because their properties aren't doing well, shouldn't just run out and buy a mall, because that's not in their circle of competence. Empire State in particular knows New York City very well, and they're not buying an apartment building in Albuquerque, they're buying apartment buildings that are right around the corner from their office buildings, areas they know very well that they can analyze very well, their managers live around the corners from, that's their circle of competence, is New York.
It's not necessarily office because their office buildings have retail elements, they have entertainment elements to it. The observatory on top of the Empire State Building. They have experience with a few different property types, but all within the context of the New York City metropolitan area, which is where they're sticking to. The short answer to the question is yes, diversification is probably a smart move for them with the office uncertainty, but I don't think office is dead, and I think if you have the knowledge, it's really a nice luxury to have three or four different avenues that you could direct your capital to when you see opportunities.
Deidre Woollard: I like what you said there. I think it's a good reminder for investors that anytime you see the headlines of something is dead, don't immediately agree. Question that, look around. I also like what you said about how REITs need to know what they're good at and what they're good at might not be just what you see on the surface in terms of sector. I wanted to talk about another sector I'm thinking a lot about lately and that's multifamily.
You just mentioned it with Empire State Realty, it's going to be an interesting year for multifamily. Rents have been up, but they're slowing, vacancies are rising. There was a report recently from CoStar from their Apartments.com about absorption, absorption of newly built units that has been slowing down, and yet we also have the housing shortage. Some of this is, I think that we're building a little too much at the high end of things, but it's going to be an interesting year for multifamily. What are you seeing?
Matt Frankel: You mentioned that CoStar report where they said limited absorption of newly built units is driving up vacancies, that's generally at the higher end. You're seeing the worst hit at the higher end. The housing shortage, we've all heard the headlines, there's a shortage of about 4 million housing units, give or take, depending on which report you are reading. What people don't realize, it's almost exclusively starter homes that are just non-existent and that's on the rental and ownership side. Let me just give a couple of statistics that I find really just mind-blowing. In the 1970s, the average rate of construction of entry-level homes, which we generally define as under 1,400 squire feet, enough space for a new family and things like that, was about 418,000 per year in the United States.
By the '90s, that had been cut in half to about 207,000 in the average year in the 1990s. In the 2010s, the past decade, the most recent decade, 55,000 a year, almost about 1/9th of what it was in the 1970s. It's pretty much stabilized at that for now in 2022, 65,000 so-called starter homes have been built. But in 2020, 65,000 starter homes had been built, but there were 2.4 million first-time homebuyers in the market. People were buying a lot of house, and now that the mortgage rates are higher, home prices are higher, it's a lot more difficult to afford that, we're starting to see a trend in the other direction, but there's not enough being built. Short answer to your question is that we need more entry-level housing units and we need rent to stabilize.
Rent, it's starting to pull back a little bit, but I wouldn't call it stable in any way. If you look at a chart of rent prices in the U.S., it looks like a checkmark right now, it doesn't look like any type of flat graph that you up and then just down. Rent needs to stabilize and we need to see a lot more entry-level units, especially even on the apartment side of things. We've spent a lot of time talking about built-for-rent housing, but the average built-for-rent home right now is about 2,500 square feet. It's still an expensive place to live, and it's pricing a lot of people who need homes out of the market. It's all about entry-level homes. I think entry-level housing construction in general is going to be a massive investment opportunity over the next decade or two.
Deidre Woollard: You and I have talked before about where that housing is, too, and the migration that we were seeing certainly before the pandemic, but increasingly during the pandemic. We've talked about the Sun Belt, it's always the Sun Belt. Although some of those markets got too hot, too fast, I'm thinking about Austin, Texas, but some of the markets have longer-term staying power, certainly in North Carolina and around the Research Triangle. It's important to, I think, to think about where the housing is, where we're going, where population is growing. It's a complicated thing. I think it's something that we're talking about publicly traded REITs.
But I wanted to shift a little bit because the non-traded REITs are trying to figure this out, too. With Blackstone's, they recently paused redemptions. For the non-traded REITs, it's a little different. You can't trade a like a publicly traded REIT, you have to redeem your shares. Usually this happens pretty regularly, but it's almost a little bit like a bank run. I hate using that phrase. But is there a high-profile redemption like little bit of panic going on? Is that anything that would bleed over into the public REIT market in terms of how people are considering REITs?
Matt Frankel: A redemption pause is a necessary evil for private REITs, I would say. It prevents them from having to sell a lot of properties to cover redemptions at fire-sale prices. If I were to tell you you have to sell your house within the next 10 days to get the money, you probably wouldn't get full market value for it. It prevents them from having to sell assets when they don't want to and things like that, but I also think it tells us that public REITs are the way to go for 99% of investors. It's something that you just don't like to see.
You want a REIT because you want access to your money. If I want an illiquid real estate asset, I'll buy a rental property. This would be like if Vanguard said you can't redeem its mutual funds. Obviously, that's a gigantic scale, if Vanguard said we don't have the money for redemptions that would crash the market. But it's the same idea, where you are saying, we don't want people to pull their money out of the fund as quickly, let's hold off. But for me, it's one of the big reasons why I invest in rental properties and publicly traded REITs. The private REITs are in that middle ground. They can be very lucrative investments if you don't care about liquidity.
Deidre Woollard: I invest in some of the real estate crowdfunding, Fundrise and RealtyMogul, and we haven't heard anything major on those yet, but definitely I know that that's something that they're looking at, too. Our producer had a question that I think is worth considering, which is real estate trends that aren't going away, and I'm going to start with one, industrial real estate. As we're taping this, Prologis had their earnings today, and a lot of companies are, they scaled back their use of warehouses last year, certainly most famously Amazon. I'm not worried about industrial in the long term. What trends are you watching that you think aren't going away?
Matt Frankel: First of all, I totally agree with you on industrial demand for warehouses is strong, and fulfillment spaces, things like that are very strong from the long term, but they can be rather cyclical, and they tend to anticipate cycles rather than react to them. What I mean by that is you're seeing a lot of operators like Amazon and things like that, they're getting hesitant to invest in new warehouse space at a time when they think the consumer is going to stop spending. It can be cyclical, but the long-term trend is fine. Data centers are another example of one that I think gives a great opportunity right now because that is massive long-term trends.
Forget the short-seller calls. I know Jim Chanos has come out publicly and said that the data centers are his big short, I don't buy it. His thesis is that the tech companies are going to start bringing data centers in-house, they don't want that capital commitment. Maybe like the Apples of the world, don't care and have hundreds of billions of dollars to build their own data centers. But the tech start-ups that pride themselves on being asset-light businesses are not going to shy away from data centers. They might stop spending for the next year or two similar to industrial tenants. They might stop investing in growth in times of uncertainty, but your long-term that trajectory is still very positive.
Deidre Woollard: I love that, too. I've been thinking about the data centers, too, totally agree with that because I think it's akin to industrial. Amazon is a huge tenant of industrial REITs, but they also build their own. With data centers, it's the same thing. Alphabet and Meta, they build their own data centers. At the same time, they're also tenants of the data center REITs because they want that flexibility and that's important. They don't want it all on their shoulders for some really good reasons.
Matt Frankel: It's the same reason that Facebook doesn't own most of the office buildings it's in, it leases them. It wants to keep its capital commitments low, even though it could afford to buy them. But the whole premise of a REIT is that it's not economical for all of these businesses to own their own real estate. It's not economical for companies like Walgreens to own the buildings they operate in, which creates an opportunity for companies like Realty Income. There's a whole bunch of examples like that where it's just doesn't make sense to own your own real estate. That's one thing that I think the market is really overlooking when it comes to data centers.
Deidre Woollard: Well, you teased it earlier in the show talking about retail, so let's go into that a little bit. Last year, a great year for retail, great year for foot traffic. We kept using the term "revenge spending," but people wanted to go back to the malls certainly, but they also wanted to go back to the grocery stores, which I thought was interesting. Everybody got their Instacart accounts, but when they could, they wanted to go back and do more shopping. I've got favorites in both the shopping center side and the mall side, and I think you mentioned Simon, we both share that one, what else are you watching when it comes to retail?
Matt Frankel: Well, for one thing, it wasn't just the foot traffic was up. It's that we saw occupancy for the first time in a long time trending the right direction. One that I follow his Tanger Outlets which along with Simon dominate the outlet industry. Simon's No. 1 by far with its premium outlets, and then Tanger is the big stand-alone, ticker's SKT on that one. They're both doing great, not just in terms of foot traffic they are, both of their tenants have never been making more money per square footage basis, which allows them to raise rent, but their occupancy is trending in the right direction as well. The outlet industry is very conducive to the e-commerce shift we're seeing.
It's a much more economical way for retailers to maintain a vast physical presence without having to pay high-end mall rent. Outlets are generally very cheap rent-wise compared to space in a mall. One of the reasons that both premium outlets -- you know, Simon -- and Tanger have been raising occupancy is that they're bringing companies that historically don't have an outlet presence into their system. We've talked about the malls being dead. The malls aren't dead, the high-end malls are fine, but the mid-level malls, a company like Abercrombie & Fitch, might start closing some of its underperforming stores in mid-level malls, and shifting more of those resources to outlets where it can be a much more economical way to have that physical presence. I'm very bullish on the outlet space. Companies that just generally have an online presence are starting to open up outlets.
Companies that are big-box stores are starting to open up smaller outlets to get rid of merchandise that they need to get rid of. Dick's Sporting Goods opened its first outlet during COVID in a Tanger property. For me, outlets are the area of retail that I'm most bullish on over the next, say, 20 years, but if you're worried about cyclicality, if you're worried about recessions, the grocery anchored, like you mentioned, is a fantastic way to go and that's one that's just not going anywhere. Now, you have to be selective. It's just like the malls where you want your properties located in good areas, you want them to be relatively young, you don't want a REIT full of old strip malls that just happened to grocery stores in them. Kimco's, one of my favorites in that space, KIM, that's probably what you were going to say, but I think Tanger is probably my favorite retail stock right now in terms of real estate and with Simon and Kimco being a close second and third.
Deidre Woollard: As we wrap up here, if you're an investor and you're starting with REITs, we've talked about different sectors, does it make sense to just go for an ETF or should you try to pick a favorite in each sector?
Matt Frankel: Well, picking favorites is definitely good if you have a good working knowledge of the stock market in general and how to evaluate REITs. I know we have some good guidance on the Fool. As far as the ETF route, there's absolutely nothing wrong with that, and it's a great way to add diversification if you're say, mostly a tech-focused growth investor, adding a REIT ETF can be a good move. I'll tell you, too, that I really like for beginners, there's the Vanguard Real Estate ETF that I mentioned a lot. VNQ is the symbol on that one. The biggest problem with that is it's very top-heavy. There are some really big REITs like American Tower, Crown Castle, Prologis, Equinix, but then there's a lot of really small ones.
I don't know the exact percentage off the top of my head, but it's something like 30 percent of that fund's assets are concentrated in like four companies. If you don't want that kind of exposure, Invesco does have an equal-weight real estate ETF that invests in the exact same index. The ticker symbol for that one is EWRE, and it splits the money equally. A company like Prologis has the same weight as say, Simon Property Group, which is a couple of times smaller than it. An equal-weight fund could be a nice option for newer investors if they don't want that much exposure to say the big communications REITs because that's really what the big ones are. They're all very similar in nature and you would have very limited exposure to things like retail REITs like we're talking about, which tend to be relatively small compared to those.
Those are two ETFs that are perfect for beginners. REITs are nice sector where it's not that tough to find stable companies. It's not like investing, if I wanted to buy say, cybersecurity stocks, it's a lot tougher to pick the winners, pick the companies that are still gonna be here in 10 years, things like that. In the real estate sector, it's not, and that's a luxury that newer investors can use to their advantage. It's less guesswork. A company, like would we mention Prologis, what's the chances that Prologis will zero X in the next 10 years. It's almost nil. I actually would call real estate probably the most beginner-friendly sector in the stock market.
Deidre Woollard: I would definitely agree with that, although I think they're absolutely ways you can still get yourself into trouble just like any other sector.
Matt Frankel: Absolutely. Stay away from yield traps. If a REIT that owns properties yields more than say, 7% or 8% and there's not a really good reason why, you should probably stay away from it. Yield traps are the way you get in trouble in real estate.
Deidre Woollard: That is really good advice. As we wrap up, I want to pivot away from the beginner and to something like, if you want something risky, there are things in real estate, they can be a little riskier, maybe as a smaller REIT or something like that, what's something you would maybe look at?
Matt Frankel: The riskier REIT that I'm looking at right now is Innovative Industrial Properties. That's known as the marijuana REIT. They own legalized marijuana production facilities mainly. It's mostly in industrial REIT and they rent out to those very specific group of tenants. The risk is, what happens if one of those tenants goes bankrupt, which one of them just did? The re-leasing and everything like that can be very tricky. Those are very purpose-built facilities. It can be very tough to re-lease those.
But having said that, the operators that they do have signed 15- to 20-year leases, so as long as they're in business, it's going to be a very steady income stream, it's really a well-run company, but it's one that does have its risks. For example, their tenants are generally outside of the main banking system. They're usually cash businesses. Right now, marijuana is still federally illegal, so they're tenants can open an account at Bank of America for their businesses. There are some unique risks, but after, I think it's down like 70% from the highs right now, and still making very good profits. It's one that I'm watching very closely right now.
Deidre Woollard: That one is interesting because it got so caught up in that cannabis hype cycle that I think it went up a lot more than it should have and then it went down with the cannabis hype cycle, which happens because sometimes people, when they get caught in the hype cycle, they don't look at the underlying fundamentals. I liked that you bring that one up. I think they have an interesting way of expansion, too.
Matt Frankel: There are a bunch of interesting ones on the radar right now, but most of the REITs I like aren't that risky. It's just that they're beaten down and paying great dividends because of that yield sensitivity that I mentioned. There are some great REITS right now paying 6% or 7% dividends with a lot of growth potential. So I don't really need to venture too much into the realm of the risky right now. Investors can get great returns just by staying safe.
Chris Hill: As always, people on the program may have an interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Hill has positions in Alphabet, Amazon.com, American Tower, and Apple. Deidre Woollard has positions in Alphabet, American Tower, Apple, CoStar Group, Empire State Realty Trust, Meta Platforms, Prologis, and Simon Property Group. Matthew Frankel, CFP® has positions in Amazon.com, Bank of America, Empire State Realty Trust, Realty Income, Simon Property Group, and Tanger Factory Outlet Centers. The Motley Fool has positions in and recommends Alphabet, Amazon.com, American Tower, Apple, Bank of America, Blackstone, CoStar Group, Crown Castle, Equinix, Innovative Industrial Properties, Meta Platforms, Prologis, and Vanguard Specialized Funds - Vanguard Real Estate ETF. The Motley Fool recommends Empire State Realty Trust, Simon Property Group, Store Capital, and Tanger Factory Outlet Centers and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That's part of what Deidre Woollard and Matt discuss in this episode, along with the fundamentals of REITs, how to spot a yield trap, and investment ideas in warehousing, retail, and a couple of ETFs. Matt Frankel: You mentioned that CoStar report where they said limited absorption of newly built units is driving up vacancies, that's generally at the higher end. In the 1970s, the average rate of construction of entry-level homes, which we generally define as under 1,400 squire feet, enough space for a new family and things like that, was about 418,000 per year in the United States. | Deidre Woollard has positions in Alphabet, American Tower, Apple, CoStar Group, Empire State Realty Trust, Meta Platforms, Prologis, and Simon Property Group. The Motley Fool has positions in and recommends Alphabet, Amazon.com, American Tower, Apple, Bank of America, Blackstone, CoStar Group, Crown Castle, Equinix, Innovative Industrial Properties, Meta Platforms, Prologis, and Vanguard Specialized Funds - Vanguard Real Estate ETF. The Motley Fool recommends Empire State Realty Trust, Simon Property Group, Store Capital, and Tanger Factory Outlet Centers and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | It wasn't that the businesses were doing poorly, we didn't see massive amounts of tenants not paying their rent, we didn't see a lot of vacancies, if anything, REITs business-wise did better than they had been. These are going private because one, private equity investors or alternative asset managers are seeing a lot of demand for investments that aren't stocks right now, which isn't a big surprise because of what the market is doing, people are like, get me out of here, let's get into something that's a little more stable and predictable or at least that I don't have to look at the price every day. If a REIT doesn't have to give a 5% dividend increase, if they can keep their streak alive with a 2% increase and satisfy the requirements to remain a REIT by handing out at least 90% of its taxable income, from a REIT's perspective, that's a way to retain some of its earnings and reinvest that in growth instead of diluting shareholders by issuing new shares or taking on more debt or things like that. | Deidre Woollard: Not a great year for REITs in 2022. It's something that you just don't like to see. Last year, a great year for retail, great year for foot traffic. | null |
323 | 17,408 | 2023-01-27 00:00:00 UTC | Should Invesco S&P 500 Top 50 ETF (XLG) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-invesco-sp-500-top-50-etf-xlg-be-on-your-investing-radar-6 | null | null | Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $1.90 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.26%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 38.10% of the portfolio. Healthcare and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.02% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 47.68% of total assets under management.
Performance and Risk
XLG seeks to match the performance of the S&P 500 Top 50 ETF Index before fees and expenses. The S&P 500 Top 50 Index is composed of 50 of the largest companies in the S&P 500 Index.
The ETF has added roughly 6.49% so far this year and is down about -11.02% in the last one year (as of 01/27/2023). In the past 52-week period, it has traded between $266.55 and $358.55.
The ETF has a beta of 1 and standard deviation of 25.66% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Top 50 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLG is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $305.43 billion in assets, SPDR S&P 500 ETF has $378.71 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.02% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Click to get this free report Invesco S&P 500 Top 50 ETF (XLG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market. | Click to get this free report Invesco S&P 500 Top 50 ETF (XLG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.02% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Costs When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal. | Click to get this free report Invesco S&P 500 Top 50 ETF (XLG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.02% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Alternatives Invesco S&P 500 Top 50 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.02% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Click to get this free report Invesco S&P 500 Top 50 ETF (XLG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Launched on 05/04/2005, the Invesco S&P 500 Top 50 ETF (XLG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market. | null |
324 | 17,422 | 2023-01-26 00:00:00 UTC | These 3 Companies Can't Get Enough of Their Own Stock | AAPL | https://www.nasdaq.com/articles/these-3-companies-cant-get-enough-of-their-own-stock | null | null | Stock buybacks, also regularly known as share repurchase programs, are a common strategy we see implemented by companies.
There are several reasons companies elect to buy back their stock; they’ve decided to utilize excess cash, they want to limit dilution caused by employee stock option programs, or simply because they believe their shares are undervalued.
Three companies – Chevron CVX, Kinder Morgan KMI, and Agilent Technologies A – have all announced repurchase programs in 2023. Below is a chart illustrating the performance of all three over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at how each one stacks up.
Chevron
Chevron is one of the world's largest publicly traded oil and gas companies, with operations that span almost every corner of the globe. Yesterday, the company announced a sizable $75 billion share repurchase program.
The recent surge in energy prices has benefitted the company in a big way; CVX reported free cash flow of a steep $12.3 billion in its latest quarter, good enough for a 16% sequential uptick and an 84% Y/Y increase.
As we can see in the chart below, Chevron has been a cash-generating machine.
Image Source: Zacks Investment Research
In addition, the company’s dividend is in decent shape, currently yielding 3.2% annually paired with a sustainable payout ratio sitting at 33% of its earnings.
Image Source: Zacks Investment Research
Most importantly, the company is scheduled to release quarterly results tomorrow, January 27th, before the market open. Currently, the Zacks Consensus EPS Estimate of $4.16 suggests a 62% Y/Y increase in earnings.
And our consensus revenue estimate stands firm at $52.3 billion, suggesting an improvement of nearly 9% from the year-ago quarter.
Image Source: Zacks Investment Research
Kinder Morgan
Kinder Morgan is a leading midstream energy infrastructure provider in North America. Earlier in the year, KMI increased its previously authorized $2 billion stock buyback to $3 billion.
An increase in energy prices has helped Kinder Morgan increasingly reward its shareholders; KMI’s dividend payout grew nearly 3% over the last year, currently yielding a steep 6% annually.
Image Source: Zacks Investment Research
Impressively, last year marked the fifth consecutive year of increased payouts.
Image Source: Zacks Investment Research
Agilent Technologies
Agilent is an original equipment manufacturer (OEM) of a broad-based portfolio of test and measurement products serving multiple end markets. Currently, the company sports the highly-coveted Zacks Rank #1 (Strong Buy).
On January 9th, Agilent approved a fresh $2 billion share repurchase program.
Agilent has reported strong results as of late, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in back-to-back releases. Just in its latest print, the company posted a 10% EPS beat and reported sales nearly 5% above expectations.
Image Source: Zacks Investment Research
The company does pay a dividend, currently yielding a modest 0.6%. Still, while the yield may be on the lower end of the spectrum, Agilent’s 8.6% five-year annualized dividend growth rate helps bridge the gap.
Image Source: Zacks Investment Research
Bottom Line
Buybacks have been common in recent years, with titans such as Alphabet GOOGL, Apple AAPL, and Microsoft MSFT also regularly joining in on the fun.
Buybacks send a positive message to investors, indicating that the company is confident in its future prospects.
All three companies above – Chevron CVX, Kinder Morgan KMI, and Agilent Technologies A – have recently announced repurchase programs, with investors cheering on the news.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Image Source: Zacks Investment Research Bottom Line Buybacks have been common in recent years, with titans such as Alphabet GOOGL, Apple AAPL, and Microsoft MSFT also regularly joining in on the fun. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. The recent surge in energy prices has benefitted the company in a big way; CVX reported free cash flow of a steep $12.3 billion in its latest quarter, good enough for a 16% sequential uptick and an 84% Y/Y increase. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Image Source: Zacks Investment Research Bottom Line Buybacks have been common in recent years, with titans such as Alphabet GOOGL, Apple AAPL, and Microsoft MSFT also regularly joining in on the fun. Image Source: Zacks Investment Research Kinder Morgan Kinder Morgan is a leading midstream energy infrastructure provider in North America. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Image Source: Zacks Investment Research Bottom Line Buybacks have been common in recent years, with titans such as Alphabet GOOGL, Apple AAPL, and Microsoft MSFT also regularly joining in on the fun. Image Source: Zacks Investment Research In addition, the company’s dividend is in decent shape, currently yielding 3.2% annually paired with a sustainable payout ratio sitting at 33% of its earnings. | Image Source: Zacks Investment Research Bottom Line Buybacks have been common in recent years, with titans such as Alphabet GOOGL, Apple AAPL, and Microsoft MSFT also regularly joining in on the fun. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Three companies – Chevron CVX, Kinder Morgan KMI, and Agilent Technologies A – have all announced repurchase programs in 2023. | null |
325 | 17,451 | 2023-01-25 00:00:00 UTC | Apple's Chip Strategy Is Great News for Shareholders, Bad News for Skyworks, Broadcom, and Qualcomm | AAPL | https://www.nasdaq.com/articles/apples-chip-strategy-is-great-news-for-shareholders-bad-news-for-skyworks-broadcom-and | null | null | Apple (NASDAQ: AAPL) is the world's largest company, Warren Buffett's largest holding, and one of the most successful stocks of this millennium.
However, even with a record that impressive, its management team is not resting on its laurels. In order to improve its products and maintain or expand its already-high margins, Apple has embarked on a new strategy: to design more and more of the semiconductors that will go into its smartphones, computers, and other electronic devices.
This plan entails some risk, but also could deliver a lot of advantages for Apple if it's successful. On the other hand, its strategy should continue to be an overhang for major component suppliers Qualcomm (NASDAQ: QCOM), Broadcom (NASDAQ: AVGO), and Skyworks Solutions (NASDAQ: SWKS).
Apple's vertical integration efforts to date
When a company manufactures more of the sub-components that go into its end devices, that's a strategy called vertical integration.
Of note, this has been an aspect of Apple's brand since its founding. Unlike other device makers, Apple never used the industry standard Windows operating system for PCs, nor the Android operating system for smartphones. Rather, Apple has its own proprietary macOS and iOS operating systems, which allow for tighter integration with hardware components and design.
So, Apple has always married proprietary software with its hardware. However, its expertise has been in design, not making the semiconductors for its devices. In the 20th century, semiconductor manufacturing was expensive, and required lots of design and manufacturing expertise.
However, as Apple got bigger, it gained more resources to invest in research and development. In the 2000s, the semiconductor industry also began to gravitate toward an outsourced foundry model under which third-party chip manufacturers gained snowballing manufacturing expertise and scale while letting "fabless" chip designers operate without shouldering the high costs of owing the manufacturing infrastructure. That meant Apple could build its own internal chip designer.
In 2010, Apple unveiled its A-series system-on-a-chip for the iPhone, which contained a proprietary CPU and GPU, along with other intelligence. Then in 2020, Apple dumped Intel's processors for its Mac computers and replaced them with its own M-series CPU processors. In 2019, Apple bought the Intel unit that manufactures cellular modems -- the hardware components that connect cellphones with mobile cell towers. While Apple has not yet been able to stop using modems from Qualcomm (the dominant player in that niche) in its phones, it plans to transition away from them by 2024 or 2025, according to Bloomberg. And just a couple of weeks ago, Bloomberg reported that Apple was looking to replace Broadcom's radio frequency and wireless charging chips with its own proprietary chips by 2025. Bloomberg also reported Apple is looking to replace various chips from Skyworks in the future, though its plans on that front aren't definitive yet.
The risks and rewards for Apple
Obviously, if Apple is designing its own chips, it has to invest in research and development. Moreover, there is the risk that Apple's internal teams won't be able to devise better components than its current suppliers, which, after all, specialize in chip design.
On the other hand, the apparent potential benefits seem to outweigh the risks. First, because Apple can coordinate its component design into a single end product, its engineers should be able to design chips that perform optimally with each other in the context of a whole device system.
And while Apple does have to invest in incremental R&D, it should be able to make up for that in gross margin savings. Over the last 12 months, Qualcomm had a gross margin of 58%, Broadcom had a gross margin of 75%, and Skyworks had a gross margin of 47%. Since Apple sells devices at such massive scales, vertical integration could yield huge savings.
In fact, the margin savings it has already achieved via in-house component design have already been substantial. Even though the past year featured high cost inflation for the company due to elevated materials and shipping costs, Apple surprised tech watchers in September by keeping prices for the iPhone stable, and prices for the Apple Watch at lower-than-expected levels. It's estimated that replacing Intel chips with its in-house Series M chips in Macs alone is saving Apple $2.5 billion per year in licensing fees.
Image source: Getty Images.
Who is at risk?
Obviously, the likelihood of losing some or all of Apple's business could be a headwind for shares of Skyworks, Broadcom, and Qualcomm. In the past year, Apple accounted for roughly 21% of Qualcomm's revenue. However, even if Apple is able to replace Qualcomm's chips with its own, it may have to continue paying patent licensing fees to the chipmaker. So Qualcomm may not lose 100% of its Apple revenue.
According to Bloomberg, Apple also accounted for about 20% of Broadcom's revenue. So for that component maker, the risk -- assuming its components are replaced in 2025 -- would be greater. And while there have been no definitive reports confirming that Apple's planning to phase out its use of Skyworks' components, that would be a much bigger deal for the company: Apple accounts for 58% of Skyworks' revenue.
Of course, this is all known by the markets, and is probably why Qualcomm trades at 12 times this year's earnings estimates, Broadcom trades at 14 times, and Skyworks trades at 9 times this year's estimates -- well below Apple's forward price-to-earnings ratio of 22.
It's also not as if these companies are standing still. Qualcomm has been gaining market share in high-end 5G phones from other vendors, and has been aggressively growing its newer auto and Internet of Things (IoT) chip units. Broadcom is in the midst of attempting to buy software giant VMware for $61 billion. And Skyworks has begun attempting to diversify away from Apple, acquiring Silicon Laboratories in 2021.
Which stock is the better buy?
These three Apple suppliers will likely trade with the Apple overhang for the next few years at least. And while each company should survive and diversify their businesses away from dependence on the iPhone giant, that could be expensive to do, as Broadcom's massive VMware bid is showing.
Meanwhile, it appears as though Apple plans to continue deepening its technology moat and widening its control over its supply chain. So despite its much higher valuation, Apple's superior market position makes it a safer play for investors.
On the other hand, the relatively cheaper valuations of Skyworks, Broadcom, and Qualcomm could lead to upside surprises, should their other sources of revenue in auto, IoT, and other types of chips do better than expected, or should they be able to hold onto their Apple revenues longer than expected. Yet while outsized gains are possible for these suppliers, that's less assured than Apple's continued strength.
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Billy Duberstein has positions in Apple and Broadcom and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends Broadcom, Skyworks Solutions, and VMware and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) is the world's largest company, Warren Buffett's largest holding, and one of the most successful stocks of this millennium. In order to improve its products and maintain or expand its already-high margins, Apple has embarked on a new strategy: to design more and more of the semiconductors that will go into its smartphones, computers, and other electronic devices. In 2019, Apple bought the Intel unit that manufactures cellular modems -- the hardware components that connect cellphones with mobile cell towers. | Apple (NASDAQ: AAPL) is the world's largest company, Warren Buffett's largest holding, and one of the most successful stocks of this millennium. On the other hand, its strategy should continue to be an overhang for major component suppliers Qualcomm (NASDAQ: QCOM), Broadcom (NASDAQ: AVGO), and Skyworks Solutions (NASDAQ: SWKS). Of course, this is all known by the markets, and is probably why Qualcomm trades at 12 times this year's earnings estimates, Broadcom trades at 14 times, and Skyworks trades at 9 times this year's estimates -- well below Apple's forward price-to-earnings ratio of 22. | Apple (NASDAQ: AAPL) is the world's largest company, Warren Buffett's largest holding, and one of the most successful stocks of this millennium. And while there have been no definitive reports confirming that Apple's planning to phase out its use of Skyworks' components, that would be a much bigger deal for the company: Apple accounts for 58% of Skyworks' revenue. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple and Broadcom and has the following options: short January 2023 $210 calls on Apple. | Apple (NASDAQ: AAPL) is the world's largest company, Warren Buffett's largest holding, and one of the most successful stocks of this millennium. First, because Apple can coordinate its component design into a single end product, its engineers should be able to design chips that perform optimally with each other in the context of a whole device system. It's estimated that replacing Intel chips with its in-house Series M chips in Macs alone is saving Apple $2.5 billion per year in licensing fees. | 4 |
326 | 17,456 | 2023-01-24 00:00:00 UTC | Why Alphabet Stock Pulled Back Today | AAPL | https://www.nasdaq.com/articles/why-alphabet-stock-pulled-back-today | null | null | What happened
Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were moving lower today in response to a lawsuit from the Department of Justice and eight states, which are suing to break up what they see as Alphabet's online advertising monopoly.
As a result, the stock finished the day down 2%.
So what
The Justice Department's lawsuit alleges that Google abuses its power in advertising auctions as a dominant broker and supplier in the digital advertising supply chain, harming both ad tech companies and publishers.
The suit calls for Google to unwind its 2008 acquisition of DoubleClick, an ad-serving company, and to sell its ad exchange.
The filing said, "Google uses its dominion over digital advertising technology to funnel more transactions to its own ad tech products where it extracts inflated fees to line its own pockets at the expense of the advertisers and publishers it purportedly serves."
This is far from the first time Alphabet has been sued over antitrust matters. The company also faces an investigation in Europe. And the Justice Department sued it in 2020 over its payment to be the default search engine on Apple's Safari browser, among related issues, in a case due to go to trial this year.
Now what
The lawsuit is the latest headache for the company, coming just days after it said it would lay off 12,000 employees after profits declined and the stock price tumbled last year. Activist investor TCI called on the company to cut even more costs after the announcement.
Regulatory concerns have long been a thorn in Alphabet's side, but so far nothing has significantly damaged the company. Still, the lawsuit is more aggressive than observers had expected, and the Justice Department earlier rejected Alphabet's offer to spin off the ad tech business into a separate subsidiary.
It will take time for the suit to play out in court, and while it might not have a material impact on the business, investors shouldn't ignore the regulatory risk with Alphabet stock.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And the Justice Department sued it in 2020 over its payment to be the default search engine on Apple's Safari browser, among related issues, in a case due to go to trial this year. Now what The lawsuit is the latest headache for the company, coming just days after it said it would lay off 12,000 employees after profits declined and the stock price tumbled last year. Still, the lawsuit is more aggressive than observers had expected, and the Justice Department earlier rejected Alphabet's offer to spin off the ad tech business into a separate subsidiary. | After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | What happened Shares of Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) were moving lower today in response to a lawsuit from the Department of Justice and eight states, which are suing to break up what they see as Alphabet's online advertising monopoly. So what The Justice Department's lawsuit alleges that Google abuses its power in advertising auctions as a dominant broker and supplier in the digital advertising supply chain, harming both ad tech companies and publishers. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. | So what The Justice Department's lawsuit alleges that Google abuses its power in advertising auctions as a dominant broker and supplier in the digital advertising supply chain, harming both ad tech companies and publishers. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Alphabet wasn't one of them! The Motley Fool has positions in and recommends Alphabet and Apple. | null |
327 | 17,472 | 2023-01-23 00:00:00 UTC | Big Tech Layoffs; Signs of Trouble in the Housing Market | AAPL | https://www.nasdaq.com/articles/big-tech-layoffs-signs-of-trouble-in-the-housing-market | null | null | In this podcast, Motley Fool senior analysts Matt Argersinger and Jason Moser discuss:
The ripple effect of Big Tech layoffs.
Netflix founder Reed Hastings stepping down from his co-CEO role.
Cancellation rates soaring in one segment of the housing market.
Differing views on interest rates from two major bank CEOs.
The latest from Procter & Gamble, Nordstrom, and holiday retail data.
CEOs they'd like to shadow for a day.
Under-the-radar trends.
Two stocks on their radar: Roper Technologies and Regions Financial.
John Rotonti, head of investor training and development at The Motley Fool, talks with Jurrien Timmer, director of global macro at Fidelity Investments, about what history can teach about the current market cycle and sectors that may hold opportunities for investors.
Motley Fool Stock Advisor is open to new members for just $99 a year. Join the hundreds of thousands of investors in Stock Advisor by going to www.fool.com/intro.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Jan. 20, 2023
Chris Hill: We've got CEOs to follow, under-the-radar trends to watch, and we've got the latest from Big Tech. Motley Fool Money starts now.
From Fool global headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill, joining me, Motley Fool senior analysts Jason Moser and Matt Argersinger. Good to see you both.
Matt Argersinger: Hey, Chris.
Jason Moser: Hey.
Chris Hill: We've got the latest news from Wall Street. We're going to dip into the Fool mailbag, and as always, we've got a couple of stocks on our radar, but we begin with Big Tech. This week, Microsoft and Alphabet became the latest major companies to announce layoffs. From Microsoft, it was 10,000 employees, roughly five percent of the workforce. Alphabet 12,000 employees, nearly seven percent of the workforce. Matt, a common refrain from these companies in the sense that, both talked about how they over-hired during the pandemic.
Matt Argersinger: Right. That's not a secret anymore. It just seems like every day we're getting a new major announcement that a major tech company is cutting tens of thousands or thousands of jobs, 6 to 7 percent of their workforce. It almost feels like we're getting numb to this happening. I think it's also easy to ignore, and set aside a little bit because the economy, overall, is still adding jobs. The unemployment rate is still, I think, around 3.5 percent, which is near a record low. I think we have to remind ourselves that these companies are the largest companies on the planet, and they have massive tentacles within the overall economy. A 12,000 job cut from Alphabet, it doesn't just affect Google employees. It affects workers who clean Alphabet's offices, food service workers, businesses that do consulting or HR work for the company, businesses that partner with Alphabet on various projects. The more of these come, I feel like the more we're going to see downstream effects to the overall economy. I think, we're getting to a point where it's no longer going to be about inflation that we're concerned about or what the Fed is going to do next. It really is going to start being about jobs and consumer spending. I don't want us listening to this, and seeing these headlines, and saying, "Well, things got overheated during the pandemic, these companies are just correcting, and there's going to be a reversion to the mean, and sure". But the economy is in a vulnerable state, and I think the more of this happens, the more we're going to see that.
Chris Hill: Jason, it does seem like a situation where now the eyes turn to Apple. I mean, Apple is really the lone major tech company that hasn't made this announcement. Do you expect them to, and if they do, what does it say? Because you can look at Alphabet for all of their success, their employee base is actually a little bit smaller than these two other companies.
Jason Moser: Yeah, it is. I guess it's a coin flip as to whether Apple does this or not. I feel like they may be a little bit more insulated than some of these other companies really just due to the nature of the actual business. I mean, at the end of the day, Apple is still, primarily, the iPhone company. I mean, it's a hardware company that uses that hardware. It's the gateway drug to then bring people into its universe, and sell those services, and develop long-lasting relationships. It certainly is possibly, we saw a slowdown on the services side for that business, and so it is possible that they may feel like there are some areas where they can trim a little bit of the fat, so to speak. In regard to Apple, I just don't expect it to be as drastic, perhaps, as some of the other Big Tech names we've seen.
Chris Hill: Let's move on to Netflix, and founder Reed Hastings, going out with a bang. In addition to announcing that subscribers in the fourth quarter came in much higher than expected, the streaming giant announced that Hastings will be stepping down as co-CEO, but staying on as Executive Chairman of the Board. Chief Operating Officer, Greg Peters, has been promoted to co-CEO alongside Ted Sarandos, and shares of Netflix up seven percent on Friday, Jason?
Jason Moser: Yeah. I mean, on the face of it, it was a very strong quarter just due to the subscriber growth alone. They guided for around four-and-a-half million subscriber additions for the quarter, chalked up around 7.7 million. Great to report from that perspective, revenue, $7.8 billion. That was up 10 percent from a year ago, excluding currency effects. Operating profit is down slightly, but better than the target they set. An average revenue per member was up five percent on a currency-neutral basis as well. Really good news on the cash flow front for the year, generated $1.6 billion in free cash flow versus a modest lost a year ago. They are now guiding for three billion dollars in free cash flow for this year, and ultimately, project being free-cash-flow positive from here on out. It does feel like, maybe, that's why Reed Hastings feels like this is a great place to pass the torch along. He's got this business where he wants it, where it feels like it can really start to grow, and produce meaningful revenue and cash flows now. I'm still not bought in on the co-CEO model, it feels like every time we talk about this, a year later, we revisit why it didn't work. It's not to say it can't work in this case, but I don't know. I just like the chain of command a little bit more. CEO, COO, you got the decision-makers, they know their roles. It is a business in transition. I mean, you've got the ad-supported model rolling off now. It's off too a slow, but what they consider a satisfactory start, and they will continue to start cracking down on the password sharing here, which could crimp results in the near term, but I think, ultimately, it's the right long-term goal.
Chris Hill: Do you think part of the timing here is they've just launched the ad tier, and if you dose them with truth serum, Reed Hastings didn't want to do the ad tier, did he?
Jason Moser: I don't believe he did. I think he made the right call, ultimately, in doing it, because that opportunity is so large. I mean, a quote this market opportunity in a call with this estimated $300 billion pay TV and streaming industry, along with the $180 billion branded TV advertising spend. That's not to say Netflix is going to capture all of that by any stretch of the imagination, but it is to say that's a big market opportunity that business can pursue. They feel like he can ultimately contribute 10 percent or better to the business. Now, that's three billion dollars plus by today's numbers, and this is a company that will continue growing. But back to your point, no, I don't think Hastings really wanted to do it. I feel like he probably felt like they had to do it either way. It sounds [laughs] like it's going to be someone else's problem going forward.
Chris Hill: Signs of trouble in the housing market. In the last three months of 2022, KB Homes, which is one of the largest homebuilders in America, experienced a cancellation rate of 68 percent. Meaning, home-buyers canceled 68 percent of the homes that went under contract. For context, just one year prior, the cancellation rate was only 13 percent. Matt, there are a couple of things I want to get to here, but first and foremost, how bad does this look for the housing industry?
Matt Argersinger: Yeah, that's a dire statistic from KB Homes, and I don't think they're going to be the only one. They just happen to be the one that reports earliest. Yeah. You said it, normally their cancellation rate is a lot lower for the industry. It's usually in the teens. But the reality is, a lot of these buyers are having trouble getting financing or they're locked into a good rate, but are worried they overpaid by 10-15 percent for their home. I think, that's a real worry, and that's probably the case for most markets across the country. I just would say that, housing is a major contributor to the economy. You look at construction, materials, home improvement, financial services for the mortgage lenders, etc. It feeds into so many places, and so to see a cancellation that high, it's remarkable to me that KB Homes didn't sell off more, that the home-building industry hasn't really sold off that much. But a lot of it was, they had a difficult 2022 already. Some of this was priced in.
Chris Hill: Earlier you were talking about the ripple effects of the layoffs at the major tech company, and you're absolutely right about that. It's not just for those individual people. There are ripple effects when the companies are that large. Let's apply that thinking to this story. Because this cancellation rate, the last time we saw at this high it was 2008, 2009, and that was a housing crisis that threatened the entire US economy. Based on what you've seen so far, does this, at least, look contained to the housing industry, even allowing for the ripple effects for businesses tied to the housing industry?
Matt Argersinger: It's a good question. I don't think this spills over into a larger issue for the economy the way it did back in the last housing bubble and the financial crisis. I think, the scars from that global financial crisis runs so deep. As we discussed before the show, you didn't have the same speculation in its latest housing run-up that you had back then. You don't have the bank's lending out billions of dollars to unqualified buyers, homeowners who bought, even in the last few years, they still have a ton of equity in their homes. Even if prices drop, 10-15 percent nationwide, a lot of those homeowners are still protected. But yeah, at the margins, I think, this hurts consumer spending. Absolutely, especially, when you marry it with some of the issues we've talked about that you just mentioned. Like those massive job cuts at Microsoft and Alphabet, and the other is Amazon, Salesforce, Twitter, etc. Or we could get into the other issues, the surge in car loans, the surge in credit card debt, which is at record levels, I believe so. I think it certainly could factor into lower consumer spending. To a certain extent, I think, we're going to start seeing it with fourth-quarter earnings.
Chris Hill: After the break, we're going to get a check on how the holiday retail season went, and we're going to head to Switzerland for a headline out of Davos. Don't touch that dial. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Matthew Argersinger. Quick shout out to our flagship investing service, Stock Advisor. When you joined Stock Advisor, you get two new stock picks every month. Plus you get access to exclusive reports on fast-growing industries and exclusive access to our brand new Stock Advisor round table podcast on Spotify. The service is open to new members, is just $99 a year. If you want to learn more, just go to fool.com/intro. That's fool.com/intro. Late this week, Nordstrom said that week sales and lots of discounting hurt their holiday sales and not surprisingly, Nordstrom cut their earnings guidance for the fiscal year which ends later this month, Jason.
Jason Moser: Well, the pre-announce is usually not good news and in this case, that streak continues. I think the company summed it up nicely in the release where they said, I, ''the holiday season was highly promotional and sales were softer than pre-pandemic levels." To quantify that net sales down 3.5 percent for the nine-week holiday period that ended the year versus the same nine weeks from a year ago. It seems like the wealthier, better-off shopper is still spending, the lower-income spenders are not. That's certainly playing out on Nordstrom. They took additional markdowns on inventory and they feel like they've got inventory in a good place now. But you look at this business, you go back to 2018 at this time during the year, the share price was closing in on $60. When you look at the numbers, revenue for the full-year clocked in around $15 billion. They saw net income $437 million. You look at this today. Share price now around $17. I think you're looking at revenue. Same 15 billion hasn't really moved. Big difference in the bottom line, the bottom-line is shrinking, they're trailing 12 months, $326 million now, but it gets better. Chris. If you look at the balance sheet for this company and this is what's really concerning. I think investors really need to take note of this. You go back to 2018, their balance sheet, they had $1.2 billion in cash and equivalents. You look at that number today is 293 million. That's what we call that cash burn, that it's worth watching because it plays out, it's an indicator, it tells you what the business is doing and the state that the business is in. Right now, this is a business that's really hunkering down, I think for some tougher times ahead.
Chris Hill: Not that Nordstrom is necessarily a bellwether for the retail industry, but we also got some additional data. Last fall, the National Retail Federation predicted that holiday retail sales would grow 6-8 percent and their track record is really strong. Earlier this week we got data. Overall sales grew 5.3 percent. I'm a little worried that the National Retail Federation missed by the margin that they did.
Jason Moser: Well, they did miss, but let's give them a little bit of credit. Let's give them partial credit because they did nail the year. They said sales for the year would fall between six and eight percent and sales for the year grew seven percent. They did at least bring some of the noise, so to speak, right Chris. But yeah, I think when you look at all of the retail categories, mean over a year ago, there were gains and all but two of the nine categories, furniture and home furnishings were down 1.1 percent. Interestingly, electronics and appliances were down 5.7 percent. But there was an interesting quote in that release that I just thought, well, I'm pushing back on this when they said the last two years of retail sales have been unprecedented, no one ever thought it was sustainable. I don't know about you. It seems like a lot of business is higher because they thought it was sustainable and now they're realizing it's unsustainable and they're letting all these people go. I think a lot of businesses did think it was sustainable. It's just now we're realizing it wasn't and they're having to right size accordingly.
Chris Hill: Procter & Gamble's second-quarter results were in line with Wall Street's expectations. But every division of the consumer products giant reported lower sales volume in the quarter. Matt, it's not like P&G stock got hammered this week, but it does seem like the business has hit the ceiling in terms of raising prices.
Matt Argersinger: I think that's the case. I mean, with any business, even a consumer stable business like P&G, at some point, price increases are going to hurt demand. It wasn't a terrible quarter necessarily. I mean, if you looked at headline sales were down one percent. But if you take out foreign exchange and adjust for some acquisitions and divestitures, the sales were up five percent on an organic basis. But the point is, all of that came from price increases. As you mentioned, sales volume was down in all five of the company's main segments, overall volumes were down six percent. It's just fortunate that prices were up 10 percent so you get the overall sales increase. But I think what I'm worried about as now going forward, can they have more sales price increases, probably not. You can look at their earnings per share. It was down four percent year-over-year. As you know, even higher sales weren't able to offset higher operating expenses and that I think those headwinds only gets stronger as we go through 2023. But should you worry if you're P&G shareholder? For one, I expect the company's going to raise its dividend again next quarter. That'll mark the 67th consecutive annual dividend increase. They've been paying a dividend for 132 years. Believe it or not, the stock has outperformed the market over the last five years. If you're in a P&G shareholder, I wouldn't worry. It's not necessarily why you own the stock, but you do at some point have to say, have to expect revenue to slow down here. Price increases are just not going to be able to flow-through as they were earlier in 2022.
Chris Hill: The World Economic Forum in Davos, Switzerland always attract some of the biggest CEOs in the world. But two from the same industry shared different predictions of what the Federal Reserve will do this year. JP Morgan Chase CEO Jamie Dimon said he believes interest rates are going higher than five percent. While Morgan Stanley CEO James Gorman said that interest rates have clearly peaked. Jason, who do you think is going to be proven correct?
Jason Moser: Well, we could get to that just one second, but I just want to say, can you imagine how triggered crypto investors had to be when Dimon said what he said about crypto in that interview. In calling it a pet rock, in saying why you guys waste any breadth on it is totally beyond me. I mean, he couldn't have had harsher awards. Then he went further to split crypto in blockchain technology. I just thought that was an interesting conversation for sure. In regard to interest rates, I think I'll tend to side with Dimon on this one simply because I think the Fed, I think Jay Powell, I think they've been pretty consistent with what they've been saying they want to do and that they would rather overdo it than not do enough. They've already botched the whole transitory call. I can't imagine that he or they want to risk something else coming back to bite them something as significant as this. It's really guided every policy decision. It just feels like at least if he overdoes it, then that will be consistent with what he's been saying all along. That better safe than sorry, mentality. But I guess we'll have to watch how the year plays out.
Chris Hill: Jason Moser, Matt Argersinger, guys. We'll see you a little bit later in the show. But up next, if the era of easy money is over, shouldn't you change the way you invest? The answer is coming up after the break. This is Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Jurrien Timmer is the Director of Global Macro at Fidelity Investments. Motley Fool senior analyst John Rotonti caught up with Timmer to learn what history can teach us about this market cycle and sectors where there may be some opportunity for investors.
John Rotonti: Someone else that the markets follow very closely, Howard Marks, thinks he has identified only the third, what he calls sea change in his 53-year investing career. In his recent memo, he says that the investment strategies that work best over the prior 13 years "may not be the one that outperforms in the years ahead." Similarly, KKR, the large global alternative asset manager, just put out their investment outlook for 2023 where they say, "We have entered a regime change that requires a different approach to overall global macro and asset allocation." What do you think about this? Are we in a sea change or a regime change? If so, does that require a change of strategy from the profitless high multiple tech stocks that benefited over the last several years from a zero interest rate policy?
Jurrien Timmer: No, it's a great question and it's a very important one, especially for the structural outlook. I think if I can summarize the KKR and Howard Marks, I think maybe what they're saying is that the great moderation is over. You look past going to history and I look at a lot of history which you can tell from my charts, until the late 90s when we went into this disinflationary era called the Great Moderation, where you had lower inflation, lower interest rates, less volatility of inflation and interest rates, therefore, higher multiples. You had financial engineering start to take shape. You had the Feds put, if you will, lower rates, but quantitative easing. As soon as financial conditions were tightened, the Fed would put its foot on the gas pedal because there was no inflation price to be paid for that at that time. That was this great secular bull market where PEs were high, volatilities were low, and returns were outsized, and interest rates were well-behaved, and the Fed would always bill out the market. We can't know in real-time whether the Great Moderation is over, but certainly, it looks over, at least at this point. You look at inflation, which is now coming down, but it's come down from 9-6.5 or so, and the question is, will it go down all the way to two, or will it start getting really stubborn at three or four? We don't know the answer to that yet, of course.
But the period before the Great Moderation was pretty volatile. You had the classic inventory cycle where the economy starts to overheat, becomes inflationary, the Fed starts to tighten, the yield curve inverts, the Fed overstays its welcome, it breaks something, you got a recession, and then the whole cycle starts over. That was the four-year cycle. You look at old charts of the Dow Jones and you can see that four-year cycle very clearly. The market today feels like the old market before the Great Moderation. It's more volatile. Maybe the cycles are shorter because you don't have these elongated periods where inflation just doesn't do anything, and part of that has to do with globalization, the great labor arbitrage may be coming to an end either for geopolitical reasons or just because it's been played out. The labor arbitrage has been played out. It's possible that we go back to the markets of yesteryear in that sense. You mentioned the big growers, the FAANGs, the large growth names, and I've been following that whole phenomenon, not specifically for the FAANGs, but what we call the NIFTY 50 stocks. We have a custom series here that we create in-house that goes back all the way to the 1960s, where you can clearly see the NIFTY 50 period coming up, so the top 50 stocks in the S&P relative to the bottom 450. The original NIFTY 50 of course, was in the early 70s, which happened when, and this goes way back, but in '68, you had a big speculative bubble. People were speculating in the space stock. Any company with the word tronics in it was just bid up to 50 times earnings. Those were the glamour stocks as they were called, and then the market fell.
We had a recession in 1970. It wiped out the retail speculators. Very similar to the meme stock stuff of today and the dot-com stuff of 1999. Then when the market recovered, the market was in the hands of institutional investors and they would only buy the companies that they knew they would never have to worry about in terms of producing earnings. They were the one-and-done companies like Colgate and IBM and Xerox and companies like that and those were the original NIFTY 50. That became a bubble relative to the rest of the market, and then a long period where they underperformed because we had inflation in the 70s. That tends to favor value stocks and small-cap stocks, not the big growth stocks, which are of course sensitive to changes in interest rates which were soaring back then.
Then we had a similar episode in the late 90s, of course, the dot-com bubble. We all know how that ended. Then around 10 years ago, the current phenomenon started and it never reached bubble levels, like the PE of Apple never went to 100, but relative to the rest of the market, the performance looked very similar. We had an eight-year run of large-cap growth companies dominating everything else, small-cap value, and by extension, the US would dominate non-US because the US is very centric to those very large growth companies. Purely from a technical point of view, it looks like that trade is over, and if that trade is over, you juxtapose that against, again, a really long-term chart going back 100-plus years of large secular swings between value and growth, small and large, US and non-US, commodities and financial assets, and they all have the same 30-year rhythm and we're right at that point where, on a 10-year rate of change basis, value, and small, and commodities, and non-US should start to take the baton from the big grower. In that sense, I think a regime change seems to be underway indeed.
John Rotonti: That was the best financial history lesson in five minutes I think I've ever heard, honestly. Just to pull on that string a bit, if you think we are in possibly in this regime change, how do you think equity investors should be positioned going into 2023? What asset classes do you prefer? Is it the value, small-cap commodities that you just referenced?
Jurrien Timmer: Yes. I think the market will, almost by definition, based on what we just talked about, will broaden out. If you have five FAANG stocks and they're 25 percent of the market and those are outperforming, you don't really have to look very much further than that. You could just buy an index fund or just buy those stocks. But when you're on the flip side of that and think back to 2000, 2001, when the dot-com bubble burst, and I'm not suggesting the overall market is going to follow the same route because that was a 53 percent bear market, which is something I definitely not feel expecting this time. But you had a market that went down or sideways, and there was a lot of breath in the market. All those names, all the older styles, values, small commodities, non-US, all did extremely well, and that, of course, also was when China entered the WTO. You had the whole EM investing phenomenon really take off into 2000. We're obviously much further down the path on EM, but I do think 2023 and beyond will be a period where it'll become more of a stock picker's market and more of an active management type of market where you have to look beyond just that core group of really large companies. We're already seeing this, but non-US equities, for instance, are performing very well, and one of the reasons, of course, is that the dollar is down and the dollar plays a large role in currency translation. But the other one is that the global cycle has become more fragmented.
The US is now in a late cycle, possibly heading into a recession. We don't know, but you look at the yield curve, you look at where the Fed is going to take rates relative to your all-star, or the natural rate of interests. Every time it's done that in the past, we've had a recession. A recession call is something we can't ignore. Maybe it happens later this year, and maybe it's only shallow, who knows? But this is where the US cycle is, and on the other side, China is now finally reopening after three years of COVID, like we reopened a long time ago. China has been relatively locked down the whole time, and now they're reopening in a big way. I mean, I think the latest I heard was that by March, the entire economy is going to be completely freely operate it in terms of movements. Obviously, we have to worry about the human toll because a lot of people there haven't gotten COVID, and they're going to get it. They're also going to start traveling. We have to worry about where else it ends up going.
But that's a different dimension. But in terms of where the market cycle is, you have a period where China is now going to be creating that economic tailwind, even though the US is on the other side, and that creates opportunities to be invested in emerging markets in China, assuming China is investable, which is another, maybe a conversation for another day. But you see that fragmentation, and then you look at the level of interest rates. Eventually, the yield curve will start to steepen again. That tends to be good for banks. Energy stocks are still very, very cheap. There's a lot of things that look interesting, and actually, even bonds look pretty interesting because they actually finally offer a real yield again. We can talk about the correlation between the 60 and the 40 going forward over the very long term, because that correlation tends to only be negative during periods of low inflation, and we don't know where the inflation question is going to end up settling. But I think in 2023, bonds will actually offer a good insurance policy if we do end up having that other shoe-dropping, which again, we don't know if it will, but at least it provides viable insurance now that the valuation across all these asset classes has risen.
Chris Hill: Coming up after the break. Jason Moser and Matt Argersinger are coming back. We're going to dip into the Fool mailbag and they've got a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money.
As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against so don't buy or sell stocks based solely on what you hear. Welcome back to Motley Fool Money. Chris Hill here once again with Matt Argersinger and Jason Moser. Our email address is podcasts@fool.com. Got a question from Emilia in New Hampshire, who writes, you often talk about CEOs on the show. If you could shadow a CEO for a day, who would you pick, and what would you hope to learn? Matt, who you're going to follow for a day, if you could?
Matt Argersinger: I love that question. I think right now I'd go with Steve Schwarzman over at Blackstone. I love real estate. I love the alternative assets space and Blackstone has reached in so many places. I would just love to know what he's thinking about the end market, and certain investments. But I also just would love to be in a room where analysts at Blackstone pitching him ideas which I think happens on a weekly basis. I think that'd be super fascinating.
Chris Hill: Jason, what about you?
Jason Moser: Yeah. I think I'd go with Josh Silverman at Etsy. I think he'd be a fun one because he's helped build this tremendous network that ultimately has to serve so many different stakeholders. They took on the Amazon challenge with positive results. But ultimately, back to the stakeholder's thing, we'd get the customers who buy from Etsy, but you also have the merchants that sell on the platform that the company has to serve. They have to build out this tremendous tech infrastructure. They've got a phenomenal mobile presence. What's the philosophy on balancing the two-site design? How far forward-thinking are they? How do they act on that? Just seems a very interesting business that's very customer-centric and a lot of moving parts there to understand better their decision-making.
Chris Hill: I would follow Howard Schultz at Starbucks.
Jason Moser: You just want the free coffee.
Chris Hill: I want to go to the Roastery and I think he'd be a good tour guide. But also as a shareholder, I would feel compelled to ask him like this is the last time. Like this is the last time? Just confirm for me that when you step away in April, this is really the last time. Question from Doug in San Francisco, "For as bad and investment, as it's been over the past year, crypto still seems to get a lot of attention from the financial media. What is the topic or trend that you think we should be paying attention to, instead? Matt, what do you think?
Matt Argersinger: Doug, anything but crypto? They're just so nobody productive businesses, productive assets, so why spend so much time on something that really just, I think has no intrinsic value to it. For one, I'd focus on companies that are paying dividends and growing dividends. That's real cash and I mean, real cash in your pocket.
Chris Hill: Jason, what about you?
Jason Moser: Yeah, I think firstly, crypto gets a lot of attention for the financial media because they pay for it. I mean, you see all of the advertisements every day. I mean, they're paying for those advertisements while they've got to talk about it on the show. That's part of it there. For me, one of the services I run here is focused on 5G and connectivity. Obviously, I like that, but I would actually even take it one step further to go beyond just 5G. Talk about 6G, talk about the inevitable 7G, the capabilities these networks will open up. It's just such a broad universe of opportunity, and connectivity enables so much that impacts so many around the world. It just seems like an endless conversation.
Chris Hill: Keep the emails coming. Podcasts@fool.com is our email address, that's podcasts@fool.com. Really appreciate it, great questions. Let's get to the stocks on our radar. Our man behind the glass, Rick Engdahl, is going to hit you with a question. Matt Argersinger, you're up first. What are you looking at this week?
Matt Argersinger: Chris, I'm going to go with Regions Financial, the ticker is RF. It's just a really well-run regional bank locations, mostly in the South and Midwest. It was in fact the best performing S&P 500 bank in 2022. Q4 results just came out this Friday morning. You had net interest income up 11 percent, 3.99 percent, net interest margin, that's up from 2.8 percent last year. It's also a dividend knight if you know what that means. Not only is it raised its dividend by more than 10 percent per year over the last 10 years, but it's also beaten the S&P 500 during that span, so just a lot to like about this bank.
Chris Hill: I like the fact that you're bringing in a regional bank because we give a decent amount of oxygen to the big banks, it's always worth remembering there are regional banks out there as well. Rick, question about Regions Financial?
Rick Engdahl: By those regional banks, how many banks are there out there? It seems like there's big banks and then there's all these regionals all over the place. I mean, how many banks do we need?
Matt Argersinger: Small local banks. Yeah, there's hundreds Rick, and well, thousands if you count branches, but there's hundreds of bank companies, and I think that is a good point. There's definitely room for consolidation. I think Regions Financial in fact, could be a bio candidate itself.
Chris Hill: Jason Moser, what are you looking at this week?
Jason Moser: Chris, I always liked Mr. Furley, but this week I'm going with Roper Technologies. Ticker is ROP. Roper Technologies is actually a collection of many businesses that focus on everything from software to medical and water products. They are smaller companies that really specialize in niche markets, and so that makes for growing switching costs over time ultimately gives them a little pricing power and gross retention rates of greater than 95 percent in many cases. You look at the business itself, I mean, from 2012 through 2021, free cash flow grew at an annualized rate of 13.4 percent. Ten-year total returns on this business right now, 300 percent, almost doubling up on the market over that period of time. Earnings come out on Friday, January 27th before the market opens. I will be interested to see what they have to say.
Chris Hill: Rick's question about Roper Technologies.
Rick Engdahl: You know, I do a lot of research before asking these questions and I went over to the Roper website and for the life of me, I could not find anything about what this business does. What the heck what this company for?
Jason Moser: Rick, I just told you what they do.
Rick Engdahl: I'm sorry, I nodded it off.
Jason Moser: Okay. Well, that sounds like a Rick problem not a Jason problem.
Chris Hill: Before I go back to Rick, I have to say it always blows my mind. Matt, you mentioned P&G earlier and how long that company has been around. Roper Technologies started in 1890. Maybe I shouldn't, but I am impressed by businesses that have that longevity. Rick, what do you want to add to your watchlist?
Rick Engdahl: I think I have to go with at least something where I can envision the buildings. I'll go with the little bank.
Chris Hill: I don't know if they're going to take offense to being called a little bank. I don't know. Matt, what do you think?
Matt Argersinger: It's a big bank, the 26th largest bank in the country, but I agree, relative to JPMorgan. It's a small, tiny bank.
Chris Hill: Matt Argersinger, Jason Moser, guys thanks for being here.
Matt Argersinger.: Thank you.
Chris Hill: That's going to do it for this week's Motley Fool Money radio show. The show's mixed by Rick Engdahl. I'm Chris Hill. Thanks for listening and we'll see you next time.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Hill has positions in Alphabet, Amazon.com, Apple, Etsy, JPMorgan Chase, Microsoft, Roper Technologies, and Starbucks. Jason Moser has positions in Alphabet, Amazon.com, Apple, Etsy, and Starbucks. John Rotonti has positions in Alphabet, Apple, Blackstone, KKR, Microsoft, and Salesforce. Matthew Argersinger has positions in Alphabet, Amazon.com, Blackstone, Etsy, Netflix, Regions Financial, Roper Technologies, and Starbucks and has the following options: short January 2023 $80 puts on Amazon.com and short March 2023 $85 puts on Blackstone. Rick Engdahl has positions in Alphabet, Amazon.com, Apple, Etsy, Microsoft, Netflix, Salesforce, and Starbucks. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Blackstone, Etsy, JPMorgan Chase, KKR, Microsoft, Netflix, Salesforce, and Starbucks. The Motley Fool recommends KB Home and Roper Technologies and recommends the following options: long March 2023 $120 calls on Apple, short January 2023 $92.50 puts on Starbucks, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Motley Fool senior analyst John Rotonti caught up with Timmer to learn what history can teach us about this market cycle and sectors where there may be some opportunity for investors. Then around 10 years ago, the current phenomenon started and it never reached bubble levels, like the PE of Apple never went to 100, but relative to the rest of the market, the performance looked very similar. They are smaller companies that really specialize in niche markets, and so that makes for growing switching costs over time ultimately gives them a little pricing power and gross retention rates of greater than 95 percent in many cases. | John Rotonti, head of investor training and development at The Motley Fool, talks with Jurrien Timmer, director of global macro at Fidelity Investments, about what history can teach about the current market cycle and sectors that may hold opportunities for investors. Matthew Argersinger has positions in Alphabet, Amazon.com, Blackstone, Etsy, Netflix, Regions Financial, Roper Technologies, and Starbucks and has the following options: short January 2023 $80 puts on Amazon.com and short March 2023 $85 puts on Blackstone. The Motley Fool recommends KB Home and Roper Technologies and recommends the following options: long March 2023 $120 calls on Apple, short January 2023 $92.50 puts on Starbucks, and short March 2023 $130 calls on Apple. | I'm Chris Hill, joining me, Motley Fool senior analysts Jason Moser and Matt Argersinger. As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against so don't buy or sell stocks based solely on what you hear. You had net interest income up 11 percent, 3.99 percent, net interest margin, that's up from 2.8 percent last year. | In this podcast, Motley Fool senior analysts Matt Argersinger and Jason Moser discuss: The ripple effect of Big Tech layoffs. But you look at this business, you go back to 2018 at this time during the year, the share price was closing in on $60. The market today feels like the old market before the Great Moderation. | null |
328 | 17,497 | 2023-01-22 00:00:00 UTC | If I Could Buy Only 1 Stock, This Would Be It | AAPL | https://www.nasdaq.com/articles/if-i-could-buy-only-1-stock-this-would-be-it-7 | null | null | I love to pick stocks. There's nothing quite like the thrill of researching a company, analyzing its financials, digging into its business model, and making a decision on where my investment-ready cash is going. And then I get to show you the whole process, from finding the first glimmer of promise to slamming the "buy" button with both hands. It's what I do, and I wouldn't change it for the world.
But selecting stocks one by one works only as long as I get to grab a whole bunch of them. You know what they say about eggs and baskets.
The thrills and spills of stock-picking
There is no such thing as a risk-free investment.
For instance, Netflix (NASDAQ: NFLX) continues to deliver fantastic results and great shareholder value. This stock has made me a lot of money over the years, but the media-streaming expert's stock is also prone to deep dives every now and then. What if I needed to cash in my Netflix stock at the bottom of the Qwikster conundrum, or after a slowdown in subscriber growth drove share prices 77% lower in 2022? Clearly, this ticker isn't suitable for a full commitment to a single ticker.
And Netflix isn't uniquely risk-packed. In fact, every business always faces a mix of obvious and unknown risks. Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) may have looked invulnerable for years, but now everyone is concerned about artificial intelligence bots stealing the online search market. Oil giants like Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) used to be paragons of unassailable value, but now they face challenges from renewable energy sources and electric vehicles.
And it gets worse, too. Enron was the kind of highly respected blue chip were people would feel comfortable parking their entire life savings and nest eggs. Lehman Brothers was the fourth-largest investment bank in America, actively advising people on how their money should be managed. Going all-in on Lehman stock in 2008 or Enron in 2001 would quickly leave you with nothing. Remember, these were highly respectable businesses, until they weren't.
Finding inspiration in Berkshire Hathaway
Stock-picking can work, but only if you set up a diverse portfolio across different industries, geographies, and business models.
Look at Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) as a great example to follow. To simplify Berkshire's investment history, its portfolio was built around insurance companies and banks, then extended into retailers and restaurant chains. Today, Berkshire's holdings have expanded into sectors Buffett would never have touched ten or twenty years ago, like video game studios and microchip makers.
And Apple (NASDAQ: AAPL) accounts for 42% of Berkshire's invested assets. The iPhone maker's portion of the Berkshire collection is so large, I wouldn't be surprised to see Buffett's team taking some of their Apple profits off the table to redeploy it in other ideas. It's one thing to let your winners run, and another to let them dominate your portfolio.
I don't care how respectable your favorite company is, how guaranteed its long-term success might be, nor how much you trust its management. There is no single stock, bond, cryptocurrency, real estate parcel, or other one-trick pony that can be trusted to carry your entire net worth.
Even the safest bets aren't worth the risk. No, not even Berkshire Hathaway, even though its own investments constitute a broadly diversified portfolio. How deep is Berkshire's bench when Warren Buffett and Charlie Munger aren't running the show anymore? Owning some Berkshire stock makes sense, and you could make it the centerpiece of your own stock holdings with an oversize investment. But it shouldn't be 100% of your nest egg.
ETFs: The ultimate stock market safety net
If you really can't -- or don't want to -- piece together your own stock collection with a couple of dozen tickers, there is still an easy way out. The trick is to choose a passive exchange-traded fund (ETF) that simply tracks a popular market index with dozens, hundreds, or even thousands of stocks. If one or more of the individual companies inside your chosen index turns out to be a bad egg, you'll see a limited price drop in your ETF but life goes on. The failed stock will soon be replaced and you'll continue to share the gains of the broader market.
Popular options include ETFs mirroring the components of the S&P 500 (SNPINDEX: ^GSPC) or Russell 3000 indexes. Passive funds like the Vanguard 500 Index Fund (NYSEMKT: VOO) and iShares Russell 3000 (NYSEMKT: IWV) offer large collections of diverse stocks, featuring expense ratios that are low because of the automated nature of index-tracking investments.
So if I could only pick one ticker to hold my life savings, it would be one of these index-tracking ETFs. There is really no other choice under those circumstances.
And here's the best part. You can always start your investing experience with one of these safe and sound ETFs, then add in specific tickers on top of that fundamental base as you get more comfortable with the stock market.
And if it turns out that stock picking isn't your cup of tea after all, you can always go back to the index-base ETF that got you started. Beating the market is a noble goal, but there's nothing wrong with simply matching the long-term returns of a healthy index like the S&P 500. With an average annual return of roughly 10% in the long run, you can double your money in seven years and triple it in 12.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Netflix, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, Netflix, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And Apple (NASDAQ: AAPL) accounts for 42% of Berkshire's invested assets. Today, Berkshire's holdings have expanded into sectors Buffett would never have touched ten or twenty years ago, like video game studios and microchip makers. The iPhone maker's portion of the Berkshire collection is so large, I wouldn't be surprised to see Buffett's team taking some of their Apple profits off the table to redeploy it in other ideas. | And Apple (NASDAQ: AAPL) accounts for 42% of Berkshire's invested assets. Passive funds like the Vanguard 500 Index Fund (NYSEMKT: VOO) and iShares Russell 3000 (NYSEMKT: IWV) offer large collections of diverse stocks, featuring expense ratios that are low because of the automated nature of index-tracking investments. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, Netflix, and Vanguard S&P 500 ETF. | And Apple (NASDAQ: AAPL) accounts for 42% of Berkshire's invested assets. Owning some Berkshire stock makes sense, and you could make it the centerpiece of your own stock holdings with an oversize investment. ETFs: The ultimate stock market safety net If you really can't -- or don't want to -- piece together your own stock collection with a couple of dozen tickers, there is still an easy way out. | And Apple (NASDAQ: AAPL) accounts for 42% of Berkshire's invested assets. The trick is to choose a passive exchange-traded fund (ETF) that simply tracks a popular market index with dozens, hundreds, or even thousands of stocks. So if I could only pick one ticker to hold my life savings, it would be one of these index-tracking ETFs. | null |
329 | 17,505 | 2023-01-21 00:00:00 UTC | 3 Top Warren Buffett Stocks to Buy in 2023 | AAPL | https://www.nasdaq.com/articles/3-top-warren-buffett-stocks-to-buy-in-2023 | null | null | It's not a bad idea to check what stocks Warren Buffett's Berkshire Hathaway owns. A $1,000 investment in the company in 1965, when he took over, would have been worth $36 million through 2021.
Keep in mind that many of Berkshire's stocks were not selected by Buffett, but were chosen by one of his investing lieutenants, Ted Weschler and Todd Combs, who have also have an impressive investing record. However, it's usually not clear who picked what.
That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH).
Buffett's new favorite
Jeremy Bowman (Apple): For years, Buffett avoided tech stocks, saying he couldn't confidently predict future cash flows in the industry.
However, Berkshire Hathaway began buying Apple in 2016, and the Oracle of Omaha has fully embraced the iPhone maker, calling it "probably the best business" in the world.
Apple has become Berkshire's largest holding, representing close to half of its stock portfolio as of the end of the third quarter, and it's easy to see why Buffett has become a big fan of the tech giant.
Apple's economic moat is huge and self-evident. It has an installed base of roughly 2 billion active devices, which form a network of competitive advantages as the devices work best when used together. You can share information through iCloud, for example, and wearables such as AirPods are designed to pair with an iPhone. Apple's App Store unites its devices through a high-margin services business as the company generally takes a 30% commission on money spent in the App Store.
The company's brand and product quality also allowed it to maintain pricing power and high margins on its devices. It continues to gain market share on Android and is the phone of choice among the youngest customers in the U.S., indicating a strong growth pipeline.
Like other tech giants, Apple is expected to see slow growth this year in response to recessionary headwinds. Even so, the company is making smart moves to plan for the next stage of growth, recently announcing that it would design its own chips in a range of hardware components, bringing business that had been outsourced to chipmakers in-house, which should help boost the company's margins. It's also expected to unveil a new mixed-reality headset in June, according to Bloomberg, which could unlock a new revenue stream for the company.
Currently, the stock trades at a price-to-earnings ratio of 22, only slightly more expensive than the S&P 500 average. Considering its manifest competitive advantages, and ability to grow and expand margins over the long term, that price looks like a great entry point for investors.
Your local grocery store is a great investment
John Ballard (Kroger): Local grocery stores have a lot of advantages serving a large pool of customers within a near proximity. Kroger has capitalized on this position with consistent financial results despite uncertainty in the economy. Management is aiming to deliver annualized shareholder returns between 8% and 11% over the long term. However, the stock trades at a low multiple of earnings, which makes it a solid buy in 2023.
The sky-high inflation over the last year hasn't hurt Kroger's business. It's actually brought more good for the company's growth, since eating at home is much less expensive than dining out. In the most recent quarter, Kroger reported comparable sales, or what it calls identical sales, of 6.9% over the year-ago quarter. Adjusted earnings grew even faster at 12.8%, which is better than management's long-term goal to grow earnings between 3% and 5% per year.
Kroger is a profitable and durable business with growth opportunities. It generates a very slim profit margin, but it reinvests into the stores to drive traffic. That churns out higher revenue and profits, which also fuels investment in higher-margin revenue streams, such as private label brands.
Kroger can do all that while also distributing dividend payments to shareholders. Over the last four quarters, it paid out more than a third of its earnings per share in dividends, bringing the yield to about 2.04%. Combine this above-average dividend yield with a cheap price-to-earnings ratio of 11 based on forward earnings estimates and it all adds up to a solid stock to hold in this rocky market environment.
Getting ready for a big comeback
Jennifer Saibil (RH): RH had a huge setback at the end of 2022 as inflation cut into its sales and disrupted its margins. Even as many stocks are showing signs of recovery a few weeks into 2023, RH stock remains down about 30% over the past year.
But this looks like an excellent opportunity, and it's a classic Buffett move. RH stock looks significantly undervalued. It trades at less than 12 times trailing-12-month earnings, which is cheap even in this market.
Yet it has outperformed the broader market over time, in fact by huge amounts, under better circumstances.
RH data by YCharts
Considering its business model and opportunities, RH has enormous potential to do that again.
RH sells luxury furniture, but the company has embarked on a process of becoming a leading luxury brand. Its core business is selling upscale products through its galleries in select affluent communities and its web portal. It has developed several exclusive lines that cater to this niche, with the advantages of high margins and a resilient clientele that has spending money even when the economy is volatile.
Also, RH branched out into luxury experiences, including several high-end restaurants, a guesthouse, and yacht and jet rentals. It recently hired well-known editor Margaret Russell to direct RH Media.
The company has resisted changing its strategy for the short-term benefits of raising sales through promotions. It has, even more so, continued to implement its efforts to build its premium brand through several acquisitions.
The risk here is that business doesn't come back so quickly, and that will depend on the state of the economy. But with sales down, year-over-year comparisons are in its favor. Any progress is likely to result in a higher stock price even if the economy remains pressured, and strong sales could lead to a surging stock. Whether or not that happens in 2023, RH stock looks like an outstanding long-term opportunity to create shareholder wealth.
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Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in RH. John Ballard has positions in RH. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends RH and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). However, Berkshire Hathaway began buying Apple in 2016, and the Oracle of Omaha has fully embraced the iPhone maker, calling it "probably the best business" in the world. Apple has become Berkshire's largest holding, representing close to half of its stock portfolio as of the end of the third quarter, and it's easy to see why Buffett has become a big fan of the tech giant. | Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Your local grocery store is a great investment John Ballard (Kroger): Local grocery stores have a lot of advantages serving a large pool of customers within a near proximity. | Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). Even as many stocks are showing signs of recovery a few weeks into 2023, RH stock remains down about 30% over the past year. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Jennifer Saibil has no position in any of the stocks mentioned. | Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Kroger is a profitable and durable business with growth opportunities. | null |
330 | 17,517 | 2023-01-20 00:00:00 UTC | 89% of Warren Buffett's Secret Portfolio Is Invested in Just 5 Stocks | AAPL | https://www.nasdaq.com/articles/89-of-warren-buffetts-secret-portfolio-is-invested-in-just-5-stocks | null | null | Few investors command as much respect on Wall Street as Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. Although he's not infallible, he's crushed the benchmark S&P 500 on a head-to-head basis, including dividends paid, since taking the reins for Berkshire Hathaway in 1965. Through the end of 2021, Berkshire's Class A shares (BRK.A) had delivered an aggregate return of 3,641,613%, which is over 120 times greater than the 30,209% total return of the S&P 500 over the same stretch.
Suffice it to say that following Berkshire Hathaway's 13F filings with the Securities and Exchange Commission (SEC) and riding the Oracle of Omaha's coattails has been a moneymaking proposition for over a half-century.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
However, not all of Berkshire Hathaway's holdings can be found in its quarterly 13F filing with the SEC. Thanks to the acquisition of reinsurance giant General Re 25 years ago, Buffett's company also owns specialty investment firm New England Asset Management (NEAM). Even though Buffett isn't involved in the investment decisions of this $5.9 billion fund, NEAM is, nevertheless, owned by Berkshire Hathaway. This makes New England Asset Management Warren Buffett's secret portfolio.
What's particularly interesting about Warren Buffett's hidden portfolio is that it's concentrated very similarly to Berkshire Hathaway's investment portfolio. All told, 89% of Warren Buffett's secret portfolio is invested in just five stocks.
Apple: 48.13% of invested assets
If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. As of Sept. 30, 2022, Apple accounted for more than 48% of New England Asset Management's nearly $5.9 billion in assets under management.
The lure of Apple is that it's an undeniable moneymaker. It's generated more than $122 billion in operating cash flow over the trailing-12-month period, with exceptional customer loyalty and top-tier innovation acting as the company's lead drivers. Apple's iPhone is its top revenue producer and accounts for about half of all U.S. smartphone share.
Meanwhile, CEO Tim Cook is overseeing a successful shift to a subscription-driven operating model. This services segment offers sustained double-digit annual growth potential throughout the decade.
Additionally, Apple's capital-return program is unrivaled. It's paying out approximately $14.6 billion in dividends each year and has repurchased a whopping $554 billion worth of its common stock over the past decade. These buybacks have had a tangibly positive impact on Apple's earnings per share.
Bank of America: 11.69% of invested assets
Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding.
The reason Warren Buffett and his team love bank stocks so much is because they're perfectly positioned to take advantage of long periods of U.S. economic expansion. Even though recessions are a normal part of the economic cycle, they don't last very long.
As the U.S. economy expands, money-center giants like Bank of America are able to benefit from what I like to call the "bread-and-butter of banking": loan and deposit growth. It may not be sexy from a business standpoint, but growing loans and deposits is what generates a profit for banks and allows them to return capital to shareholders via buybacks and dividends.
Bank of America is also well positioned for the Federal Reserve's aggressive rate hikes. Among large banks, BofA has the highest sensitivity to shifts in the yield curve. With the nation's central bank having no choice but to combat historically high inflation, Bank of America is benefiting from a sizable jump in net interest income.
Image source: U.S. Bank.
U.S. Bancorp: 11.37% of invested assets
Regional banking giant U.S. Bancorp (NYSE: USB) is the third-largest holding in the Oracle of Omaha's hidden portfolio. The company, which is the parent of the more familiar U.S. Bank, accounts for more than 11% of NEAM's investment portfolio.
If there's one factor that helps U.S. Bancorp stand out from the crowd of publicly traded bank stocks, it's the company's digital engagement trends. As of the end of August, 82% of U.S. Bancorp's active customers were banking digitally, with 62% of total sales completed online or via mobile app.
Digital transactions cost banks just a fraction of what in-person or phone-based interactions run. Not surprisingly, this digitization push has helped U.S. Bancorp consistently produce above-average return on assets.
U.S. Bancorp's other secret to success has been its financial discipline. Unlike most money-center banks, U.S. Bancorp has predominantly avoided the riskier derivative investments that sacked its larger peers during the financial crisis. I'll say it again: By focusing on the bread-and-butter of banking, it's been able to consistently outperform.
Chevron: 10.85% of invested assets
Energy stock Chevron (NYSE: CVX) was the biggest buy in 2022 for Warren Buffett's secret portfolio. As of the end of the third quarter, Chevron stacked up as a 10.85% weighting.
Investors currently bullish on Chevron are likely betting on crude oil and natural gas prices to remain elevated for years to come. When Russia invaded Ukraine, it put Europe's supply of these energy commodities into limbo. But the bigger issue might be that the COVID-19 pandemic substantially reduced capital investments in drilling, exploration, and infrastructure for years. This makes it difficult to increase the global oil and gas supply anytime soon, and should provide a relatively safe floor beneath the spot prices of energy commodities.
Another key point with Chevron is that it's an integrated operator. Though it generates its juiciest margins from drilling, Chevron also operates pipelines, chemical plants, and refineries. Chemical plants and refineries are downstream assets that benefit when crude oil prices fall. In other words, Chevron's integrated model allows it to successfully navigate any economic environment.
HP: 6.99% of invested assets
The fifth sizable holding in Warren Buffett's secret portfolio is computing and printing solutions company HP (NYSE: HPQ). As of the end of September, HP accounted for roughly 7% of New England Asset Management's invested assets.
There's no denying that HP's growth heyday is in the rearview mirror. Nonetheless, selling personal computers and printing solutions tends to generate very predictable profits and operating cash flow from one quarter to the next. Further, with HP valued at 8 times Wall Street's forecast earnings in fiscal 2023 and 2024, the argument can be made that there's a safe floor beneath HP's share price.
Mature businesses also have a tendency to put rewarding shareholders at the top of their list. HP returned $5.3 billion to its shareholders in fiscal 2022 (ended Oct. 31, 2022) in the form of dividends and share buybacks. The company, which recently announced a modest increase to its quarterly dividend, is doling out a market-topping 3.8% yield.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and HP. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Thanks to the acquisition of reinsurance giant General Re 25 years ago, Buffett's company also owns specialty investment firm New England Asset Management (NEAM). The reason Warren Buffett and his team love bank stocks so much is because they're perfectly positioned to take advantage of long periods of U.S. economic expansion. | Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding. HP: 6.99% of invested assets The fifth sizable holding in Warren Buffett's secret portfolio is computing and printing solutions company HP (NYSE: HPQ). | Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Berkshire Hathaway CEO Warren Buffett. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding. | 4 |
331 | 17,535 | 2023-01-19 00:00:00 UTC | How Does Warren Buffett Handle a Bull Market? | AAPL | https://www.nasdaq.com/articles/how-does-warren-buffett-handle-a-bull-market | null | null | Warren Buffett has mastered being greedy when others are fearful, but what does he do when the market is going up? Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks.
*Stock prices used were end-of-day prices of Jan. 12, 2023. The video was published on Jan. 19, 2023.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jon Quast has no position in any of the stocks mentioned. Travis Hoium has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Goldman Sachs Group wasn't one of them! The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. | Travis Hoium has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. Their opinions remain their own and are unaffected by The Motley Fool. | 4 |
332 | 17,552 | 2023-01-18 00:00:00 UTC | 2 Top Stocks to Buy in 2023 and Hold Forever | AAPL | https://www.nasdaq.com/articles/2-top-stocks-to-buy-in-2023-and-hold-forever | null | null | "If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." So says investing star Warren Buffett. In other words, one of the best ways to succeed in the stock market is to hold onto shares in companies with solid businesses for the long term. By doing so, you can safeguard yourself from short-term economic declines and unexpected fluctuations in the market.
Last year was a prime example as a sell-off saw declines in numerous stocks. However, companies with the strongest businesses will, no doubt, be able to navigate this challenging time and come out ahead. So without further ado, here are two top stocks you can buy in 2023 and hold indefinitely.
Apple
Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. However, Apple isn't so bad off when noting the 33% to 39% stock declines that its peers, such as Alphabet and Amazon, experienced in the same period.
Last year, macroeconomic headwinds highlighted the strength of Apple's business with consistent demand for its products. For instance, in the third quarter of 2022, global PC shipments for the industry fell 15%. However, Apple reported the only growth among its competitors -- up 40.2% during the period.
While the company's hardware remained in demand, its services business continued to boom. In fiscal 2022, services revenue increased 14% year over year to $78.1 billion, while iPhone revenue rose by 7%. Additionally, services reported a 71.7% profit margin, while products came in at a 36.3% profit margin.
Apple proved the resilience and reliability of its business in an economically challenging year. Its stock price has grown 203% in the last five years despite a recent sell-off. Apple has multiple, highly anticipated products that are expected to be released in 2023 and continuing growth in its services. As a result, its stock is a screaming buy this year and one you can hold forever.
Microsoft
Like Apple, Microsoft (NASDAQ: MSFT) is a company that fared better than its competition in 2022, proving its stock would be an asset in any portfolio over the long term. The company's shares are down 25% year over year. However, those who bought the stock five years ago have still retained a 167% return on their investment thanks to the tech giant's stellar growth.
The company's biggest strength is its priority on diverse revenue streams. As the home to such brands as Windows, Office, Xbox, Azure, and LinkedIn, the company has carved out dominating positions in operation systems, productivity software, video games, cloud computing, and social media. As these markets continue to grow annually, so does Microsoft's revenue.
Moreover, the company's diversity kept its business growing in 2022 despite hits to the PC market. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment.
Microsoft's earnings growth primarily came from businesses less affected by economic headwinds, such as subscription-based productivity services like LinkedIn and Office as well as its cloud computing platform, Azure. In Q1 2023, productivity processes saw revenue grow 9% year over year to $16.4 billion, with operating income increasing 10%. Meanwhile, its intelligent cloud segment enjoyed revenue growth of 20% to $20.3 billion, with operating income rising 17% to $8.9 billion.
In 2023, moves such as expanding Azure data centers to 11 new regions, growing its digital advertising business with a Netflix partnership, and boosting its gaming division by potentially acquiring Activision Blizzard are only further reasons to buy Microsoft stock. It's an ever-expanding company and a stock you can buy in 2023 with plans to hold forever.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Microsoft, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. As the home to such brands as Windows, Office, Xbox, Azure, and LinkedIn, the company has carved out dominating positions in operation systems, productivity software, video games, cloud computing, and social media. Microsoft's earnings growth primarily came from businesses less affected by economic headwinds, such as subscription-based productivity services like LinkedIn and Office as well as its cloud computing platform, Azure. | Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Microsoft, and Netflix. | Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment. | Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. Apple proved the resilience and reliability of its business in an economically challenging year. | 4 |
333 | 17,574 | 2023-01-17 00:00:00 UTC | 3 Great Foreign Companies to Invest In Right Now | AAPL | https://www.nasdaq.com/articles/3-great-foreign-companies-to-invest-in-right-now-6 | null | null | Sure, many U.S. stocks look cheap after the 2022 bear market; however, investors shouldn't restrict themselves to just U.S. stocks. Because of a lack of familiarity on the part of U.S. investors and geopolitical turmoil overseas, even some of the world's greatest, most competitively advantaged companies trade at bargain-basement valuations today -- even bigger bargains than their U.S. counterparts.
On that note, the following three stocks from Taiwan, France, and the U.K. all look like incredible deals today.
Taiwan Semiconductor Manufacturing
It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term.
Yes, the chip industry is seeing a big inventory correction in both PCs and low-end mobile phones coming off the pandemic, but if one thinks about the rise of artificial intelligence, such as the recent release of ChatGPT, the energy transition to EVs and the smart grid, the Metaverse, and cloud and edge computing, all of these applications need lots and lots of semiconductors to work.
That's why investors should take advantage of the fact that Taiwan Semiconductor Manufacturing (NYSE: TSM), the world's leading chip foundry, can be bought at just 13 times earnings today.
TSMC has demonstrated technological manufacturing superiority cultivated over decades, with a lead in producing semiconductors at the leading edge, and a 60% estimated total market share of the foundry industry.
That dominance has allowed TSMC to raise prices to its chip designer customers this year, flexing its pricing power over the likes of even giant clients Apple and Nvidia. Growth and price increases enabled TSMC to grow earnings 70% and achieve a return on equity of 40% in 2022. And it's quite possible the mission-critical TSMC will be getting a greater share of the profitability pie from the chip industry through this decade, since virtually all semiconductor companies outsource their manufacturing and virtually all leading-edge chipmakers use TSMC.
On last week's fourth-quarter conference call, Chairman C.C. Wei touched on this topic:
The semiconductor [has] become more essential and more pervasive in people's life. And the semiconductor industry value in the supply chain is increasing. And if we look at our customers' performance, they are rising structural gross margin over the past five to six years, it continues to improve. That reflects what I just said, the semiconductors' value has been recognized and also very important in our daily life. And so, we set out our pricing strategy to reflect all the values we share to customer, and customer, also, in their value for the end market.
Management predicts the semiconductor industry will contract about 4% this year, but even in a down market, TSMC expects to see "slight growth" in 2023, because of its technological advantages. Even with no earnings growth, the past two years -- one "boom," one "bust" -- would see a two-year earnings growth rate of 35%. With its low-teens earnings multiple, it's no wonder Warren Buffett was attracted to this market leader.
TotalEnergies
France's TotalEnergies (NYSE: TTE) may be off the radar of U.S. investors more familiar with U.S.-domiciled oil and gas majors, but this is a high-yielding gem. TotalEnergies' dividend yield is currently 4.62%, but when factoring in a special dividend paid to shareholders in December thanks to the past year's high profits, that yield pops up to 5.14%.
That yield is also backed by a robust, diversified portfolio across not only integrated oil and natural gas upstream, midstream, and downstream operations, but also a growing renewables portfolio in solar and wind. The company used to be called just Total but changed its name in 2021 to TotalEnergies, reflecting its brand shift toward making the energy-focused transition.
While TotalEnergies still gets the bulk of its profits from oil and natural gas, the company has pivoted away from any fuel source that is overly carbon-intensive, even in its oil projects, and the renewables portfolio is growing quickly. This year, the company will devote 25% of capital expenditures to "decarbonized" technologies.
As a global energy producer, trader, and transporter, Total can run into hiccups. For instance, Total had to write off or sell some Russian assets last year. The company was also hit by windfall profits taxes levied by European governments.
Still, the company's profitability has soared so much that shareholders are still getting their fair share. The LNG and refining businesses saw their profitability soar after Russia's invasion of Ukraine and subsequent sanctions on Russia by Europe, taking away those competitive oil and gas products. Return on average capital employed was an impressive 27.2% over the past 12 months, allowing the company to add more renewables, pay out the special dividend, repurchase stock, and de-lever its balance sheet.
That last part is especially noteworthy, as Total now has only about $5 billion in net debt as of Sept. 30, down from $24 billion one year prior.
Considering Total's diversified portfolio, by both energy source and geography, its nearly debt-free balance sheet, and ample payouts to shareholders, the fact that the stock trades at just 5.3 times 2023 earnings estimates is surprising. It's a bargain-priced energy stock U.S. investors should consider as part of their energy sector allocation.
Farfetch
Finally, luxury e-commerce leader Farfetch (NYSE: FTCH) had a terrible 2022, capped off by a Capital Markets Day in December that I think was widely misunderstood. Overall, the stock plunged 86% in 2022. Even after a nice bounce to start 2023, it still looks wildly undervalued.
Farfetch is the leading global e-commerce marketplace for luxury brands, and it also powers many brands' direct-to-consumer websites. In addition, Farfetch owns the New Guards platform, which cultivates up-and-coming luxury brands, and also owns some brands outright itself. Each of these three businesses is high-margin in terms of gross and contribution margins, but Farfetch is unprofitable today, because of operating expenses and investments in growth.
The investing community sold off pretty much any unprofitable growth stock en masse last year. On top of that, Farfetch suffered from the shutdown of its Russian business, which was its third-largest market, and lockdowns in China, its second-largest market. Reporting in U.S. dollars, Farfetch's results were also hit by the rise of the U.S. dollar. At its Capital Markets Day on Dec. 1, the company forecast solid growth and profit numbers to 2025, but those forecasts were probably conservative, given the myriad headwinds, and that disappointed some investors. Combined with tax-loss selling opportunities, the market subsequently sold the stock to bargain-basement levels.
So 2022 was a perfect storm. Yet already, those headwinds look to be reversing. Just after the Capital Markets Day, China suddenly reopened, and the dollar has weakened against other currencies. After February, Farfetch will have lapped the shutdown of its Russia business.
Despite a nice bounce off its lows, Farfetch still trades equal to sales. This is for a company that should grow at a 20%-plus rate for the next several years at least, and should show increasing profitability as it does. Although management's 10% adjusted EBITDA margin forecast for 2025 may have underwhelmed some, Farfetch won't be done growing and scaling by then, given the size of the luxury market and Farfecth's competitive position.
Remember, luxury giant Richemont sold Farfetch's main rival, Yoox Net-a-Porter, to Farfetch this past summer, taking a large stake in Farfetch in return at a much higher valuation. That seemed to consolidate the luxury e-commerce landscape in Farfetch's favor.
The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022.
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Billy Duberstein has positions in Apple, Farfetch, Taiwan Semiconductor Manufacturing, and TotalEnergies Se and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Apple, Farfetch, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Because of a lack of familiarity on the part of U.S. investors and geopolitical turmoil overseas, even some of the world's greatest, most competitively advantaged companies trade at bargain-basement valuations today -- even bigger bargains than their U.S. counterparts. Return on average capital employed was an impressive 27.2% over the past 12 months, allowing the company to add more renewables, pay out the special dividend, repurchase stock, and de-lever its balance sheet. Considering Total's diversified portfolio, by both energy source and geography, its nearly debt-free balance sheet, and ample payouts to shareholders, the fact that the stock trades at just 5.3 times 2023 earnings estimates is surprising. | That's why investors should take advantage of the fact that Taiwan Semiconductor Manufacturing (NYSE: TSM), the world's leading chip foundry, can be bought at just 13 times earnings today. TSMC has demonstrated technological manufacturing superiority cultivated over decades, with a lead in producing semiconductors at the leading edge, and a 60% estimated total market share of the foundry industry. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Taiwan Semiconductor Manufacturing It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term. The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Farfetch, Taiwan Semiconductor Manufacturing, and TotalEnergies Se and has the following options: short January 2023 $210 calls on Apple. | Sure, many U.S. stocks look cheap after the 2022 bear market; however, investors shouldn't restrict themselves to just U.S. stocks. Taiwan Semiconductor Manufacturing It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term. The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022. | 4 |
334 | 17,583 | 2023-01-16 00:00:00 UTC | 2 FAANG Stocks to Buy in 2023 and 1 to Avoid: Here's Why | AAPL | https://www.nasdaq.com/articles/2-faang-stocks-to-buy-in-2023-and-1-to-avoid%3A-heres-why | null | null | The five FAANG stocks took a beating in 2022. Last year, each and every one of these tech titans underperformed the S&P 500 index, which wasn't having a great year in the first place:
META data by YCharts
But that was then, and this is now. Most of the FAANG greats are poised to bounce back in 2023, most likely beating the market from their current spring-loaded discounts. Read on to see why Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) fit that bill in my eyes.
I could talk your ear off about the long-term virtues of owning Netflix (NASDAQ: NFLX) but the stock has nearly doubled since mid-July and no longer strikes me as the most obvious no-brainer buy on the market. This recovery is well underway already. Still a great investment, but you may want to hold your horses on buying Netflix until this Thursday's fourth-quarter earnings report.
As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023.
That leaves Meta Platforms (NASDAQ: META), formerly known as Facebook, whose trouble runs so deep that I recommend going out of your way to avoid it this year. Read on beyond the Alphabet and Amazon reviews if you want to hear more.
FAANG buy 1: Alphabet
Alphabet's stock is down 36% since the end of 2021. However, it's important to remember that market sell-offs can often present buying opportunities. In this case, there are several reasons why the parent company of Google and YouTube remains a strong buy.
First and foremost, Google has a virtual monopoly on the search engine market, with over 90% market share in search around the world. I'd show you a graph, but it's pretty boring with Google'sglobal marketshare maxed out and everyone else bunched up in single-digit percentages. This gives the company tremendous market power and reliable profits, as well as an entrenched brand across many sub-sectors of the technology market. This dominance is unlikely to change in the near future, making Google and its many services a reliable revenue stream for Alphabet.
Another reason to consider buying Alphabet stock is the company's generous profit margins. In the long run, Alphabet's operating margins have often hovered in the 25-35% range, with a dip around the early COVID-19 crisis followed by a spike in the last two years.
Moreover, Alphabet's cloud infrastructure business, Google Cloud, is showing potential for profitable long-term growth. While it currently trails behind rivals like Amazon Web Services, it's growing quickly with revenue up 38% to $6.9 billion in its most recent quarter. Additionally, the division's negative operating margin narrowed from -14% to -10% in the third quarter, suggesting a path to profitability. While it may never be as profitable as AWS or Azure, it should eventually become a significant contributor to Alphabet's bottom line.
Lastly, Alphabet's other bets, such as Waymo, its autonomous vehicle division, and life sciences projects, could potentially pay off over the years. These businesses give Alphabet a long-term flexibility that's worth its weight in gold. While they have lost over $20 billion in the last five years and brought in little revenue, any breakthroughs in these areas could have a significant impact on the company's bottom line. One day, I'm sure the Google name will fade away as new technologies and as-yet unheard-of rivals undermine the traditional web search and advertising operation. In its place, one or more of today's or tomorrow's "other bets" will take over, letting Alphabet investors forget about the Google name and still feel good about the company's future.
Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. And the stock trades at a very reasonable 18 times earnings, giving value investors something to chew on, too.
FAANG buy 2: Amazon
E-commerce giant Amazon took a deeper dive than Alphabet in 2022. The stock is off to a strong start this year, but still trails Alphabet's returns since the end of 2021 with a 41% dip. This price cut had its reasons, and you need to weigh these bearish arguments before putting your money to work in Amazon stock.
The primary pressure point for Amazon is competition. The company used to have a solid first-mover advantage and be the only game in town, but many old-school retailers have stepped up their online sales to offer tougher competition. This has made it difficult for Amazon to maintain its torrential growth rates and dominant market share. While Amazon still rules the American e-commerce space with a 38% market share, Walmart (NYSE: WMT) has a 30% share of the e-commerce grocery space, according to Euromonitor data. This is an important segment and Amazon has struggled to gain a foothold here.
Furthermore, Amazon has invested heavily in its physical logistics network that gives it delivery advantages over traditional retailers. This has come with significant costs, including increases in net shipping costs and fulfillment costs. These infrastructure expenses now represent 16.8% of sales.
However, there are also many reasons for optimism around Amazon's business and stock.
The Amazon Web Services (AWS) cloud computing platform has long been Amazon's primary source of profitability on the segment level, and it also continues to drive the company's top-line growth. AWS's revenue jumped 27% in the third quarter, and year-to-date operating profits of $17.3 billion are 33% higher year over year.
So Amazon's stock had a rough year, but the sharp price drop looks like an overreaction. The company's dominance in the e-commerce space, profitability from AWS, and potential for robust growth in cloud computing make Amazon stock a strong buy for long-term investors.
The FAANG stock to stay away from: Meta Platforms
Meta's core advertising business stalled out for a few reasons last year, including Apple's iOS update with new restrictions to advertisers' ad-tracking efforts, the rise of TikTok and its competition with Instagram, and the macroeconomic headwinds affecting the broader advertising market. So Meta's operating margins are running at multiyear lows and the stock is down 59% over the same year-and-change period as Alphabet's and Amazon's slightly smaller drops.
To counter TikTok, Meta aggressively invested in the expansion of Instagram Reels, but warned that monetizing those short videos would be more difficult than its Feed-based ads. However, instead of streamlining its business to offset those costs, Meta doubled down on expanding its Reality Labs segment, which houses its virtual reality products. That effort is off to a rocky start. The Reality Labs segment's revenue rose less than 3% YoY to $1.4 billion in the first nine months of 2022 while its operating loss widened from $6.9 billion to $9.4 billion.
This painful combination of slowing growth and rising expenses has driven away investors, with analysts expecting a 2% drop in revenue and a 33% lower earnings for 2022. In 2023, Wall Street expects a 5% rise in revenue and 15% drop in earnings as expenses continue to climb. It's also worth noting that Meta's insiders sold nearly four times as many shares as they bought over the past 12 months.
Slowing sales, dropping profits, weak insider trading, and an unconvincing response to surging competition are not qualities I look for in prospective investments. Meta has work to do before I would consider buying or recommending this stock, starting with a clearer response to the TikTok challenge. Until then, I'll gladly stay on Meta's sidelines.
Find out why Amazon.com is one of the 10 best stocks to buy now
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Amazon.com, and Netflix. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, and Walmart. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. I could talk your ear off about the long-term virtues of owning Netflix (NASDAQ: NFLX) but the stock has nearly doubled since mid-July and no longer strikes me as the most obvious no-brainer buy on the market. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. | As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Moreover, Alphabet's cloud infrastructure business, Google Cloud, is showing potential for profitable long-term growth. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. | As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. The company's dominance in the e-commerce space, profitability from AWS, and potential for robust growth in cloud computing make Amazon stock a strong buy for long-term investors. | As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Read on to see why Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) fit that bill in my eyes. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. | 4 |
335 | 17,593 | 2023-01-15 00:00:00 UTC | 2 Cheap Tech Stocks to Buy Right Now | AAPL | https://www.nasdaq.com/articles/2-cheap-tech-stocks-to-buy-right-now-10 | null | null | Last year's interest rate increases are reminding everyone about the merits of value investing, but that doesn't mean you should ignore tech stocks. While "tech" gets a bad rap due to many high-profile yet unprofitable companies -- mostly in the software or EV spaces -- many hardware companies are very cheap on a multiple of current earnings.
Even better, technology hardware infrastructure is the key enabler for many of today's big innovations, from artificial intelligence to industrial automation to electric vehicles and the smart grid.
Here are two dividend-paying hardware companies powering each of those big trends, and their stocks can be had at bargain-basement valuations today.
Kulicke and Soffa
Advanced packaging company Kulicke and Soffa (NASDAQ: KLIC) is known for its core ball bonder business, which attaches chips in packages or to an electronic circuit board. The highly cyclical business boomed over 2020 and 2021. However, with investors fearing a downturn in wire-bonding equipment sales going forward, K&S trades at just a 6.8 price-to-earnings (PE) ratio. Actually, even that low valuation underrates how cheap this stock is. K&S has about $775 million in cash and no debt, which amounts to more than a quarter of its market cap!
However, Kulicke and Soffa, while cyclical, should see higher highs and lows with time as semiconductors are now leaning more on advanced packaging to drive breakthroughs in power and performance. And new applications, such as electric vehicles, also need more packaging equipment.
Meanwhile, even chipmakers themselves are using advanced packaging techniques within individual processors. Leading logic chip designers have begun constructing complex chips through connected "chiplets" in which individual semiconductor functions are etched onto small sub-chips. The sub-chips are then stitched together in a modular fashion with advanced packaging techniques in various combinations.
Since processors have become more advanced and difficult to produce, Intel and Advanced Micro Devices each recently incorporated chiplet architectures into their most current processor designs.
In addition, K&S has an exciting new growth business in advanced LED displays, including mini- and microLED formats. Mini- and micro-LEDs are the next generation of high-end screens with quality advantages over traditional LCD and OLED screens. While mini-LEDs are now used only in the highest-end screens, such as televisions, as the technology matures, mini- and micro-LEDs could find their way into mainstream devices like PCs and smartphones.
On the lastearnings call CEO Fusen Chen noted that the company's advanced display tools business had already exceeded the company's internal targets for 2022. And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. The move is another bid by Apple to bring more of its hardware production in-house and replace its existing OLED screens made by third parties.
According to people familiar with the matter, Apple intends to use mini-LEDs in high-end Apple Watches by the end of next year, with plans to potentially expand the advanced display technology to the iPhone later on.
Should Apple begin to use mini-LEDs in iPhone screens and adopt Kulicke and Soffa's technology to produce them, it could be a massive new business for this small-cap company.
Dell Technologies
There's a good reason Dell Technologies (NYSE: DELL) trades at just 6.5 times next year's earnings estimates: The PC market is in freefall. Just last week, tech research firm Gartner reported that PC shipments fell a stunning 28.5% in the fourth quarter -- the largest decline since the firm began collecting data in the mid-1990s!
That's likely factored into Dell's low valuation. Meanwhile, Dell's infrastructure segment, which sells servers, storage, and software to data center operators, actually surpassed the PC segment last quarter in terms of operating income. So the massive slowdown in PC and desktop sales won't affect Dell's overall results as much as some may think. While data center investment is projected to slow, it won't be by nearly as much as the PC slowdown.
Dell has also been selling more multi-cloud storage software of late, as well as other services not tied purely to hardware sales. Last quarter, services made up 23% of Dell's revenue and grew 6%, even as hardware products fell 10%. Overall, recurring services and software revenue should be less sensitive to the economic cycle.
More than one-third off its all-time highs, Dell should be able to continue growing its 3.2% dividend and repurchasing stock, even in these lean times. Once the company gets past this downturn, it should be able to capture opportunities in the data economy over the long term.
Management's model is to grow revenue at a 3% to 4% rate over the long term, with earnings-per-share growth of 6%. That may not sound like much, but since shareholders can buy Dell's stock today at a 16% earnings yield, it actually makes Dell attractive despite its various headwinds.
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Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Intel. The Motley Fool recommends Gartner and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Even better, technology hardware infrastructure is the key enabler for many of today's big innovations, from artificial intelligence to industrial automation to electric vehicles and the smart grid. However, Kulicke and Soffa, while cyclical, should see higher highs and lows with time as semiconductors are now leaning more on advanced packaging to drive breakthroughs in power and performance. | And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Kulicke and Soffa Advanced packaging company Kulicke and Soffa (NASDAQ: KLIC) is known for its core ball bonder business, which attaches chips in packages or to an electronic circuit board. Meanwhile, Dell's infrastructure segment, which sells servers, storage, and software to data center operators, actually surpassed the PC segment last quarter in terms of operating income. | And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Dell Technologies There's a good reason Dell Technologies (NYSE: DELL) trades at just 6.5 times next year's earnings estimates: The PC market is in freefall. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple. | And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Dell Technologies wasn't one of them! See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple. | null |
336 | 17,598 | 2023-01-14 00:00:00 UTC | Is It Time to Buy the Dow Jones' 3 Worst-Performing December Stocks? | AAPL | https://www.nasdaq.com/articles/is-it-time-to-buy-the-dow-jones-3-worst-performing-december-stocks | null | null | Last month was another tough one for the stock market ... even the blue chips. The Dow Jones Industrial Average (DJINDICES: ^DJI) lost a little more than 4% of its value in December, bringing a budding rebound effort to a screeching halt. It remains to be seen if the rally since then has legs.
And it was even worse for some of the Dow's constituent stocks. Several of its components fell by double-digit percentages last month, in fact, driving a handful of these tickers to new 52-week lows in the process.
Veteran investors of course know such sell-offs can be buying opportunities. The question is, are the biggest of the Dow's December losers worth stepping into now?
What went wrong
For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). Apple and Intel each fell a little more than 12% in December, while Salesforce ended the month with a setback of more than 17%.
AAPL data by YCharts
Intel's stumble isn't rooted in a specific cause. Indeed, the company made some encouraging announcements last month. Not only is it splitting up its graphics processing operating arm to better focus on its opportunities in that arena, but the company also introduced new software that extracts more computing power for its institutional hardware customers. It's just that none of this news was bigger than Intel's broader, perceived problems: competition and brewing economic weakness.
Apple's uncharacteristic pullback stems from early December reports that holiday demand for its iPhone was tepid, followed by news that the company was struggling to procure them anyway. Neither headline is something Apple's shareholders are accustomed to seeing. Just bear in mind the stock's weakness for the better part of 2022 may have made these investors sensitive to such red flags.
As for Salesforce, chalk its loss up to so-so guidance for the quarter now underway, and the resignation of co-CEO Bret Taylor. Although the company is in good hands with Marc Benioff at the helm, Taylor's abrupt exit at the same time Salesforce announced expectations for top-line growth of only between 8% and 10% for the quarter ending this month was more than investors could bear. Ditto for the several analysts who downgraded and/or lowered their price targets for the stock last month.
Look five years down the road, not five days
The question remains, however: Are any or all of these Dow stocks worthy buys following last month's lousy results? The official, "most-correct" answer is no.
While it's certainly better to purchase a quality stock while it's down rather than up, there's nothing about a calendar month's results that makes it a better (or worse) time to step into a new name. Stocks hit major highs and lows in all days and all months, and it's entirely possible all three of these names have more value left to lose before making a bottom.
The unofficial, "don't overthink this" answer, however, is yes -- all three of these stocks are arguably closer to a major low than not; you could certainly find less compelling entry points.
Take Salesforce as an example. Although Taylor's impending exit sends a warning of sorts, it shouldn't. Benioff has been the company's figurehead for years, in the spotlight, answering the tough questions. Very little will change in terms of effective leadership.
The company is also adapting to what looks like an economic headwind, announcing earlier this month it would be laying off about 10% of its workers in the near future. Rather than seeing the glass as half-empty, investors celebrated the cost-cutting measure, sending the stock well up from last month's new 52-week low. It's a sign that the market may be shopping for any reason to start stepping back in again after Salesforce shares' 58% pullback from their late-2021 high.
Intel shares are starting to test the bullish waters as well, up 15% from December's low. That may be because the company unveiled the 13th Gen Intel Core Mobile Processor -- now the world's fastest mobile CPU -- at this year's CES (held early this month). It's also starting to turn heads with its recently released 4th Gen Xeon Processors aimed at the server and data center market, which were also unveiled at this year's CES. While Intel sells hardware to the consumer market, institutions are big business for the company too.
Newcomers can buy the stock at only around 10 times its past and projected per-share profits. That's not bad, even with Intel's long-standing design and foundry challenges.
And Apple? It's the biggest and most profitable company in the world for good reason. The stock, however, is down more than 20% since August for the wrong reason. That's the erroneous, generalized worry that Apple can't thrive in a lousy economic environment.
The main thing is still the main thing
Let's be clear. These stocks aren't attractive additions to your portfolio simply because they lost a lot of ground in a short period of time. Lots of stocks suffer setbacks of this scope, but fully deserve to do so.
In this instance, though, all three of these stocks represent companies with staying power that's not being factored in. And, the fact that December's pullbacks are only part of much bigger pullbacks bolsters the long-term bullish thesis. That thesis remains intact even if these three stocks end up moving a little lower before moving meaningfully higher again. For perspective, Apple and Salesforce shares are presently priced below their consensus price targets, while Intel is trading right at its target price.
In other words, don't be penny-wise and pound-foolish here, and don't get too hung up on the short-term noise.
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Intel, and Salesforce. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. Not only is it splitting up its graphics processing operating arm to better focus on its opportunities in that arena, but the company also introduced new software that extracts more computing power for its institutional hardware customers. | What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. That may be because the company unveiled the 13th Gen Intel Core Mobile Processor -- now the world's fastest mobile CPU -- at this year's CES (held early this month). | What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. See the 10 stocks *Stock Advisor returns as of January 9, 2023 James Brumley has no position in any of the stocks mentioned. | What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. Apple and Intel each fell a little more than 12% in December, while Salesforce ended the month with a setback of more than 17%. | null |
337 | 17,606 | 2023-01-13 00:00:00 UTC | Is It the Right Time to Buy Apple Stock? | AAPL | https://www.nasdaq.com/articles/is-it-the-right-time-to-buy-apple-stock | null | null | Apple (NASDAQ: AAPL) is a stalwart stock that many investors own in their portfolios, but when it comes to new money being invested, the tech giant can get overlooked because of its size and perceived lack of growth potential. In this episode, Jamie Louko and Connor Allen break down the bull case for Apple stock and the growth opportunity this behemoth still has in store. If you enjoy this episode, leave a like and consider subscribing.
*Stock prices used were the after-market prices of Jan. 10, 2023. The video was published on Jan. 13, 2023.
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Connor Allen has positions in Apple. Jamie Louko has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Jamie Louko is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) is a stalwart stock that many investors own in their portfolios, but when it comes to new money being invested, the tech giant can get overlooked because of its size and perceived lack of growth potential. In this episode, Jamie Louko and Connor Allen break down the bull case for Apple stock and the growth opportunity this behemoth still has in store. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | Apple (NASDAQ: AAPL) is a stalwart stock that many investors own in their portfolios, but when it comes to new money being invested, the tech giant can get overlooked because of its size and perceived lack of growth potential. In this episode, Jamie Louko and Connor Allen break down the bull case for Apple stock and the growth opportunity this behemoth still has in store. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | Apple (NASDAQ: AAPL) is a stalwart stock that many investors own in their portfolios, but when it comes to new money being invested, the tech giant can get overlooked because of its size and perceived lack of growth potential. In this episode, Jamie Louko and Connor Allen break down the bull case for Apple stock and the growth opportunity this behemoth still has in store. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Connor Allen has positions in Apple. | Apple (NASDAQ: AAPL) is a stalwart stock that many investors own in their portfolios, but when it comes to new money being invested, the tech giant can get overlooked because of its size and perceived lack of growth potential. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! See the 10 stocks *Stock Advisor returns as of January 9, 2023 Connor Allen has positions in Apple. | null |
338 | 17,619 | 2023-01-12 00:00:00 UTC | AAPL March 3rd Options Begin Trading | AAPL | https://www.nasdaq.com/articles/aapl-march-3rd-options-begin-trading | null | null | Investors in Apple Inc (Symbol: AAPL) saw new options begin trading today, for the March 3rd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new March 3rd contracts and identified one put and one call contract of particular interest.
The put contract at the $131.00 strike price has a current bid of $4.90. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $131.00, but will also collect the premium, putting the cost basis of the shares at $126.10 (before broker commissions). To an investor already interested in purchasing shares of AAPL, that could represent an attractive alternative to paying $132.38/share today.
Because the $131.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.74% return on the cash commitment, or 27.31% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Apple Inc, and highlighting in green where the $131.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $136.00 strike price has a current bid of $3.90. If an investor was to purchase shares of AAPL stock at the current price level of $132.38/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $136.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.68% if the stock gets called away at the March 3rd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $136.00 strike highlighted in red:
Considering the fact that the $136.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.95% boost of extra return to the investor, or 21.51% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $132.38) to be 36%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $136.00 strike highlighted in red: Considering the fact that the $136.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options begin trading today, for the March 3rd expiration. | Below is a chart showing AAPL's trailing twelve month trading history, with the $136.00 strike highlighted in red: Considering the fact that the $136.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Investors in Apple Inc (Symbol: AAPL) saw new options begin trading today, for the March 3rd expiration. | Below is a chart showing AAPL's trailing twelve month trading history, with the $136.00 strike highlighted in red: Considering the fact that the $136.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options begin trading today, for the March 3rd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new March 3rd contracts and identified one put and one call contract of particular interest. | At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new March 3rd contracts and identified one put and one call contract of particular interest. Below is a chart showing AAPL's trailing twelve month trading history, with the $136.00 strike highlighted in red: Considering the fact that the $136.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options begin trading today, for the March 3rd expiration. | null |
339 | 17,642 | 2023-01-11 00:00:00 UTC | Alphabet (GOOGL) Boosts YouTube Music With Redesigned Library | AAPL | https://www.nasdaq.com/articles/alphabet-googl-boosts-youtube-music-with-redesigned-library | null | null | Alphabet’s GOOGL division Google is consistently adding new features to its music-streaming service, YouTube Music.
According to 9TO5Google, Google started rolling out a redesigned Library tab on YouTube Music for iOS and Android users.
By clicking on the View my option on the updated tab, users can switch between Library, Downloads, Uploads and Device files. The tab also shows options like Playlists, Songs, Albums and Artists to let users filter preferred songs.
With the abovementioned features, Google is providing an enhanced experience to Android and iOS users. This is likely to boost the adoption rate of YouTube Music.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Growing YouTube Music Efforts
Apart from the latest move, Google recently rolled out 2022 Recap features on YouTube Music to let users view personalized music stats of the entire year.
Google also rolled out the redesigned album UI on Android tablet. The redesign version shows the artiste’s name, type of media and the release year on top. Options like download, add to library, play, share and an overflow menu are also included.
Google added a capability whereby users can save queues as playlists. The company also rolled out its Recent Played and Turntable widgets to Android users.
We believe that the growing efforts will continue to contribute well to Google’s parent Alphabet’s Google services’ revenues in the upcoming period.
Revenues from the Google services business increased 2.5% year over year to $61.4 billion, accounting for 88.8% of the total third-quarter revenues.
Competitive Music Streaming Market
The growing music-streaming initiatives are positioning Alphabet well to rapidly penetrate the booming global music-streaming market.
Per a Grand View Research report, the global music streaming market is expected to see a CAGR of 14.7% from 2022 to 2030.
Given the upbeat scenario, not only Alphabet but other companies like Amazon AMZN, Apple AAPL and Spotify SPOT are also making strong efforts to capitalize on the above-mentioned prospect.
Amazon is gaining strong momentum in the music streaming market on the back of its expanding global footprint. AMZN offers its premium music subscription service Amazon Music Unlimited to customers. With Amazon Music Unlimited, music lovers can listen to any song anytime and anywhere on all types of devices, including smartphone, tablet, PC/Mac, Fire TV and Alexa-enabled devices like Amazon Echo. AMZN has lost 45.6% in the past year.
Shares of Apple have been down 25.3% in the same time frame. Apple’s music-streaming service Apple Music offers a subscription tier powered by Siri named Apple Music Voice Plan. Using Apple Music Voice Plan, subscribers can access millions of songs, playlists, personalized mixes, genre stations and Apple Music Radio. Music listeners can also download the Apple Music app on their Android tablet or Chromebook supporting Android apps.
Spotify provides commercial free music and ad-supported services to customers. Music lovers can enjoy ad-free music and offline playbacks with Spotify Premium service. SPOT users can enjoy the tablet version of Spotify on their iPad or Android tablets. Spotify has lost 61.4% in the past year.
Nevertheless, Google’s growing initiatives toward YouTube Music are expected to help Alphabet gain a competitive edge against aforesaid peers.
Shares of Alphabet have been down 36.7% in the past year compared with the Computer and Technology sector’s decline of 32.5%.
Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Given the upbeat scenario, not only Alphabet but other companies like Amazon AMZN, Apple AAPL and Spotify SPOT are also making strong efforts to capitalize on the above-mentioned prospect. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Spotify Technology (SPOT) : Free Stock Analysis Report To read this article on Zacks.com click here. By clicking on the View my option on the updated tab, users can switch between Library, Downloads, Uploads and Device files. | Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Spotify Technology (SPOT) : Free Stock Analysis Report To read this article on Zacks.com click here. Given the upbeat scenario, not only Alphabet but other companies like Amazon AMZN, Apple AAPL and Spotify SPOT are also making strong efforts to capitalize on the above-mentioned prospect. Alphabet Inc. Price and Consensus Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote Growing YouTube Music Efforts Apart from the latest move, Google recently rolled out 2022 Recap features on YouTube Music to let users view personalized music stats of the entire year. | Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Spotify Technology (SPOT) : Free Stock Analysis Report To read this article on Zacks.com click here. Given the upbeat scenario, not only Alphabet but other companies like Amazon AMZN, Apple AAPL and Spotify SPOT are also making strong efforts to capitalize on the above-mentioned prospect. Alphabet Inc. Price and Consensus Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote Growing YouTube Music Efforts Apart from the latest move, Google recently rolled out 2022 Recap features on YouTube Music to let users view personalized music stats of the entire year. | Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Spotify Technology (SPOT) : Free Stock Analysis Report To read this article on Zacks.com click here. Given the upbeat scenario, not only Alphabet but other companies like Amazon AMZN, Apple AAPL and Spotify SPOT are also making strong efforts to capitalize on the above-mentioned prospect. Alphabet’s GOOGL division Google is consistently adding new features to its music-streaming service, YouTube Music. | null |
340 | 17,660 | 2023-01-10 00:00:00 UTC | Zacks Industry Outlook Highlights Apple and Lenovo | AAPL | https://www.nasdaq.com/articles/zacks-industry-outlook-highlights-apple-and-lenovo | null | null | For Immediate Release
Chicago, IL – January 10, 2023 – Today, Zacks Equity Research discusses Apple AAPL and Lenovo Group LNVGY.
Industry: Mini-Computers
Link: https://www.zacks.com/commentary/2036855/2-stocks-to-watch-from-the-challenging-computer-industry
The Zacks Computer – Mini Computers industry is suffering from massive supply-chain and logistical issues, along with several pandemic-related and geopolitical challenges, including the ongoing Russia-Ukraine war. The declining demand for PCs has become a concern for industry participants. Nevertheless, strong demand for high-end laptops is benefiting Apple and Lenovo Group.
Improving the availability of 5G-enabled smartphones has been a key catalyst for industry participants. The growing adoption of tablets among enterprises bodes well for companies like Apple and Lenovo.
The launch of foldable, and AI and ML-infused smartphones, tablets, wearables and hearables is another major growth driver for the industry participants. Robust demand for production printers, materials and software bodes well for 3-D printing solution providers.
Industry Description
The Zacks Computer – Mini Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based either on iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems.
The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors.
Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.
3 Mini Computer Industry Trends to Watch
Bring Your Own Device (BYOD) Aids Momentum: The industry is benefiting from the rapid adoption of BYOD in workplaces. Enterprises practicing BYOD allow employees to use their personal devices, including mobiles, laptops and tablets, for work purposes. BYOD helps connect remote workers and desk-bound employees, thereby improving process management and workflow. BYOD has proved more productive as it lowers training time. Moreover, the coronavirus-induced remote-working and online-learning models bode well for industry participants as demand is expected to increase for desktops and laptops.
Impressive Formfactor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from the likes of Qualcomm (Snapdragon-branded), NVIDIA (Tegra X1), Apple (A16 Bionic) and Samsung (Exynos 9609). Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers.
Improved graphics quality is making smartphones suitable for playing games like PUBG and Fortnite. This is expected to boost the demand for high-end smartphones and open up significant opportunities for device makers.
PCs Face Extinction Risk: Personal computers (desktops and laptops), be it Windows or Apple’s MacOS-based ones, have been facing the risk of extinction due to the rapid proliferation of smartphones and tablets. Stiff competition from smartphones has compelled global PC makers to not only upgrade hardware frequently but also add apps and cloud-based services to attract consumers. Nevertheless, the emergence of 5G, AI, machine learning and foldable computers is likely to be the key catalyst in expanding the total addressable market of PCs.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Computer – Mini Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #227, which places it in the bottom 9% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Mar 31, 2022, the Zacks Consensus Estimate for this industry’s 2022 earnings has moved down 2.9%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Computer – Mini Computers industry has outperformed the broader Zacks Computer and Technology sector but lagged the S&P 500 index over the past year.
The industry has dropped 27.1% over this period compared with the S&P 500’s decline of 19.8% and the broader sector’s fall of 34%.
Industry's Current Valuation
On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 19.35X compared with the S&P 500’s 16.92X and the sector’s 19.49X.
Over the last five years, the industry has traded as high as 32.32X, as low as 11.49X and at the median of 20.94X.
2 Computer Stocks to Watch Right Now
Apple: This Zacks Rank #3 (Hold) company is benefiting from the continued momentum in the Services segment, driven by App Store, Cloud Services, Music, advertising and AppleCare. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple’s near-term prospects are driven by the launch of the latest iPhone models, with iPhone 14 Pro witnessing strong demand. Apple TV+ is gaining recognition due to award-winning shows. This bodes well for the Services segment.
Apple currently has more than 900 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers worldwide, helping it offer appealing new apps that drive App Store’s traffic. A growing number of AI-infused apps will attract subscribers to the App Store.
The Zacks Consensus Estimate for fiscal 2023 earnings has declined 0.6% to $6.19 per share over the past 30 days. The stock has lost 27.1% in the past year.
Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitization efforts by enterprises worldwide and faster adoption of the hybrid work model.
Lenovo’s healthy cash balance is also helping it increase investments in research & development.
The Zacks Consensus Estimate for fiscal 2023 earnings has been unchanged at $3 per share over the past 30 days. Shares of LNVGY have declined 27.7% in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For Immediate Release Chicago, IL – January 10, 2023 – Today, Zacks Equity Research discusses Apple AAPL and Lenovo Group LNVGY. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. Stiff competition from smartphones has compelled global PC makers to not only upgrade hardware frequently but also add apps and cloud-based services to attract consumers. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. For Immediate Release Chicago, IL – January 10, 2023 – Today, Zacks Equity Research discusses Apple AAPL and Lenovo Group LNVGY. Impressive Formfactor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. | For Immediate Release Chicago, IL – January 10, 2023 – Today, Zacks Equity Research discusses Apple AAPL and Lenovo Group LNVGY. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. Industry Description The Zacks Computer – Mini Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. | For Immediate Release Chicago, IL – January 10, 2023 – Today, Zacks Equity Research discusses Apple AAPL and Lenovo Group LNVGY. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. Industry Outperforms Sector, Lags S&P 500 The Zacks Computer – Mini Computers industry has outperformed the broader Zacks Computer and Technology sector but lagged the S&P 500 index over the past year. | 4 |
341 | 17,678 | 2023-01-09 00:00:00 UTC | 2 Stocks to Watch From the Challenging Computer Industry | AAPL | https://www.nasdaq.com/articles/2-stocks-to-watch-from-the-challenging-computer-industry-1 | null | null | The Zacks Computer – Mini Computers industry is suffering from massive supply-chain and logistical issues, along with several pandemic-related and geopolitical challenges, including the ongoing Russia-Ukraine war. The declining demand for PCs has become a concern for industry participants. Nevertheless, strong demand for high-end laptops is benefiting Apple AAPL and Lenovo Group LNVGY. Improving the availability of 5G-enabled smartphones has been a key catalyst for industry participants. The growing adoption of tablets among enterprises bodes well for companies like Apple and Lenovo. The launch of foldable, and AI and ML-infused smartphones, tablets, wearables and hearables is another major growth driver for the industry participants. Robust demand for production printers, materials and software bodes well for 3-D printing solution providers.
Industry Description
The Zacks Computer – Mini Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based either on iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or Google Chrome and Android operating systems. The companies predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving the demand for wearables.
3 Mini Computer Industry Trends to Watch
Bring Your Own Device (BYOD) Aids Momentum: The industry is benefiting from the rapid adoption of BYOD in workplaces. Enterprises practicing BYOD allow employees to use their personal devices, including mobiles, laptops and tablets, for work purposes. BYOD helps connect remote workers and desk-bound employees, thereby improving process management and workflow. BYOD has proved more productive as it lowers training time. Moreover, the coronavirus-induced remote-working and online-learning models bode well for industry participants as demand is expected to increase for desktops and laptops.
Impressive Formfactor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been the key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from the likes of Qualcomm (Snapdragon-branded), NVIDIA (Tegra X1), Apple (A16 Bionic) and Samsung (Exynos 9609). Improved Internet penetration and speed, along with the evolution of mobile apps, have made smartphones indispensable for consumers. Improved graphics quality is making smartphones suitable for playing games like PUBG and Fortnite. This is expected to boost the demand for high-end smartphones and open up significant opportunities for device makers.
PCs Face Extinction Risk: Personal computers (desktops and laptops), be it Windows or Apple’s MacOS-based ones, have been facing the risk of extinction due to the rapid proliferation of smartphones and tablets. Stiff competition from smartphones has compelled global PC makers to not only upgrade hardware frequently but also add apps and cloud-based services to attract consumers. Nevertheless, the emergence of 5G, AI, machine learning and foldable computers is likely to be the key catalyst in expanding the total addressable market of PCs.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Computer – Mini Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #227, which places it in the bottom 9% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Mar 31, 2022, the Zacks Consensus Estimate for this industry’s 2022 earnings has moved down 2.9%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Computer – Mini Computers industry has outperformed the broader Zacks Computer and Technology sector but lagged the S&P 500 index over the past year.
The industry has dropped 27.1% over this period compared with the S&P 500’s decline of 19.8% and the broader sector’s fall of 34%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 19.35X compared with the S&P 500’s 16.92X and the sector’s 19.49X.
Over the last five years, the industry has traded as high as 32.32X, as low as 11.49X and at the median of 20.94X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Watch Right Now
Apple: This Zacks Rank #3 (Hold) company is benefiting from the continued momentum in the Services segment, driven by App Store, Cloud Services, Music, advertising and AppleCare. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple’s near-term prospects are driven by the launch of the latest iPhone models, with iPhone 14 Pro witnessing strong demand. Apple TV+ is gaining recognition due to award-winning shows. This bodes well for the Services segment.
Apple currently has more than 900 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers worldwide, helping it offer appealing new apps that drive App Store’s traffic. A growing number of AI-infused apps will attract subscribers to the App Store.
The Zacks Consensus Estimate for fiscal 2023 earnings has declined 0.6% to $6.19 per share over the past 30 days. The stock has lost 27.1% in the past year.
Price and Consensus: AAPL
Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitalization efforts by enterprises worldwide and faster adoption of the hybrid work model.
Lenovo’s healthy cash balance is also helping it increase investments in research & development.
The Zacks Consensus Estimate for fiscal 2023 earnings has been unchanged at $3 per share over the past 30 days. Shares of LNVGY have declined 27.7% in the past year.
Price and Consensus: LNVGY
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Apple Inc. (AAPL) : Free Stock Analysis Report
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To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Price and Consensus: AAPL Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitalization efforts by enterprises worldwide and faster adoption of the hybrid work model. Nevertheless, strong demand for high-end laptops is benefiting Apple AAPL and Lenovo Group LNVGY. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. Nevertheless, strong demand for high-end laptops is benefiting Apple AAPL and Lenovo Group LNVGY. Price and Consensus: AAPL Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitalization efforts by enterprises worldwide and faster adoption of the hybrid work model. | Nevertheless, strong demand for high-end laptops is benefiting Apple AAPL and Lenovo Group LNVGY. Price and Consensus: AAPL Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitalization efforts by enterprises worldwide and faster adoption of the hybrid work model. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. | Nevertheless, strong demand for high-end laptops is benefiting Apple AAPL and Lenovo Group LNVGY. Price and Consensus: AAPL Lenovo: This Zacks Rank #3 company is benefiting from the ongoing digitalization efforts by enterprises worldwide and faster adoption of the hybrid work model. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. | null |
342 | 17,689 | 2023-01-08 00:00:00 UTC | 2 Top Stocks in Warren Buffett's Secret Portfolio to Buy Now and Hold Forever | AAPL | https://www.nasdaq.com/articles/2-top-stocks-in-warren-buffetts-secret-portfolio-to-buy-now-and-hold-forever | null | null | Many investors keep apprised of Warren Buffett's investing decisions by monitoring the quarterly Form 13Fs filed by Berkshire Hathaway. But those disclosures only tell part of the story. Berkshire owns New England Asset Management (NEAM), a financial institution with $5.9 billion in invested assets, but none of those securities will appear in Berkshire's 13F filings. Instead, NEAM files its own Form 13Fs with the Securities and Exchange Commission.
To be perfectly clear, Buffett does not control NEAM's invested assets, at least not directly, but he does run the company that ultimately owns those assets. Here are two stocks from Buffett's "secret portfolio" to buy now and hold forever.
1. PayPal: A leader in digital payments
PayPal Holdings (NASDAQ: PYPL) is the most accepted digital wallet in North America and Europe, and it ranked as the most downloaded finance app worldwide in the first half of 2022. That success stems in large part from its two-sided network. Whereas most payment providers work solely with merchants, PayPal builds relationships with merchants and consumers, and that gives the company a material advantage.
For instance, PayPal has a deeper understanding of consumer spending habits, which enhances its ability to drive sales and combat fraud for merchants. In fact, PayPal pairs the lowest loss rates with the highest authorization rate in the industry, meaning it can identify fraudulent transactions more effectively than any rival.
Additionally, PayPal derives another important benefit from its two-sided network. The company has built trust with merchants and consumers, which drives higher conversion rates, more frequent purchases, and larger average order values. In fact, according to CEO Dan Schulman, PayPal checkout conversion is 34% higher than other checkout options.
Those competitive advantages fueled solid financial results on a relatively consistent basis. Despite the challenging economic environment, PayPal's revenue climbed 10% to $27 billion over the past year, and its free cash rose 13% to $5.7 billion. More importantly, investors have good reason to believe the company can maintain (or accelerate) that momentum.
PayPal values its addressable market at $110 trillion, meaning it has hardly scratched the surface of its potential, and it recently forged new partnerships with Amazon and Apple. U.S. consumers can now check out with Venmo on Amazon, and they will soon be able to use PayPal and Venmo branded cards through Apple Pay. Those partnerships could help PayPal take market share in physical and digital commerce.
Currently, shares trade at 3.3 times sales, a bargain compared to the three-year average of 9.1 times sales. That's why this growth stock is worth buying.
2. Nvidia: A leader in graphics and accelerated computing
Nvidia (NASDAQ: NVDA) has come a long way since inventing the graphics processing unit (GPU) in 1999, a chip that brought revolutionary visual effects to video games. GPUs were built to perform billions or even trillions of calculations simultaneously, meaning they can process a lot of data very quickly. That quality makes them very good at rendering ultra-realistic graphics -- in fact, Nvidia holds more than 90% market share in workstation graphics -- but GPUs have also seen widespread adoption in data centers, where they accelerate complex workloads such as artificial intelligence (AI) and scientific computing.
Today, Nvidia holds more than 90% market share in supercomputer accelerators, and its GPUs have become synonymous with AI infrastructure, according to Forrester Research. Additionally, Nvidia doubled down on its data center business by diversifying its portfolio with high-speed networking solutions and subscription software. For instance, AI Enterprise is a suite of software that streamlines the development of AI applications. Nvidia AI addresses use cases across virtually every industry, including autonomous robots in logistics, intelligent avatars in customer service, and loss prevention in retail.
Unfortunately, the semiconductor industry is cyclical, and economic headwinds have exacerbated that cyclicality. High inflation decreased demand for graphics and data center chips while simultaneously putting upward pressure on operating expenses. That one-two punch led to disappointing financial results for Nvidia over the past year. Revenue rose just 18% to $28.6 billion, and free cash flow dropped 33% to $4.8 billion.
Fortunately, Nvidia is poised to reaccelerate growth when the economic headwinds fade. The company puts its addressable market at $1 trillion, and it should benefit from the continued evolution of technologies like autonomous vehicles, intelligent robots, and the metaverse.
The company also plans to debut its first central processing unit (CPU) this year. Code-named Grace, the CPU is a server chip designed to accelerate tasks like machine learning, and it should reinforce Nvidia's importance in the data center.
Currently, shares trade at about 13 times sales, a meaningful discount compared to the three-year average of 20.3 times sales. At that price, investors should buy a small position in this stock.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon.com, Nvidia, and PayPal. The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Nvidia, and PayPal. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The company has built trust with merchants and consumers, which drives higher conversion rates, more frequent purchases, and larger average order values. Nvidia AI addresses use cases across virtually every industry, including autonomous robots in logistics, intelligent avatars in customer service, and loss prevention in retail. Code-named Grace, the CPU is a server chip designed to accelerate tasks like machine learning, and it should reinforce Nvidia's importance in the data center. | Despite the challenging economic environment, PayPal's revenue climbed 10% to $27 billion over the past year, and its free cash rose 13% to $5.7 billion. The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Nvidia, and PayPal. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | That quality makes them very good at rendering ultra-realistic graphics -- in fact, Nvidia holds more than 90% market share in workstation graphics -- but GPUs have also seen widespread adoption in data centers, where they accelerate complex workloads such as artificial intelligence (AI) and scientific computing. The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Nvidia, and PayPal. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | Berkshire owns New England Asset Management (NEAM), a financial institution with $5.9 billion in invested assets, but none of those securities will appear in Berkshire's 13F filings. The company has built trust with merchants and consumers, which drives higher conversion rates, more frequent purchases, and larger average order values. The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Nvidia, and PayPal. | null |
343 | 17,695 | 2023-01-07 00:00:00 UTC | Everyone Is Talking About This Stock. Is It a Good Long-Term Option? | AAPL | https://www.nasdaq.com/articles/everyone-is-talking-about-this-stock.-is-it-a-good-long-term-option-6 | null | null | The streaming wars have never been more intense, characterized by endless viewing options on the market, all vying for consumer attention. One company in particular, Roku (NASDAQ: ROKU), might be an attractive investment because of its agnostic stance on its platform's content services. In other words, the thinking is that as more people cut the cable cord and move to streaming, Roku should benefit.
The business has been in the news lately, prompting investors to reassess whether this streaming stock makes for a good long-term option. Let's take a closer look at what's going on with Roku.
Recent developments
At the Consumer Electronics Show in Las Vegas this past week, Roku CEO Anthony Wood mentioned that the company ended 2022 with 70 million active accounts, up 16% from 60 million at the end of 2021. What's more, he pointed out that the total number of hours streamed on Roku's platform was a whopping 23.9 billion in the fourth quarter, compared to 19.5 billion hours in Q4 2021. These growth trends are a breath of fresh air in what is becoming a difficult macroeconomic environment.
In addition to these positive data points, perhaps the most shocking bit of news was Roku announcing it will launch its own set of branded TVs starting this spring. This follows news in late 2021 from e-commerce juggernaut Amazon that it would be doing the same, introducing its own smart TVs.
I'm surprised by this move from Roku. Selling televisions is a notoriously low-margin business. Prices tend to go down over time, and customers don't have much loyalty when it comes to specific brands. Additionally, Roku will now be competing directly with the third-party TV manufacturers that carry its pre-installed operating system.
However, I can understand what Wood and his team might have been thinking with this strategy. The goal is to raise the number of households Roku is in and continue growing active accounts and hours streamed to increase monetization. Time will tell what will happen.
What should investors do?
Roku operates a three-sided ecosystem that connects viewers, content companies like Netflix and Walt Disney, and advertisers. It sells hardware devices, like its well-known media sticks and upcoming TVs, while also entering into agreements to share advertising and subscription revenue. The business has posted stellar historical top-line gains.
However, profits have been elusive thus far as Roku has focused entirely on growth at the expense of the bottom line. This strategy was generously rewarded in a low-interest-rate environment before 2022, but the tides have shifted. Investors now crave net income and free cash flow, especially in a monetary-tightening environment like the one we're in currently.
Another factor negatively impacting the business is a softer ad market. Behemoths in the digital ad industry, Alphabet and Meta Platforms have both reported a slowdown in their businesses as companies look to significantly cut spending on marketing efforts. And because this is Roku's bread and butter, albeit on a TV, it's also feeling the pain.
Furthermore, Roku has some stiff competition. While it does brag about having the top market share in the U.S. when it comes to TV operating systems, Alphabet, Amazon, and Apple are all battling it out to control the living room. These tech giants have much deeper pockets and can survive for longer when compared to Roku and its quest for profitability.
Therefore, if you're a shareholder who believes that Roku will maintain its lead in the market, benefit from more consumers and viewing hours moving to streaming over time, and ultimately stop bleeding cash, then it makes sense to remain an owner of the stock. A compelling valuation at a price-to-sales ratio of 1.9, it's nearly the cheapest in its history. This also might be an important factor for you.
On the other hand, if you think 2022 is a clear sign of the beginning of the end for Roku -- a new reality where account growth will slow, net income will remain a pipe dream, and competition intensifies -- then this is a stock you should stay away from without any hesitation.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Patel has positions in Alphabet and Amazon.com. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, Roku, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Behemoths in the digital ad industry, Alphabet and Meta Platforms have both reported a slowdown in their businesses as companies look to significantly cut spending on marketing efforts. Therefore, if you're a shareholder who believes that Roku will maintain its lead in the market, benefit from more consumers and viewing hours moving to streaming over time, and ultimately stop bleeding cash, then it makes sense to remain an owner of the stock. On the other hand, if you think 2022 is a clear sign of the beginning of the end for Roku -- a new reality where account growth will slow, net income will remain a pipe dream, and competition intensifies -- then this is a stock you should stay away from without any hesitation. | Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, Roku, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | One company in particular, Roku (NASDAQ: ROKU), might be an attractive investment because of its agnostic stance on its platform's content services. Therefore, if you're a shareholder who believes that Roku will maintain its lead in the market, benefit from more consumers and viewing hours moving to streaming over time, and ultimately stop bleeding cash, then it makes sense to remain an owner of the stock. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, Roku, and Walt Disney. | Therefore, if you're a shareholder who believes that Roku will maintain its lead in the market, benefit from more consumers and viewing hours moving to streaming over time, and ultimately stop bleeding cash, then it makes sense to remain an owner of the stock. On the other hand, if you think 2022 is a clear sign of the beginning of the end for Roku -- a new reality where account growth will slow, net income will remain a pipe dream, and competition intensifies -- then this is a stock you should stay away from without any hesitation. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, Roku, and Walt Disney. | null |
344 | 17,710 | 2023-01-06 00:00:00 UTC | Should BNY Mellon US Large Cap Core Equity ETF (BKLC) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-bny-mellon-us-large-cap-core-equity-etf-bklc-be-on-your-investing-radar-4 | null | null | The BNY Mellon US Large Cap Core Equity ETF (BKLC) was launched on 04/09/2020, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Bny Mellon. It has amassed assets over $423.85 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.65%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 29.10% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 33.35% of total assets under management.
Performance and Risk
BKLC seeks to match the performance of the MORNINGSTAR U.S. LARGE CAP INDEX before fees and expenses. The Morningstar US Large Cap Index is a float-adjusted market capitalization weighted index designed to measure the performance of U.S. large-capitalization stocks.
The ETF has lost about -0.98% so far this year and is down about -20.03% in the last one year (as of 01/06/2023). In the past 52-week period, it has traded between $65.88 and $88.66.
The ETF has a beta of 1.03 and standard deviation of 20.15% for the trailing three-year period. With about 218 holdings, it effectively diversifies company-specific risk.
Alternatives
BNY Mellon US Large Cap Core Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, BKLC is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $287.11 billion in assets, SPDR S&P 500 ETF has $351.90 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Click to get this free report BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. It has amassed assets over $423.85 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market. | Click to get this free report BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). The BNY Mellon US Large Cap Core Equity ETF (BKLC) was launched on 04/09/2020, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market. | Click to get this free report BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). The BNY Mellon US Large Cap Core Equity ETF (BKLC) was launched on 04/09/2020, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Click to get this free report BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. The BNY Mellon US Large Cap Core Equity ETF (BKLC) was launched on 04/09/2020, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market. | null |
345 | 17,717 | 2023-01-05 00:00:00 UTC | The Time Has Come to Bet Big on the Automation Economy | AAPL | https://www.nasdaq.com/articles/the-time-has-come-to-bet-big-on-the-automation-economy | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Editor’s note: “The Time Has Come to Bet Big on the Automation Economy” was previously published in September 2022. It has since been revised and republished.
In the midst of 2022’s stock market chaos, I focused on one thing: finding generational investment opportunities. Why? Because history shows that the best time to invest in emerging technological megatrends is during a market crash, such as the one that’s been occurring over the past year.
For example, the best time to invest in computer stocks was after the 1987 Flash Crash. That left promising computer stocks like Microsoft (MSFT) trading for less than 20 cents per share (split adjusted).
The best time to invest in internet stocks was after the 2000 dot-com bubble burst. That left promising internet stocks like Amazon (AMZN) trading for about 30 cents per share (split adjusted).
The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks like Apple (AAPL) trading for less than $3 per share (split adjusted).
And the best time to invest in electric vehicle stocks was after the 2020 COVID crash. That left EV stocks like Tesla (TSLA) trading for about $25 per share (split adjusted).
This pattern is clear. Every time the stock market crashes, a group of emerging technology stocks is left trading at massive discounts. Investors who buy at those prices end up making fortunes over the next several years.
So, what group of emerging technology stocks are the best buys during the 2022 stock market rout? I’d like to make the case for AI stocks.
Here’s why.
The Need Is Urgent
I truly believe AI and automation technologies will represent one of the greatest technological paradigm shifts of our lifetimes. And according to my research, that shift will mostly occur in the 2020s.
That is, over the next decade, we will go from a human-driven world to a robot-driven one. All the while, our society and global economy will be forever transformed.
Like many before it, this technological megatrend will be driven by a convergence of the world’s need for automation technologies and the swell of engineers capable of building them.
Let’s talk about the “need” part first.
In short, the world needs to fix inflation. And ubiquitous adoption of automation technologies is the only way we permanently suppress inflation.
There are two parts to the inflation problem. The demand for goods and services is too high, and the supply for those goods and services is too low.
The Fed can solve the first part by hiking interest rates, choking off consumer spending, and suppressing economic demand.
But rate hikes don’t address the supply side of the inflation problem. The only way you fix that is if companies figure out how to make more products and services. But to do that in a human-driven world, you need more labor. That requires companies to hire more workers, which means more wages, more consumer income, more spending, and more economic demand.
In other words, the present “solution” to fixing the supply side of the inflation equation will actually exacerbate the demand side of the problem. And therefore, it won’t permanently resolve the inflation situation.
We need a different solution. We don’t need an inflationary human-driven solution – we need a disinflationary automation-driven solution.
The Disinflationary Solution
Let’s play out the same scenario as above but in an automation-driven world.
A company needs to make more product. It deploys a series of automation technologies – both software and hardware – to make it.
Those technologies have a big upfront installation fee but very low recurring costs after that. Net impact to annual operating expenses? Tiny.
Yet, those technologies don’t sleep, clock out, or take vacations. They’re always working to make more product. Net impact to output? Huge boost.
The overall result – the company can make a lot more product at a fractionally higher marginal cost. Supply goes up without producing more economic demand.
Automation is the panacea to our current inflation problem.
Companies are starting to realize this. That’s why they are starting to turn toward automation technologies in 2022. And so emerges the multi-trillion-dollar Automation Economy.
Automation Technologies Have Arrived
As far as capability goes, automation technologies have progressed rapidly over the past few years. They are now able to create meaningful real-world value – and at the perfect time, too!
For example, Walmart (WMT) is in the process of automating all its warehouses with an end-to-end robotics system. It unpacks, sorts, stores, and repacks inbound and outbound parcels with a combination of robot arms and mini autonomous vehicles.
That’s after Amazon has already automated all its warehouses with its own robotic system. And in fact, it recently acquired both iRobot (robotic vacuum maker) and Cloostermans (warehouse robotics firm), just months after unveiling its first-ever home robot.
Clearly, Amazon is making a big push for household robotics. Soon, we’ll see the deployment of robots to automate household chores like lawn mowing, pool cleaning, and more.
In the restaurant world, fast-casual chains like Chipotle (CMG), Wing Zone, and White Castle are using robots to make food. Other chains like Chili’s are using them to wait tables. The robot takeover in the restaurant world has arrived!
It’s arrived in retail, too. Robots and autonomous vehicles are being used to stock shelves at grocery stores, clean shopping aisles, and deliver orders.
And the Automation Revolution has also touched down in the media and entertainment world. Have you seen those ads that say “this ad was probably written by a robot”? Or those drawings that were created by DALL-E, the AI that generates pictures from queries? Have you heard of Jasper, the AI writing machine?
Most recently, a new AI chatbot – ChatGPT – has taken the world by storm. It’s a super version of Siri that can write full research papers, articles, essays, and more in just minutes.
The automation being deployed in the world today is incredibly impressive.
But it is just the tip of the iceberg. Experts predict that by 2026, 90% of all online content will be produced by AI.
Alas, I rest my case. The world just doesn’t need automation technologies today – it has tech it can readily deploy today, too. That’s a potent combination.
The Final Word on the Automation Boom
Despite the challenges facing the market in 2023, including the potential for a recession, I see exciting opportunities on the horizon. Every stock market crash is an opportunity – an opportunity to buy the “next big thing” in the stock market for dirt-cheap, while everyone else is worrying about short-term problems that will pass (they always do).
In the 1980s, that “next big thing” was the computer. In the 1990s, it was the internet. It was the smartphone in the 2000s and electric vehicles in the 2010s.
And now, in the 2020s, it’s automation.
The time to bet big on automation stocks is today. They’re dirt-cheap, trading for just a few bucks… But they’ll absolutely soar over the next decade as robots and software eat the world.
Though automation isn’t the only megatrend I see great promise in…
Find out how to be successful no matter which way the market turns.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The post The Time Has Come to Bet Big on the Automation Economy appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks like Apple (AAPL) trading for less than $3 per share (split adjusted). It unpacks, sorts, stores, and repacks inbound and outbound parcels with a combination of robot arms and mini autonomous vehicles. In the restaurant world, fast-casual chains like Chipotle (CMG), Wing Zone, and White Castle are using robots to make food. | The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks like Apple (AAPL) trading for less than $3 per share (split adjusted). That left promising internet stocks like Amazon (AMZN) trading for about 30 cents per share (split adjusted). Every time the stock market crashes, a group of emerging technology stocks is left trading at massive discounts. | The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks like Apple (AAPL) trading for less than $3 per share (split adjusted). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Editor’s note: “The Time Has Come to Bet Big on the Automation Economy” was previously published in September 2022. Every time the stock market crashes, a group of emerging technology stocks is left trading at massive discounts. | The best time to invest in smartphone stocks was after the 2008 financial crisis, which left smartphone stocks like Apple (AAPL) trading for less than $3 per share (split adjusted). I’d like to make the case for AI stocks. Automation Technologies Have Arrived As far as capability goes, automation technologies have progressed rapidly over the past few years. | 4 |
346 | 17,741 | 2023-01-04 00:00:00 UTC | Apple to sign Luxshare for iPhone production in China - FT | AAPL | https://www.nasdaq.com/articles/apple-to-sign-luxshare-for-iphone-production-in-china-ft | null | null | Jan 4 (Reuters) - Apple Inc AAPL.O is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter.
The iPhone maker and Luxshare did not immediately respond to Reuters requests for comment.
(Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber)
((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Jan 4 (Reuters) - Apple Inc AAPL.O is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter. The iPhone maker and Luxshare did not immediately respond to Reuters requests for comment. (Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber) ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Jan 4 (Reuters) - Apple Inc AAPL.O is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter. The iPhone maker and Luxshare did not immediately respond to Reuters requests for comment. (Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber) ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Jan 4 (Reuters) - Apple Inc AAPL.O is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter. The iPhone maker and Luxshare did not immediately respond to Reuters requests for comment. (Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber) ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Jan 4 (Reuters) - Apple Inc AAPL.O is set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, the Financial Times reported on Wednesday, citing sources familiar with the matter. The iPhone maker and Luxshare did not immediately respond to Reuters requests for comment. (Reporting by Akash Sriram in Bengaluru; Editing by Shailesh Kuber) ((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 4 |
347 | 17,773 | 2023-01-03 00:00:00 UTC | Dow Movers: UNH, DIS | AAPL | https://www.nasdaq.com/articles/dow-movers%3A-unh-dis | null | null | In early trading on Tuesday, shares of Walt Disney topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.4%. Year to date, Walt Disney registers a 2.4% gain.
And the worst performing Dow component thus far on the day is UnitedHealth Group, trading down 1.8%. UnitedHealth Group Inc is lower by about 1.8% looking at the year to date performance.
Two other components making moves today are Apple, trading down 1.7%, and Boeing, trading up 2.4% on the day.
VIDEO: Dow Movers: UNH, DIS
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In early trading on Tuesday, shares of Walt Disney topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.4%. And the worst performing Dow component thus far on the day is UnitedHealth Group, trading down 1.8%. UnitedHealth Group Inc is lower by about 1.8% looking at the year to date performance. | In early trading on Tuesday, shares of Walt Disney topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.4%. Year to date, Walt Disney registers a 2.4% gain. And the worst performing Dow component thus far on the day is UnitedHealth Group, trading down 1.8%. | In early trading on Tuesday, shares of Walt Disney topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.4%. And the worst performing Dow component thus far on the day is UnitedHealth Group, trading down 1.8%. Two other components making moves today are Apple, trading down 1.7%, and Boeing, trading up 2.4% on the day. | In early trading on Tuesday, shares of Walt Disney topped the list of the day's best performing Dow Jones Industrial Average components, trading up 2.4%. And the worst performing Dow component thus far on the day is UnitedHealth Group, trading down 1.8%. VIDEO: Dow Movers: UNH, DIS The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 3 |
348 | 17,786 | 2023-01-02 00:00:00 UTC | Foxconn reinvents itself, and EV supply chains | AAPL | https://www.nasdaq.com/articles/foxconn-reinvents-itself-and-ev-supply-chains | null | null | Reuters
Reuters
HONG KONG (Reuters Breakingviews) - Foxconn’s most important project in 2023 will be to remake itself. The Taiwanese company is best known for churning out Apple iPhones in China and shipping them around the world, but Chairman Liu Young-way is looking elsewhere for the next phase of growth. It’s a well-timed pivot. Liu is repurposing the top electronics contract manufacturer into an electric vehicle powerhouse. Foxconn, formally known as Hon Hai Precision Industry, is gearing up to supply cars, and the chips and batteries that go into them, to global marques. It sees automakers entrusting the company with production in Indonesia, Thailand, Saudi Arabia, the United States and beyond. By 2025, Liu wants to take 5% of the global electric-vehicle market and generate annual revenue of T$1 trillion ($32.6 billion) – roughly 15% of Foxconn’s forecast 2022 top line, per analyst estimates from Refinitiv. Getting there requires Foxconn ditching a tried and tested business model. To make smartphones, the company relies on a few factories it owns in China and it has little say over the underlying supply chains and which components to use. Cars, on the other hand, are bigger and harder to move, so Foxconn is setting up regional production hubs in partnership with potential customers. Its 40%-owned joint venture with Thailand’s PTT aspires to manufacture for automakers in Southeast Asia. Foxconn has also tied up with Ohio-based Lordstown Motors in the United States; its factory is already making electric pickup trucks and could start supplying to other American brands within a year. The Apple-like prize would be to convince a big established carmaker, like Tesla, to outsource production. Vertical integration is rare in the auto industry for a good reason: despite the allure of greater efficiencies and higher margins, upfront costs are huge, and it requires scale to take on chipmakers and battery giants like NXP Semiconductors and China’s Contemporary Amperex Technology. Recent chaos at Foxconn’s major factory in China, and the Taiwanese company’s falling gross margins, suggest its two-decade-long relationship with Apple is past its prime. That’s a good reason for Foxconn to shift gear in the year ahead.
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(This is a Breakingviews prediction for 2023. To see more of our predictions, click here.)
(Editing by Una Galani and Streisand Neto)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By 2025, Liu wants to take 5% of the global electric-vehicle market and generate annual revenue of T$1 trillion ($32.6 billion) – roughly 15% of Foxconn’s forecast 2022 top line, per analyst estimates from Refinitiv. Foxconn has also tied up with Ohio-based Lordstown Motors in the United States; its factory is already making electric pickup trucks and could start supplying to other American brands within a year. Vertical integration is rare in the auto industry for a good reason: despite the allure of greater efficiencies and higher margins, upfront costs are huge, and it requires scale to take on chipmakers and battery giants like NXP Semiconductors and China’s Contemporary Amperex Technology. | HONG KONG (Reuters Breakingviews) - Foxconn’s most important project in 2023 will be to remake itself. It sees automakers entrusting the company with production in Indonesia, Thailand, Saudi Arabia, the United States and beyond. Foxconn has also tied up with Ohio-based Lordstown Motors in the United States; its factory is already making electric pickup trucks and could start supplying to other American brands within a year. | Foxconn has also tied up with Ohio-based Lordstown Motors in the United States; its factory is already making electric pickup trucks and could start supplying to other American brands within a year. Vertical integration is rare in the auto industry for a good reason: despite the allure of greater efficiencies and higher margins, upfront costs are huge, and it requires scale to take on chipmakers and battery giants like NXP Semiconductors and China’s Contemporary Amperex Technology. Recent chaos at Foxconn’s major factory in China, and the Taiwanese company’s falling gross margins, suggest its two-decade-long relationship with Apple is past its prime. | HONG KONG (Reuters Breakingviews) - Foxconn’s most important project in 2023 will be to remake itself. It sees automakers entrusting the company with production in Indonesia, Thailand, Saudi Arabia, the United States and beyond. That’s a good reason for Foxconn to shift gear in the year ahead. | 4 |
349 | 17,794 | 2023-01-01 00:00:00 UTC | Down 28% in 2022, Is Apple Stock a Buy for 2023? | AAPL | https://www.nasdaq.com/articles/down-28-in-2022-is-apple-stock-a-buy-for-2023 | null | null | Apple (NASDAQ: AAPL) has benefited from robust consumer demand and hopes that easing supply chain constraints will boost the tech giant's prospects.
*Stock prices used were the afternoon prices of Dec. 29, 2022. The video was published on Dec. 31, 2022.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) has benefited from robust consumer demand and hopes that easing supply chain constraints will boost the tech giant's prospects. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. | Apple (NASDAQ: AAPL) has benefited from robust consumer demand and hopes that easing supply chain constraints will boost the tech giant's prospects. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Apple. | Apple (NASDAQ: AAPL) has benefited from robust consumer demand and hopes that easing supply chain constraints will boost the tech giant's prospects. 10 stocks we like better than Apple When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of December 1, 2022 Parkev Tatevosian, CFA has positions in Apple. | Apple (NASDAQ: AAPL) has benefited from robust consumer demand and hopes that easing supply chain constraints will boost the tech giant's prospects. See the 10 stocks *Stock Advisor returns as of December 1, 2022 Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Apple. | 4 |
350 | 17,796 | 2022-12-31 00:00:00 UTC | Where Will Apple Stock Be in 1 Year? | AAPL | https://www.nasdaq.com/articles/where-will-apple-stock-be-in-1-year | null | null | Apple's (NASDAQ: AAPL) stock declined nearly 30% in 2022 as investors fretted over the tech giant's persistent supply chain issues in China. A lack of clarity regarding its roadmap beyond the aging iPhone, which still generated 52% of its revenue in fiscal 2022 (ended in September 2022), and inflationary headwinds exacerbated that uncertainty.
But could Apple's stock bounce back in 2023 as it resolves its supply chain problems and rolls out new products and services? Or will it continue to be held back as investors pivot toward other blue-chip tech stocks?
Image source: Apple.
Why was 2022 so challenging for Apple?
In fiscal 2021, Apple's revenue and earnings per share (EPS) jumped 33% and 71%, respectively, as the company finally entered the 5G race with its iPhone 12 family of smartphones. That long-awaited launch sparked an upgrade cycle throughout 2021 that nearly matched that of the best-selling iPhone 6 and 6 Plus in 2014.
However, that growth also set Apple up for tough year-over-year comparisons in fiscal 2022 as fewer people bought the iPhone 13. At the same time, the global chip shortage and China's "zero-COVID" policies disrupted its supply chain throughout the entire year. As a result, Apple's revenue and EPS only rose 8% and 9%, respectively, in fiscal 2022.
That cyclical slowdown wasn't surprising, but several other events in China rattled investors as fiscal 2023 started. In November 2022, Foxconn (Apple's main contract manufacturer) was disrupted by protests regarding its COVID-19 policies and unpaid bonuses at its largest iPhone plant in Zhengzhou, China. Apple subsequently reduced its annual production target for its iPhone 14 Pro and Pro Max models from 90 million to 87 million units to account for those disruptions.
China's government then loosened its COVID-19 restrictions in response to a wave of anti-lockdown protests across the country. That decision might generate some near-term tailwinds for China's sluggish economy, but it could also generate fierce headwinds if rising infection rates and deaths disrupt the country's supply chain and consumer spending.
Those unpredictable issues make the Greater China region -- which accounted for 19% of Apple's sales in fiscal 2022 -- a soft spot for the company. Inflationary headwinds across the world could also curb the market's appetite for the company's pricier hardware devices and subscription-based services.
Faced with all these challenges, analysts expect Apple's revenue and earnings to only increase 3% and 2%, respectively, in fiscal 2023. Even after its year-long decline, Apple's stock still doesn't look cheap relative to those growth rates at 21 times forward earnings and 5 times this year's sales.
Why 2023 could be a brighter year for Apple
Apple's supply chain problems are daunting, but it's been taking steps to shift some of its production to Vietnam and India instead. It also plans to source its future iPhone and Mac chips from Taiwan Semiconductor Manufacturing's new plant in Arizona instead of the chipmaker's top-tier plants in Taiwan. Those changes won't bear any fruit until 2024 and 2025, but they'll likely reduce Apple's long-term dependence on China.
China also expects its COVID-19 cases to peak in early 2023, which suggests the current supply chain and consumer spending headwinds should wane in the second half of the year.
Meanwhile, analysts' forecasts for fiscal 2023 still don't account for any of Apple's upcoming products and services. Apple is expected to launch a new "mixed reality" headset in the second half of 2023, and that new gadget could generate a fresh stream of hardware revenue while expanding its software and services ecosystem into the VR, AR, and metaverse markets.
Apple's paid subscriber base, which expanded from 745 million in fiscal 2021 to more than 900 million in fiscal 2022, should also continue to grow in fiscal 2023 as Apple Music, Apple TV+, Apple Arcade, Apple Fitness+, and its other digital services gain more momentum. That expansion should lock in its hardware users, enable it to challenge a broader range of companies (including Spotify, Netflix, Amazon, and even Peloton) and squeeze out more revenue per customer to offset its slower hardware sales.
Lastly, Apple still generates plenty of cash. The company ended fiscal 2022 with $169 billion in cash and marketable securities, so it might surprise investors with some big acquisitions over the next 12 months. Buying a media or video game company to expand its services ecosystem makes sense right now, since a lot of those stocks are on sale, and could help it keep pace with Amazon's big moves in both markets. It will also likely continue its streak of $550 billion in buybacks over the past decade.
Where will Apple's stock be in a year?
Next year, Apple probably won't return to its all-time high of $180.73 from January 2022 -- which would require a rally of more than 40% from its recent price.
But the downside potential should also be limited as investors focus on its gradual supply chain improvements, upcoming products, the expansion of its services ecosystem, and its consistent buybacks and dividends. I'm not expecting explosive gains, but I believe Apple's stock will stabilize and gradually rise throughout 2023 as investors again prioritize the company's long-term strengths over its near-term challenges.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple's (NASDAQ: AAPL) stock declined nearly 30% in 2022 as investors fretted over the tech giant's persistent supply chain issues in China. Apple is expected to launch a new "mixed reality" headset in the second half of 2023, and that new gadget could generate a fresh stream of hardware revenue while expanding its software and services ecosystem into the VR, AR, and metaverse markets. Buying a media or video game company to expand its services ecosystem makes sense right now, since a lot of those stocks are on sale, and could help it keep pace with Amazon's big moves in both markets. | Apple's (NASDAQ: AAPL) stock declined nearly 30% in 2022 as investors fretted over the tech giant's persistent supply chain issues in China. That decision might generate some near-term tailwinds for China's sluggish economy, but it could also generate fierce headwinds if rising infection rates and deaths disrupt the country's supply chain and consumer spending. Faced with all these challenges, analysts expect Apple's revenue and earnings to only increase 3% and 2%, respectively, in fiscal 2023. | Apple's (NASDAQ: AAPL) stock declined nearly 30% in 2022 as investors fretted over the tech giant's persistent supply chain issues in China. Why 2023 could be a brighter year for Apple Apple's supply chain problems are daunting, but it's been taking steps to shift some of its production to Vietnam and India instead. Apple's paid subscriber base, which expanded from 745 million in fiscal 2021 to more than 900 million in fiscal 2022, should also continue to grow in fiscal 2023 as Apple Music, Apple TV+, Apple Arcade, Apple Fitness+, and its other digital services gain more momentum. | Apple's (NASDAQ: AAPL) stock declined nearly 30% in 2022 as investors fretted over the tech giant's persistent supply chain issues in China. Meanwhile, analysts' forecasts for fiscal 2023 still don't account for any of Apple's upcoming products and services. Where will Apple's stock be in a year? | null |
351 | 17,807 | 2022-12-30 00:00:00 UTC | US STOCKS-Wall St set to end challenging year with steep drop | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-to-end-challenging-year-with-steep-drop | null | null | By Echo Wang
Dec 30 (Reuters) - U.S. stocks fell on Friday as growth shares dipped in the final trading session of a year marked by aggressive interest rate hikes to curb inflation, recession fears, the Russia-Ukraine war and rising concerns over COVID cases in China.
Wall Street's three main indexes are on track for their first yearly drop since 2018 as an era of loose monetary policy ended with the Federal Reserve's fastest pace of rate hikes since the 1980s.
The indexes are also set to post their biggest yearly declines since the 2008 financial crisis, largely driven by growth shares as the Fed's rate hikes boosted U.S. Treasury yields and made stocks less attractive.
Growth stocks have been under pressure from rising yields for much of 2022 and have underperformed their economically linked value peers, reversing a trend that had lasted for much of the past decade.
Apple Inc AAPL.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Nvidia Corp NVDA.O, Amazon.com Inc AMZN.O, Tesla Inc TSLA.O are among the worst drags on the S&P 500 growth index .IGX, down between 28% and 66% in 2022.
Energy .SPNY has recorded stellar annual gains of 58% due to a surge in oil prices.
Ten of the 11 S&P .SPX sector indexes dropped on Friday, led by real estate and utilities.
"The housing market has really slowed down and the values of people's homes have declined off of the highs earlier this year," said J. Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management in Champaign, Illinois.
"That, along with a slightly weakening job picture, is probably affecting ... the market right now economically. And then on the back of everyone's mind is China as they loosen up their policies toward COVID restrictions and as they open up their economy."
The focus has turned to the 2023 corporate earnings outlook, with growing concern about the likelihood of a recession.
Still, signs of U.S. economic resilience have fueled worries that rates could stay higher for longer, though easing inflationary pressures have raised hopes of dialed-down rate hikes.
Money market participants see 65% odds of a 25-basis-point hike in the Fed's February meeting, with rates expected to peak at 4.97% by mid-2023. FEDWATCH
At 3:00 p.m. ET, the Dow Jones Industrial Average .DJI fell 321.86 points, or 0.97%, to 32,898.94; the S&P 500 .SPX lost 42.36 points, or 1.10%, at 3,806.92; and the Nasdaq Composite .IXIC dropped 117.38 points, or 1.12%, to 10,360.70.
U.S.-listed shares of Shaw Communications Inc SJR.N jumped 9.6% after Canada's antitrust tribunal approved rival Rogers Communications Inc's RCIb.TO C$20 billion ($14.77 billion) bid for the telecom company.
Declining issues outnumbered advancers on the NYSE by a 2.42-to-1 ratio; on Nasdaq, a 1.77-to-1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and 116 new lows.
Most major S&P sectors fall in 2022, energy outperformshttps://tmsnrt.rs/3WSRYtB
(Reporting by Echo Wang in New York; Additionaly reporting by Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi, Arun Koyyur, Sriraj Kalluvila and Richard Chang)
((E.Wang@thomsonreuters.com; +1 9172873971; Reuters Messaging: E.Wang@thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc AAPL.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Nvidia Corp NVDA.O, Amazon.com Inc AMZN.O, Tesla Inc TSLA.O are among the worst drags on the S&P 500 growth index .IGX, down between 28% and 66% in 2022. By Echo Wang Dec 30 (Reuters) - U.S. stocks fell on Friday as growth shares dipped in the final trading session of a year marked by aggressive interest rate hikes to curb inflation, recession fears, the Russia-Ukraine war and rising concerns over COVID cases in China. Wall Street's three main indexes are on track for their first yearly drop since 2018 as an era of loose monetary policy ended with the Federal Reserve's fastest pace of rate hikes since the 1980s. | Apple Inc AAPL.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Nvidia Corp NVDA.O, Amazon.com Inc AMZN.O, Tesla Inc TSLA.O are among the worst drags on the S&P 500 growth index .IGX, down between 28% and 66% in 2022. By Echo Wang Dec 30 (Reuters) - U.S. stocks fell on Friday as growth shares dipped in the final trading session of a year marked by aggressive interest rate hikes to curb inflation, recession fears, the Russia-Ukraine war and rising concerns over COVID cases in China. The indexes are also set to post their biggest yearly declines since the 2008 financial crisis, largely driven by growth shares as the Fed's rate hikes boosted U.S. Treasury yields and made stocks less attractive. | Apple Inc AAPL.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Nvidia Corp NVDA.O, Amazon.com Inc AMZN.O, Tesla Inc TSLA.O are among the worst drags on the S&P 500 growth index .IGX, down between 28% and 66% in 2022. By Echo Wang Dec 30 (Reuters) - U.S. stocks fell on Friday as growth shares dipped in the final trading session of a year marked by aggressive interest rate hikes to curb inflation, recession fears, the Russia-Ukraine war and rising concerns over COVID cases in China. The indexes are also set to post their biggest yearly declines since the 2008 financial crisis, largely driven by growth shares as the Fed's rate hikes boosted U.S. Treasury yields and made stocks less attractive. | Apple Inc AAPL.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O, Nvidia Corp NVDA.O, Amazon.com Inc AMZN.O, Tesla Inc TSLA.O are among the worst drags on the S&P 500 growth index .IGX, down between 28% and 66% in 2022. Wall Street's three main indexes are on track for their first yearly drop since 2018 as an era of loose monetary policy ended with the Federal Reserve's fastest pace of rate hikes since the 1980s. The indexes are also set to post their biggest yearly declines since the 2008 financial crisis, largely driven by growth shares as the Fed's rate hikes boosted U.S. Treasury yields and made stocks less attractive. | null |
352 | 17,841 | 2022-12-29 00:00:00 UTC | TSMC starts volume production of most advanced chips in Taiwan | AAPL | https://www.nasdaq.com/articles/tsmc-starts-volume-production-of-most-advanced-chips-in-taiwan-0 | null | null | Adds chairman comment; paragraph 4
TAINAN, Taiwan, Dec 29 (Reuters) - Chipmaker Taiwan Semiconductor Manufacturing Company Ltd (TSMC)2330.TW, TSM.N began mass production of its most advanced chips in southern Taiwan on Thursday and the company's chairman said it would continue to expand capacity on the island.
The long-awaited mass production of chips with 3-nanometre technology comes as attention focuses on the world's largest contract chipmaker's investment plans at home and abroad. TSMC has a dominant position as a maker of advanced chips used in technology from cellphones to fighter jets.
"TSMC is maintaining its technology leadership while investing significantly in Taiwan, continuing to invest and prosper with the environment," TSMC Chairman Mark Liu told a ceremony marking the production and capacity expansion in the southern city of Tainan.
Liu said demand for the firm's 3-nanometre chip was "very strong", driven by new technologies including 5G and high-performance computing products. He did not elaborate.
Earlier this month, TSMC said it would more than triple its planned investment at its to $40 billion, among the largest foreign investments in U.S. history.
The Taiwanese company, which counts Apple Inc AAPL.O and Nvidia Corp NVDA.O among its major clients, is also building a chip plant in Japan and has said it was in the early stages of reviewing a potential expansion into Germany.
In an apparent response to the concerns that TSMC's foreign investment would undermine Taiwan's key position in semiconductors, Liu said the production was a demonstration that TSMC was "taking concrete action to develop advanced technology and expand capacity in Taiwan."
Taiwan's government has dismissed concerns about a "goodbye to Taiwan" trend for the chip industry, saying the island's position as a major semiconductor producer and maker of the most advanced chips is secure.
Liu said the mass production was successful and with good yields, adding that the new 3-nanometre technology would create end products with a market value of $1.5 trillion within five years.
TSMC said it was working to build factories for the next generation 2-nanometre chips, which were planned to be manufactured in northern and central Taiwan.
TSMC has repeatedly said that the bulk of its manufacturing will remain in Taiwan.
(Reporting by Yimou Lee and Ann Wang; Editing by Stephen Coates)
((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Taiwanese company, which counts Apple Inc AAPL.O and Nvidia Corp NVDA.O among its major clients, is also building a chip plant in Japan and has said it was in the early stages of reviewing a potential expansion into Germany. The long-awaited mass production of chips with 3-nanometre technology comes as attention focuses on the world's largest contract chipmaker's investment plans at home and abroad. TSMC said it was working to build factories for the next generation 2-nanometre chips, which were planned to be manufactured in northern and central Taiwan. | The Taiwanese company, which counts Apple Inc AAPL.O and Nvidia Corp NVDA.O among its major clients, is also building a chip plant in Japan and has said it was in the early stages of reviewing a potential expansion into Germany. Adds chairman comment; paragraph 4 TAINAN, Taiwan, Dec 29 (Reuters) - Chipmaker Taiwan Semiconductor Manufacturing Company Ltd (TSMC)2330.TW, TSM.N began mass production of its most advanced chips in southern Taiwan on Thursday and the company's chairman said it would continue to expand capacity on the island. "TSMC is maintaining its technology leadership while investing significantly in Taiwan, continuing to invest and prosper with the environment," TSMC Chairman Mark Liu told a ceremony marking the production and capacity expansion in the southern city of Tainan. | The Taiwanese company, which counts Apple Inc AAPL.O and Nvidia Corp NVDA.O among its major clients, is also building a chip plant in Japan and has said it was in the early stages of reviewing a potential expansion into Germany. Adds chairman comment; paragraph 4 TAINAN, Taiwan, Dec 29 (Reuters) - Chipmaker Taiwan Semiconductor Manufacturing Company Ltd (TSMC)2330.TW, TSM.N began mass production of its most advanced chips in southern Taiwan on Thursday and the company's chairman said it would continue to expand capacity on the island. "TSMC is maintaining its technology leadership while investing significantly in Taiwan, continuing to invest and prosper with the environment," TSMC Chairman Mark Liu told a ceremony marking the production and capacity expansion in the southern city of Tainan. | The Taiwanese company, which counts Apple Inc AAPL.O and Nvidia Corp NVDA.O among its major clients, is also building a chip plant in Japan and has said it was in the early stages of reviewing a potential expansion into Germany. Adds chairman comment; paragraph 4 TAINAN, Taiwan, Dec 29 (Reuters) - Chipmaker Taiwan Semiconductor Manufacturing Company Ltd (TSMC)2330.TW, TSM.N began mass production of its most advanced chips in southern Taiwan on Thursday and the company's chairman said it would continue to expand capacity on the island. Earlier this month, TSMC said it would more than triple its planned investment at its to $40 billion, among the largest foreign investments in U.S. history. | null |
353 | 17,848 | 2022-12-28 00:00:00 UTC | US STOCKS-Wall St reverses gains as energy, growth shares drag | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-reverses-gains-as-energy-growth-shares-drag | null | null | By Amruta Khandekar and Ankika Biswas
Dec 28 (Reuters) - Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices.
All the major S&P 500 .SPX sector indexes were lower. Energy stocks .SPNY were the biggest losers with a 2% drop as worries over demand in China weighed on oil prices. O/R
Investors have been carefully assessing China's move to reopen its COVID-battered economy against the backdrop of a surge in infections.
Tesla Inc TSLA.Owas last up 1.2% in choppy trade, after hitting its lowest level in more than two years in the previous session. The stock is down nearly 69% for the year.
"What you're hearing from investors is that recession is going to be a hard landing and there are other people who say we've already been in a recession," said Nancy Tengler, chief executive officer at Laffer Tengler Investments in Scottsdale, Arizona.
Traders and analysts have also pointed to year-end tax-loss selling as one of the key headwinds for equities.
While recent data pointing to an easing in inflationary pressures has bolstered hopes of smaller rate hikes, a tight labor market and a resilient American economy have spurred worries that rates could stay higher for longer.
Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank's February meeting and see rates peaking at 4.94% in the first half of next year. FEDWATCH.
At 11:33 a.m. ET, the Dow Jones Industrial Average .DJI was down 167.87 points, or 0.51%, at 33,073.69, the S&P 500 .SPX was down 24.08 points, or 0.63%, at 3,805.17, and the Nasdaq Composite .IXIC was down 90.78 points, or 0.88%, at 10,262.45.
Southwest Airlines Co LUV.N slipped 2.2% as the carrier came under fire from the U.S. government on Tuesday after it canceled thousands of flights.
Declining issues outnumbered advancers for a 2.63-to-1 ratio on the NYSE and 1.69-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and four new lows, while the Nasdaq recorded 42 new highs and 289 new lows.
(Reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva)
((Amruta.Khandekar@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Amruta Khandekar and Ankika Biswas Dec 28 (Reuters) - Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices. Energy stocks .SPNY were the biggest losers with a 2% drop as worries over demand in China weighed on oil prices. O/R Investors have been carefully assessing China's move to reopen its COVID-battered economy against the backdrop of a surge in infections. | By Amruta Khandekar and Ankika Biswas Dec 28 (Reuters) - Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices. The S&P index recorded seven new 52-week highs and four new lows, while the Nasdaq recorded 42 new highs and 289 new lows. (Reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Sriraj Kalluvila and Anil D'Silva) ((Amruta.Khandekar@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Amruta Khandekar and Ankika Biswas Dec 28 (Reuters) - Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices. While recent data pointing to an easing in inflationary pressures has bolstered hopes of smaller rate hikes, a tight labor market and a resilient American economy have spurred worries that rates could stay higher for longer. Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank's February meeting and see rates peaking at 4.94% in the first half of next year. | By Amruta Khandekar and Ankika Biswas Dec 28 (Reuters) - Wall Street's main indexes fell on Wednesday as a rise in U.S. Treasury yields pressured growth stocks, while the energy sector took a hit from a slide in oil prices. The stock is down nearly 69% for the year. Markets are now pricing in 69% odds of a 25-basis point rate hike at the U.S. central bank's February meeting and see rates peaking at 4.94% in the first half of next year. | null |
354 | 17,879 | 2022-12-27 00:00:00 UTC | Technology Sector Update for 12/27/2022: XLK, SOXX, HIMX, AAPL, PTON | AAPL | https://www.nasdaq.com/articles/technology-sector-update-for-12-27-2022%3A-xlk-soxx-himx-aapl-pton | null | null | Technology stocks were declining pre-bell Tuesday. The Technology Select Sector SPDR Fund (XLK) was down 0.2%, while the iShares Semiconductor ETF (SOXX) retreated 0.5%.
Himax Technologies (HIMX) inched down 0.3% after announcing a partnership with Novatek Microelectronics to showcase an ultralow power pre-roll Artificial Intelligence, or AI, offering for battery surveillance cameras at CES 2023.
Apple (AAPL) was decreasing 0.3% after its Japan unit has reportedly been hit with 14 billion yen ($105 million) in additional taxes, with authorities finding that bulk sales of iPhones and other devices to foreign tourists were incorrectly exempted from consumption tax.
Peloton Interactive (PTON) was inching up 0.1% after saying it will sell both a refurbished Peloton Bike and Peloton Bike+ at discounts of up to $500 starting Monday.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) was decreasing 0.3% after its Japan unit has reportedly been hit with 14 billion yen ($105 million) in additional taxes, with authorities finding that bulk sales of iPhones and other devices to foreign tourists were incorrectly exempted from consumption tax. The Technology Select Sector SPDR Fund (XLK) was down 0.2%, while the iShares Semiconductor ETF (SOXX) retreated 0.5%. Himax Technologies (HIMX) inched down 0.3% after announcing a partnership with Novatek Microelectronics to showcase an ultralow power pre-roll Artificial Intelligence, or AI, offering for battery surveillance cameras at CES 2023. | Apple (AAPL) was decreasing 0.3% after its Japan unit has reportedly been hit with 14 billion yen ($105 million) in additional taxes, with authorities finding that bulk sales of iPhones and other devices to foreign tourists were incorrectly exempted from consumption tax. Himax Technologies (HIMX) inched down 0.3% after announcing a partnership with Novatek Microelectronics to showcase an ultralow power pre-roll Artificial Intelligence, or AI, offering for battery surveillance cameras at CES 2023. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) was decreasing 0.3% after its Japan unit has reportedly been hit with 14 billion yen ($105 million) in additional taxes, with authorities finding that bulk sales of iPhones and other devices to foreign tourists were incorrectly exempted from consumption tax. Himax Technologies (HIMX) inched down 0.3% after announcing a partnership with Novatek Microelectronics to showcase an ultralow power pre-roll Artificial Intelligence, or AI, offering for battery surveillance cameras at CES 2023. Peloton Interactive (PTON) was inching up 0.1% after saying it will sell both a refurbished Peloton Bike and Peloton Bike+ at discounts of up to $500 starting Monday. | Apple (AAPL) was decreasing 0.3% after its Japan unit has reportedly been hit with 14 billion yen ($105 million) in additional taxes, with authorities finding that bulk sales of iPhones and other devices to foreign tourists were incorrectly exempted from consumption tax. Technology stocks were declining pre-bell Tuesday. The Technology Select Sector SPDR Fund (XLK) was down 0.2%, while the iShares Semiconductor ETF (SOXX) retreated 0.5%. | null |
355 | 17,887 | 2022-12-26 00:00:00 UTC | Apple Japan hit with $98 mln in back taxes- Nikkei | AAPL | https://www.nasdaq.com/articles/apple-japan-hit-with-%2498-mln-in-back-taxes-nikkei | null | null | Dec 26 (Reuters) - Apple Inc's AAPL.O Japan unit is being charged 13 billion yen ($97.82 million) in additional taxes by Tokyo for bulk sales of iPhoneS and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, Nikkei reported on Monday citing sources.
According to the newspaper, bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores with at least one transaction involving an individual buying hundreds of handsets at once and the store missed taxing at least one possible reseller.
Japan allows tourists staying less than six months to buy items without paying the 10% consumption tax, but the exemption does not apply to purchases for the purpose of resale.
Apple Japan is believed to have filed an amended tax return according to Nikkei. The company did not respond to a Reuters' request for comment on the report.
The iPhone maker's Chief Executive Officer Tim Cook visited Japan earlier this month and announced that the company had invested more than $100 billion in its Japanese supply network over the last five years.
($1 = 132.9000 yen)
(Reporting by Akanksha Khushi in Bengaluru; Editing by Chizu Nomiyama)
((Akanksha.Khushi@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 26 (Reuters) - Apple Inc's AAPL.O Japan unit is being charged 13 billion yen ($97.82 million) in additional taxes by Tokyo for bulk sales of iPhoneS and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, Nikkei reported on Monday citing sources. Japan allows tourists staying less than six months to buy items without paying the 10% consumption tax, but the exemption does not apply to purchases for the purpose of resale. The iPhone maker's Chief Executive Officer Tim Cook visited Japan earlier this month and announced that the company had invested more than $100 billion in its Japanese supply network over the last five years. | Dec 26 (Reuters) - Apple Inc's AAPL.O Japan unit is being charged 13 billion yen ($97.82 million) in additional taxes by Tokyo for bulk sales of iPhoneS and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, Nikkei reported on Monday citing sources. According to the newspaper, bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores with at least one transaction involving an individual buying hundreds of handsets at once and the store missed taxing at least one possible reseller. Apple Japan is believed to have filed an amended tax return according to Nikkei. | Dec 26 (Reuters) - Apple Inc's AAPL.O Japan unit is being charged 13 billion yen ($97.82 million) in additional taxes by Tokyo for bulk sales of iPhoneS and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, Nikkei reported on Monday citing sources. According to the newspaper, bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores with at least one transaction involving an individual buying hundreds of handsets at once and the store missed taxing at least one possible reseller. ($1 = 132.9000 yen) (Reporting by Akanksha Khushi in Bengaluru; Editing by Chizu Nomiyama) ((Akanksha.Khushi@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 26 (Reuters) - Apple Inc's AAPL.O Japan unit is being charged 13 billion yen ($97.82 million) in additional taxes by Tokyo for bulk sales of iPhoneS and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, Nikkei reported on Monday citing sources. According to the newspaper, bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores with at least one transaction involving an individual buying hundreds of handsets at once and the store missed taxing at least one possible reseller. The company did not respond to a Reuters' request for comment on the report. | 1 |
356 | 17,894 | 2022-12-25 00:00:00 UTC | Which FAANG Stock Will Be the Top Performer in 2023? | AAPL | https://www.nasdaq.com/articles/which-faang-stock-will-be-the-top-performer-in-2023 | null | null | With less than a week to go before we turn the page on 2022, it's fair to say it's been one of the worst years for investors in a long time. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have all entered respective bear markets, with the major indexes on track to deliver their worst returns since 2008.
Worse yet, the usually sure-footed FAANG stocks haven't been spared from the carnage. By "FAANG," I'm referring to:
Facebook, which is now a subsidiary of Meta Platforms (NASDAQ: META)
Apple (NASDAQ: AAPL)
Amazon (NASDAQ: AMZN)
Netflix (NASDAQ: NFLX)
Google, which is now a subsidiary of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG)
Through the closing bell on Dec. 22, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (the Class A shares, GOOGL) were respectively lower by 65%, 25%, 50%, 51%, and 39% on a year-to-date basis. Yuck!
Image source: Getty Images.
The FAANG stocks are all facing significant headwinds in the new year
The unfortunate issue for these industry leaders is that their near-term headwinds aren't going to disappear overnight.
For example, Apple has been the leader of this group, with a decline in 2022 of "only" 25%. Not only is it likely to deal with continued supply chain uncertainty tied to China's COVID-19 mitigation policies, but rapidly rising interest rates have removed its access to cheap capital. For years, Apple has leaned on ultra-low-rate debt offerings to raise capital for share repurchases. That's very unlikely to occur in 2023.
Netflix is another FAANG stock that'll be facing its own set of difficult circumstances in the new year. Walt Disney recently surpassed Netflix in terms of aggregate streaming subscribers (Disney+, Hulu, and ESPN+, combined), and Netflix's aggressive international expansion has led to cash outflows or relatively minimal positive operating cash flow. At a time when valuations have come under scrutiny, Netflix's premium valuation to its cash flow stands out for all the wrong reasons.
As for ad-driven businesses Meta Platforms and Alphabet, ad spending looks to take a serious hit for at least the early portion of 2023. It's not uncommon for advertisers to pare back spending when economic uncertainty arises. That's an especially big problem for Meta given that its increased spending on metaverse projects has substantially shrunk its free cash flow.
Lastly, Amazon is expected to deal with weakness from its flagship e-commerce marketplace. Even though online retail sales aren't where Amazon generates most of its operating cash flow, it's the operating segment that's become the face of the company. High inflation and a potentially weaker U.S. economy bode poorly for Amazon's top revenue-producing segment in 2023.
Image source: Getty Images.
The best-performing FAANG stock for 2023 is likely to be...
However, not even the FAANG stocks are created equally. Even though these five stocks have been industry leaders and outperformers for more than a decade, they'll likely produce very different returns next year.
Among Meta, Apple, Amazon, Netflix, and Alphabet, there stands one company that has a good chance to outperform its peers in 2023. That company is Google, YouTube, and Waymo parent, Alphabet.
As noted, Alphabet is almost assured of ad-spending weakness during the first half of 2023. With the Federal Reserve expected to further raise interest rates, the likelihood of a U.S. recessions grows. Ad spending tends to front-run the prospect of economic weakness.
But there's another side to this coin. Though ad spending is highly cyclical, the economic cycle very much favors the patient. While recessions are an inevitable part of that cycle, they usually last for no more than a couple of quarters. By comparison, economic expansions are measured in years. Ad-price weakness for Alphabet should prove temporary.
To build on this point, Alphabet is a veritable monopoly in the internet search space thanks to Google. Looking back through three years of monthly data from GlobalStats, internet search engine Google has accounted for no less than 91% of all global search share. It's pretty clear that Google gives advertisers the best chance to reach their targeted audience, which more often than not means ad-pricing power will be in Alphabet's favor.
Another reason to be excited about Alphabet is because of its ancillary operating growth. Its acquisition of YouTube for $1.65 billion in 2006 looks smarter with each passing day. According to figures from DataReportal, YouTube has 2.52 billion monthly active users (MAUs), which is second among social media sties only to Facebook's slightly more than 2.9 billion MAUs. Alphabet is in the process of improving monetization for YouTube Shorts (short-form videos lasting less than 60 seconds), and should benefit immensely from landing the Sunday Ticket package from the National Football League over the next seven years.
Alphabet is also benefiting from the rapid growth of cloud infrastructure service segment Google Cloud. Despite an exceptionally challenging environment for businesses of all sizes, Google Cloud reported 38% revenue growth during the third quarter from the prior-year period, and is approaching nearly $28 billion in annual run-rate revenue. That's good enough for a 9% share of global cloud infrastructure spending, based on the latest estimates from Canalys.
Although this is a money-losing segment for Alphabet at the moment, cloud services have a tendency to generate considerably better margins than advertising. This operating segment has the potential to be a big-time winner for Alphabet by mid-decade, as well as offset ad-sales weakness in the short term.
Lastly, Alphabet is, arguably, the best value of the bunch among the FAANG stocks. As of the end of September, the company had $116.3 billion in cash, cash equivalents, and marketable securities, compared to just $14.7 billion in long-term debt. Having more than $101 billion in net cash has its perks. It allows Alphabet to buy back its own stock as a lift to shareholders, and it ensures the company can continue to innovate without any disruption.
Over the past five years, investors have willingly paid a multiple of close to 19 times cash flow to buy shares of Alphabet. But thanks to its virtual monopoly in internet search, as well as the rapid growth of its higher-margin ancillary operations, the company's operating cash flow can more than double over the next four years. Even if revenue stagnates in 2023, cash flow per share can still grow by a double-digit percentage.
Based on its current share price, investors can buy into the Alphabet growth story right now for roughly 6 times Wall Street's forecast cash flow for the company in 2026. It's arguably the best and safest deal among the FAANG stocks, which makes Alphabet the logical choice to outperform in 2023.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sean Williams has positions in Alphabet, Amazon.com, and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By "FAANG," I'm referring to: Facebook, which is now a subsidiary of Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which is now a subsidiary of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Through the closing bell on Dec. 22, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (the Class A shares, GOOGL) were respectively lower by 65%, 25%, 50%, 51%, and 39% on a year-to-date basis. Not only is it likely to deal with continued supply chain uncertainty tied to China's COVID-19 mitigation policies, but rapidly rising interest rates have removed its access to cheap capital. Alphabet is in the process of improving monetization for YouTube Shorts (short-form videos lasting less than 60 seconds), and should benefit immensely from landing the Sunday Ticket package from the National Football League over the next seven years. | By "FAANG," I'm referring to: Facebook, which is now a subsidiary of Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which is now a subsidiary of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Through the closing bell on Dec. 22, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (the Class A shares, GOOGL) were respectively lower by 65%, 25%, 50%, 51%, and 39% on a year-to-date basis. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | By "FAANG," I'm referring to: Facebook, which is now a subsidiary of Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which is now a subsidiary of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Through the closing bell on Dec. 22, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (the Class A shares, GOOGL) were respectively lower by 65%, 25%, 50%, 51%, and 39% on a year-to-date basis. Over the past five years, investors have willingly paid a multiple of close to 19 times cash flow to buy shares of Alphabet. Based on its current share price, investors can buy into the Alphabet growth story right now for roughly 6 times Wall Street's forecast cash flow for the company in 2026. | By "FAANG," I'm referring to: Facebook, which is now a subsidiary of Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which is now a subsidiary of Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Through the closing bell on Dec. 22, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (the Class A shares, GOOGL) were respectively lower by 65%, 25%, 50%, 51%, and 39% on a year-to-date basis. Among Meta, Apple, Amazon, Netflix, and Alphabet, there stands one company that has a good chance to outperform its peers in 2023. That's right -- they think these 10 stocks are even better buys. | null |
357 | 17,896 | 2022-12-24 00:00:00 UTC | PepsiCo's Chief Design Officer Talks About the Human Side of Innovation | AAPL | https://www.nasdaq.com/articles/pepsicos-chief-design-officer-talks-about-the-human-side-of-innovation | null | null | Mauro Porcini is the chief design officer at PepsiCo and the author of The Human Side of Innovation: The Power of People in Love with People.
Motley Fool producer Ricky Mulvey caught up with Porcini to discuss:
Why investors should watch companies with great design thinkers.
The strategy behind limited-edition releases.
How wearables could change what we eat and drink.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than PepsiCo
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This video was recorded on Dec. 11, 2022.
Mauro Porcini: Multiple people, the executives of these companies were asking me, what is the ROI of design? How do you quantify the value that you create for the company? So I was still at 3M, we started to work on defining this ROI. Obviously, the most powerful form of ROI is if you grow the business, it's impact on top line, bottom line, market share. But you can't quantify that just on a project.
Chris Hill: I'm Chris Hill and that's Mauro Porcini. He's the Chief Design Officer at Pepsi and author of the book, The Human Side of Innovation. Ricky Mulvey caught up with Porcini to talk about how top-tier design can lead to return on investment, why more companies are offering products with limited edition releases, and one designer's vision of the future with tattoos that read your health patterns and 3D printed cookies.
Ricky Mulvey: You say that a lot of companies have stepped toward design. Why do you think you see that let's say, distance between talk and action?
Mauro Porcini: Well, because forget even the word design and this is one of the key points of the book. It's not even about design, but to change culture, to change approach, to do something different than what you're used to, you're familiar with, something that worked for you for a long time. All of this is risky by definition. So in this specific case of design, to embrace it in the right way, if you're not doing it already, if it's not part of your culture, if it's not part of your way of working and thinking, then by definition, it's a risk and to take that kind of risk, you need to have the right people within the organization comfortable with taking that risk.
So a culture of innovation and risk-taking. Then you need to have the right know-how, the right knowledge. It's not something that you buy from the next design agency that you can hire to help you, but it's something that you need to build within the DNA, the genetic code of the company over time. This is true for design, it's true for anything else. Any radical transformation requires an evolution of the genetic code of the company especially the ones like in the case of design, they require some form of higher perceived risk. By the way, I call it perceived risk because actually not changing is eventually the bigger risk that companies take often in these kind of situations.
Ricky Mulvey: It's also interesting, you've brought this up in other interviews, which it's essentially when you need to convince investment people to invest in high-quality design and you've brought up this study from McKinsey, it's called the McKinsey Design Index. One of the things I noticed in the study is the asymmetric returns in it. I think it goes back to your point of; you need to be fully committed to a design culture. What these researchers at McKinsey found are consultants, or people who put together the interview or the paper, excuse me, is there's asymmetric returns. So if you're in the top quartile of design for pretty much any industry, there's a measure of out performance you gain from that. However, there's no difference between the second quartile in the bottom quartile so if you're in the top 50 percent or the bottom 25 percent, there's not a huge difference. Why do you think design carries that kind of asymmetric return for those companies were only the top winners are rewarded?
Mauro Porcini: Because you need to do it right and you need to do it holistically across the entire portfolio that you have, the entire operations of the company, the entire culture of the organization. Let me make a very, very practical, simple example. I'm just picking a company, I may take any company, but let's say Apple was deciding years ago, they had an average portfolio products. Let's assume that we're not leveraging design and design thinking. They decide all of a sudden to design the iPhone. They will design the iPhone exactly as they did design the iPhone. But they wouldn't touch the packaging, they wouldn't touch experience in retail, they wouldn't touch the service. Let's say that everything else would be average like the rest of the industry, but they will just design an amazing product.
That operation would have failed. It wouldn't be the Apple that we all know, obviously. You can't invest in design and be like, well, I can't change the company from night to day, so I need to start from somewhere. Let's start with the specific product, the specific brand. Let's do one project, let's see how it goes. Tell me what is the return on investment on that project. I'll design help changing the product. When you do that, you're not understanding what design with the capital can really do for your company. You may be lucky and just redesigning the aesthetic, not even the functionality, the aesthetic of a product, you can increase the sales of the product. It happened to me 20 years ago when I entered 3M, the tech company from Minnesota, and we redesigned a line or multimedia projectors, the very first project that we did and just by redesigning the aesthetic and the little bit of the ergonomic of the product, we doubled the sales of that product line.
So it can happen here and there, but the truth is that for sustainable business growth and to really build sustainable financial value for the company, you need to impact every single touchpoint of the business. Therefore, many years ago, even before I got in PepsiCo, so when I was at 3M and then in PepsiCo, multiple people, executives of these companies were asking me, what is the ROI of design? How do you quantify the value that you create for the company? So I was still at 3M, and we started to work on defining this ROI. Obviously the most powerful form of ROI is if you grow the business, it's the impact on top line, bottom line, market share. But you can't quantify that just on a project. Let me give you an example, if I work on Pepsi, and they do a series of operations on the pack, on experiences that don't generate a real relevant return for a brand of that size, for a brand that is multi-billion-dollar worth.
But the impact with its effect, your overall brand and therefore increase sales and a law for the brand. In the core product they eventually didn't touch yet, that's still ROI of what I'm doing with design. But if your approach to that ROI is very myopic and you're just calculating the return of investment on that specific project, you go nowhere. Obviously, once again, it needs to be an holistic approach where you touch all the different dimensions of the brand. So, the result of the work, that I did many years ago, define a series of areas of value creation that you can identify when you do design in their ROI in the company. The first one is the impact you have in your customer relation, not the consumers, the customer being for a company like PepsiCo, the hotel chains, the restaurants, the retailers, the distribution essentially.
By changing the conversation with them, by offering them the ability to envision how you can leverage your technologies, your brands, your products, to increase their business, to help their relation with their guests or the people that they serve, you change completely the relationship and the partnership therefore you build a partnership with these customers. Is not anymore, I'm coming to you to sell you stuff, I'm coming to you to co-create the future together. It's the impact on the consumer a word that I don't like to match but let's go the consumer, so everybody understands what we're talking about. Again, you can measure it, but it's easy to see it, especially today in the world of social media, is the way they talk about your brands online, in their conversations. This is obvious to everybody.
When you go in your LinkedIn, you're going Instagram and you are an employee of the company, whatever position you have, the CEO or an entry-level employee and everything in-between, you observe the way the people talk about your brands, the excitement. If you think about the content that we create as design organization of PepsiCo, we have 100 percent positive sentiment. This is unique, 100 percent positive sentiment. When we post outdoor PepsiCo design Instagram account or when I post out on my social media content related to PepsiCo design, the sentiment is positive because people understand. The people out there feel, they were driven by really creating value, by really, that human centricity, you see that they're sincere, that these bunch of designers and this design driven approach is human-centered for real.
We're not here to just generate profit for the company and financial value for the company, eventually not caring about the quality of what we're offering you. People feel that what excites us as designers and human center organization is to deliver value. Then yes, of course, we know how to build business value as well through that human value. This is the second dimension, I could go on and on, but very quickly it's impact on your innovation pace and the ability to generate innovative ideas that you can quantify multiple ways patterns, for instance, trademarks and many other things. It's the impact on corporate reputation, it's the impact on cost of the product, it's the impact on cost of the process and so on, so forth.
Ricky Mulvey: Yeah, 100 percent positive sentiment. Boy, does that sound like a lot? One thing I think is a part of this conversation is not just having businesses that understand the importance of design, but rather the designers understand business realities. You touched on this in your book when you were designing a Pepsi Perfect bottle to celebrate the 30th anniversary of Back to the Future 2 and the only reason it was possible for you to come up with this, I would say not the only reason, but one of the key reasons it was possible for that product to happen, which is now a collectible that sells for 200 bucks on eBay, is because there was a gap in the schedule, promotional schedules. If you didn't have that gap then you may have not been able to have that product go to market.
Mauro Porcini: Yeah. Look, it was something that happened at the beginning of a journey of culture creation. As I describe in the book, it was the beginning of my PepsiCo journey. We knew that, Back to the Future, the anniversary was about to arrive. There was somebody in my team, his name is Martin Broen, he was a big fan of that movie. He came to me one day and was like, "We need to do the Pepsi perfect bottle that you see in the movie, and we need to be ready for the anniversary, that is in 2015." We're talking about the end of 2012 when we started this conversation. We started to create it and prototype it, then we started to put these prototypes on the desks of people. We tried to convince people, and there was a general excitement about that idea. But for a variety of different reasons, it was not part of the marketing agenda. What are the reasons? Well, they are the typical one that you find in a company.
First of all, those marketing agendas are decided by marketing, not by designers. They own those agendas, and they follow specific deadlines, specific moments in the season, there is a Halloween, there is back-to-school, there is super bowl, there are a variety of different things. You used to work in a certain way, there was not initially the gap. There is also if you want, this is very human, they had not invented your syndrome. It is not my idea, it is your idea. It is interesting, but I'm not really interested. Long story short, and this is what I mentioned in the book and I think is very important, what changed the game was not just the gap in the agenda of the year, was the fact that the person, a marketer, a human being with a name and the last name, decided to find that gap and leverage the gap because you could have had the gap and not do anything anyway with us. It's always about people. It was the collision between myself, people in my team with a passion that were resilience, didn't give up and kept pushing.
Then the kindness, division, the empathy, the ability to open his mind and listen to people different than him. Off this marketing leader, they decided to embrace that idea. We made it happen, and we launched Pepsi Perfect in the middle of the night, I think it was 4:00 AM something like. In 21st of October of 2015 was exactly the time Marty McFly went to his future and landed in the future. We drop it in amazon.com and in Walmart.com, and we sold out in seconds. We sold a lot of licensing, the caps and shirts, record sales of licensing just in one week, and there was a ha-ha moment for the company. The company realized that in this kind of operations there was value. It was the first of many that we did in a variety of different ways over the years. These operations had being very powerful because they've been generating very authentic content for us, transforming people, embracing these ideas in the best ambassadors for our brands, our products, the moment they take that idea, that experience, and they share it with the rest of the world.
Ricky Mulvey: It also creates scarcity around a product that is not scarce at all. I can go to the 7-Eleven a block away from me and grab a Pepsi bottle. However, if it's in this different packaging that I remember from watching Back to the Future 2, then there's different levels of connection with it.
Mauro Porcini: Yeah, then look it's not easy to do, there is a full strategy because you go from when we do limited edition packaging or limited edition products in general, you go from the ones that are almost impossible to find, they go just to influencers and in some cases, we don't even sell them, to the ones that are sold in limited quantities like Pepsi Perfect. All the way to the ones that you can find in any Walmarts in the United States, in any Target, in any Kroger, in any store. Each of them has a different design and characteristic because it's important when you are in every shelf of the united states or the world because we designed for the entire world, that you have easy navigation. For instance, of flavors, that the brand and the product is recognizable.
You want the excitement, you want people to go crazy about the beauty of the pack, but you also want people to find it on shelf easily. These are problems that eventually you don't have when the number of products that you create is very-very limited. It's very interesting, not just with packaging, the same with any kind of licensing, the collaborations we do in the world of fashion, with the [Block's] Square, with Puma, with Nike, and many other brands Zara, H&M. From supper high end all the way to mass fashion depending on the channel, depending on the kind of operation, the design change completely. Even though, we're still talking about Pepsi, Cheetos, Lay's the same brand with the same identity.
It's fascinating and it has been a journey also for all of us to understand the nuances of what works and what doesn't, and why we do it, why we do all of this, it makes sense today, eventually, didn't make sense too much 30 years ago. All of these activations across every touch point of the brands, excite people, build a new bond between these people and the brand. Transcending eventually the product itself, the color, the potato chips, and really creating that connection with the brand. Then once again, when you build a connection, people feel the pride, feel the desire of the instinct to share that experience with others. Then become, once again, the best possible ambassadors for these brands. Because it's not a brand anymore bragging about itself but it's your consumer or the people buying your products that are promoting the wonderful experience that they had with your brands and the products.
Ricky Mulvey: I really enjoyed learning about great designers in your book and your brushes with them, especially these people who have shaped our worlds in ways we may not expect. One of those is Stefano Marzano, who I know you've had interactions with, but he's in some ways help design touchscreens and virtual reality headsets in the cloud. Hoping you can tell us a little bit about him and how he shaped our world in ways we may not expect or may not know.
Mauro Porcini: Well, Stefano Marzano used to be the Head of Design of Philips in the '90s. For anybody that started the industrial design in those years around the world, especially in Europe, Stefano was a little bit of an icon to meet somebody that every young designer wanted to meet and know. Stefano, what he did in Philips, he literally shaped my approach to design. In the '90s, they were working on understanding ho society will look like 20 years later, 30 years later. Essentially, if you think about the '90s, they were thinking about how our society will look like today, in the age we're living today. What they were doing well, they were connecting designer, sociologists, marketers, people of business, together to envision first of all how society will change. How we will move, we will walk, we will play, we will take care of our health and how technologies will play a role in that society.
The theory of Philips was that technologies will be embedded, hidden inside our way of leaving. But aesthetically, our society will look really similar to the one of today, is just that the product surrounding us would be smarter. Your eyewear would be smarter and will help you enter in virtual reality, what we call today the metaverse. I remember working on vision of the future. The picture of these people playing ping pong in virtual reality in front of a physical digital table, but with somebody in one place and somebody else in another place. The idea of Cloud was already there, even though they were not calling it Cloud. Your collection of CDs was in the Cloud. You didn't have a physical device anymore. We're talking about the '90s where we still add CDs. We're talking about an age where Bluetooth didn't exist, Wi-Fi didn't exist, just to give you an idea and so that was fascinating.
This is what they've been trying to do since then. Think about PepsiCo today. A company like PepsiCo, you're like, well, you are the Chief Business Officer of PepsiCo, what do you do? You design pretty packaging of the products of the company, the brands of the company. While we do also that, we try to build financial value through that, but we also try to imagine where the world is going. We know that in the future, people will wake up in the morning and they will have some form of device on their skin. It could be an Apple Watch or it could be one of those patches that we launched almost two years ago with the Gatorade brand, the Gatorade Gx Patch, that monitor your skin, your sweating, the composition of your sweat. Let's say that you're going to have a smarter version of that patch, or you're going to have an Apple Watch or maybe or as we were imagining the word of Philips, you're going to have a tattoo.
You're going to have something on your skin that will monitor the way you sleep in this specific case. I wake up in the morning and Alexa or Google Home will tell me, Mauro, I know you didn't sleep very well. I would be like, what are you talking about, Alexa, l thought I slept so well? No, I analyzed your sleeping patterns and they were not really good, and check this and that part. Then Alexa obviously knows my healthy history. Alexa knows also my agenda of the day. I'm going to have a very busy day, and so Alexa is going to tell the machine that I have in the kitchen to customize a drink exactly on the base of what I love. They know that I love a lemon flavor and a hot drink in the morning, but adding a series of ingredients, vitamins, magnesium, turmeric, whatever is right for me that day, on the base of what I need exactly in that moment. What Mauro needs in that moment.
An analysis real-time on my body, and then an analysis of my full life and health history. Now, in the future on top of the drink, we will have the possibility also to 3D print a snack, or maybe a cookie. Then I still want to go to the restaurant and to have a good farm-to-table salad or a pasta with lobster or whatever I love, but I will have a series of snacks and drinks that will help me integrating the way I feed myself during the day in the most ideal possible way. Now, if you do this in your company, imagine your company, whatever is the industry of company, you need to do this. You need to leverage design thinkers together with your scientists, engineers, business leaders altogether, sociologists, the human scientist. With designers, envision what is the future, design it, create it, make prototypes.
Then the strategy should inform your acquisition strategy, your new venture strategy and partnerships you do with companies today. What we do in PepsiCo, your quick cycle innovation strategy, so the products that you want to launch quickly, market, eventually leveraging the digital channel to test ideas, to make prototypes of products, business models, surpass different ideas of communication and branding, and then learn out of it, and then feed with those insights, the breakthrough projects that you're going to drive from within. Then the first stream of work is the real breakthrough projects, that they have some form of technological advantage. That's the ideal breakthrough projects because it's defendable in time and is sustainable in time, and is something worth investing years and resources, and taking the risk as well, because those projects obviously have a higher level of risk.
Ricky Mulvey: Well, and I also imagine building trust is huge with that. I looked at the Gx Sweat Patch, which it's a one-time essentially. I don't want to call it a sticker, but a patch that looks at your sweat and then tells you what optimal blend of Gatorade you should drink to recover. I saw that and I thought like, well, I would feel a little distrustful using that because maybe this would tell me I need to drink Gatorade when the actual answer is water or a cup of coffee, that thing. I imagine that's got to be a huge hurdle, that trust barrier for designers at companies to build that vision of the wearable future that you're talking about, in addition to battery and privacy issues.
Mauro Porcini: Well, look, the reality is that we'll have a series of technologies that our platform, and they will enable us having a better life. Then there are pioneers, companies, and brands that are starting to experiment with those technologies before order products and brands. Obviously, there is always the business goal of these products and brands and companies, but also the idea of advancing society and advancing the way people interact with products categories in entire industries, so the more a company, because you need companies. You can't have this technological platform just grow like mushrooms like these in society, so you need the companies to drive it. The more they do something that is relevant to people and the people start to use, the more you will build an ecosystem where other companies will arrive.
They will start to compete, they will apply their technology to other fields, and the technology will start to be used in a variety of different ways, in the most possible democratic way, but to accelerate all of these, to build value for people in society, to push technology to the next frontier, you need companies that embrace that culture of innovation, that embrace the cultural love for people, that embrace the idea that you're not there just to generate profit for yourself, for your shareholders, but you're there to generate value for society, for the world, for the planet first, that's your role as a company together in line with generating business value and financial value for your shareholders and for your company a. Again, while these 20-30 years ago may have sound like a little bit naive to some, the reality is that today the world is so different. The competitive landscape is so different, is so extreme, that either you build the culture in your company of excellence, you build the culture of innovation, you build a culture of love for the people you serve, and the culture is going to drive productivity, efficiency, effectiveness and quality, or somebody else will do it on your behalf in your industry, because that is what is going to happen.
Ricky Mulvey: Appreciate it. Mauro Porcini, he's the Chief Design Officer at PepsiCo. His book is The Human Side of Innovation: The Power of People in Love With People. Appreciate your time and thanks for joining us on Motley Fool Money.
Mauro Porcini: Thank you.
Chris Hill: As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Chris Hill has positions in Amazon.com, Apple, Block, Nike, PepsiCo, and eBay. Ricky Mulvey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Apple, Block, Nike, and Walmart. The Motley Fool recommends 3m and eBay and recommends the following options: long January 2025 $47.50 calls on Nike, long March 2023 $120 calls on Apple, short January 2023 $45 calls on eBay, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Motley Fool producer Ricky Mulvey caught up with Porcini to discuss: Why investors should watch companies with great design thinkers. They know that I love a lemon flavor and a hot drink in the morning, but adding a series of ingredients, vitamins, magnesium, turmeric, whatever is right for me that day, on the base of what I need exactly in that moment. I imagine that's got to be a huge hurdle, that trust barrier for designers at companies to build that vision of the wearable future that you're talking about, in addition to battery and privacy issues. | Ricky Mulvey caught up with Porcini to talk about how top-tier design can lead to return on investment, why more companies are offering products with limited edition releases, and one designer's vision of the future with tattoos that read your health patterns and 3D printed cookies. What we do in PepsiCo, your quick cycle innovation strategy, so the products that you want to launch quickly, market, eventually leveraging the digital channel to test ideas, to make prototypes of products, business models, surpass different ideas of communication and branding, and then learn out of it, and then feed with those insights, the breakthrough projects that you're going to drive from within. The Motley Fool recommends 3m and eBay and recommends the following options: long January 2025 $47.50 calls on Nike, long March 2023 $120 calls on Apple, short January 2023 $45 calls on eBay, and short March 2023 $130 calls on Apple. | Ricky Mulvey caught up with Porcini to talk about how top-tier design can lead to return on investment, why more companies are offering products with limited edition releases, and one designer's vision of the future with tattoos that read your health patterns and 3D printed cookies. Obviously, there is always the business goal of these products and brands and companies, but also the idea of advancing society and advancing the way people interact with products categories in entire industries, so the more a company, because you need companies. They will start to compete, they will apply their technology to other fields, and the technology will start to be used in a variety of different ways, in the most possible democratic way, but to accelerate all of these, to build value for people in society, to push technology to the next frontier, you need companies that embrace that culture of innovation, that embrace the cultural love for people, that embrace the idea that you're not there just to generate profit for yourself, for your shareholders, but you're there to generate value for society, for the world, for the planet first, that's your role as a company together in line with generating business value and financial value for your shareholders and for your company a. | It's always about people. You design pretty packaging of the products of the company, the brands of the company. Now, if you do this in your company, imagine your company, whatever is the industry of company, you need to do this. | null |
358 | 17,906 | 2022-12-23 00:00:00 UTC | Why Apple's No Longer Interested In NFL Sunday Ticket | AAPL | https://www.nasdaq.com/articles/why-apples-no-longer-interested-in-nfl-sunday-ticket | null | null | Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (NASDAQ: AAPL) streaming service.
The tech giant was once considered the leading candidate to land the National Football League's Sunday Ticket package, but negotiations have reportedly fallen silent after Apple couldn't see the logic in paying billions for the rights. The NFL is looking to package the service with its NFL Network and NFL Redzone channels, which certainly make more sense with a traditional pay-TV distributor, not Apple.
Apple's decision to bow out of negotiations as the package became bloated and it couldn't get exactly what it wanted shows discipline. At the same time, it leaves the door open for Amazon (NASDAQ: AMZN) and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google to make a deal.
Apple's already spending big on Apple TV+
Apple's streaming content budget is absolutely massive, even compared to some of the legacy media companies pushing into streaming.
Apple's slowly building up a nice-sized library of original films and series that have gotten a lot of buzz from viewers and critics alike. It's already won a Best Picture Oscar and loads of Emmys.
Apple's primarily focused on developing prestige films and series with big-name talent and high production value. Despite its relatively small library of titles, its production budget adds up fast. Wells Fargo analysts expected Apple to spend around $8 billion on content at the start of 2022. Only Disney, Amazon, and Netflix spent more on streaming video this year.
Apple also inked a deal with Major League Soccer earlier this year, agreeing to pay a minimum of $250 million per year for the rights to every game in the league. It will, however, ask subscribers to pay more for access to those games. It was reportedly mulling the idea of including Sunday Ticket as part of the standard Apple TV+ subscription, to which the NFL objected.
What's more, Apple is continuing to increase the number of series it greenlights while the rest of the industry pulls back on content production to focus on profitability. The only other company developing more series in the back half of 2022 than it did in 2021 is Amazon. If that trend continues, Apple will have more opportunities to develop better programming than its competitors, and the rights to Sunday Ticket won't be as valuable, relatively speaking, to the service.
In short, Apple has better things to spend its already massive streaming budget on than NFL rights. Investors should applaud the discipline Apple's taking in dropping out of negotiations when it can't get exactly what it wants. It's refocusing its budget on content that fits its platform better and retains its value longer. The move could help push the Apple TV+ service toward the black, becoming a valuable part of its increasingly important services segment.
The NFL makes more sense elsewhere
Apple was always a strange fit for the NFL Sunday Ticket package. The league had no pre-existing relationship with the company -- which is actually part of the reason it wanted to sell the rights to the tech giant. But for the way Apple's set up its streaming service, it doesn't make much sense.
Sunday Ticket makes much more sense on either Amazon Prime or Google's YouTube. Amazon has exclusive rights to Thursday Night Football in the United States, and it has effectively used these games to sign up new Prime members and sell advertising. Positioning Sunday Ticket as an add-on to Prime memberships could support the valuable subscription service while improving subscriber retention during the most important quarter in retail.
YouTube, meanwhile, has built the largest virtual pay-TV service in the United States. With over 5 million subscribers, though, it's still relatively small compared to the big cable companies. Google could easily copy the old model for Sunday Ticket -- using it as a loss-leader to sell more pay-TV subscriptions. That would open the door to more ad revenue for YouTube and an improved position in negotiating carriage fees with cable networks.
Either company can probably get more value out of Sunday Ticket than Apple, and it doesn't make sense for Apple to try to outbid either, even if it has the cash to do so.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Adam Levy has positions in Alphabet, Amazon.com, Apple, Netflix, and Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (NASDAQ: AAPL) streaming service. The tech giant was once considered the leading candidate to land the National Football League's Sunday Ticket package, but negotiations have reportedly fallen silent after Apple couldn't see the logic in paying billions for the rights. If that trend continues, Apple will have more opportunities to develop better programming than its competitors, and the rights to Sunday Ticket won't be as valuable, relatively speaking, to the service. | Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (NASDAQ: AAPL) streaming service. At the same time, it leaves the door open for Amazon (NASDAQ: AMZN) and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google to make a deal. Apple's already spending big on Apple TV+ Apple's streaming content budget is absolutely massive, even compared to some of the legacy media companies pushing into streaming. | Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (NASDAQ: AAPL) streaming service. Apple's already spending big on Apple TV+ Apple's streaming content budget is absolutely massive, even compared to some of the legacy media companies pushing into streaming. Either company can probably get more value out of Sunday Ticket than Apple, and it doesn't make sense for Apple to try to outbid either, even if it has the cash to do so. | Football fans still don't know where they'll be able to watch every out-of-market game next season, but it probably won't be on Apple's (NASDAQ: AAPL) streaming service. But for the way Apple's set up its streaming service, it doesn't make much sense. Sunday Ticket makes much more sense on either Amazon Prime or Google's YouTube. | null |
359 | 17,926 | 2022-12-22 00:00:00 UTC | ANALYSIS-Short sellers gain nearly $304 bln after tumble in U.S. stocks | AAPL | https://www.nasdaq.com/articles/analysis-short-sellers-gain-nearly-%24304-bln-after-tumble-in-u.s.-stocks-0 | null | null | By Carolina Mandl and David Randall
NEW YORK, Dec 22 (Reuters) - This year's steep decline in U.S. equities is juicing the returns of short sellers, who are on track for their first yearly gain since 2018 thanks in part to bets against shares of Tesla TSLA.O, Amazon.com AMZN.O and other megacap growth stocks that have led markets higher for years.
Short sellers - investors who bet on declines in a company's share price - are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018, their last profitable year, data from analytics firm S3 Partners showed. That works out to a 31.2% return on total average short interest of $973.6 billion throughout the year, according to S3 Partners.
Bets against electric-vehicle maker Tesla Inc lead the pack in terms of dollar gains, with investors seeing $15 billion in realized and unrealized profits on some $19.3 billion of shares sold short. Shares of the electric carmaker, whose meteoric rally over the last few years has burned many bearish investors, are down roughly 60% year-to-date.
Other top winners for shorts include Amazon, Meta Platforms META.O, Apple Inc AAPL.O and used car seller Carvana Co CVNA.N, S3 data showed. The S&P 500 is down almost 19% this year and on track for its biggest yearly percentage loss since 2008 after the Federal Reserve's most aggressive rate increases in decades dried up risk appetite.
This year "was easier for shorting because the economic environment felt like a headwind to the whole market, instead of the tailwind seen in previous years," said Moez Kassam, portfolio manager at long-short hedge fund firm Anson Funds, which oversees around $1.7 billion and posted a 4.9% gain through November. "Shorts have been impossible for years," he said.
Among the fund's top positions were bets against biotech company Novavax Inc NVAX, which fell over 90% year-to-date, and electric-vehicle maker Rivian Automotive Inc RIVN.O, down roughly 80%.
Stanphyl Capital portfolio manager Mark Spiegel, who has been short Tesla "constantly, in varying size" since 2014, said a bet against Tesla was his fund's most profitable individual short position this year. The $18 million fund is up roughly 60% in 2022. Tesla's shares are up 1,271% since 2014.
While higher interest rates have punished growth stocks, some investors believe Tesla CEO Elon Musk's purchase of Twitter is diverting his time running the electric car company. Musk's Tesla share sales have also weighed on the stock, and investors have been watching for signs that consumer demand for electric vehicles is cooling.
Spiegel has maintained his bearish bets against Tesla, believing the stock has a long way to go before reaching a fair price.
The last several years haven’t been kind to bearish investors. Shorts lost $142.4 billion in 2021, a year when huge rallies in so-called meme stocks such as GameStop GME.Nhurt several firms that had bet against GameStop and similar companies. They took a $241.7 billion hit in 2020, when the Fed cut rates to historic lows in response to the COVID-19 pandemic, sparking a massive rally in markets.
Not all short strategies worked this year. Long-short hedge funds, which bet on stock prices rising or falling, posted a 9.7% loss through November, according to data provider HFR.
Market swings sparked by economic data and Fed decisions have often wrong-footed investors and fueled lockstep moves in asset prices, making it more difficult to select individual stocks, traders said.
"It's a very difficult environment because correlations (among stocks) are high," said Venu Krishna, head of U.S. equity strategy at Barclays in New York.
At the same time, energy stocks such as Exxon Mobil Corp XOM.N, Occidental Petroleum Corp OXY.N, Chevron Corp CVX.N and Marathon Petroleum MPC.N notched big gains following a surge in energy prices, bruising those who bet against them.
Charles Lemonides, portfolio manager at $226 billion hedge fund ValueWorks LLC, believes tight monetary policy will weigh on risk appetite next year. His fund now has its highest ever level of overall short positioning.
"It's much less likely that we will get back to the sort of dangerous enthusiasm on the part of investors for stocks like Tesla that took short-sellers to the cleaners in years past," he said.
Companies that Lemonides is betting against include aircraft component supplier Transdigm Group TDG.N, whose shares are up 1.45% year-to-date, and semiconductor company Broadcom AVGO.O, whose shares are down almost 16%.
"There are a bunch of companies out there … that have a significant amount of debt, but equity investors are perceiving them as bulletproof right now," he said.
Short sellers' gainshttps://tmsnrt.rs/3FMhhXw
(Reporting by Carolina Mandl and David Randall in New York; Editing by Ira Iosebashvili and Leslie Adler)
((carolina.mandl@thomsonreuters.com; +1 (917) 891-4931;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Other top winners for shorts include Amazon, Meta Platforms META.O, Apple Inc AAPL.O and used car seller Carvana Co CVNA.N, S3 data showed. Short sellers - investors who bet on declines in a company's share price - are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018, their last profitable year, data from analytics firm S3 Partners showed. While higher interest rates have punished growth stocks, some investors believe Tesla CEO Elon Musk's purchase of Twitter is diverting his time running the electric car company. | Other top winners for shorts include Amazon, Meta Platforms META.O, Apple Inc AAPL.O and used car seller Carvana Co CVNA.N, S3 data showed. By Carolina Mandl and David Randall NEW YORK, Dec 22 (Reuters) - This year's steep decline in U.S. equities is juicing the returns of short sellers, who are on track for their first yearly gain since 2018 thanks in part to bets against shares of Tesla TSLA.O, Amazon.com AMZN.O and other megacap growth stocks that have led markets higher for years. Short sellers - investors who bet on declines in a company's share price - are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018, their last profitable year, data from analytics firm S3 Partners showed. | Other top winners for shorts include Amazon, Meta Platforms META.O, Apple Inc AAPL.O and used car seller Carvana Co CVNA.N, S3 data showed. By Carolina Mandl and David Randall NEW YORK, Dec 22 (Reuters) - This year's steep decline in U.S. equities is juicing the returns of short sellers, who are on track for their first yearly gain since 2018 thanks in part to bets against shares of Tesla TSLA.O, Amazon.com AMZN.O and other megacap growth stocks that have led markets higher for years. Short sellers - investors who bet on declines in a company's share price - are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018, their last profitable year, data from analytics firm S3 Partners showed. | Other top winners for shorts include Amazon, Meta Platforms META.O, Apple Inc AAPL.O and used car seller Carvana Co CVNA.N, S3 data showed. By Carolina Mandl and David Randall NEW YORK, Dec 22 (Reuters) - This year's steep decline in U.S. equities is juicing the returns of short sellers, who are on track for their first yearly gain since 2018 thanks in part to bets against shares of Tesla TSLA.O, Amazon.com AMZN.O and other megacap growth stocks that have led markets higher for years. Short sellers - investors who bet on declines in a company's share price - are sitting on $303.7 billion in realized and unrealized gains, a fourfold increase compared with 2018, their last profitable year, data from analytics firm S3 Partners showed. | null |
360 | 17,938 | 2022-12-21 00:00:00 UTC | Apple Stock: Bull vs. Bear | AAPL | https://www.nasdaq.com/articles/apple-stock%3A-bull-vs.-bear-1 | null | null | For much of the past two decades, Apple (NASDAQ: AAPL) has been a star not just in the business world, but in the stock market as well.
The company dominates consumer tech hardware. It has the largest market cap of any U.S. company, and it even counts Warren Buffett as one of its biggest fans.
However, while Apple may have an admirable track record, that doesn't necessarily mean its future is equally bright. Is Apple stock a buy today? Keep reading as two Motley Fool contributors discuss the bull and bear cases for the tech giant.
Image source: Apple.
The numbers speak for themselves
Parkev Tatevosian (Bull case): My bull case for Apple starts with its demonstrated ability to repeatedly create innovative tech hardware that consumers willingly pay premium prices to buy. The iPhone is arguably one of the most significant consumer products in the world (as measured by dollars spent). Notable products like the iPod, the iMac, and more preceded the legendary smartphone. Since the iPhone, Apple's produced sought-after devices like the iPad, Apple Watch, Airpods, and more. Most importantly, millions of people pay premium prices for each of the aforementioned, leaving excellent profit margins for Apple and its shareholders.
Between 2013 and 2022, Apple's annual sales soared from $171 billion to $394 billion. Considering the diverse and large markets in which Apple sells products, it is not likely to hit the ceiling on sales anytime soon despite its already massive scale. The pricing power that Apple earned over decades of improving the customer experience allowed it to average an operating profit margin of 28.3% in that time.
Admittedly, these are all backward-looking figures, but Apple's highly connected ecosystem makes it less likely for customers to switch to a competitor's product. In other words, many of yesterday's customers will likely stick with Apple longer-term.
AAPL data by YCharts
The bear market in 2022 brought Apple's stock down meaningfully. Today's investors can buy Apple stock at a price-to-earnings and price-to-free cash flow of 21.7 and 19.4, respectively. This is a relatively fair price to pay for an excellent business. Investors will do well in building wealth if they can buy great companies at reasonable prices.
What have you done for me lately?
Jeremy Bowman (Bear case): It's hard to question Apple's bona fides, as the company is one of the biggest in the world, and generates huge margins. But stocks are generally valued based on future cash flows, and Apple's may not be as strong as the market seems to think.
In Apple's most recent quarter, revenue was up 8%, and earnings per share grew just 4%. According to Wall Street, this is not the growth stock that some might like to think it is. Apple didn't give specific guidance in its most recent earnings report, but the company said it expected revenue to slow sequentially in the current quarter due to the macroeconomic environment, a 10-percentage-point headwind from currency exchange, and difficult comparisons in the Mac segment.
Wall Street, meanwhile, expects revenue growth of just 2.7% in the current fiscal year, and even slower growth in earnings per share. In fiscal 2024, it only expects top and bottom line growth to improve slightly.
Apple has built a dominant consumer franchise, but there are also real risks to the company as rivals push forward with the next computing platform. Meta Platforms, for example, will spend close to $20 billion next year to make its visions of the metaverse a reality, and other companies like Nvidia and Microsoft are pushing past the mobile computing era as well.
Apple still gets more than half of its revenue from the iPhone, which it first introduced 15 years ago. And while the company has had success in raising prices on its trademark smartphone, it's bound to reach a limit in what people are willing to pay, especially with a global recession potentially around the corner. The law of large numbers will eventually catch up to it, and it will run out of new customers to convert.
Finally, Apple's services segment, which is underpinned by its App Store, is facing more legal challenges as companies balk at its 30% commission fee. We could see a reckoning in the App Store model over the coming years.
Overall, Apple's strengths as a business are self-evident, but investors can find better growth at this valuation elsewhere.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Meta Platforms. Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | For much of the past two decades, Apple (NASDAQ: AAPL) has been a star not just in the business world, but in the stock market as well. AAPL data by YCharts The bear market in 2022 brought Apple's stock down meaningfully. Apple didn't give specific guidance in its most recent earnings report, but the company said it expected revenue to slow sequentially in the current quarter due to the macroeconomic environment, a 10-percentage-point headwind from currency exchange, and difficult comparisons in the Mac segment. | For much of the past two decades, Apple (NASDAQ: AAPL) has been a star not just in the business world, but in the stock market as well. AAPL data by YCharts The bear market in 2022 brought Apple's stock down meaningfully. The company dominates consumer tech hardware. | For much of the past two decades, Apple (NASDAQ: AAPL) has been a star not just in the business world, but in the stock market as well. AAPL data by YCharts The bear market in 2022 brought Apple's stock down meaningfully. The numbers speak for themselves Parkev Tatevosian (Bull case): My bull case for Apple starts with its demonstrated ability to repeatedly create innovative tech hardware that consumers willingly pay premium prices to buy. | For much of the past two decades, Apple (NASDAQ: AAPL) has been a star not just in the business world, but in the stock market as well. AAPL data by YCharts The bear market in 2022 brought Apple's stock down meaningfully. Apple still gets more than half of its revenue from the iPhone, which it first introduced 15 years ago. | 2 |
361 | 17,941 | 2022-12-20 00:00:00 UTC | 1 Top Stock to Buy for 2023 and Beyond | AAPL | https://www.nasdaq.com/articles/1-top-stock-to-buy-for-2023-and-beyond | null | null | With Apple (NASDAQ: AAPL) shares pulling back more than 12% over the past 30 days as of this writing, now is a good time to take a closer look at the stock. Many investors are probably wondering: Is this decline a sign of a poor investment, or is this a buying opportunity?
A closer look at the tech company and its stock's valuation reveals that shares are priced attractively after a sharp pullback. Here's why investors may want to consider buying some shares of the tech stock while they're trading at this level.
Why are shares down?
First, it's always helpful to know why shares are trading lower. The stock's recent retreat seems to be driven by two main factors: macroeconomic uncertainty that has weighed on the overall stock market and a recent statement from Apple saying that COVID-19-related government restrictions in China have pressured iPhone 14 Pro and iPhone 14 Pro Max shipments.
Capturing weakness in the overall market, the S&P 500 has slid more than 3% over the last 30 days as Wall Street considers the probability and duration of a recessionary environment amid inflation and rising interest rates.
Regarding the situation in China, Apple said in a Nov. 6 press release that "COVID-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China." This led to the factory operating at a "significantly reduced capacity" and ultimately led management to lower its forecast for iPhone 14 Pro and iPhone 14 Pro Max shipments.
Investors should zoom out
While Apple could see a year-over-year sales decline during its important holiday quarter due to some of China's recent challenges, these issues are likely only temporary problems. The same thing can be said about the current macroeconomic environment. Historically, periods of economic growth, stagnation, and contraction come in waves. While the current environment may be one of contraction, this doesn't rule out a period of growth or even an economic boom in the years ahead. Investors who buy the right stocks opportunistically during times of pessimism could be rewarded handsomely during such a time.
An attractive valuation
The best reason to buy Apple stock is also the simplest. Trading at less than 22 times earnings at the time of this writing, the stock's valuation is attractive relative to the underlying business fundamentals. As a cash cow, Apple has generated more than $111 billion of free cash flow from less than $400 billion of revenue for the trailing 12-month period ended Sep. 24, 2022.
Further, management has historically been a great steward of its cash flow. In addition to paying a quarterly dividend that has consistently increased on an annual basis since it was initiated in 2012, the company has bought back more than $550 billion worth of stock at an average price of $47 since it started its repurchase program in the same year.
All of this to say, even if revenue growth stalls for Apple in the interim, management will likely continue judiciously deploying capital to create meaningful shareholder value.
Overall, the stock looks extremely attractive at this price -- especially if history is any guide to the future and we do eventually return to a period of economic growth.
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Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With Apple (NASDAQ: AAPL) shares pulling back more than 12% over the past 30 days as of this writing, now is a good time to take a closer look at the stock. Capturing weakness in the overall market, the S&P 500 has slid more than 3% over the last 30 days as Wall Street considers the probability and duration of a recessionary environment amid inflation and rising interest rates. Investors should zoom out While Apple could see a year-over-year sales decline during its important holiday quarter due to some of China's recent challenges, these issues are likely only temporary problems. | With Apple (NASDAQ: AAPL) shares pulling back more than 12% over the past 30 days as of this writing, now is a good time to take a closer look at the stock. A closer look at the tech company and its stock's valuation reveals that shares are priced attractively after a sharp pullback. The stock's recent retreat seems to be driven by two main factors: macroeconomic uncertainty that has weighed on the overall stock market and a recent statement from Apple saying that COVID-19-related government restrictions in China have pressured iPhone 14 Pro and iPhone 14 Pro Max shipments. | With Apple (NASDAQ: AAPL) shares pulling back more than 12% over the past 30 days as of this writing, now is a good time to take a closer look at the stock. The stock's recent retreat seems to be driven by two main factors: macroeconomic uncertainty that has weighed on the overall stock market and a recent statement from Apple saying that COVID-19-related government restrictions in China have pressured iPhone 14 Pro and iPhone 14 Pro Max shipments. See the 10 stocks *Stock Advisor returns as of December 1, 2022 Daniel Sparks has no position in any of the stocks mentioned. | With Apple (NASDAQ: AAPL) shares pulling back more than 12% over the past 30 days as of this writing, now is a good time to take a closer look at the stock. A closer look at the tech company and its stock's valuation reveals that shares are priced attractively after a sharp pullback. Here's why investors may want to consider buying some shares of the tech stock while they're trading at this level. | 4 |
362 | 17,966 | 2022-12-19 00:00:00 UTC | Investors Heavily Search Apple Inc. (AAPL): Here is What You Need to Know | AAPL | https://www.nasdaq.com/articles/investors-heavily-search-apple-inc.-aapl%3A-here-is-what-you-need-to-know-2 | null | null | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Over the past month, shares of this maker of iPhones, iPads and other products have returned -11.1%, compared to the Zacks S&P 500 composite's -2.7% change. During this period, the Zacks Computer - Mini computers industry, which Apple falls in, has lost 9.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Apple is expected to post earnings of $1.94 per share for the current quarter, representing a year-over-year change of -7.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.4%.
The consensus earnings estimate of $6.19 for the current fiscal year indicates a year-over-year change of +1.3%. This estimate has changed -1.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $6.70 indicates a change of +8.3% from what Apple is expected to report a year ago. Over the past month, the estimate has changed -0.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Apple is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Apple, the consensus sales estimate for the current quarter of $121.22 billion indicates a year-over-year change of -2.2%. For the current and next fiscal years, $404.04 billion and $427.22 billion estimates indicate +2.5% and +5.7% changes, respectively.
Last Reported Results and Surprise History
Apple reported revenues of $90.15 billion in the last reported quarter, representing a year-over-year change of +8.1%. EPS of $1.29 for the same period compares with $1.24 a year ago.
Compared to the Zacks Consensus Estimate of $88.47 billion, the reported revenues represent a surprise of +1.9%. The EPS surprise was +2.38%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Apple is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom Line
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Apple. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. For the next fiscal year, the consensus earnings estimate of $6.70 indicates a change of +8.3% from what Apple is expected to report a year ago. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. And if earnings estimates go up for a company, the fair value for its stock goes up. | 4 |
363 | 17,969 | 2022-12-18 00:00:00 UTC | Foxconn fine for unauthorised China investment likely to be imposed soon - source | AAPL | https://www.nasdaq.com/articles/foxconn-fine-for-unauthorised-china-investment-likely-to-be-imposed-soon-source | null | null | TAIPEI, Dec 19 (Reuters) - Foxconn 2317.TW, the world's largest contract electronics maker, is likely to be fined soon by Taiwan's government for an unauthorised investment in a Chinese chip maker, a person with direct knowledge of the situation said on Monday.
Taiwan, which Beijing views as sovereign Chinese territory, has turned a wary eye on China's ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.
Foxconn, a major Apple Inc AAPL.O supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. Taiwan said on Saturday it would fine Foxconn over the investment.
Taiwan's government, which needs to approve all outbound investments, had not approved the deal. Taipei also prohibits companies from building their most advanced chip foundries in China to ensure they do not site their best technology offshore.
The person familiar with the situation told Reuters that the Economy Ministry would contact Foxconn on Monday to confirm the equity sale.
"Even though the investment was later pulled the fact has already been established that they invested first, and they will be fined," said the source, who was not authorised to speak to the media.
"It should not take too long for Hon Hai to be punished," the source added, referring to the company's formal name, Hon Hai Precision Industry Co Ltd.
Reuters has previously reported that the company could be fined up to T$25 million ($813,749).
Foxconn declined to comment.
Tsinghua Unigroup has not responded to a request for comment on the investment being pulled.
Taiwanese law states the government can prohibit investment in China "based on the consideration of national security and industry development". Violators of the law can be fined repeatedly until corrections are made.
Foxconn has been seeking to acquire chip plants globally as a worldwide chip shortage rattles producers of goods from cars to electronics. It is keen to make auto chips in particular as it expands into the electric vehicle market.
($1 = 30.7220 Taiwan dollars)
(Reporting by Jeanny Kao and Yimou Lee; Writing by Ben Blanchard; Editing by Kenneth Maxwell)
((ben.blanchard@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Foxconn, a major Apple Inc AAPL.O supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. The person familiar with the situation told Reuters that the Economy Ministry would contact Foxconn on Monday to confirm the equity sale. Taiwanese law states the government can prohibit investment in China "based on the consideration of national security and industry development". | Foxconn, a major Apple Inc AAPL.O supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. TAIPEI, Dec 19 (Reuters) - Foxconn 2317.TW, the world's largest contract electronics maker, is likely to be fined soon by Taiwan's government for an unauthorised investment in a Chinese chip maker, a person with direct knowledge of the situation said on Monday. "It should not take too long for Hon Hai to be punished," the source added, referring to the company's formal name, Hon Hai Precision Industry Co Ltd. Reuters has previously reported that the company could be fined up to T$25 million ($813,749). | Foxconn, a major Apple Inc AAPL.O supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. TAIPEI, Dec 19 (Reuters) - Foxconn 2317.TW, the world's largest contract electronics maker, is likely to be fined soon by Taiwan's government for an unauthorised investment in a Chinese chip maker, a person with direct knowledge of the situation said on Monday. Taiwan, which Beijing views as sovereign Chinese territory, has turned a wary eye on China's ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology. | Foxconn, a major Apple Inc AAPL.O supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. TAIPEI, Dec 19 (Reuters) - Foxconn 2317.TW, the world's largest contract electronics maker, is likely to be fined soon by Taiwan's government for an unauthorised investment in a Chinese chip maker, a person with direct knowledge of the situation said on Monday. Taiwan said on Saturday it would fine Foxconn over the investment. | 4 |
364 | 17,976 | 2022-12-17 00:00:00 UTC | 3 Stocks to Invest in Virtual Reality | AAPL | https://www.nasdaq.com/articles/3-stocks-to-invest-in-virtual-reality-0 | null | null | At a time when investors are pretty skeptical of tech stocks, now might seem like an odd time to jump into virtual reality (VR).
But the massive VR market size (which includes related augmented reality and mixed reality) will be worth an estimated $252 billion by 2028, up from just $28 billion in 2021.
That market opportunity is too big to ignore and there are some great companies investing in the hardware and software to make it a reality. Here's why Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) have great VR potential.
Image source: Getty Images.
A new Apple headset may soon be a reality
The iPhone maker has long been rumored to be working on a mixed-reality headset (some VR and AR capabilities) that could debut as soon as next year.
Noted Apple analyst Ming-Chi Kuo thinks the company will launch its mixed-reality headset in 2023 and could ship 1.5 million units in the first year.
While the timing is still uncertain, some insights have already become known, including that the company has already shown the device to its board members (an indication of its potential for a launch soon).
The company is also reportedly creating a dedicated operating system for the headset, called xrOS, and will launch a separate app store, according to recent reporting by Bloomberg.
Apple could benefit from the headset not just through device sales -- the headset is rumored to sell for around $2,000 -- but also from in-app sales.
While investors will have to wait a little while longer for Apple's headset, the company's stock is a good deal right now. Apple's shares are trading at 24 times the company's earnings, compared to a price-to-earnings (P/E ratio) of about 32 this time last year.
Alphabet's mobile dominance could translate to VR
Alphabet's Google has the most VR experience of all the companies on this list. The company launched its ill-fated augmented reality device Google Glass back in 2013 (it still exists in enterprise form) and, up until last year, had a bare-bones VR headset called Google Cardboard.
So what's Google working on now? Some Google insiders reportedly spoke to The Verge earlier this year and spilled some of the virtual reality beans, saying that the company is working on a new AR device that could launch as soon as 2024.
The company had at least 300 employees working on the secretive project at the time and was hiring people to create an operating system specifically for the device, dubbed Project Iris.
While the device isn't available yet, investors should consider the potential of the world's largest mobile software maker releasing a VR/AR headset.
Google has already proved that it can make high-quality devices -- its Pixel phones have top-notch hardware and software -- and with so many of its competitors looking to enter the VR/AR space, Google could use its software prowess to challenge them in this space.
In addition to its VR potential, Alphabet is also looking more attractive right now as the company's P/E ratio is sitting at 19 right now, down from a price-to-earnings ratio of about 28 this time last year.
Nvidia's chips could power the VR future
While Apple and Google are betting on devices and software in the VR space, Nvidia has a unique opportunity with its graphics processors.
The company is already a leader in the GPU market, and the company's high-end graphics processors -- used for everything from gaming to artificial intelligence -- are a logical choice for creating virtual worlds.
Already, Nvidia has created developer tools and applications to help companies and individuals take advantage of the company's GPUs for virtual world-building.
Most recently, the company launched its Omniverse Cloud, which it defines as a "suite of cloud services for artists, developers and enterprise teams to design, publish, operate and experience metaverse applications."
One estimate for the AR/VR chip market size from Emergen Research said it could reach $19.3 billion by 2030, up from less than $3 billion last year.
With Nvidia's shares trading at about 76 times the company's earnings, the tech stock isn't cheap. But Nvidia's strong position in gaming, its leading GPU tech, and its commitment to releasing VR tools for developers gives Nvidia's stock lots of potential in the growing VR market.
VR is still around the corner
The virtual reality market is still taking form, which means investors will need to be patient as this market grows.
But there's a shift happening right now among many technology companies toward VR, and it could eventually become a significant segment for each of these companies.
For example, the VR headset market that Apple is pursuing is poised to increase from less than 15 million headset shipments this year to nearly 35 million in 2026.
Additionally, both Apple and Google's pursuit of VR software could help each of the companies expand their services revenue through in-app purchases. And for Nvidia, VR will allow the company to sell chips in an entirely new space, including for the metaverse.
The massive virtual reality market size is a good indicator that VR will be large enough to help move the needle for these stocks, but investors will likely have to wait as VR takes shape over the next couple of years before they see the benefits.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Nvidia. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Here's why Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) have great VR potential. Noted Apple analyst Ming-Chi Kuo thinks the company will launch its mixed-reality headset in 2023 and could ship 1.5 million units in the first year. While the timing is still uncertain, some insights have already become known, including that the company has already shown the device to its board members (an indication of its potential for a launch soon). | Here's why Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) have great VR potential. But Nvidia's strong position in gaming, its leading GPU tech, and its commitment to releasing VR tools for developers gives Nvidia's stock lots of potential in the growing VR market. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Here's why Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) have great VR potential. The company launched its ill-fated augmented reality device Google Glass back in 2013 (it still exists in enterprise form) and, up until last year, had a bare-bones VR headset called Google Cardboard. Nvidia's chips could power the VR future While Apple and Google are betting on devices and software in the VR space, Nvidia has a unique opportunity with its graphics processors. | Here's why Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) have great VR potential. But Nvidia's strong position in gaming, its leading GPU tech, and its commitment to releasing VR tools for developers gives Nvidia's stock lots of potential in the growing VR market. And for Nvidia, VR will allow the company to sell chips in an entirely new space, including for the metaverse. | 4 |
365 | 17,985 | 2022-12-16 00:00:00 UTC | EU greenlights only half of global tax deal | AAPL | https://www.nasdaq.com/articles/eu-greenlights-only-half-of-global-tax-deal | null | null | Reuters
Reuters
BRUSSELS (Reuters Breakingviews) - The European Union has at last found unanimity on the global minimum tax, half of an almost 140-nation pact to clamp down on global tax avoidance. Hungary finally dropped its veto this week, only for Poland to provide last-minute drama before finally allowing the EU to proceed. Whack-a-mole objections have become EU routine on tax matters, which require the unanimity of the 27 member states.
The other half of the global deal, struck under the Organisation for Economic Co-operation and Development auspices in 2021, concerned big digital services companies. The aim was to make tech giants like Google, Microsoft and Apple pay a fairer amount of taxes on their profits, regardless of where they are booked. Here the EU is nowhere close to an agreement, and seems headed for a bigger fight.
In the meantime, trade wars over a hodgepodge of national digital services taxes are likely to continue. The U.S. suspended its trade complaints against the UK, France, Austria, Italy and the Czech Republic after the OECD deal. Those battles may have to resume before governments feel motivated enough to make more progress. (By Rebecca Christie)
Follow @Breakingviews on Twitter
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The other half of the global deal, struck under the Organisation for Economic Co-operation and Development auspices in 2021, concerned big digital services companies. The aim was to make tech giants like Google, Microsoft and Apple pay a fairer amount of taxes on their profits, regardless of where they are booked. (By Rebecca Christie) Follow @Breakingviews on Twitter Capital Calls - More concise insights on global finance: Danske slap confirms pay-what-you-can principle Nuclear fusion triggers an overreaction Rent prices conceal better U.S. inflation picture Ukraine’s Nestlé boost is as important as EU aid Deal whiz Byron Trott suffers minor grill burns (Editing by Pierre Briancon and Streisand Neto) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Reuters Reuters BRUSSELS (Reuters Breakingviews) - The European Union has at last found unanimity on the global minimum tax, half of an almost 140-nation pact to clamp down on global tax avoidance. In the meantime, trade wars over a hodgepodge of national digital services taxes are likely to continue. | BRUSSELS (Reuters Breakingviews) - The European Union has at last found unanimity on the global minimum tax, half of an almost 140-nation pact to clamp down on global tax avoidance. The aim was to make tech giants like Google, Microsoft and Apple pay a fairer amount of taxes on their profits, regardless of where they are booked. (By Rebecca Christie) Follow @Breakingviews on Twitter Capital Calls - More concise insights on global finance: Danske slap confirms pay-what-you-can principle Nuclear fusion triggers an overreaction Rent prices conceal better U.S. inflation picture Ukraine’s Nestlé boost is as important as EU aid Deal whiz Byron Trott suffers minor grill burns (Editing by Pierre Briancon and Streisand Neto) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | BRUSSELS (Reuters Breakingviews) - The European Union has at last found unanimity on the global minimum tax, half of an almost 140-nation pact to clamp down on global tax avoidance. Hungary finally dropped its veto this week, only for Poland to provide last-minute drama before finally allowing the EU to proceed. The other half of the global deal, struck under the Organisation for Economic Co-operation and Development auspices in 2021, concerned big digital services companies. | 2 |
366 | 17,996 | 2022-12-15 00:00:00 UTC | Why Apple, Amazon, and Microsoft Are All Falling Today | AAPL | https://www.nasdaq.com/articles/why-apple-amazon-and-microsoft-are-all-falling-today | null | null | What happened
Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) were all sliding this morning as investors processed the latest Federal Reserve interest rate hike and as investors worry that the Fed could potentially tip the economy into a recession.
Making matters worse today, the latest data shows that retail sales are slowing down.
As a result, Apple had fallen by 3.4%, Amazon had plunged 4%, and Microsoft had tumbled by 3.1% at 11:31 a.m. ET.
So what
The first bit of news that tech investors were focusing on this morning is that the Fed increased interest rates by an additional 50 basis points -- pushing rates up to a 15-year high.
Image source: Getty Images.
While the latest rate increase was lower than the 75-basis-point increase of previous meetings, investors were disappointed that the Fed said that its new target rate of 5.1% is higher than many economists were expecting.
Additionally, the Fed said that the job market is still too robust for its liking.
All of that caused Apple, Amazon, and Microsoft investors to worry that the Fed will continue to take an aggressive approach to tame inflation and could end up pushing the economy into a recession.
Making matters worse for these stocks today was Commerce Department data showing that retail sales fell 0.6% in November, more than the 0.3% some economists had been expecting.
That drop was the largest in nearly a year.
Apple, Amazon, and Microsoft are all dependent on consumer sales for at least some segments of their overall businesses, so data showing a retail slowdown has investors worried.
Additionally, the Commerce Department data also showed that online sales fell 0.9% in November, another troubling trend for these companies.
Now what
Between rising interest rates, fears of a recession, and slowing retail sales, it's not surprising to see these companies' share prices falling today.
While Apple beat top- and bottom-line estimates in its fourth quarter (which ended on Sept. 24), the company's iPhone sales and services revenue were below expectations.
Microsoft also beat expectations for its most recent quarter (which ended on Sept. 30), but it issued guidance that was weaker than expected, and its cloud revenue disappointed investors.
Meanwhile, Amazon missed analysts' consensus revenue estimates in its latest quarter (ending Sept. 30) and issued lower-than-expected revenue guidance.
All this means that investors were already a bit on edge and keeping a close eye on what the economy is doing and how it could affect these tech stocks. And with retail sales falling and interest rates likely rising through 2023, Apple, Amazon, and Microsoft investors worried today that the coming year could be a difficult one.
That doesn't mean these stocks aren't still good long-term investments, but their share prices could remain volatile in the near term as investors process negative economic data.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Amazon.com, Apple, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) were all sliding this morning as investors processed the latest Federal Reserve interest rate hike and as investors worry that the Fed could potentially tip the economy into a recession. All of that caused Apple, Amazon, and Microsoft investors to worry that the Fed will continue to take an aggressive approach to tame inflation and could end up pushing the economy into a recession. Making matters worse for these stocks today was Commerce Department data showing that retail sales fell 0.6% in November, more than the 0.3% some economists had been expecting. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) were all sliding this morning as investors processed the latest Federal Reserve interest rate hike and as investors worry that the Fed could potentially tip the economy into a recession. Making matters worse today, the latest data shows that retail sales are slowing down. Making matters worse for these stocks today was Commerce Department data showing that retail sales fell 0.6% in November, more than the 0.3% some economists had been expecting. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) were all sliding this morning as investors processed the latest Federal Reserve interest rate hike and as investors worry that the Fed could potentially tip the economy into a recession. Apple, Amazon, and Microsoft are all dependent on consumer sales for at least some segments of their overall businesses, so data showing a retail slowdown has investors worried. And with retail sales falling and interest rates likely rising through 2023, Apple, Amazon, and Microsoft investors worried today that the coming year could be a difficult one. | What happened Shares of Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) were all sliding this morning as investors processed the latest Federal Reserve interest rate hike and as investors worry that the Fed could potentially tip the economy into a recession. So what The first bit of news that tech investors were focusing on this morning is that the Fed increased interest rates by an additional 50 basis points -- pushing rates up to a 15-year high. And with retail sales falling and interest rates likely rising through 2023, Apple, Amazon, and Microsoft investors worried today that the coming year could be a difficult one. | null |
367 | 18,015 | 2022-12-14 00:00:00 UTC | Noteworthy Wednesday Option Activity: AZO, AMZN, AAPL | AAPL | https://www.nasdaq.com/articles/noteworthy-wednesday-option-activity%3A-azo-amzn-aapl | null | null | Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in AutoZone, Inc. (Symbol: AZO), where a total of 1,961 contracts have traded so far, representing approximately 196,100 underlying shares. That amounts to about 134.5% of AZO's average daily trading volume over the past month of 145,760 shares. Particularly high volume was seen for the $2000 strike put option expiring January 13, 2023, with 68 contracts trading so far today, representing approximately 6,800 underlying shares of AZO. Below is a chart showing AZO's trailing twelve month trading history, with the $2000 strike highlighted in orange:
Amazon.com Inc (Symbol: AMZN) saw options trading volume of 929,962 contracts, representing approximately 93.0 million underlying shares or approximately 124.2% of AMZN's average daily trading volume over the past month, of 74.9 million shares. Particularly high volume was seen for the $95 strike call option expiring December 16, 2022, with 46,577 contracts trading so far today, representing approximately 4.7 million underlying shares of AMZN. Below is a chart showing AMZN's trailing twelve month trading history, with the $95 strike highlighted in orange:
And Apple Inc (Symbol: AAPL) saw options trading volume of 812,455 contracts, representing approximately 81.2 million underlying shares or approximately 114.4% of AAPL's average daily trading volume over the past month, of 71.0 million shares. Especially high volume was seen for the $150 strike call option expiring December 16, 2022, with 47,775 contracts trading so far today, representing approximately 4.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange:
For the various different available expirations for AZO options, AMZN options, or AAPL options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
Cheap Consumer Shares
EOLS Average Annual Return
Top Ten Hedge Funds Holding DYNC
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Especially high volume was seen for the $150 strike call option expiring December 16, 2022, with 47,775 contracts trading so far today, representing approximately 4.8 million underlying shares of AAPL. Below is a chart showing AMZN's trailing twelve month trading history, with the $95 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 812,455 contracts, representing approximately 81.2 million underlying shares or approximately 114.4% of AAPL's average daily trading volume over the past month, of 71.0 million shares. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: For the various different available expirations for AZO options, AMZN options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing AMZN's trailing twelve month trading history, with the $95 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 812,455 contracts, representing approximately 81.2 million underlying shares or approximately 114.4% of AAPL's average daily trading volume over the past month, of 71.0 million shares. Especially high volume was seen for the $150 strike call option expiring December 16, 2022, with 47,775 contracts trading so far today, representing approximately 4.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: For the various different available expirations for AZO options, AMZN options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing AMZN's trailing twelve month trading history, with the $95 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 812,455 contracts, representing approximately 81.2 million underlying shares or approximately 114.4% of AAPL's average daily trading volume over the past month, of 71.0 million shares. Especially high volume was seen for the $150 strike call option expiring December 16, 2022, with 47,775 contracts trading so far today, representing approximately 4.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: For the various different available expirations for AZO options, AMZN options, or AAPL options, visit StockOptionsChannel.com. | Below is a chart showing AMZN's trailing twelve month trading history, with the $95 strike highlighted in orange: And Apple Inc (Symbol: AAPL) saw options trading volume of 812,455 contracts, representing approximately 81.2 million underlying shares or approximately 114.4% of AAPL's average daily trading volume over the past month, of 71.0 million shares. Especially high volume was seen for the $150 strike call option expiring December 16, 2022, with 47,775 contracts trading so far today, representing approximately 4.8 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $150 strike highlighted in orange: For the various different available expirations for AZO options, AMZN options, or AAPL options, visit StockOptionsChannel.com. | null |
368 | 18,024 | 2022-12-13 00:00:00 UTC | After Hours Most Active for Dec 13, 2022 : INTC, DIS, AMZN, AAPL, T, VZ, MSFT, HBAN, V, GOOGL, NIO, BEKE | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-dec-13-2022-%3A-intc-dis-amzn-aapl-t-vz-msft-hban-v-googl-nio | null | null | The NASDAQ 100 After Hours Indicator is down -5.33 to 11,828.88. The total After hours volume is currently 167,541,844 shares traded.
The following are the most active stocks for the after hours session:
Intel Corporation (INTC) is unchanged at $28.73, with 8,045,958 shares traded. INTC's current last sale is 95.77% of the target price of $30.
Walt Disney Company (The) (DIS) is unchanged at $94.70, with 6,567,501 shares traded. As reported by Zacks, the current mean recommendation for DIS is in the "buy range".
Amazon.com, Inc. (AMZN) is unchanged at $92.49, with 5,464,912 shares traded. As reported by Zacks, the current mean recommendation for AMZN is in the "buy range".
Apple Inc. (AAPL) is unchanged at $145.47, with 5,404,084 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
AT&T Inc. (T) is -0.01 at $19.11, with 5,064,573 shares traded. T's current last sale is 84% of the target price of $22.75.
Verizon Communications Inc. (VZ) is unchanged at $37.86, with 4,827,699 shares traded. VZ's current last sale is 75.72% of the target price of $50.
Microsoft Corporation (MSFT) is unchanged at $256.92, with 4,442,117 shares traded. As reported by Zacks, the current mean recommendation for MSFT is in the "buy range".
Huntington Bancshares Incorporated (HBAN) is +0.02 at $14.23, with 3,910,414 shares traded. HBAN's current last sale is 91.81% of the target price of $15.5.
Visa Inc. (V) is unchanged at $213.04, with 3,853,339 shares traded. As reported by Zacks, the current mean recommendation for V is in the "buy range".
Alphabet Inc. (GOOGL) is -0.12 at $95.51, with 3,771,241 shares traded. As reported by Zacks, the current mean recommendation for GOOGL is in the "buy range".
NIO Inc. (NIO) is +0.03 at $12.34, with 3,691,025 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
KE Holdings Inc (BEKE) is unchanged at $14.62, with 3,290,915 shares traded. As reported by Zacks, the current mean recommendation for BEKE is in the "buy range".
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc. (AAPL) is unchanged at $145.47, with 5,404,084 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Walt Disney Company (The) (DIS) is unchanged at $94.70, with 6,567,501 shares traded. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is unchanged at $145.47, with 5,404,084 shares traded. As reported by Zacks, the current mean recommendation for DIS is in the "buy range". | Apple Inc. (AAPL) is unchanged at $145.47, with 5,404,084 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". As reported by Zacks, the current mean recommendation for AMZN is in the "buy range". | Apple Inc. (AAPL) is unchanged at $145.47, with 5,404,084 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The NASDAQ 100 After Hours Indicator is down -5.33 to 11,828.88. | null |
369 | 18,034 | 2022-12-12 00:00:00 UTC | Top advisor for French data privacy watchdog advises 6 mln-euro fine against Apple | AAPL | https://www.nasdaq.com/articles/top-advisor-for-french-data-privacy-watchdog-advises-6-mln-euro-fine-against-apple | null | null | PARIS, Dec 12 (Reuters) - The top advisor for French data protection authority's sanction body advised on Monday to fine iPhone maker Apple AAPL.O 6 million euros ($6.34 million) for breach of privacy rules tied to the use of trackers for ad campaigns online.
The recommendation made by the rapporteur, François Pellegrini, follows an investigation by the authority, CNIL, after the complaint from France Digitale, the biggest lobby for French startups and venture capitalists in the country.
CNIL's sanction body is free to follow the rapporteur's recommendations. It still has to make a decision on the case.
($1 = 0.9464 euros)
(Reporting by Mathieu Rosemain, Editing by Dominique Vidalon)
((Mathieu.Rosemain@thomsonreuters.com; +33 1 8098 1239; Reuters Messaging: mathieu.rosemain.thomsonreuters.com@reuters.net; Twitter: https://twitter.com/MathieuRosemain))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | PARIS, Dec 12 (Reuters) - The top advisor for French data protection authority's sanction body advised on Monday to fine iPhone maker Apple AAPL.O 6 million euros ($6.34 million) for breach of privacy rules tied to the use of trackers for ad campaigns online. The recommendation made by the rapporteur, François Pellegrini, follows an investigation by the authority, CNIL, after the complaint from France Digitale, the biggest lobby for French startups and venture capitalists in the country. ($1 = 0.9464 euros) (Reporting by Mathieu Rosemain, Editing by Dominique Vidalon) ((Mathieu.Rosemain@thomsonreuters.com; +33 1 8098 1239; Reuters Messaging: mathieu.rosemain.thomsonreuters.com@reuters.net; Twitter: https://twitter.com/MathieuRosemain)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | PARIS, Dec 12 (Reuters) - The top advisor for French data protection authority's sanction body advised on Monday to fine iPhone maker Apple AAPL.O 6 million euros ($6.34 million) for breach of privacy rules tied to the use of trackers for ad campaigns online. The recommendation made by the rapporteur, François Pellegrini, follows an investigation by the authority, CNIL, after the complaint from France Digitale, the biggest lobby for French startups and venture capitalists in the country. CNIL's sanction body is free to follow the rapporteur's recommendations. | PARIS, Dec 12 (Reuters) - The top advisor for French data protection authority's sanction body advised on Monday to fine iPhone maker Apple AAPL.O 6 million euros ($6.34 million) for breach of privacy rules tied to the use of trackers for ad campaigns online. The recommendation made by the rapporteur, François Pellegrini, follows an investigation by the authority, CNIL, after the complaint from France Digitale, the biggest lobby for French startups and venture capitalists in the country. ($1 = 0.9464 euros) (Reporting by Mathieu Rosemain, Editing by Dominique Vidalon) ((Mathieu.Rosemain@thomsonreuters.com; +33 1 8098 1239; Reuters Messaging: mathieu.rosemain.thomsonreuters.com@reuters.net; Twitter: https://twitter.com/MathieuRosemain)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | PARIS, Dec 12 (Reuters) - The top advisor for French data protection authority's sanction body advised on Monday to fine iPhone maker Apple AAPL.O 6 million euros ($6.34 million) for breach of privacy rules tied to the use of trackers for ad campaigns online. The recommendation made by the rapporteur, François Pellegrini, follows an investigation by the authority, CNIL, after the complaint from France Digitale, the biggest lobby for French startups and venture capitalists in the country. CNIL's sanction body is free to follow the rapporteur's recommendations. | null |
370 | 18,048 | 2022-12-11 00:00:00 UTC | 1 Green Flag for Apple Stock in 2022, and 1 Red Flag | AAPL | https://www.nasdaq.com/articles/1-green-flag-for-apple-stock-in-2022-and-1-red-flag | null | null | With a market cap of $2.26 trillion, Apple (NASDAQ: AAPL) is the most valuable company in the world. Its dominance in the tech world has made it one of the best growth stocks, with its shares rising 227% in the last five years despite a sell-off in 2022, which has pulled its stock down 22% year to date.
There are numerous green flags for the iPhone manufacturer, with its walled garden of products capable of pulling consumers further into its ecosystem with just one purchase. However, its services business, including subscription-based platforms such as Apple Music, TV+, Fitness+, Arcade, News+, and iCloud, is especially promising for its long-term growth.
Meanwhile, Apple's reliance on China for its iPhone production could present more short-term headwinds. Here's why.
Green flag: Growing services business
Apple's services business has quickly become its second-biggest segment, earning 19.8% of the company's revenue in its fiscal 2022 (which ended in September). Throughout the year, services revenue increased 14% year over year to $78.1 billion.
The most attractive aspect of Apple's services business is its considerable profit margins. In fiscal 2022, the company's gross profit margin for its services stood at 71.7%, while the same metric for its products came in at 36.3%. Gross margins in services have also grown over the last three years, with the segment reporting 69.7% in 2021 and 66% in 2020.
In its products business, Apple accrues an operating expense for each device made, from the materials and labor involved. However, with services, the company can pay once for a piece of content and sell it millions of times over to consumers worldwide. And adding a monthly subscription for consumers to access that content benefits margins further.
In October, Apple introduced price hikes across all of its services, with Apple TV+ specifically rising 40% from $4.99 to $6.99 per month. With 2023 just around the corner, services revenue is likely to increase over the next year as Apple products continue to grow in popularity and consumers are attracted to all of the offerings associated with them.
Red flag: Production strains for its cash cow
In Apple's fiscal 2022, its iPhone segment earned $205.5 billion, making up 52% of its total revenue. As a result, when news broke at the end of October that an outbreak of COVID-19 cases in China had prompted the government to introduce strict lockdowns, Apple's stock began to slide as investors grew concerned over potential issues with iPhone production. From Oct. 28 to Nov. 9, the company's shares dipped 13.4%.
On Oct. 31, Reuters reported that Foxconn -- also known as Hon Hai Technology Group (OTC: HNHPF), which manufactures about 70% of all iPhones -- could see a 30% decline in iPhone production amid the lockdowns. While lockdown measures in China allow factories like Foxconn to remain active, workers must live at the plants to continue working, understandably leading to pushback from employees.
Foxconn said it coordinated backup production with other plants to reduce the impact. However, that has done little to quell investor concern about Apple's overreliance on China to produce its biggest earner.
Apple has recently made moves to relocate portions of its iPhone production to India; JPMorgan Chase estimates the tech giant will move about 5% of iPhone 14 manufacturing to the country by the end of 2022, and 25% of all of its products by 2025.
China's zero-COVID policy seems to have been the last straw for Apple as it begins to improve its supply chain. However, shifting countries won't come quickly. Wedbush analyst Daniel Ives estimates it will take until 2025 or 2026 for Apple to relocate 50% of its iPhone production to India or Vietnam, if it takes an aggressive approach.
Apple may suffer temporary headwinds from a troubling supply chain; however, its stock remains a buy for the long term. The company ended Sept. 30 with $111.4 billion in free cash flow, proving it has the means to invest heavily in altering its production strategy. Given that it's the home of a quickly growing services business and some of the world's most in-demand products, I wouldn't bet against Apple's long-term prospects.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and JPMorgan Chase. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | With a market cap of $2.26 trillion, Apple (NASDAQ: AAPL) is the most valuable company in the world. Red flag: Production strains for its cash cow In Apple's fiscal 2022, its iPhone segment earned $205.5 billion, making up 52% of its total revenue. As a result, when news broke at the end of October that an outbreak of COVID-19 cases in China had prompted the government to introduce strict lockdowns, Apple's stock began to slide as investors grew concerned over potential issues with iPhone production. | With a market cap of $2.26 trillion, Apple (NASDAQ: AAPL) is the most valuable company in the world. Green flag: Growing services business Apple's services business has quickly become its second-biggest segment, earning 19.8% of the company's revenue in its fiscal 2022 (which ended in September). Apple has recently made moves to relocate portions of its iPhone production to India; JPMorgan Chase estimates the tech giant will move about 5% of iPhone 14 manufacturing to the country by the end of 2022, and 25% of all of its products by 2025. | With a market cap of $2.26 trillion, Apple (NASDAQ: AAPL) is the most valuable company in the world. Green flag: Growing services business Apple's services business has quickly become its second-biggest segment, earning 19.8% of the company's revenue in its fiscal 2022 (which ended in September). As a result, when news broke at the end of October that an outbreak of COVID-19 cases in China had prompted the government to introduce strict lockdowns, Apple's stock began to slide as investors grew concerned over potential issues with iPhone production. | With a market cap of $2.26 trillion, Apple (NASDAQ: AAPL) is the most valuable company in the world. Its dominance in the tech world has made it one of the best growth stocks, with its shares rising 227% in the last five years despite a sell-off in 2022, which has pulled its stock down 22% year to date. Green flag: Growing services business Apple's services business has quickly become its second-biggest segment, earning 19.8% of the company's revenue in its fiscal 2022 (which ended in September). | 4 |
371 | 18,052 | 2022-12-10 00:00:00 UTC | An Investor's Look at the Energy Picture | AAPL | https://www.nasdaq.com/articles/an-investors-look-at-the-energy-picture | null | null | In this podcast, Motley Fool analysts Deidre Woollard and Jim Gillies discuss:
Europe's energy crunch and why Russia isn't playing along with price caps.
Investing in economic cycles as a contrarian.
Why AutoZone is "one of the best-managed companies and capital allocation stories."
Plus, Motley Fool contributor Brian Withers joins Motley Fool host Alison Southwick and Motley Fool personal finance expert Robert Brokamp to discuss how to encourage kids to invest.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Dec. 6, 2022.
Deidre Woollard: Europe's gotten energy conscious, AutoZone keeps driving along. You're listening to Motley Fool Money. Welcome to Motley Fool Money. Today we're looking at the impact of energy prices as cold weather gets real here in North America. We're checking out more retail results, and we'll be talking about kids and money. I'm Deidre Woollard sitting in for Chris Hill, and I'm joined by Motley Fool Senior Analyst Jim Gillies. Hi, Jim.
Jim Gillies: How are you doing?
Deidre Woollard: I'm doing all right. I'm a little bundled up today. I know you are probably a lot more bundled up than I am because you live in Guelph, Ontario, Canada, where I don't think it's very warm right now. We're getting close to winter. Energy is a huge problem this year. How bad could it get, and what areas are you looking at?
Jim Gillies: We're not that cold up here. Unfortunately, Ontario is pretty much all natural gas-fired housing heat plus a lot of energy. It's all very natural gas or nuclear. We actually live in a pretty decent area for energy, but that is not an energy pricing. That's not the case for a large part of America and Europe, even Canada for that matter. My approach to energy is basically this. There's a certain amount of demand worldwide for energy of all sorts. We're talking about heating, we're talking about electrical power, we're talking about driving your car. But there's a certain rather large number that represents the amount of aggregate demand. That number is growing just shy of about 2 percent annually, and it has for the last seven decades or something like that. So it's probable that trend will probably continue for the foreseeable future as much as we want to get on efficiency, and I think that's a great thing as a former environmental engineer, but big fan of energy efficiency. I think it's driven as well by the move to renewables and the move to more sustainable energy sources and just burning hydrocarbons. I'm a big fan of that.
I've got solar panels on my roof. When they work, they're great. But that giant bowl that we need to fill every year is growing by about 2 percent a year, and the amount of that bowl or the portion of that bowl has been filled by fossil fuels, the big three fossil fuels, coal, oil, and gas, is, tends to run between 75 and 80 percent, about 77 percent I think so, but say 75-80. That amount has not been changed for the better part of my lifetime, the last four decades plus. We can say, cold weather might portend higher heating bills or higher energy bills or higher cost of gasoline, although it's coming down. I step back and go like, one hot summer where everyone's running their AC, one cold winter, that doesn't change what I look at as the bigger drivers here. And the bigger driver is a gradually 2 percent a year expanding bowl that you have to fill. Heretofore we fill it mostly with fossil fuels.
While I'd love to see that change, and I think it's important to drive as much change as possible toward the renewable side of things or even toward the nuclear side of things. My present value investing dollar does tend to be more focused on what's working now and what will probably be working for the foreseeable, read less than the next decade, foreseeable future. That does tend to be oil and gas plays for me, especially when you're looking at a lot of the oil and gas plays today after a lot of them lived a little, shall we say, liberally in the last oil boom, when oil got up to about 100 bucks, averaged around 100 bucks 2012-2014. Those companies didn't make a lot of money because they were spending it all over the place and paying big dividends and living on company credit cards. Oil fell, those companies got destroyed and they're now coming back and they are living within their means more now, they're really focused on shareholder returns, those dividends, share buybacks, living within their means in terms of cash flow, they're not willy-nilly borrowing. I know it's not very popular, it's certainly not where I thought I'd be as an environmental engineer.
From an investing perspective, I like the oil and gas plays with some nuclear stuff. But oil and gas plays are for me. If I get 5 percent yield and I know you're going to probably buy in between 5 to 10 percent of your stock or your shares this year, and you're going to make a lot of money basically at oil prices above $55? That's where I'm putting my money.
Deidre Woollard: Well, that makes sense because what you talked about, how long this cycle is, it's exciting to have renewables, we want to have more renewables. It's where things are going. But as you pointed out, it's not where things are at right now. This year especially, we're facing the geopolitical concerns have been dramatic. We've got, last week the EU agreed to cap the Russians seaborne prices at $60. That's led to all of this concern about, is this process going to work? Are they instead just going to go to China, India, or anyone else and sell their oil there? There have been some tanker problems happening. This is all short-term stuff, but is it anything that we should keep an eye on?
Jim Gillies: I do like how it was worded. The EU agreed to cap Russian seaborne oil prices. Did Russia agree to this cap?
Deidre Woollard: Not so much.
Jim Gillies: No, not so much. I think that's always where I come down on these things. If you foist something upon a person, if you foist something upon a country or a company or whatever, you should expect they're going to work around it. That's probably a terrible analogy, but if there's a specific type of tax, it's leveled upon you as a citizen, regardless, some sort of an income tax, or they change the tax bracket where the higher income tax bracket might apply, what's going to happen to the people upon whom that tax is expected to fall? All those people are going to start shifting money around to try to report lower taxable earnings or take advantage of tax shelters, they're going to react, and so such taxes when they come in, never quite raise the tax revenue that they initially thought they're going to do. I look at this going, OK, so we've got this price cap on seaborne Russian oil, that is $60 a barrel. I did see that Ural crude, so the Russian oil price, it was about 80 bucks a barrel a month ago. Now it's barely over 60. It's certainly the pricing market seems to think that, oh yeah, great, it's going to be 60 bucks.
Yeah, if I'm Russia, I'm just sell it, like, OK fine to the EU. It's like, I'm going to China and India to the degree that the West and Europe can put pressure on China, India to not buy. I suppose that could hurt Russia a little bit. It sounds horribly cynical and I'm sorry for that, but I think most countries, most people are going to act in their own self-interest pretty much all of the time. You've just imposed this upon Russia. They're going to act in their own self-interest. Which means, yeah, picking up the phone and calling clients in China and India. I don't have to like it, but [laughs] I think it probably does flow in the direction -- no pun intended -- that you suggested.
Deidre Woollard: Well, let's take your contrarian point of view to retail. We had two very different companies reporting earnings today, and both did really well. We had AutoZone and we had Signet Jewelers. Different companies, but definitely specialty retailers. Let's start out with AutoZone. Good quarter for them. Net sales of $4 billion, their same-store sales -- you always got to look at that for retail -- that's up 5.6 percent. In the short term, it seems like AutoZone, great for if the recession, people were repairing their cars or car staying on the road longer. Is this a long-term play?
Jim Gillies: I think AutoZone has been one of the great long-term plays for the past couple of decades, and I've never owned a share, which more fool me, I suppose.
Jim Gillies: I think AutoZone has been probably one of the best-managed companies and one of the best capital allocation strategies the past few decades. Because what do they do? They basically have a market space that not a lot of people come into, all are going to be chasing them down the distribution network is already a prohibitive, I think, competitive advantage for potential interlopers. I think there's probably some argument that the rise of electric vehicles, if it does play out the way certain people think it'll play out, probably could be a bit of a detractor to AutoZone's business because a lot of the parts that that we replace in our internal combustion engine vehicles, a lot of those maintenance items, may migrate away or cars with regenerative braking so your not slamming on the brakes a lot as much because you're using the car's natural generative breaking to slow yourself down might extend say the life of your brake pads and your brake rotors and whatever. Maybe you replace them less, and if you're replacing them less, it weighs on AutoZone or competitors like O'Reilly. You probably still use the same amount of windshield wiper blades, but I think that this company has been and probably for the foreseeable future, probably continues doing what it's been doing. It's taken over. It's a saying I got from our colleague Bill Mann and I think it's a really good one.
Companies that take over mountains. No one else knows what they want until it's almost impossible to dislodge them. AutoZone's one of, I'll argue it's a duopoly in the auto-parts space, replacement parts, accessories, that sort of thing with O'Reilly. As a result, they have a distribution network second to none and they can leverage this whole thing to make a great amount of cash. Then what do they do with that cash? I'm a cash-flow based investor, probably a little too obsessed with it to be honest with you. But it is what it is. The amount of cash that they've generated has led them to just relentlessly buying back their own stock. When they done what they've done relentlessly buying back their own stock, it ratchets, I think the market cap today is about 45, 47 billion dollars, I'd have to go look up the number of years, but since they started being very aggressive with the buybacks, I think. Oh, here it is, since 1998. Just over two decades. Again, $45 billion market cap today, roughly 47 billion. They bought back $31 billion worth of stock. They bought back almost their entire self. What that's done is it's taken the share count for back in the day has gone from the share count from 150 million shares, I think like a yeah, like in 1998, there was 152 million shares outstanding. Today it is 19 million shares outstanding. They just been eating themselves.
Then you go look at, well, what's that done to the share price? Because as a company buys back its own stock, if you're not selling, you own a greater proportionate amount of the company because you didn't sell while the company bought in and took it out. Just over the past decade, I'm just looking at the last 10 years, it's gone from $360 a share ballpark to $2,500 a share. But just by doing nothing and letting this company generate cash and then return that cash back to you in the form of very aggressive share buybacks. You've got, what, an eight-bagger. It's not a very exciting story. It's more exciting -- cybersecurity is much more exciting, e-commerce, a much more exciting story. But it's these quiet little non exciting stories. These stories where again, it's essentially, I took over -- a seven-bagger -- I took over a mountain. No one else knew they wanted and have treated myself to 21 percent annualized returns, which is roughly what AutoZone has given you the past decades. I'm not very exciting myself, so I try to avoid the really exciting investing stories. Again, it's remarkable to me I've never owned a share of AutoZone, even though I respect the hell out of them.
Deidre Woollard: You're pretty exciting.
Jim Gillies: No, I'm not.
Deidre Woollard: What I think you talked about it being a quiet plan, but I think it's also a visible play. If you're driving around, you see them. There's thousands of stores all over, there are definitely visible. I want to talk about one more that's visible. Probably not your area of interest, but Signet Jewelers. They also reported, parent company of Zales, Jared, Kay Jewelers. They also recently bought Blue Nile. They've got a lock on consumer jewelry and we're headed into a recession potentially, inflation's high. You might think this is a bad time to be them and it hasn't been. They had a great quarter, they raised their forecast. What is happening here? Consumer discretionary seems to be doing a lot better than I would have thought.
Jim Gillies: Can I be contrarian?
Deidre Woollard: Please.
Jim Gillies: I'm not sure we're heading into a recession.
Deidre Woollard: Yeah. I'm not so sure, either, but everybody likes to talk about it. [laughs]
Jim Gillies: Well, that's just it. Everyone likes to talk about it. If there is a recession coming and there might be, but I think it's primed to be fairly mild and my evidence I'll cite against that is again, the unemployment numbers don't say recession. Yes, a lot of the big tech companies are doing some layoffs. But the more blue collar companies are as of yet not following along, and then the other pieces of evidence I would point to is, have you tried to travel recently? Boy, people are spending a lot of money to do practically anything. Then the third piece is this what you've just said here, the consumer discretionary and certainly the wealthy haven't noticed any inflationary issue. But for those of us, shall we say further down the socioeconomic ladder. Boy, there's a lot of spending going on and on consumer discretionary and jewelry on people still playing with cars [inaudible].
The pent-up demand, I think from the pandemic, from being largely shuttered depending where you live, I suppose, but having your options to go out and do things for much of 2020 and 2021, that demand has been unfettered and I think it's still running pretty hot. Because of that, I'm not sure we're into that much of a recession. If you're not in that much of recession, then companies like what's going on with Signet and what have you, I think makes a little bit more sense. Doesn't mean I'm buying a lot of jewelry [laughs] but some people are. I took your question about a specific company and went off in a macro rant, but that's more I'm like yeah, I'm not sure we're going to get the recession, some people think we're going to get, and if that's the case, then I actually think it portends fairly bullish things resolved.
Deidre Woollard: I think it portends fairly bullish things for stocks that people maybe thinking about a recession and think I should stay away from those stocks that are mostly discretionary. It seems like the contrarian view is maybe not. Well, I think that's a great place to end things. Thank you so much for your time. This was always a pleasure to talk to you, Jim.
Jim Gillies: Thank you very much.
Deidre Woollard: Want your kids to start investing? Then keep the conversation short. Motley Fool contributor Brian Withers joins Alison Southwick and Robert Brokamp to discuss how he got his kids in the market and let that compound interest go to work. Last month, Brian, you posted a thread on Twitter and it started, my kids will be millionaires by the time they are 40. Here's how, and that here's how wasn't because they will win the lottery or because of wealthy aunt is going to suffer a sudden tragic accident. Don't ask how you know that. The answer was because you introduced investing to your kids at a young age, which is an incredible gift to give someone you love. The younger, the better. Brian, how did this happen?
Brian Withers: Let's jump in the wayback machine back to 2004. Fancy music. I was 37 years old. My kids were 5 and 7, and I had just joined The Motley Fool and at the time, I had this realization that investing was all about time in the market and not timing the market. I've been investing for about six years at that point. This realization just hit me like a ton of bricks, and I was like, man, if I just realized this 10 years ago, 15 years ago, wait a minute. I can give my kids a head start that I didn't have. In fact, I can give them about a 30-year head start. That's when I committed that I was going to make this happen however I was going to try to make it happen.
Deidre Woollard: Your boys are now in their 20s, but you started when they were about 5 and 7. What exactly did you do? Because while I'm sure your kids were very advanced, they probably weren't ready for a discounted cash flow and EBITDA.
Brian Withers: I don't know that we've ever done this cash flow with the kids. But it all started with a piece of construction paper and a Buzz Lightyear figurine. It was something I called the pennies game. I took one of these 11 by 17 pieces of construction paper and broke it into six squares, or made it into six squares, and then I took a Buzz Lightyear figurine and put it on one of the squares. At the time, Pixar was a public company, and so that square, essentially represented Pixar. I drew the golden arches for McDonald's. I took a Nintendo game cartridges that they had for EA sports, and I filled in the rest of the squares with other companies they were familiar with. Then I sat them around the little piece of construction paper and it gave them a set of pennies and they said, invest each as many pennies as you want into the companies that you think have the brightest future, the ones that you like the best. They went ahead and they put their pennies down and five minutes later they were off back to their Game Boy colors, playing one of their Pokémon games. It was quick and done. They were like, whatever. [laughs]
Deidre Woollard: We'll get back to having low expectations. We'll probably visit that in a little bit here, but let's talk a little bit more than about, so they put the pennies where they wanted to, they allotted their little chit, so to speak. Then what did you do? How did this then works or the mechanics of the pennies game throughout the year?
Brian Withers: For each penny, it represented $100 and I invested a $100 into each of the companies that they had chosen on the piece of construction paper. The next year, I had them more involved in the process about picking the companies that went onto the piece of construction paper. We did it just once a year and part of the reason i did it once a year so, I can have enough money so that they could spread it out over a few companies. I always have it hard time just picking one stock if I can only invest in one stock today. That allowed for multiple purchases. The other piece that I did was I wanted to set them up for success. I picked from a vetted list of Stock Advisor buy recommendations so that I knew that these were good companies to start with. Then the last piece was, I let them pick. I didn't influence their picks and so they knew that they were in charge of what they were investing in and how much.
Deidre Woollard: What happened when your kids got older? Like how did the pennies games evolve or how did the conversations change?
Brian Withers: After a few years, I actually shared their portfolio with them and partially because I didn't want them already picking stocks that were already more than maybe 10 percent of their portfolio that they had. But as they got older and they got more savvy with computers, I set up a spreadsheet to split the money up between the stocks that they selected. Eventually, they set up the buy orders in their Fidelity account to buy the stocks. We rarely sold, but if there was a decision that came up, we thought it was a good time to do it. We always involve the kids and the decision and they had the final word. We did this once a year for about 12 years until the oldest started in college, and then we stopped funding the accounts.
Deidre Woollard: In the past, I've tried to talk to my child about investing. She's 9 now. It made me feel a bit better that you had a similar experience with your kids, which of course, as we've mentioned before, it leads to the advice of have low expectations on how much time you're going to spend actually talking stocks?
Brian Withers: I remember when I brought up it's time to do the pennies game again this summer. I would actually get eye rolls. [laughs] It's like, no, don't make me do it, like seriously. We did drag them through a few years, but I did share when good things happen, like there was a spiffy-pop or one of their stocks has doubled over the period of time they had owned it. I think the key thing here is like anything else is to expose your kids to as many experiences possible. Hopefully, something clicks along the way. I guess the other piece is, don't really force it and meet them where they are. I've always tried to ask them about why they picked certain stocks and I always get insightful answers. I've seen some parents insist on an investing journal, but [laughs] that would have never worked with my kids.
Deidre Woollard: No, I don't think mine, either. You talk about thinking about investing in like teachable moments. I'm reminded of a well-worn story here at The Motley Fool of how our founders first fell in love with investing. They tell the story all the time. Basically, they were with their dad at the grocery store and their dad pulled some chocolate pudding down from the shelf and said, "You see this chocolate pudding. We own shares of the company that makes this chocolate pudding. Let's buy some chocolate pudding." From a young age they made the connection that investing gets you something awesome, like chocolate pudding. What are some teachable moments that you've had with your kids about investing?
Brian Withers: There was one story of the Gardners. I remember when they had graduated from high school and they were gifted some stocks, I think, from their grandfather. When they looked at this portfolio statement, they were amazed at the super-low cost basis. Then the value of the stocks was mostly all in gains. I wanted that kind of experience for my kids, and so over this period of time, we started when they were 5 and 7 and like now they're in the 20s. Some of that did happen and that was really cool. But I remember one specific time when Zack was in a Chipotle with me, and he asked, how does Chipotle make money? I was like, oh boy, don't screw this up. [laughs] That went over pretty well and I loved Chipotle as a starter stock because it's pretty easy to understand. But I've also had the kids teach me. I remember they were buying Netflix in 2010 when I was selling. They've bought Apple multiple times, even though both of them are Android phone users. I was like why are you buying Apple stock when you own Android phones? They were like, Dad, didn't you just pay over $1,000 for the new iPhone X? I'm like, well, you got me there. Also Alex has had a tremendous conviction for Tesla from the very beginning.
Deidre Woollard: Let's talk about the type of account options you have for investing when you're a kid. I know this is a topic near and dear to Bro's heart. Bro, you've been sitting there so patiently and quiet. Let's hear everything you have to say about this topic.
Robert Brokamp: Well, maybe not everything, but I do have three options for you. The first is a custodial account like an UGMA and UTMA, that's what Brian used for his kids. There are some tax benefits, so investment earnings up to 1,150 is tax-free for the kid and then the next 1,150 is taxed at the kid's tax bracket now, but then gains taxed after that are taxed at the parents' tax bracket. I should add that these numbers are for 2022 and they're going up a bit in 2023. Another thing you need to know about these accounts as the kids get control at the age of majority and that varies by state, but it's generally 18 to 21, but can be as high as 25 in some states. Then at that point, once they get controlling, do whatever they want with the money. It's important to know that the account is considered an asset of the child on college financial aid applications, which lowers age eligibility when compared to maybe a parental asset. Then finally on this, it's an irrevocable gift, so the money must be used for the kid's benefit and you can't take it back. A second option might be a college savings account like a 529 or a Coverdell. These have tax benefits, too. The growth and withdrawals are tax-free if the money is used for qualified educational expenses. But this won't set your kid up to be a millionaire by age 40 as Brian is trying to do with his kids, because obviously the money will be spent on college. That said it can still teach kids about the power of just regularly contributing to a portfolio and letting it grow over the years. Then the third option is you just own the account, but you eventually gift it to the kid. The benefits of this are basically more control because you can spend the money however you want. You give it to the kid when you feel she or he is ready. Frankly, some kids aren't ready to just be given thousands of dollars when they're 21 or so. This will lower the impact and financial aid eligibility because it's considered a parental asset. The main downside of this is that you'll load the taxes on the interest, dividends and gains while the account is yours. When you give the account to your kid, the cost basis of the investments will carry over.
Deidre Woollard: Brian, before we get to your final advice here for people who want to get their young loved ones investing. Well, how can they connect with you online? You are on Twitter? I know you're on Twitter. Where else?
Brian Withers: I'm on Twitter @StockswithBrian and then I'm also on LinkedIn. Look me up, Brian Withers.
Deidre Woollard: Look him up. He's a nice guy, is great to hang out with. All right, Brian, what is your parting advice here?
Brian Withers: I guess last I'd like to encourage members to start with even a small amount. Just little math. I guess we can do math on the show. If you invest 600 bucks over 10 years, say your kids between the ages of 7 and 17, by the time they're 23, they could have $18,000 built up if they achieve a 10 percent annual growth rate, which is the market average over the last 50-100 years. Having that nest egg starting out could be a huge financial advantage. A side benefit is they already have 15 years of, air quotes here, investing experience. Hopefully, we'll realize the power of long-term buy and hold.
Deidre Woollard: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what your hear. I'm Deidre Woollard. Thanks for listening. We'll see you tomorrow.
Alison Southwick has positions in Apple. Brian Withers has no position in any of the stocks mentioned. Deidre Woollard has positions in Apple. Jim Gillies has positions in Apple and Chipotle Mexican Grill. Robert Brokamp, CFP(R) has positions in Tesla. The Motley Fool has positions in and recommends Apple, Chipotle Mexican Grill, Netflix, and Tesla. The Motley Fool recommends Electronic Arts and Nintendo and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this podcast, Motley Fool analysts Deidre Woollard and Jim Gillies discuss: Europe's energy crunch and why Russia isn't playing along with price caps. They basically have a market space that not a lot of people come into, all are going to be chasing them down the distribution network is already a prohibitive, I think, competitive advantage for potential interlopers. Motley Fool contributor Brian Withers joins Alison Southwick and Robert Brokamp to discuss how he got his kids in the market and let that compound interest go to work. | In this podcast, Motley Fool analysts Deidre Woollard and Jim Gillies discuss: Europe's energy crunch and why Russia isn't playing along with price caps. Plus, Motley Fool contributor Brian Withers joins Motley Fool host Alison Southwick and Motley Fool personal finance expert Robert Brokamp to discuss how to encourage kids to invest. Motley Fool contributor Brian Withers joins Alison Southwick and Robert Brokamp to discuss how he got his kids in the market and let that compound interest go to work. | In this podcast, Motley Fool analysts Deidre Woollard and Jim Gillies discuss: Europe's energy crunch and why Russia isn't playing along with price caps. Because as a company buys back its own stock, if you're not selling, you own a greater proportionate amount of the company because you didn't sell while the company bought in and took it out. Deidre Woollard: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what your hear. | In this podcast, Motley Fool analysts Deidre Woollard and Jim Gillies discuss: Europe's energy crunch and why Russia isn't playing along with price caps. Deidre Woollard: Want your kids to start investing? Deidre Woollard: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what your hear. | 1 |
372 | 18,060 | 2022-12-09 00:00:00 UTC | 59% of Warren Buffett's Portfolio Is Invested in Just 3 Stocks | AAPL | https://www.nasdaq.com/articles/59-of-warren-buffetts-portfolio-is-invested-in-just-3-stocks | null | null | If you've ever wondered why Wall Street professionals and everyday investors pay such close attention to what Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett has been buying or selling, just take a closer look at his track record. Since taking the reins in 1965, the Oracle of Omaha has led his company's Class A shares (BRK.A) to an aggregate return of 3,641,613% (through Dec. 31, 2021). That's 120 times greater than the broad-based S&P 500, including dividends, over the same period.
Warren Buffett's success has been driven by a mammoth list of factors, including his long-term mindset and attraction to dividend stocks and cyclical businesses. But perhaps tops on the list of reasons Berkshire Hathaway has outperformed is Buffett's shunning of portfolio diversification. In the Oracle of Omaha's eyes, diversification is only something investors should rely on if they don't know what they're doing.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Warren Buffett most definitely knows what he's doing -- and he has 59% of Berkshire Hathaway's $345 billion investment portfolio tied up in just three stocks.
Apple: $135.3 billion (39.2%) of invested assets
Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (NASDAQ: AAPL) accounted for more than $135 billion of invested assets as of the end of last week. That's close to $0.40 of every $1 invested by Buffett's company tied up in Apple.
Aside from being the largest publicly traded company in the U.S., Apple offers Buffett three key selling points. First, there's the value of its brand and the customer loyalty it brings to the table. According to the Kantar BrandZ global survey released in June, Apple reclaimed the top spot as the world's most-valuable brand. The survey cited a multitude of competitive advantages, innovations, and products that resonate with consumers. For instance, the iPhone has gobbled up a little over half of all smartphone market share in the United States.
The second reason Apple makes for such a rock-solid investment is its innovation. In addition to developing smartphones, laptops, tablets, watches, and other accessories that consumers absolutely flock to, the company is in the process of shifting its operating model to focus on subscription services. Shifting to a subscription-driven platform should help minimize the revenue peaks and troughs often associated with physical product replacement cycles. Additionally, subscriptions offer higher margins and tend to improve customer loyalty.
The third reason Warren Buffett thinks fondly of Apple is its capital-return program. Although its 0.6% yield might not sound like much, Apple's nominal annual payout of $14.64 billion is one of the largest in the world.
Furthermore, since launching an aggressive share-repurchase program in 2013, the company has bought back $554 billion worth of its own stock. For context of just how massive this buyback program has been, only five S&P 500 companies not named Apple have a market cap of more than $554 billion -- and Berkshire Hathaway happens to be one of them.
Despite not being immune to cyclical slowdowns, Apple remains well positioned to thrive over the long run.
Bank of America: $37.3 billion (10.8%) of invested assets
The second stock Warren Buffett and his investment team have absolutely piled into is Bank of America (NYSE: BAC). BofA, as it's also called, accounted for close to 11% of invested assets as of last week. Keep in mind this figure also includes positions held by specialty investment firm New England Asset Management, which Berkshire Hathaway owns.
There's a very good reason financials are, arguably, Buffett's favorite sector: They're cyclical. As a long-term investor, the Oracle of Omaha is well aware that periods of economic expansion last considerably longer than downturns and recessions. Even though bank stocks like BofA do take their lumps when recessions arise, they benefit far more from disproportionately long expansions. In other words, patience pays off big time when investing in bank stocks.
This is a particularly interesting time to have $37.3 billion tied up in Bank of America. At no point in history has the Federal Reserve aggressively hiked interest rates into a plunging stock market. Although higher interest rates threaten to cool lending and slow economic activity, they should be a boon for banks that have outstanding variable-rate loans. Bank of America's net interest income jumped $2.7 billion during the third quarter from the prior-year period, and the company has estimated that a 100 basis-point parallel shift in the interest rate yield curve would bring in $4.2 billion in addition to net interest income over the next 12 months.
Bank of America's digitization push is paying off, too. The company closed out September with 43 million active digital users -- that's up 5 million from the comparable quarter in 2019 -- and saw 48% of total sales completed online or via mobile app. On top of added convenience, digital transactions cost banks just a fraction of what in-person and phone-based interactions run. As more users shift to online banking, BofA should be able to consolidate some of its branches and improve its operating efficiency.
Lastly, bank stocks have a pretty rich history of rewarding their shareholders during the good times. Including dividends and share buybacks, it's not uncommon for Bank of America to approve capital-return programs topping $20 billion per year.
Image source: Getty Images.
Chevron: $30.7 billion (8.9%) of invested assets
The third stock that Warren Buffett made a significant portion of Berkshire Hathaway's investment portfolio is energy stock Chevron (NYSE: CVX). As of last week, Chevron accounted for close to 9% of invested assets, including the shares also held by New England Asset Management.
What's intriguing about this position is that, prior to 2022, energy stocks didn't comprise a greater than 8.9% weighting in Berkshire's portfolio this century. Now, Chevron alone comprises an 8.9% stake, with Occidental Petroleum contributing to make energy Buffett's third-largest sector by invested assets.
With roughly an eighth of his company's invested assets tied up in energy stocks, Buffett appears to be sending a very clear message that oil and natural gas prices will remain above average for some time. Even though Chevron is an integrated operator, it generates its best margins from drilling. Due to pandemic-related underinvestment from energy companies, as well as Russia's invasion of Ukraine, a challenged energy supply chain favors higher energy commodity spot prices.
Chevron is also a considerably safer bet than most oil and gas stocks. As noted, it's an integrated operator, which means that in addition to drilling and exploration, it operates midstream pipelines and downstream assets (refineries and chemical plants). Midstream providers utilize long-term, fixed-fee and volume-based contracts with drillers to produce predictable cash flow. Meanwhile, refineries and chemical plants benefit from higher demand and lower input costs when the price for crude oil falls. In short, Chevron is hedged for whatever the energy market throws its way.
It's an oil stock with a relatively pristine balance sheet, too. As of the end of the third quarter, Chevron had $8.2 billion in net debt, equating to a debt ratio of 13%. That's below virtually all major oil and gas stocks, and it affords Chevron superior financial flexibility.
Historically high energy commodity prices have also allowed Chevron to increase its dividend and enact a share-repurchase program for up to $15 billion worth of its common stock in 2022. A healthy capital-return program and industry-leading balance sheet is a recipe for a company to find itself in Buffett's good graces.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple: $135.3 billion (39.2%) of invested assets Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (NASDAQ: AAPL) accounted for more than $135 billion of invested assets as of the end of last week. In addition to developing smartphones, laptops, tablets, watches, and other accessories that consumers absolutely flock to, the company is in the process of shifting its operating model to focus on subscription services. With roughly an eighth of his company's invested assets tied up in energy stocks, Buffett appears to be sending a very clear message that oil and natural gas prices will remain above average for some time. | Apple: $135.3 billion (39.2%) of invested assets Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (NASDAQ: AAPL) accounted for more than $135 billion of invested assets as of the end of last week. Bank of America: $37.3 billion (10.8%) of invested assets The second stock Warren Buffett and his investment team have absolutely piled into is Bank of America (NYSE: BAC). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. | Apple: $135.3 billion (39.2%) of invested assets Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (NASDAQ: AAPL) accounted for more than $135 billion of invested assets as of the end of last week. Bank of America: $37.3 billion (10.8%) of invested assets The second stock Warren Buffett and his investment team have absolutely piled into is Bank of America (NYSE: BAC). Chevron: $30.7 billion (8.9%) of invested assets The third stock that Warren Buffett made a significant portion of Berkshire Hathaway's investment portfolio is energy stock Chevron (NYSE: CVX). | Apple: $135.3 billion (39.2%) of invested assets Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (NASDAQ: AAPL) accounted for more than $135 billion of invested assets as of the end of last week. Bank of America: $37.3 billion (10.8%) of invested assets The second stock Warren Buffett and his investment team have absolutely piled into is Bank of America (NYSE: BAC). This is a particularly interesting time to have $37.3 billion tied up in Bank of America. | 4 |
373 | 18,071 | 2022-12-08 00:00:00 UTC | Time to Buy These Iconic Stocks for 2023? | AAPL | https://www.nasdaq.com/articles/time-to-buy-these-iconic-stocks-for-2023 | null | null | Past performance is, of course, not always an indication of future success but strong management and historical dominance are surely a calming feeling for investors.
Two stocks that come to mind in this regard are Deere & Company DE and International Business Machines IBM. Let’s see if this narrative supports buying shares of these two iconic companies at the moment.
Overview
While Deere and IBM’s businesses are very different, they have both been staples of the American and global economy for many years.
Deere & Company was founded in 1837 and has established itself as the world’s largest producer and manufacturer of agricultural equipment and machinery.
International Business Machines has a long history as well. IBM was founded in 1911 and became one of the world’s most recognizable companies and a leading producer and distributor of computer hardware and software. To that note, IBM has started to adapt to current technological times to include cloud computing along with its data analytics.
Over the years, both companies have paid out nice dividends to investors, with Deere’s current annual yield at 1.03% ($4.52) and IBM’s at 4.48% ($6.60).
Historical Performance
Looking back 30 years, we can see the performance of both stocks has been stellar. Deere’s performance sticks out though, DE is up an astonishing +5,590% Vs. IBM’s very respectable +1069%.
Image Source: Zacks Investment Research
From a 20-year view, Deere’s continued dominance becomes clearer. Including dividends, DE’s total return during this period is a staggering +2,746% to easily top IBM’s +240% and the S&P 500’s 599%.
Image Source: Zacks Investment Research
As we look over the last decade in the chart below, we can see the trend in Deer’s dominant performance continues and IBM begins to further lag the benchmark.
Companies in Deere’s Industrial Products sector are not as pressed with having to innovate as businesses in IBM’s technology sector.
IBM stock has been stable but has mostly remained in the $100-$150 range for the last 10 years as newer tech companies like Apple AAPL have enjoyed better price performance during more current tech waves.
In comparison, AAPL’s total return in the last decade is +800% which has topped Deere as well. Still, DE and IBM have been reliable investments in their own right and have been around much longer.
Image Source: Zacks Investment Research
Recent Performance
Historically speaking, both Deere and IBM have done well for investors. However, DE has continued its very impressive performance from decade to decade, while IBM stock began to lose its sizzle from the Dot.com bubble.
Interestingly, over the last year, IBM’s total return is +25% to slightly edge DE’s +23% and crush the benchmark. YTD, DE is up +30% Vs. IBM’s +16%. Both stocks have continued to blast the benchmark’s bearish-like performance.
Image Source: Zacks Investment Research
Outlook & Future Success
Deere & IBM’s recent performance does support the narrative that companies with strong historical performances can be great stocks to buy during economic uncertainty. Furthermore, a glance at both companies’ outlooks could help solidify this going forward.
Deere & Co’s current FY23 earnings are now expected to jump 17% at $27.28 per share. Fiscal 2024 earnings are projected to rise another 7%. Even better, earnings estimate revisions for both FY23 and FY24 have trended higher over the last 90 days.
Image Source: Zacks Investment Research
Deere’s revenue growth has been very impressive as illustrated in the above chart. Sales are forecasted to climb 13% in FY23 and rise another 2% in FY24 to $55.37 billion. FY24 would represent 41% revenue growth from pre-pandemic levels with 2019 sales at $39.25 billion.
Pivoting to IBM, earnings are now expected to rise 15% this year to $9.12 per share. Fiscal 2023 earrings are projected to rise another 6%. With that being said earnings estimate revisions have trended down over the last quarter for this year and FY23.
Image Source: Zacks Investment Research
On the top line, sales are forecasted to dip -16% in FY22, which makes what IBM can accomplish on its bottom line this year more impressive. Fiscal 2023 sales are expected to rise 1% at $59.90 billion. However, FY23 sales would represent a 22% decrease from pre-pandemic levels with 2019 sales at $77.14 billion.
Deere & Company’s outlook certainly supports that its future success will continue while IBM stock is less approachable in this regard despite impressive bottom-line growth.
Valuation & Significance
Deere stock trades at 15.9X forward earnings which is near IBM’s 16.1X. However, DE stock looks more attractive relative to its past. DE stock trades at a 50% discount to its decade high of 31.8X while IBM trades around its decade high of 16.3X.
Image Source: Zacks Investment Research
In addition to this, DE trades near its decade median of 16.6X, while IBM trades 47% above its decade-long median of 10.9X.
With Deere trading at $442 per share and near its 52-week highs the stock still appears to have more upside from a valuation standpoint. IBM also trades near its highs at $147 per share. But in terms of value, now may not be the best entry point or opportunity to buy IBM.
Bottom Line
The recent performance of Deere and IBM has been impressive. This certainly supports the narrative that these iconic companies are strong investments during economic uncertainty.
Deere, in particular, looks like a sound investment at the moment sporting a Zacks Rank #2 (Buy) in correlation with rising earnings estimate revisions. On the contrary, IBM lands a Zacks Rank #3 (Hold) as earnings estimate revisions are down despite solid growth expected for the company.
One thing is for sure, both of these iconic stocks will draw investors’ interest as we head into 2023 with their performances continuing to stand out.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | IBM stock has been stable but has mostly remained in the $100-$150 range for the last 10 years as newer tech companies like Apple AAPL have enjoyed better price performance during more current tech waves. In comparison, AAPL’s total return in the last decade is +800% which has topped Deere as well. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Deere & Company (DE) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. | Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Deere & Company (DE) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. IBM stock has been stable but has mostly remained in the $100-$150 range for the last 10 years as newer tech companies like Apple AAPL have enjoyed better price performance during more current tech waves. In comparison, AAPL’s total return in the last decade is +800% which has topped Deere as well. | Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Deere & Company (DE) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. IBM stock has been stable but has mostly remained in the $100-$150 range for the last 10 years as newer tech companies like Apple AAPL have enjoyed better price performance during more current tech waves. In comparison, AAPL’s total return in the last decade is +800% which has topped Deere as well. | IBM stock has been stable but has mostly remained in the $100-$150 range for the last 10 years as newer tech companies like Apple AAPL have enjoyed better price performance during more current tech waves. In comparison, AAPL’s total return in the last decade is +800% which has topped Deere as well. Click to get this free report International Business Machines Corporation (IBM) : Free Stock Analysis Report Deere & Company (DE) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. | 3 |
374 | 18,103 | 2022-12-07 00:00:00 UTC | Stock Market News for Dec 7, 2022 | AAPL | https://www.nasdaq.com/articles/stock-market-news-for-dec-7-2022 | null | null | Wall Street closed sharply lower on Tuesday for the second straight session in the week. The fear of a recession gripped the market as recent economic data raised concerns that the Fed might be deterred from going slow on its policy tightening. All three major indexes ended in the red.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 1% or 350.76 points to end at 33,596.34 points. Twenty-four components of the 30-stock index ended in negative territory, while six ended in the positive.
The S&P 500 lost 1.4% or 57.58 points to close at 3,941.26 points. Ten of the 11 broad sectors of the benchmark index ended in negative territory. The Communication Services Select Sector SPDR (XLC), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (K) decreased 2.9%, 2.6% and 2.1%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 0.6%.
The tech-heavy Nasdaq dropped 2% or 225.05 points to finish at 11,014.89 points.
The fear-gauge CBOE Volatility Index (VIX) increased 6.8% to 22.17. A total of 11 billion shares were traded on Tuesday, in line with the last 20-session average. The S&P 500 recorded three new 52-week highs and nine new lows, while the Nasdaq posted 52 new highs and 262 new lows.
Investors Weary Of Impending Recession
In the last few sessions, Wall Street has been reeling under the fear of an impending recession. The recent slew of economic data has wiped out any hope that the Fed would be taking a backseat with regard to its policy tightening, as numbers have suggested that indicators like labor market, wage growth, and the services sector, among others, have stayed strong.
Investors remain apprehensive that these numbers would push the Fed to infer that it has not done enough to dampen market demand. Under normal circumstances, robust economic indicators would be great for the market. But in the current scenario, market participants are eagerly waiting for economic indicators to show that business activity across sectors has slowed, thereby curbing inflation. Major financial houses have reflected that the stringent policy measures would induce an economic downturn in 2023.
There is a general consensus that the central bank might be raising rates by 50 basis points at its Dec 13-14 policy meeting, with rates expected to peak at 4.98% in May 2023. Growth stocks have suffered the most in the last few sessions as with a downturn looming large, they currently look overvalued. Investors are taking money out from large-cap growth and technology stocks to rush to safety.
Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT slid 2.5% and 2%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Meta Becomes a Drag On The Tech Sector
Reports have emerged that in the territories of the European Union, Meta Platforms, Inc. META will only be able to run advertising based on personal data with users' consent. This has dealt a blow to the social media giant, with its stocks plunging 6.8% on the day. This follows Apple's new privacy rules, which limit digital advertisers from tracking iPhone users.
Meta’s plunge became a major drag on the S&P 500, which closed its fourth straight losing session, and for the tech sector at large.
Economic Data
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported that trade deficit was $78.2 billion in October, up $4.0 billion from the revised $74.1 billion in September.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT slid 2.5% and 2%, respectively. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. The fear of a recession gripped the market as recent economic data raised concerns that the Fed might be deterred from going slow on its policy tightening. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT slid 2.5% and 2%, respectively. The Communication Services Select Sector SPDR (XLC), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (K) decreased 2.9%, 2.6% and 2.1%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 0.6%. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT slid 2.5% and 2%, respectively. The Communication Services Select Sector SPDR (XLC), the Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (K) decreased 2.9%, 2.6% and 2.1%, respectively, while the Utilities Select Sector SPDR (XLU) advanced 0.6%. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT slid 2.5% and 2%, respectively. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. The fear of a recession gripped the market as recent economic data raised concerns that the Fed might be deterred from going slow on its policy tightening. | 1 |
375 | 18,117 | 2022-12-06 00:00:00 UTC | Why Apple, Salesforce, and Qualcomm Stocks Are Volatile Today | AAPL | https://www.nasdaq.com/articles/why-apple-salesforce-and-qualcomm-stocks-are-volatile-today | null | null | What happened
It was another negative day for tech stocks today as investors began to worry again that the Federal Reserve's interest rate hikes could end up tipping the U.S. economy into a recession.
Those fears sent stocks lower yesterday and the pessimism continued into today after Morgan Stanley said that it's laying off 2% of its workforce and JPMorgan Chase's CEO said that inflation could end up causing a recession.
As a result, the S&P 500 shed 1.8% and the tech-heavy Nasdaq Composite fell 2.3%. All of this pushed Apple (NASDAQ: AAPL) down by 2.7%, caused Salesforce (NYSE: CRM) to initially drop by than 2.2% today before regaining some of its losses by mid-afternoon, and made Qualcomm's (NASDAQ: QCOM) stock slide 3% as of 3:08 p.m. ET.
So what
Last week investors had been cautiously optimistic that the Fed wouldn't accidentally spur a recession after Federal Reserve Chairman Jerome Powell said, "...it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down."
Image source: Getty Images.
Powell added, "The time for moderating the pace of rate increases may come as soon as the December meeting."
That boosted sentiment in the market temporarily, but over the past couple of days, investors began to process the rest of Powell's comments. Specifically, the Fed may need to raise the "terminal rate" -- the peak at which the Fed stops raising rates -- and Powell said that it may be "somewhat higher" than initially thought.
The Fed is meeting next week to decide how much to raise to raise interest rates again. Most economists are expecting a 50-basis-point increase.
A higher terminal rate spooked investors over the past couple of days and those fears were heightened after Morgan Stanley said it will cut about 2% of its workforce today, equal to about 1,600 jobs.
Additionally, investors were processing comments from JPMorgan Chase's CEO Jamie Dimon, who thinks that inflation and rising interest rates will push the economy into a recession next year.
Apple, Salesforce, and Qualcomm investors are likely reacting to all of this news today because any prolonged slowdown in the economy would cause pressure on their businesses.
Apple is already grappling with supply chain issues with some of its iPhone manufacturing in China due to strict zero-COVID policies.
And Salesforce's stock has been reeling after the company announced last week that its co-CEO is stepping down and after Slack's CEO said yesterday that he's leaving his position. Slack was purchased by Salesforce last year.
Additionally, Qualcomm investors have been trying to gauge where the company is headed after it reported fiscal fourth-quarter results last month that were mostly in line with expectations, but management issued first-quarter guidance that disappointed investors.
Now what
While it's not surprising to see Apple, Salesforce, and Qualcomm falling on recession fears today, it's worth mentioning that these stocks will likely have to weather some additional volatility as investors try to figure out what's happening with the economy.
What investors shouldn't be doing right now is panic-selling. Instead, one proactive measure you can take right now is to revisit your initial reasons for buying Apple, Salesforce, and Qualcomm and see if the investment thesis is still intact.
It can be easy to follow the investing crowd at the moment, but taking some time to step back and evaluate your investment strategy should give some much-needed clarity.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, Qualcomm, and Salesforce. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | All of this pushed Apple (NASDAQ: AAPL) down by 2.7%, caused Salesforce (NYSE: CRM) to initially drop by than 2.2% today before regaining some of its losses by mid-afternoon, and made Qualcomm's (NASDAQ: QCOM) stock slide 3% as of 3:08 p.m. What happened It was another negative day for tech stocks today as investors began to worry again that the Federal Reserve's interest rate hikes could end up tipping the U.S. economy into a recession. So what Last week investors had been cautiously optimistic that the Fed wouldn't accidentally spur a recession after Federal Reserve Chairman Jerome Powell said, "...it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down." | All of this pushed Apple (NASDAQ: AAPL) down by 2.7%, caused Salesforce (NYSE: CRM) to initially drop by than 2.2% today before regaining some of its losses by mid-afternoon, and made Qualcomm's (NASDAQ: QCOM) stock slide 3% as of 3:08 p.m. A higher terminal rate spooked investors over the past couple of days and those fears were heightened after Morgan Stanley said it will cut about 2% of its workforce today, equal to about 1,600 jobs. Additionally, investors were processing comments from JPMorgan Chase's CEO Jamie Dimon, who thinks that inflation and rising interest rates will push the economy into a recession next year. | All of this pushed Apple (NASDAQ: AAPL) down by 2.7%, caused Salesforce (NYSE: CRM) to initially drop by than 2.2% today before regaining some of its losses by mid-afternoon, and made Qualcomm's (NASDAQ: QCOM) stock slide 3% as of 3:08 p.m. What happened It was another negative day for tech stocks today as investors began to worry again that the Federal Reserve's interest rate hikes could end up tipping the U.S. economy into a recession. Now what While it's not surprising to see Apple, Salesforce, and Qualcomm falling on recession fears today, it's worth mentioning that these stocks will likely have to weather some additional volatility as investors try to figure out what's happening with the economy. | All of this pushed Apple (NASDAQ: AAPL) down by 2.7%, caused Salesforce (NYSE: CRM) to initially drop by than 2.2% today before regaining some of its losses by mid-afternoon, and made Qualcomm's (NASDAQ: QCOM) stock slide 3% as of 3:08 p.m. What happened It was another negative day for tech stocks today as investors began to worry again that the Federal Reserve's interest rate hikes could end up tipping the U.S. economy into a recession. Instead, one proactive measure you can take right now is to revisit your initial reasons for buying Apple, Salesforce, and Qualcomm and see if the investment thesis is still intact. | 1 |
376 | 18,132 | 2022-12-05 00:00:00 UTC | Apple explores moving some iPad production to India - CNBC | AAPL | https://www.nasdaq.com/articles/apple-explores-moving-some-ipad-production-to-india-cnbc | null | null | Dec 5 (Reuters) - India is exploring options to bring some of Apple Inc's AAPL.O iPad production to the country from China, CNBC reported on Monday, citing two sources close to the Indian government.
Apple is holding ongoing discussions with officials, according to the report.
The iPhone maker did not immediately respond to a Reuters request for comment.
(Reporting by Eva Mathews in Bengaluru; Editing by Shounak Dasgupta)
((Eva.Mathews@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 5 (Reuters) - India is exploring options to bring some of Apple Inc's AAPL.O iPad production to the country from China, CNBC reported on Monday, citing two sources close to the Indian government. The iPhone maker did not immediately respond to a Reuters request for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Shounak Dasgupta) ((Eva.Mathews@thomsonreuters.com)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 5 (Reuters) - India is exploring options to bring some of Apple Inc's AAPL.O iPad production to the country from China, CNBC reported on Monday, citing two sources close to the Indian government. Apple is holding ongoing discussions with officials, according to the report. (Reporting by Eva Mathews in Bengaluru; Editing by Shounak Dasgupta) ((Eva.Mathews@thomsonreuters.com)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 5 (Reuters) - India is exploring options to bring some of Apple Inc's AAPL.O iPad production to the country from China, CNBC reported on Monday, citing two sources close to the Indian government. The iPhone maker did not immediately respond to a Reuters request for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Shounak Dasgupta) ((Eva.Mathews@thomsonreuters.com)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Dec 5 (Reuters) - India is exploring options to bring some of Apple Inc's AAPL.O iPad production to the country from China, CNBC reported on Monday, citing two sources close to the Indian government. Apple is holding ongoing discussions with officials, according to the report. The iPhone maker did not immediately respond to a Reuters request for comment. | null |
377 | 18,151 | 2022-12-04 00:00:00 UTC | 1 Green Flag and 1 Red Flag for TSMC's Future | AAPL | https://www.nasdaq.com/articles/1-green-flag-and-1-red-flag-for-tsmcs-future | null | null | Taiwan Semiconductor Manufacturing (NYSE: TSM), the world's largest contract chipmaker, has been a divisive investment over the past year. The bears argued that cooling sales of PCs in a post-pandemic market, supply chain challenges for smartphones, and other macro headwinds would throttle the growth of the semiconductor sector and curb the market's demand for its services.
The bulls pointed out that TSMC has weathered plenty of cyclical downturns before, and that it would likely remain far ahead of its closest rivals -- Samsung and Intel -- in the "process race" to manufacture smaller and denser chips.
Image source: TSMC.
Yet TSMC's stock remains down more than 30% this year, which suggests most investors are still siding with the bears. Let's see if two recent events -- a green flag and a red flag for this Taiwanese tech giant's future -- can shift that balance.
The green flag: Berkshire's big buy
Last month, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed a $4.1 billion stake in TSMC. That makes the chipmaker Berkshire's ninth-largest holding at 1.4% of its entire portfolio.
Buffett hasn't publicly spoken about that investment yet, but Berkshire has only bought a handful of tech stocks throughout its entire history. Its top holding is Apple (NASDAQ: AAPL), which accounts for a whopping 39.2% of its portfolio, while other notable tech plays include Activision Blizzard (1.3%), HP (1%), Amazon (0.3%), and Snowflake (0.3%). Speaking at a recent meeting in Taipei, TSMC Chairman Mark Liu complimented Buffett for his "sharp eye" for good investments.
Buffett usually favors undervalued companies with stable long-term growth and wide moats. TSMC checks all three boxes: Its stock trades at just 13 times forward earnings, it grew its net income at a compound annual growth rate (CAGR) of 17% between 2011 and 2021, and it remains the sole manufacturer of the world's smallest and most powerful chips.
The red flag: Apple's problems in China
TSMC's largest customer accounted for 26% of its revenue in 2021. TSMC didn't specifically name that customer in its latest annual report, but it's widely believed to be Apple. Therefore, the Mac maker's recent problems in China could generate significant headwinds for TSMC's near-term growth.
Last month, violent protests erupted at Foxconn's largest iPhone manufacturing plant in China in response to the facility's rigid COVID-19 policies and unpaid bonuses. Those disruptions have reportedly reduced the plant's November production by more than 30%, which will likely throttle Apple's available supply of iPhones throughout the holiday season.
But that's not all. Other protests subsequently erupted across China in response to the government's draconian "zero-COVID" policies, and that ongoing social unrest could impact Apple's sales across the "Greater China" region, which accounted for 19% of its top line in fiscal 2022 (ended in September). And that, in turn, could take a toll on TSMC.
Does the good news outweigh the bad news?
Berkshire's big buy suggests that TSMC is still a solid investment for long-term investors. However, the chipmaker's heavy dependence on Apple could become a near-term liability amid its recent problems in China.
On their own, I don't think either headline will tilt the balance in favor of the bulls or the bears. I personally believe TSMC's stock will remain stuck in neutral over the next few quarters as investors continue to fret over the PC market's slowdown, Apple's supply chain challenges, and the Biden administration's recent ban on advanced chip sales to China.
But over the long term, I believe TSMC will continue to grow as Samsung and Intel abandon their costly plans to catch up in the process race. TSMC still aims to spend $36 billion on capex this year to ramp up its production of advanced chips, compared to Intel's capex of $21 billion and Samsung's combined capex of $37 billion for its semiconductors and displays.
So if you're looking for short-term gains, TSMC will likely be a disappointing investment. But if you plan to follow Buffett's mantra of buying quality stocks and holding them "forever," then TSMC is still a great long-term buy.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon.com and Apple. The Motley Fool has positions in and recommends Activision Blizzard, Amazon.com, Apple, Berkshire Hathaway, Hp, Intel, Snowflake, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Its top holding is Apple (NASDAQ: AAPL), which accounts for a whopping 39.2% of its portfolio, while other notable tech plays include Activision Blizzard (1.3%), HP (1%), Amazon (0.3%), and Snowflake (0.3%). The bulls pointed out that TSMC has weathered plenty of cyclical downturns before, and that it would likely remain far ahead of its closest rivals -- Samsung and Intel -- in the "process race" to manufacture smaller and denser chips. TSMC checks all three boxes: Its stock trades at just 13 times forward earnings, it grew its net income at a compound annual growth rate (CAGR) of 17% between 2011 and 2021, and it remains the sole manufacturer of the world's smallest and most powerful chips. | Its top holding is Apple (NASDAQ: AAPL), which accounts for a whopping 39.2% of its portfolio, while other notable tech plays include Activision Blizzard (1.3%), HP (1%), Amazon (0.3%), and Snowflake (0.3%). The green flag: Berkshire's big buy Last month, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed a $4.1 billion stake in TSMC. The Motley Fool has positions in and recommends Activision Blizzard, Amazon.com, Apple, Berkshire Hathaway, Hp, Intel, Snowflake, and Taiwan Semiconductor Manufacturing. | Its top holding is Apple (NASDAQ: AAPL), which accounts for a whopping 39.2% of its portfolio, while other notable tech plays include Activision Blizzard (1.3%), HP (1%), Amazon (0.3%), and Snowflake (0.3%). The green flag: Berkshire's big buy Last month, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed a $4.1 billion stake in TSMC. I personally believe TSMC's stock will remain stuck in neutral over the next few quarters as investors continue to fret over the PC market's slowdown, Apple's supply chain challenges, and the Biden administration's recent ban on advanced chip sales to China. | Its top holding is Apple (NASDAQ: AAPL), which accounts for a whopping 39.2% of its portfolio, while other notable tech plays include Activision Blizzard (1.3%), HP (1%), Amazon (0.3%), and Snowflake (0.3%). The green flag: Berkshire's big buy Last month, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed a $4.1 billion stake in TSMC. The red flag: Apple's problems in China TSMC's largest customer accounted for 26% of its revenue in 2021. | null |
378 | 18,157 | 2022-12-03 00:00:00 UTC | Why Taboola Stock Skyrocketed This Week | AAPL | https://www.nasdaq.com/articles/why-taboola-stock-skyrocketed-this-week | null | null | What happened
Shares of Taboola (NASDAQ: TBLA) soared 56% this past week, according to data from S&P Global Market Intelligence, after the advertising company struck a blockbuster deal with Yahoo!.
So what
Under the terms of the agreement, Taboola will serve as Yahoo!'s exclusive digital advertising partner across its websites. Taboola will run the native ads on Yahoo!'s properties spanning news, sports, finance, and more that collectively reach nearly 900 million monthly active users.
As part of the deal, Yahoo! will also receive a roughly 25% equity stake in Taboola and a seat on the ad company's board of directors.
"Yahoo! is an internet pioneer, representing one of the largest, most trusted, and most sophisticated publishers in the world," Taboola CEO Adam Singolda said in a press release. "Everywhere I look, I see a rocket ship growth opportunity for both of us -- native, e-commerce, video, header bidding (display), and more."
The transaction is projected to close in the first quarter of 2023, subject to shareholder and regulatory approval. Taboola expects the partnership to be "highly accretive" to its revenue and free cash flow post-closing.
Now what
The agreement would cement Taboola's position as a leading native advertising platform at a time when advertisers and publishers are searching for new ways to monetize their sites. The impact of Apple's privacy changes on Facebook's and other social media sites' ad-targeting abilities, along with Google's plans to reduce its reliance on cookies to power its data-collection efforts, are forcing marketers to seek out effective alternatives. Taboola is emerging as one such option. Investors, in turn, are bidding up its stock price to reflect its improved prospects in the digital ad arena.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Shares of Taboola (NASDAQ: TBLA) soared 56% this past week, according to data from S&P Global Market Intelligence, after the advertising company struck a blockbuster deal with Yahoo!. is an internet pioneer, representing one of the largest, most trusted, and most sophisticated publishers in the world," Taboola CEO Adam Singolda said in a press release. The impact of Apple's privacy changes on Facebook's and other social media sites' ad-targeting abilities, along with Google's plans to reduce its reliance on cookies to power its data-collection efforts, are forcing marketers to seek out effective alternatives. | See the 10 stocks *Stock Advisor returns as of December 1, 2022 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | What happened Shares of Taboola (NASDAQ: TBLA) soared 56% this past week, according to data from S&P Global Market Intelligence, after the advertising company struck a blockbuster deal with Yahoo!. Now what The agreement would cement Taboola's position as a leading native advertising platform at a time when advertisers and publishers are searching for new ways to monetize their sites. See the 10 stocks *Stock Advisor returns as of December 1, 2022 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. | Taboola will run the native ads on Yahoo! That's right -- they think these 10 stocks are even better buys. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. | null |
379 | 18,159 | 2022-12-02 00:00:00 UTC | Apple (AAPL) Dips More Than Broader Markets: What You Should Know | AAPL | https://www.nasdaq.com/articles/apple-aapl-dips-more-than-broader-markets%3A-what-you-should-know-4 | null | null | In the latest trading session, Apple (AAPL) closed at $147.81, marking a -0.34% move from the previous day. This change lagged the S&P 500's 0.12% loss on the day. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.05%.
Heading into today, shares of the maker of iPhones, iPads and other products had gained 6.79% over the past month, lagging the Computer and Technology sector's gain of 8.67% and outpacing the S&P 500's gain of 5.93% in that time.
Investors will be hoping for strength from Apple as it approaches its next earnings release. On that day, Apple is projected to report earnings of $1.97 per share, which would represent a year-over-year decline of 6.19%. Our most recent consensus estimate is calling for quarterly revenue of $123.05 billion, down 0.72% from the year-ago period.
AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $407.15 billion. These results would represent year-over-year changes of +2.13% and +3.25%, respectively.
It is also important to note the recent changes to analyst estimates for Apple. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.61% lower within the past month. Apple is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Apple has a Forward P/E ratio of 23.78 right now. For comparison, its industry has an average Forward P/E of 8.79, which means Apple is trading at a premium to the group.
Investors should also note that AAPL has a PEG ratio of 1.9 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers was holding an average PEG ratio of 2.56 at yesterday's closing price.
The Computer - Mini computers industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 18% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In the latest trading session, Apple (AAPL) closed at $147.81, marking a -0.34% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $407.15 billion. Investors should also note that AAPL has a PEG ratio of 1.9 right now. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. In the latest trading session, Apple (AAPL) closed at $147.81, marking a -0.34% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $407.15 billion. | AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $407.15 billion. In the latest trading session, Apple (AAPL) closed at $147.81, marking a -0.34% move from the previous day. Investors should also note that AAPL has a PEG ratio of 1.9 right now. | In the latest trading session, Apple (AAPL) closed at $147.81, marking a -0.34% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.24 per share and revenue of $407.15 billion. Investors should also note that AAPL has a PEG ratio of 1.9 right now. | null |
380 | 18,205 | 2022-12-01 00:00:00 UTC | GLOBAL ECONOMY-Asia's factory activity shrinks as China lockdown impact widens | AAPL | https://www.nasdaq.com/articles/global-economy-asias-factory-activity-shrinks-as-china-lockdown-impact-widens-1 | null | null | By Leika Kihara
TOKYO, Dec 1 (Reuters) - Factory output slumped widely across Asia in November as slowing global demand and uncertainty over the fallout from China's strict COVID-19 lockdowns weighed on business sentiment, private surveys showed on Thursday.
The results highlighted Asia's darkening economic outlook for 2023, as the lockdowns disrupt international supply and heighten fears of a further slump in its economy, the world's second-largest.
Amid the pandemic curbs, China's factory activity shrank in November, a private survey showed on Thursday. The result implied weaker employment and economic growth in the fourth quarter.
Manufacturing activity also contracted in export-reliant economies, including Japan and South Korea, and in emerging nations, such as Vietnam, underscoring widening damage from weak global demand and stubbornly high input costs, surveys showed.
"Cooling market conditions, sustained cost pressures and weak underlying demand, both domestically and internationally, were reportedly pivotal factors contributing to the declines," said economist Laura Denman at S&P Global Market Intelligence, which compiles the survey on Japan.
China's Caixin/S&P Global manufacturing purchasing managers' index (PMI) stood at 49.4 in November, up from 49.2 in the previous month but still below the 50 mark, which separates growth from contraction. It has now been below 50 for four consecutive months.
The figure followed downbeat data in an official survey on Wednesday that showed manufacturing activity had hit a seven-month low in November.
Analysts see mounting downside risks to China's economic growth in the fourth quarter, despite a flurry of policies to shore up activity, including cuts to banks' required reserve ratios and support for the sluggish property sector.
Japan's au Jibun Bank PMI also fell, to 49.0 in November from October's 50.7. That was the first contraction since November 2020.
South Korea's factory activity shrank for a fifth straight month in November but the downturn moderated slightly, possibly suggesting the worst was over for businesses.
Still, South Korea's exports in November suffered their steepest annual drop in 2-1/2 years, separate data showed on Thursday, hit by cooling global demand in major markets led by China and a downturn in the semiconductor industry.
Lockdowns in China have hit production at a factory there that is the biggest producer of Apple Inc AAPL.O iPhones. They have also stoked rare street protests across many cities.
The impact of China's woes was felt widely across Asia. Taiwan's PMI stood at 41.6 in November, up slightly from 41.5 in October but remaining far below the 50 mark.
Vietnam's PMI fell to 47.4 in November from 50.6 in October, while that for Indonesia slid to 50.3 from 51.8, the private surveys showed.
In a rare bright sign, India saw factory activity expand in November at its fastest pace in three months, thanks to robust demand for consumer goods and a slowdown in input-cost inflation.
(Reporting by Leika Kihara; Editing by Bradley Perrett)
((leika.kihara@thomsonreuters.com; +813-6441-1828; Reuters Messaging: leika.kihara.reuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Lockdowns in China have hit production at a factory there that is the biggest producer of Apple Inc AAPL.O iPhones. By Leika Kihara TOKYO, Dec 1 (Reuters) - Factory output slumped widely across Asia in November as slowing global demand and uncertainty over the fallout from China's strict COVID-19 lockdowns weighed on business sentiment, private surveys showed on Thursday. Manufacturing activity also contracted in export-reliant economies, including Japan and South Korea, and in emerging nations, such as Vietnam, underscoring widening damage from weak global demand and stubbornly high input costs, surveys showed. | Lockdowns in China have hit production at a factory there that is the biggest producer of Apple Inc AAPL.O iPhones. By Leika Kihara TOKYO, Dec 1 (Reuters) - Factory output slumped widely across Asia in November as slowing global demand and uncertainty over the fallout from China's strict COVID-19 lockdowns weighed on business sentiment, private surveys showed on Thursday. Amid the pandemic curbs, China's factory activity shrank in November, a private survey showed on Thursday. | Lockdowns in China have hit production at a factory there that is the biggest producer of Apple Inc AAPL.O iPhones. By Leika Kihara TOKYO, Dec 1 (Reuters) - Factory output slumped widely across Asia in November as slowing global demand and uncertainty over the fallout from China's strict COVID-19 lockdowns weighed on business sentiment, private surveys showed on Thursday. Amid the pandemic curbs, China's factory activity shrank in November, a private survey showed on Thursday. | Lockdowns in China have hit production at a factory there that is the biggest producer of Apple Inc AAPL.O iPhones. By Leika Kihara TOKYO, Dec 1 (Reuters) - Factory output slumped widely across Asia in November as slowing global demand and uncertainty over the fallout from China's strict COVID-19 lockdowns weighed on business sentiment, private surveys showed on Thursday. Manufacturing activity also contracted in export-reliant economies, including Japan and South Korea, and in emerging nations, such as Vietnam, underscoring widening damage from weak global demand and stubbornly high input costs, surveys showed. | 4 |
381 | 18,214 | 2022-11-30 00:00:00 UTC | US STOCKS-Wall Street ends sharply higher after Powell comments | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-ends-sharply-higher-after-powell-comments | null | null | By Noel Randewich and Shreyashi Sanyal
Nov 30 (Reuters) - Wall Street ended sharply higher on Wednesday after Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as soon as December.
The S&P 500 rallied from an earlier loss and the Nasdaq jumped after the release of Powell's remarks prepared for delivery at the Brookings Institution think tank in Washington.
Powell also cautioned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.
"(The market) has waited with bated breath, looking for that clarification in terms of duration and extent of Fed tightening. And anything that gives hope to the idea the Fed is becoming less hawkish is viewed as a positive for stocks, at least on a short-term basis," said Chuck Carlson, Chief Executive Officer at Horizon Investment Services in Hammond, Indiana.
Bets that the Fed will reduce the size of its rate hikes, as well as recent data pointing to a mild cooling in inflation, have the benchmark S&P 500 index .SPX on track for its second straight month of gains.
The CME FedWatch Tool showed futures traders seeing a 75% chance that the Fed will raise interest rates by 50 basis points at its December meeting, up from a 65% chance before Powell's comments were released. The FedWatch tool now shows a 25% chance of a 75 basis point increase.
Heavyweight technology stocks Apple AAPL.O, Microsoft MSFT.O and Nvidia NVDA.O rallied.
Tesla Inc's TSLA.Oshares surged after China Merchants Bank International said Tesla's sales in China in November were boosted by price cuts and incentives offered on its Model 3 and Model Y.
According to preliminary data, the S&P 500 .SPX gained 121.18 points, or 3.06%, to end at 4,078.81 points, while the Nasdaq Composite .IXIC gained 484.62 points, or 4.41%, to 11,468.40. The Dow Jones Industrial Average .DJI rose 716.21 points, or 2.12%, to 34,568.74.
AnADP National Employment report showed private employment increased by 127,000 in November, below expectations of 200,000 jobs, suggesting demand for labor was cooling amid high interest rates.
"The ADP employment number not meeting expectations fits into the narrative that the Fed will have room and start slowing down its rate hikes, and that definitely benefits interest rate sensitive assets," said Keith Buchanan, a portfolio manager at Globalt in Atlanta.
The Labor Department's closely watched nonfarm payrolls data is due on Friday. A report showed U.S. job openings falling to 10.334 million in October, against 10.687 million in the prior month.
Another reading showed the U.S. economy rebounded more strongly than initially thought in the third quarter.
The S&P 500 remains down about 15% so far in 2022, while the Nasdaq index .IXIC has lost about 27%.
Biogen Inc BIIB.Ojumped after its experimental Alzheimer's drug slowed cognitive decline in a closely watched trial.
(Reporting by Shreyashi Sanyal, Devik Jain & Bansari Mayur Kamdar in Bengaluru, and by Noel Randewich in Oakland, Calif.; additional reporting by Stephen Culp in New York; Editing by Shounak Dasgupta, Chizu Nomiyama and Diane Craft)
((noel.randewich@tr.com; Twitter: @randewich))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Heavyweight technology stocks Apple AAPL.O, Microsoft MSFT.O and Nvidia NVDA.O rallied. By Noel Randewich and Shreyashi Sanyal Nov 30 (Reuters) - Wall Street ended sharply higher on Wednesday after Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as soon as December. And anything that gives hope to the idea the Fed is becoming less hawkish is viewed as a positive for stocks, at least on a short-term basis," said Chuck Carlson, Chief Executive Officer at Horizon Investment Services in Hammond, Indiana. | Heavyweight technology stocks Apple AAPL.O, Microsoft MSFT.O and Nvidia NVDA.O rallied. The CME FedWatch Tool showed futures traders seeing a 75% chance that the Fed will raise interest rates by 50 basis points at its December meeting, up from a 65% chance before Powell's comments were released. The FedWatch tool now shows a 25% chance of a 75 basis point increase. | Heavyweight technology stocks Apple AAPL.O, Microsoft MSFT.O and Nvidia NVDA.O rallied. Bets that the Fed will reduce the size of its rate hikes, as well as recent data pointing to a mild cooling in inflation, have the benchmark S&P 500 index .SPX on track for its second straight month of gains. The CME FedWatch Tool showed futures traders seeing a 75% chance that the Fed will raise interest rates by 50 basis points at its December meeting, up from a 65% chance before Powell's comments were released. | Heavyweight technology stocks Apple AAPL.O, Microsoft MSFT.O and Nvidia NVDA.O rallied. According to preliminary data, the S&P 500 .SPX gained 121.18 points, or 3.06%, to end at 4,078.81 points, while the Nasdaq Composite .IXIC gained 484.62 points, or 4.41%, to 11,468.40. AnADP National Employment report showed private employment increased by 127,000 in November, below expectations of 200,000 jobs, suggesting demand for labor was cooling amid high interest rates. | 5 |
382 | 18,243 | 2022-11-29 00:00:00 UTC | Is Apple a Must-Own Stock in 2023? | AAPL | https://www.nasdaq.com/articles/is-apple-a-must-own-stock-in-2023 | null | null | Every so often, a company comes along and has so much success that many investors end up retiring millionaires by simply going along for the ride. Apple (NASDAQ: AAPL) is one of those companies. The tech giant has seen success matched by very few in history, and it has been rightfully earned. After all, it has world-class products, top-tier brand loyalty, and a bank account that other companies can only dream of having.
Past results are great, but a company's future outlook should be driving investing decisions. And although it's the largest public company in the world with a market cap of over $2.4 trillion -- more than Amazon, Berkshire Hathaway and Tesla combined -- there's still room for noticeable growth for Apple.
Here's why it's a must-own for 2023.
Apple is just getting started in the finance industry
Apple first began its journey into the financial services space in 2014 with the announcement of Apple Pay, which allowed people to pay from their iPhones. However, this move was seen as more about convenience than Apple making its way into the space. Then came 2019 and the announcement of the Apple Card -- a sign Apple was clearly taking a step in that direction.
With the Apple Card, Apple relied on Goldman Sachs to approve applications and fund the loans, which is why when they announced Apple Pay Later -- their move into the buy now, pay later space -- it was no longer a mystery whether Apple was serious about becoming a player in the financial services industry. Apple Pay Later is the first time Apple is underwriting and funding loans by itself.
Apple has an advantage that no other financial institution can duplicate: Its iPhone is in more than 100 million hands in the U.S. Between the iPhone's world-class technology and the convenience it can provide, the company's play into the financial services space is bound to test even the most formidable of financial technology (fintech) competitors.
The iPhone still reigns supreme
The iPhone is arguably the greatest consumer product ever made; it has quite literally changed the world. Apple reportedly spent over $150 million developing the original iPhone, and to say they've reaped the returns on their investments would be the understatement of the century. In its 2022 fiscal year, Apple brought in $394.3 billion in revenue -- roughly $28.5 billion more than it did in 2021. The iPhone accounted for more than half of that, bringing in $205.4 billion.
The fact that the iPhone managed to increase its sales in a year defined by inflation not seen in decades is very telling of its power. In fact, this year was the first time ever that more people in the U.S. used an iPhone than an Android phone. That's a remarkable milestone when you consider the iPhone's market share growth and much higher price point.
As long as the iPhone is padding Apple's bottom line, there's no reason to believe it won't continue to be one of the biggest cash cows you'll see from any business in any industry.
Apple is ramping up its research and development
Apple has historically spent a smaller portion of its revenue on research and development (R&D) than its other Big Tech competitors like Alphabet and Amazon. In 2020, here's how much the three companies spent on R&D and the percentage that was of their net sales:
Alphabet: $27.6 billion (15%)
Amazon: $42.7 billion (11%)
Apple: $18.8 billion (7%)
In 2021, Apple's R&D budget increased to $21.9 billion, and in 2022, it jumped up to $26.2 billion -- a company record. Although this still represents a relatively low percentage of Apple's revenue, it's a sign the company isn't getting complacent and is putting more emphasis on taking advantage of potential growth opportunities.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Stefon Walters has positions in Apple. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Goldman Sachs, and Tesla. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) is one of those companies. And although it's the largest public company in the world with a market cap of over $2.4 trillion -- more than Amazon, Berkshire Hathaway and Tesla combined -- there's still room for noticeable growth for Apple. As long as the iPhone is padding Apple's bottom line, there's no reason to believe it won't continue to be one of the biggest cash cows you'll see from any business in any industry. | Apple (NASDAQ: AAPL) is one of those companies. In 2020, here's how much the three companies spent on R&D and the percentage that was of their net sales: Alphabet: $27.6 billion (15%) Amazon: $42.7 billion (11%) Apple: $18.8 billion (7%) In 2021, Apple's R&D budget increased to $21.9 billion, and in 2022, it jumped up to $26.2 billion -- a company record. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Goldman Sachs, and Tesla. | Apple (NASDAQ: AAPL) is one of those companies. With the Apple Card, Apple relied on Goldman Sachs to approve applications and fund the loans, which is why when they announced Apple Pay Later -- their move into the buy now, pay later space -- it was no longer a mystery whether Apple was serious about becoming a player in the financial services industry. In 2020, here's how much the three companies spent on R&D and the percentage that was of their net sales: Alphabet: $27.6 billion (15%) Amazon: $42.7 billion (11%) Apple: $18.8 billion (7%) In 2021, Apple's R&D budget increased to $21.9 billion, and in 2022, it jumped up to $26.2 billion -- a company record. | Apple (NASDAQ: AAPL) is one of those companies. Apple is just getting started in the finance industry Apple first began its journey into the financial services space in 2014 with the announcement of Apple Pay, which allowed people to pay from their iPhones. With the Apple Card, Apple relied on Goldman Sachs to approve applications and fund the loans, which is why when they announced Apple Pay Later -- their move into the buy now, pay later space -- it was no longer a mystery whether Apple was serious about becoming a player in the financial services industry. | 4 |
383 | 18,257 | 2022-11-28 00:00:00 UTC | GLOBAL MARKETS-Asia shares take comfort in China property rally | AAPL | https://www.nasdaq.com/articles/global-markets-asia-shares-take-comfort-in-china-property-rally | null | null | By Wayne Cole
SYDNEY, Nov 29 (Reuters) - Asian shares edged higher on Tuesday as Beijing's latest move to support developers boosted the property sector, though it was still not clear what new damage public unrest over China's zero-COVID policy might do to the economy.
Shares of Chinese property companies surged after the country's securities regulator lifted a ban on equity refinancing for listed property firms.
That helped Chinese blue chips .CSI300 bounce 1.1%, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.7%.
Japan's Nikkei .N225 lagged with a drop of 0.4%, while South Korea KS11 firmed 0.3%.
S&P 500 futures ESc1 and Nasdaq futures NQc1 both nudged up 0.1%. EUROSTOXX 50 futures STXEc1 lost 0.2% and FTSE futures FFIc1 0.1%.
Markets were still nervous that the widening web of restrictions in China would lead to more public unrest and further undermine growth.
Analysts at Nomura said their index of lockdowns now showed the equivalent of 25% of China's GDP was affected, compared to a previous peak of 21% last April.
"Although Shanghai-style full lockdowns may be avoided, partial lockdowns in a rising number of cities may be more costly than full lockdowns in just a couple of cities," noted Nomura.
Underlining the far reaching impact of Beijing's policies, Apple Inc AAPL.O shares had fallen 2.6% on reports COVID-19 restrictions would cause a sizable shortfall in production of iPhone pro units.
"The zero China COVID policy has been an absolute gut punch to Apple's supply chain," said Daniel Ives, an analyst at Wedbush.
"We estimate that Apple now has significant iPhone shortages that could take off roughly at least 5% of units in the quarter and potentially up to 10% depending on the next few weeks in China around Foxconn production and protests."
HIGHER FOR LONGER
Sentiment also soured when Richmond Federal Reserve Bank President Thomas Barkin became the latest official to douse speculation the central bank would reverse course on interest rates relatively quickly next year.
That heightened tensions ahead of speech by Fed Chair Jerome Powell on Wednesday that is shaping up to be a major messaging event as markets yearn for a pivot on policy.
Analysts suspect they may be disappointed.
"We envision him basically confirming a slower pace of hikes at the December meeting, which is almost entirely priced in," said Jan Nevruzi, an analyst at NatWest Markets. "But we also think he will reiterate that the Fed intends to stay in restrictive territory through next year."
"The softening in the October CPI was welcome news, but hardly a complete victory yet, while growth and labour market data are still strong," he added "It doesn't feel like there is upside for Powell to dial back on the hawkishness."
The Fed is not alone in being hawkish, with European Central Bank President Christine Lagarde warnings euro zone inflation has not peaked and could go even higher.
Figures for inflation in Germany and Spain are due later on Tuesday, ahead of the main eurozone report on Wednesday.
Lagarde's comments had initially helped the euro spike to a five-month peak of $1.0497 EUR=D3 overnight, only for a rebound in the U.S. dollar to slap it back to $1.0350.
The dollar also bounced to 138.87 yen JPY=EBS, after briefly touching a three-month trough of 137.50 overnight. The dollar index rallied to 106.57 =USD, having been as low as 105.31 overnight.
The dollar did ease back on the offshore yuan at 7.2161 CNH=, after jumping 0.7% on Monday.
Bitcoin BTC=BTSP fell after major cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection along with eight affiliates.
In commodity markets, the gyrations in the dollar saw gold ease back to $1,744 an ounce XAU= after briefly getting as high as $1,763. GOL/
U.S. oil prices hit their lowest this year overnight as concerns over Chinese demand warred with talk of possible OPEC+ output cuts. O/R
U.S. crude futures CLc1 slipped 34 cents in early trade to $76.90 a barrel, though that was off a trough of $73.60, while Brent LCOc1 lost 28 cents to $82.91.
Asia stock marketshttps://tmsnrt.rs/2zpUAr4
Asia-Pacific valuationshttps://tmsnrt.rs/2Dr2BQA
(Reporting by Wayne Cole; Editing by Sam Holmes)
((Wayne.Cole@thomsonreuters.com; 612 9171 7144; Reuters Messaging: wayne.cole.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Underlining the far reaching impact of Beijing's policies, Apple Inc AAPL.O shares had fallen 2.6% on reports COVID-19 restrictions would cause a sizable shortfall in production of iPhone pro units. By Wayne Cole SYDNEY, Nov 29 (Reuters) - Asian shares edged higher on Tuesday as Beijing's latest move to support developers boosted the property sector, though it was still not clear what new damage public unrest over China's zero-COVID policy might do to the economy. That heightened tensions ahead of speech by Fed Chair Jerome Powell on Wednesday that is shaping up to be a major messaging event as markets yearn for a pivot on policy. | Underlining the far reaching impact of Beijing's policies, Apple Inc AAPL.O shares had fallen 2.6% on reports COVID-19 restrictions would cause a sizable shortfall in production of iPhone pro units. By Wayne Cole SYDNEY, Nov 29 (Reuters) - Asian shares edged higher on Tuesday as Beijing's latest move to support developers boosted the property sector, though it was still not clear what new damage public unrest over China's zero-COVID policy might do to the economy. That helped Chinese blue chips .CSI300 bounce 1.1%, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.7%. | Underlining the far reaching impact of Beijing's policies, Apple Inc AAPL.O shares had fallen 2.6% on reports COVID-19 restrictions would cause a sizable shortfall in production of iPhone pro units. By Wayne Cole SYDNEY, Nov 29 (Reuters) - Asian shares edged higher on Tuesday as Beijing's latest move to support developers boosted the property sector, though it was still not clear what new damage public unrest over China's zero-COVID policy might do to the economy. That heightened tensions ahead of speech by Fed Chair Jerome Powell on Wednesday that is shaping up to be a major messaging event as markets yearn for a pivot on policy. | Underlining the far reaching impact of Beijing's policies, Apple Inc AAPL.O shares had fallen 2.6% on reports COVID-19 restrictions would cause a sizable shortfall in production of iPhone pro units. By Wayne Cole SYDNEY, Nov 29 (Reuters) - Asian shares edged higher on Tuesday as Beijing's latest move to support developers boosted the property sector, though it was still not clear what new damage public unrest over China's zero-COVID policy might do to the economy. Lagarde's comments had initially helped the euro spike to a five-month peak of $1.0497 EUR=D3 overnight, only for a rebound in the U.S. dollar to slap it back to $1.0350. | 1 |
384 | 18,286 | 2022-11-26 00:00:00 UTC | Motley Fool Investors Look Back at 2022 and Forward to 2023 | AAPL | https://www.nasdaq.com/articles/motley-fool-investors-look-back-at-2022-and-forward-to-2023 | null | null | In this podcast, The Motley Fool's Bill Mann, Emily Flippen, and David Gardner talk about topics including:
2022 through the lens of a small business.
The importance of evaluating the management team of a small-cap company.
How fear can be contagious for investors.
Keeping an eye on inflation as we head into 2023.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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Bill Mann: You start looking for companies at that level, that if the CEO stepped down, the company is going to be OK. You saw that 100 percent with Apple.
Chris Hill: I'm Chris Hill and that's Motley Fool Senior Analyst, Bill Mann. We talked in front of a live audience at a Motley Fool event we had at the Hawk and Griffin pub in Vienna, Virginia. This was an event we had for Motley Fool members and we want it to bring you part of the conversations that we had onstage. I talked with Bill, fellow analysts, Emily Flippen and company co-Founder David Gardner about what they've learned as investors this year, and what they're watching as we look ahead to 2023.
Chris Hill: One of the things that I think we both love about working at The Motley Fool.
Bill Mann: Have we started recording by the way?
Chris Hill: As far as you know. I think one of the things we both love is the ongoing focus of learning that happens at the company and it really has been instilled from the very beginning with Tom and David Gardner. I'm reminded of a phrase that I first heard it from Tom Gardner. I don't know if he came up with it, but it's the whole idea that when we don't get what we want, we get experience. With that in mind, when you think about investing in 2022 as a lifelong learner, hat has this year taught you?
Bill Mann: I have to thank you because for the last four days, I've had the song Islands in the Stream rolling through my head over and over.
Chris Hill: Goodness, why?
Bill Mann: I don't know. But now I'm going to have Are You Experienced by Jimmy Hendrix rolling around in my brain. Thank you for getting me to the next step. We know in, as people who are students of the market, we know that there are downtimes, but like a lot of things, you do not get the chance to feel deeply that pain and that fear when times are good. We knew going through 2020 that we were going through something that was, at best remarkable. You could pull letters out of a scrabble bag and arrange them and buy that stock and it doubled, which is I don't know if you guys know this, that's not how that works.
We knew that there was a reckoning coming, but the type of reckoning that we've had in 2022 reminds you just how psychological the market can be, and it is really important to keep in mind and to be, there's such a reminder that you are not as smart as the market says, you are at any moment and you're not as dumb as the market says you are at any moment. Let me tell you something, right now the market tells me that I am stupid. We know this anyway, but the market is reaffirming it. We really need to have a sense of grace with ourselves during times like these, because it is what gets you through to the good news that comes and you're as David Gardner said so many times, the market goes down faster than it goes up, but it goes up more than it goes down.
Chris Hill: One of the reasons I benefit from our friendship, I don't know if you benefit from our friendship, but I do.
Bill Mann: You're all right.
Chris Hill: Because every once in a while, you will pull me out of what is happening in the US markets and point to something else around the world. You are very much in Global Investor. I'm curious in terms of this year, from a business standpoint, from an investing standpoint outside of the United States. What has surprised you?
Bill Mann: Can you all believe that in the stock market in 2022, we here in the united states have had it good. We've had it good. If you can imagine, one of the things that makes the united states special, there's a big list, but one of the things on the list is the fact that we have the reserve currency of the world, which means that the debt that we have, we know how much it's going to cost. In countries all around the world, they have debt that is denominated ultimately against the reserve currency in dollars, and so you have seen situations in countries around the world where the dollar has spiked against these currencies, which seems bad anyway, but when they have to pay their debt in US dollars, it makes it very painful.
One of the things that we've seen is something you never want to see is a negative correlation from country to country. We are in a global economy, mean may be less global than it has been. China seems to be pulling away. Russia, we seem to be done with them for a little while with them. I think one of the things that we're going to see in the next decade is the United States and the friendly markets to the United States really do well, and again, if it feels like it's been bad for us, it's been bad for these markets times two.
Chris Hill: There's no experience like doing something yourself. So even though you have studied businesses for decades recently, you've gotten the experience of being part owner of a small business like this. What do you know about small business and the challenges and opportunities of a small business? What do you know now that you didn't know, say a year or two ago?
Bill Mann: This is going to sound like I'm bragging on myself, but I'm not, I'm bragging on the man behind the bar, Tom Kylo, and especially with smaller companies, you need to know who you're betting on. Absolutely positively. He has built most of this place by hand. This was his passion project during COVID and passion projects don't always work out, but you've got someone who has a good business sense, who has the ability to go through the times that are hard. Running a small business in 2022 is incredibly challenging.
I don't know if you all have heard about this inflation thing, but it hits businesses as well. In some ways, with this type of business, with a razor thin margins, getting it right really matters, and so I take from this lesson when I, because my area primarily at The Motley Fool is in small caps and then internationally, and it just really confirms to me that knowing the management and getting a sense of what they are about and whether they are aligned with you is really important.
Chris Hill: Does it become, I don't want to say, less important as the company becomes larger. But does the, almost the burden of how good is this management, does it shift away to how good are they at picking their team?
Bill Mann: Yeah, I think so, and for me, that's been one of my longtime fears about Tesla for example is that they go through management, the layer below Elon Musk. Like they're going out of style and you'd get CFOs in packs of six. Because there's that much turnover. But I think one of the more important things with larger companies is not so much the manager themselves, although that can be very, very important. It's that next layer, you start looking for companies at that level, that if the CEO stepped down, the company is going to be OK. You saw that 100 percent with Apple when Steve Jobs had to step aside, 90 percent of the value of Apple has been created under Tim Cook, not under Steve Jobs. I mean, that's a remarkable way to think about what has happened with that company because you still think of it as being Steve Jobs' company, but it's not.
Chris Hill: I'd love to talk more, but you got to get buying.
Bill Mann: Thank you all so much.
Chris Hill: Man.
Bill Mann: Fool on everybody.
Chris Hill: All right, with that, it is very much my pleasure to bring up one of the true Rising Stars in the analyst community at the Motley Fool, Emily Flippen.
Emily Flippen: What an introduction? The bar is high now.
Chris Hill: Let me start with the same question that I asked, Bill. What's your investing takeaway for 2022?
Emily Flippen: Yeah, it's a hard question to answer because 2022 has been such an unusual year. But I think if I had one takeaway, it's just that fear is really contagious. For context for that, I'm 28 years old. I started investing after the Great Recession, the great financial crisis. So 2022 and honestly part of 2021 as well has been really the first time that I've seen just I guess what the fear looks like and how it manifests and how investors respond to their portfolios, decreasing day after day and 2022 has just been an incredible year to see that reaction and some spaces. Places where investors congregates, whether it'd be at the Fool or on places like Twitter.
You would think the world is ending. People are saying this time is different. They've never experienced a time like this. But at the Fool, talking to you, talking to our analysts, day after day, we just don't have the time [laughs] to get afraid. You're too busy reminding everybody that it's going to be OK that you start to believe at yourself. I'm interested to see what 2023 has in store if it's for another year. I have no doubt that will come out of it on the other side the same way we entered 2022. But I would just encourage everybody to provide some context to what they're experiencing today because 2022, as unusual as it's been, it's not unheard of, it's not unprecedented, no market pullback as well.
Chris Hill: That's part of what makes investing tricky. It's not just analyzing the numbers of a business and is this industry growing and is this business within this industry growing? A lot of it does come down to, well, what is the story of this business industry? To the point you just made, what is the story of this market? Because when the narrative every day is the sky is falling. As an individual investor, that's hard to overcome.
Emily Flippen: Yeah, I will say this. I think about the macro-environment approximately zero percent of my time. I don't like to spend my time thinking about inflation mostly because it really hurts my pocketbook. I don't want to go into the grocery store and seeing my bills up 50 percent. But really it doesn't have an impact on the long-term thesis for the vast majority of businesses that we're invested in. I focus on what I can control, I focus on the business performance, understanding how the company is doing, yes, in today's environment, but more importantly in the environment five years from now. It's the same way when you think about investing during political turmoil. We just came out of a midterm election here in the United States. We're not investing for any single market environment the same way we're not investing for any certain political regime. We're investing in companies that 10 years from now should hopefully be in a better position we are today. That depends on a lot more factors, and then just what's happening in this exact moment.
Chris Hill: Let's get to one company specifically. This week, our company is having its annual meeting. A part of that is not just presentations from our company's leadership to our entire company. It's also we get the chance to hear from leaders of other companies. You've actually recorded an interview that we're going to be seeing this week with Summit saying who is the CEO of Chewy? A company, I first heard about from you. Without giving too much away, what was your impression of him as a shareholder? How are you feeling about the business of Chewy? Like a lot of businesses, it's had a tough year.
Emily Flippen: Well, let me say I'm not a tough audience, I'm a fan girl if this company of any shareholder, basically since the company went public. But more importantly, I'm not married, I don't have kids, but I do have a cat. I do treat that cat like my family. Chewy is an integral part of my everyday life. Having the opportunity to sit down, assume it has been absolutely amazing. I will say, obviously everybody's out here selling your companies, I want to believe in the company that I'm invested in it. But I was really impressed with the mentalities that he's brought to the company. He is not the founder, but he has been the CEO. He brought it through the IPO and he brings a really great logistical mine to the business. He understands fulfillment and infrastructure better than anyone I've talked to you before, which is so vital for the position that Chewy is in today.
But more importantly, I think he just has the right culture mindset. It's a really hard thing to have, I think, when you're not the founder of a business. At the Motley Fool here where you have two co-founders that have helped to create a culture that is really unique and we all benefit from that today. But Chewy, going through that transition from their founder to an outside CEO being essentially brought into the organization, it's hard to retain it. But they have created something that is really pet parent first, if I can steal some of their language here, and really focuses on building an internal culture that creates a sense of loyalty among their customers. That's the reason why they have really high net promoter scores with the people that they engage with, have a really high level of repeat orders and customer loyalty. They have an understanding about what pet parents like myself and my tiny cat needs better than Amazon or Petco.
Chris Hill: I'm glad you mentioned Amazon because as someone who doesn't own pets, but my memory is that during the pandemic, one of the early stumbles for Amazon was with pet owners. Am I correct that Chewy benefited from the misstep of a competitor there?
Emily Flippen: Here's my thing. I don't like to say that Chewy won because of the pandemic and this grinds my gears a little bit, Chris. Because when I ever talked to me about with Chewy, they're like, oh well, that's a pandemic play. I was a shareholder to you before the pandemic, I'll be a shareholder of Chewy now and continues in the future, I expect. But the business was set up for success because they understood their customer better than Amazon, to the world. I don't think it's necessarily that the pandemic happened and Amazon misstepped. Not understanding the needs of pet parents, not doing super well with their private-label pet goods. That was the reason why Chewy did well. Chewy has been executing on the same thesis that they had a year before the pandemic and a year after the pandemic, it was just a matter of I guess everybody got a bit more pets.
Chris Hill: I was just going to say, I wasn't suggesting like now that's the only reason they're doing well because it didn't make sense to me that people will be like, well, I'm just going to try this for a year, and then when the pandemic's over.
Emily Flippen: I clearly heard it too much. You hit a sore spot.
Chris Hill: Clearly, I did. What is something you're going to be watching in 2023? Let's move away from Chewy. But just in terms of industries trends, what's on your radar as we come to the end of this year and look forward to hopefully a better one for investors.
Emily Flippen: Well, obviously I want to say Chewy. I'll be watching Chewy along with all of my investments in 2023. But there really isn't anything I expect. I like to not enter my years with expectations about what may happen. But I do like to say that I outlined things that I'll be be watching. Obviously, inflation is a big one heading into 2023, how that handles it. There's been some people who are calling last week, I guess the bottom point of the markets. I don't know if I necessarily agree with that, but it is interesting to think about if 2023 will continue this few day uptick that we've seen. But ultimately, yeah, I'm positioning my portfolio to perform much better in 2024, 2025, 2026, not just 2023.
Chris Hill: Thanks for being here.
Emily Flippen: Thanks for having me.
Chris Hill: Emily Flippen. Please welcome David Gardner.
David Gardner: Thank you.
Chris Hill: Let me start with a way that I think you've been spending part of your year with 2022 being the theme here. You've been spending time with the Motley Fool Foundation. I'm curious the conversations you've been having with people in the foundation, networking in the greater DC area. What impression are you getting from folks in terms of how they are viewing the market, the economy? This would seem on the surface to be a difficult time for non-profit foundations, and I'm curious, what's been your experience as you talk to folks in this community?
David Gardner: First of all, just to get investing out of the way, I'm about half of what I was a year ago, just straight up. Whether or not I'm picking stocks anymore on a regular basis for the Fool, doesn't matter, I remain fully invested just like I hope everybody else generally is or should be. Just to be really clear on that, I had the pleasure at our first face-to-face member gathering Fool face in three years, a couple of months ago to say. Maybe some of you heard me say this, I'll say it again. Whoever's down, however much you're down, I'm down more. I have neither bought nor sold a stock since before COVID, so I just pretty much stay fully invested all the time, and therefore I ride it all the way down, and usually down more than most other people in any given room, and then right back up and that works. That really does work.
Thank you for the question about the foundation. I think Chris, what I have really appreciated about where we are. In the early stages, this is an icon, this is a scrappy start-up. This is what the Motley Fool was in 1993, it's a print newsletter, were just a few months into the foundation. Thank you for those of you who've already leaned-in, contributed your Fool fuel as we like to use the phrase because we really are counting on our membership to fuel our foundation. We have some resources and we're fully dedicated. Some of our most mediocre minds are focused on our foundation, but we really are counting on our Fools everywhere. I think that what I've concluded about the world, after a lot of conversations the last 12 months, is that we need to continue to democratize money for everybody.
We have done that pretty well in our own small way, in our own Fool way over the last 30 years for the markets, and some of you were already investing before Chris and I were born, and you're here tonight, and for thanks for joining us, and your amazing exemplars to your families and to all the rest of us here. Many others may have gotten started in the last three years because of the Motley Fool, and a lot of people are hearing our podcasts, we have a larger audience than ever before today, so that means a lot of people have just joined in and learned about the market's during the Fool. Chris, we're here to get everybody carrying about the markets.
But in fact, before you can care about the markets, you need to care about saving, about being invested, about recognizing the importance of not just financial literacy, teaching stock market to kids, let's say, but of having a roof over your head, having your health, because financial freedom doesn't mean a lot if you don't have your health and what health means. A lot of these things are systemic and that's really where we've been. In my longest answer, I'll give to every question, that's really where we've been leaning in.
Chris Hill: I want to go back to something Emily talked about, because I was struck by this. Emily talking about fear as being an emotion, that she experienced en-mass for the first time as a younger investor. She didn't put it this way, but I will. We're older, we've been investing for decades beyond that, so maybe we don't have the same level of fear or certainly are not surprised by it. I'm curious, how you've done that over the years to the extent that you've managed your emotions? Because I think that's part of what Emily was getting at. In some cases we've seen this for years. At the Motley Fool, we've seen fear drive people out of the market all together. They're investing for a year or two, they hit a bear market and then they said that's it, I'm out. I'm curious, how you've managed your emotions, but also to the extent that you've counseled people to get through and stay in the game.
David Gardner: I think that fear needs to be replaced by knowledge. They're almost opposites. Fear and understanding, fear and knowledge. When Emily said she was 28, which is so awesome. Emily, thank you for contributing so much in your earlier as the Fool and I look forward to on association. Thank you. I'm 56, so I'm like, I'm 2x. I'm glad we had this moment, I'm like, "Okay, I'm exactly twice as old as Emily." But I think that for a lot of us, it is about making sure you understand, you have context, and some of that has to be earned in the market, in real downturns. Emily spoke really well to that. But I truly believe that the people who shy, or people who don't have the context of understanding that the stock market has traditionally returned 9-10 percent annualized over the last century, and that includes every horrific bear market that you can think of.
Some of which you can even make up in your head, it's all happened in the last century, and you still got that amazing return. But you only got that return if you stayed invested. For me, with a never sell mentality, my brother practices the same thing. I think a lot of us, I hope appreciate that. Not everybody does, some people like to trade jump in, jump out. It's just not my orientation, but I think you make a lifetime commitment to the stock market, to investing. You learn as you go, and I think that you feel less fear. I do, because you know more, I do know more. Yet it still is a bummer and I still get to say to all of you, I'm down half over the last year. That never feels good. I felt it before, and if I keep my cholesterol a little bit lower, this will happen several more times in my lifetime. This is not the last really bad market. I hope everyone is prepared for the next one. Doesn't mean batten the hatches now, doesn't mean try to guess when it's going to show up, just realize it's going to happen. Losing to win is like a critical theme for me in life, but investing too.
Chris Hill: I'm not going to ask you to make a prediction for the market for 2023 because I've known you too long.
David Gardner: I actually have the URL, predictionclub.com.
Chris Hill: Why?
David Gardner: I own it. Because I intend to make use of it at some point, so we can say predictions, I think we need to be doing more of that in this world. There needs to be more prognostication or at least more accountability for those who are constantly prognosticating, which is probably not what I'm about to do.
Chris Hill: What happens if someone goes to prognostication club.com right now, what can I get?
David Gardner: Go for it? If you make any investment, you'll be well past me, all already be in your rearview mirror. I'm a member of a longtime book club that I love, I think that there should be prediction clubs. I think that we should be convening once a quarter or a month and make predictions with each other, and then we should go back a month later, a quarter later, get back together. It's not just that Harry made this prediction and Sally made this prediction, it's that you and I, as members of the club, need to agree or disagree with Harry and or Sally, and be accountable and score it. I think we'll get smarter about the future and the big wisdom of the crowds fan. Why are we talking about predictions?
Chris Hill: I was just going to say this becomes a lot more compelling to me if I get to bet on either Harry or Sally. Okay?
David Gardner: It might be our business.
Chris Hill: We'll talk business. Now, where I was going to go was somewhere that I'm sure it's going to disappoint at least some of the people listening. I wasn't going to ask for a stock market prediction, but I know you are a believer in the idea that winners win, and we see that in companies that succeed over decades, and we see that in sports programs. How are you feeling about the North Carolina basketball team in 2023.
David Gardner: I feel as if the North Carolina basketball team this year for the few who may care about it in this room, or listening on this podcast, I feel as if this might be the best team that we've ever seen.
Chris Hill: Thanks for being here.
David Gardner: Thank you. Fool on.
Chris Hill: If you're not already listening to David Gardner's weekly podcast, check it out. It's called Rule Breaker Investing with David Gardner. New episodes every Wednesday, find it wherever you get your podcasts. If you're in Northern Virginia and looking for a bite to eat in a friendly setting, find your way over to the Hakim Griffin pub.
As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill, thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bill Mann has no position in any of the stocks mentioned. Chris Hill has positions in Amazon, Apple, and Chewy, Inc. David Gardner has positions in Apple and Tesla. Emily Flippen has positions in Chewy, Inc. The Motley Fool has positions in and recommends Amazon, Apple, Chewy, Inc., and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In this podcast, The Motley Fool's Bill Mann, Emily Flippen, and David Gardner talk about topics including: 2022 through the lens of a small business. I talked with Bill, fellow analysts, Emily Flippen and company co-Founder David Gardner about what they've learned as investors this year, and what they're watching as we look ahead to 2023. In some ways, with this type of business, with a razor thin margins, getting it right really matters, and so I take from this lesson when I, because my area primarily at The Motley Fool is in small caps and then internationally, and it just really confirms to me that knowing the management and getting a sense of what they are about and whether they are aligned with you is really important. | In this podcast, The Motley Fool's Bill Mann, Emily Flippen, and David Gardner talk about topics including: 2022 through the lens of a small business. I talked with Bill, fellow analysts, Emily Flippen and company co-Founder David Gardner about what they've learned as investors this year, and what they're watching as we look ahead to 2023. Chris Hill has positions in Amazon, Apple, and Chewy, Inc. David Gardner has positions in Apple and Tesla. | Chris Hill: I'm Chris Hill and that's Motley Fool Senior Analyst, Bill Mann. Chris Hill: I was just going to say, I wasn't suggesting like now that's the only reason they're doing well because it didn't make sense to me that people will be like, well, I'm just going to try this for a year, and then when the pandemic's over. Many others may have gotten started in the last three years because of the Motley Fool, and a lot of people are hearing our podcasts, we have a larger audience than ever before today, so that means a lot of people have just joined in and learned about the market's during the Fool. | Chris Hill: One of the things that I think we both love about working at The Motley Fool. I don't know if you all have heard about this inflation thing, but it hits businesses as well. We're investing in companies that 10 years from now should hopefully be in a better position we are today. | 4 |
385 | 18,295 | 2022-11-25 00:00:00 UTC | GLOBAL MARKETS-Nasdaq falls and dollar rises on investor caution | AAPL | https://www.nasdaq.com/articles/global-markets-nasdaq-falls-and-dollar-rises-on-investor-caution | null | null | By Sinéad Carew and Alun John
NEW YORK/LONDON, Nov 25 (Reuters) - The Nasdaq closed Friday's shorter session lower with pressure from Apple Inc AAPL.O, while the dollar gained as investors shied away from risk as they worried about consumer spending and monitored China's reaction to a resurgence of COVID cases.
Frustration simmered among residents and business groups in China as the government set stricter COVID-19 control curbs just weeks after hopes for easing restrictions had been raised.
And market heavyweight Apple's shares were weighed down by concerns about its manufacturer Foxconn 2317.TW. Foxconn's flagship iPhone plant in China was expected to show a November shipment slowdown as thousands of employees left in the latest bout of unrest, Reuters reported, citing an unnamed a source with direct knowledge of the matter.
"The biggest news item is what's going on in China, the protests against the zero-covid-tolerance policies," said Brian Jacobsen, senior investment strategist at AllSpring.
"Investors are in a holding pattern waiting for some catalyst even though we're not quite sure what that catalyst will be," said Jacobsen noting that an easing of China's restrictions would promote a risk-on mood while tightening or keeping restrictions would have the opposite effect.
In the United States, trading was also likely impacted by lower volume as many traders take vacation for the market half-day due to Thursday's Thanksgiving holiday.
The mood was cautious as the all-important gift-buying season kicked off. With inflation soaring, investors are watching out for signs of weakness in consumer spending.
And while shoppers often turn out in record numbers for Black Friday discounts, so far on Friday, Reuters reported that crowds were thin outside stores on what is historically the busiest shopping day.
The Dow Jones Industrial Average.DJI rose 152.97 points, or 0.45%, to 34,347.03, the S&P 500 .SPX lost 1.14 points, or 0.03%, to 4,026.12 and the Nasdaq Composite .IXIC dropped 58.96 points, or 0.52%, to 11,226.36.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.15% on the day but added about 1.5% for the week.
Europe's retailers, while fearing the shopping season could be the worst in at least a decade, were also offering Black Friday deals in hopes of boosting spending against the backdrop of high inflation and the distraction of the soccer World Cup.
Europe's STOXX 600 STOXX ended down 0.02% on Friday but boasted a 1.7% weekly percentage gain, marking six weekly advances in a row for the first time since late 2021.
The U.S. dollar crept higher across the board in what looked like a quiet session but it remained near multi-month lows as the prospect of the Federal Reserve moderating the pace of its policy tightening weighed on the U.S. currency.
"Today has all the indicators of another session dominated by USD consolidation in lieu of any major cross-asset drivers," said Simon Harvey, senior FX analyst at Monex Europe adding that "liquidity is quite limited."
The dollar index .DXY rose 0.21%, while the euro EUR= was down 0.07% to $1.0401.
The Japanese yen weakened 0.33% versus the greenback at 139.08 per dollar, while Sterling GBP= was last trading at $1.2082, down 0.23% on the day.
U.S. Treasury yields gave up earlier gains after already falling on Wednesday after the Fed's November meeting minutes indicated agreement that rate hiking could be slowed.
Benchmark 10-year notes US10YT=RR were down 1.5 basis points to 3.694%, from 3.709% late on Wednesday.
The 30-year bond US30YT=RR was last up 1.3 basis points to yield 3.7554%, from 3.742%. The 2-year note US2YT=RR was last down 1.4 basis points to yield 4.469%, from 4.483%.
Oil prices fell on Friday in thin market liquidity, closing a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil.
U.S. crude CLc1 futures settled down 2.13% at $76.28 per barrel while Brent settled at $83.63, down $1.71, or 2% on the day.
Gold prices retreated after the precious metal posted gains in the previous three sessions on expectations the U.S. Federal Reserve would scale back its rate-hiking stance.
Spot gold XAU= dropped 0.1% to $1,753.61 an ounce. U.S. gold futures GCc1 gained 0.40% to $1,751.90 an ounce. GOL/
World FX rates YTDhttp://tmsnrt.rs/2egbfVh
Global asset performancehttp://tmsnrt.rs/2yaDPgn
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
(Reporting by Sinéad Carew, Saqib Iqbal Ahmed and Carolina Mandl in New York, Ankika Biswas and Shubham Batra in Bengaluru, Alun John in London, and Kevin Buckland in Tokyo; Editing by Christina Fincher, Kirsten Donovan, Deepa Babington, Philippa Fletcher)
((sinead.carew@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Sinéad Carew and Alun John NEW YORK/LONDON, Nov 25 (Reuters) - The Nasdaq closed Friday's shorter session lower with pressure from Apple Inc AAPL.O, while the dollar gained as investors shied away from risk as they worried about consumer spending and monitored China's reaction to a resurgence of COVID cases. Foxconn's flagship iPhone plant in China was expected to show a November shipment slowdown as thousands of employees left in the latest bout of unrest, Reuters reported, citing an unnamed a source with direct knowledge of the matter. Europe's retailers, while fearing the shopping season could be the worst in at least a decade, were also offering Black Friday deals in hopes of boosting spending against the backdrop of high inflation and the distraction of the soccer World Cup. | By Sinéad Carew and Alun John NEW YORK/LONDON, Nov 25 (Reuters) - The Nasdaq closed Friday's shorter session lower with pressure from Apple Inc AAPL.O, while the dollar gained as investors shied away from risk as they worried about consumer spending and monitored China's reaction to a resurgence of COVID cases. Europe's STOXX 600 STOXX ended down 0.02% on Friday but boasted a 1.7% weekly percentage gain, marking six weekly advances in a row for the first time since late 2021. Oil prices fell on Friday in thin market liquidity, closing a week marked by worries about Chinese demand and haggling over a Western price cap on Russian oil. | By Sinéad Carew and Alun John NEW YORK/LONDON, Nov 25 (Reuters) - The Nasdaq closed Friday's shorter session lower with pressure from Apple Inc AAPL.O, while the dollar gained as investors shied away from risk as they worried about consumer spending and monitored China's reaction to a resurgence of COVID cases. The Dow Jones Industrial Average.DJI rose 152.97 points, or 0.45%, to 34,347.03, the S&P 500 .SPX lost 1.14 points, or 0.03%, to 4,026.12 and the Nasdaq Composite .IXIC dropped 58.96 points, or 0.52%, to 11,226.36. GOL/ World FX rates YTDhttp://tmsnrt.rs/2egbfVh Global asset performancehttp://tmsnrt.rs/2yaDPgn Asian stock marketshttps://tmsnrt.rs/2zpUAr4 (Reporting by Sinéad Carew, Saqib Iqbal Ahmed and Carolina Mandl in New York, Ankika Biswas and Shubham Batra in Bengaluru, Alun John in London, and Kevin Buckland in Tokyo; Editing by Christina Fincher, Kirsten Donovan, Deepa Babington, Philippa Fletcher) ((sinead.carew@thomsonreuters.com)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Sinéad Carew and Alun John NEW YORK/LONDON, Nov 25 (Reuters) - The Nasdaq closed Friday's shorter session lower with pressure from Apple Inc AAPL.O, while the dollar gained as investors shied away from risk as they worried about consumer spending and monitored China's reaction to a resurgence of COVID cases. The Dow Jones Industrial Average.DJI rose 152.97 points, or 0.45%, to 34,347.03, the S&P 500 .SPX lost 1.14 points, or 0.03%, to 4,026.12 and the Nasdaq Composite .IXIC dropped 58.96 points, or 0.52%, to 11,226.36. The 2-year note US2YT=RR was last down 1.4 basis points to yield 4.469%, from 4.483%. | 1 |
386 | 18,313 | 2022-11-24 00:00:00 UTC | Foxconn is stuck between rock and hard place | AAPL | https://www.nasdaq.com/articles/foxconn-is-stuck-between-rock-and-hard-place | null | null | Reuters
Reuters
HONG KONG (Reuters Breakingviews) - The $45 billion top Apple supplier Foxconn is trying to resolve its problems in China with cash. Financial fixes can only do so much to tackle a problem stemming from Beijing’s zero-Covid policy.
Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. Workers demanded bonuses to be paid without delay and, in another unusual move, Foxconn is now offering incentives exceeding a month’s wage to those among its 200,000 workforce at the site who want to leave. It quadrupled daily bonuses earlier this month to lure new hires after staff fled. Workers have been upset after being forced to live in difficult conditions designed to stamp out Covid-19 infections.
Analysts at Wuhan-based Tianfeng Securities hint at the practical problems to resolving the mess. On a field trip to Zhengzhou this week, they say the city’s partial lockdown meant they had to walk over 10 miles on foot to the chaos-hit factory. In every way, manufacturers in China face a long and bumpy road to recovery if they try to please both their workers and Beijing. (By Yawen Chen)
Follow @Breakingviews on Twitter
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(Editing by Una Galani and Thomas Shum)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. Workers demanded bonuses to be paid without delay and, in another unusual move, Foxconn is now offering incentives exceeding a month’s wage to those among its 200,000 workforce at the site who want to leave. (By Yawen Chen) Follow @Breakingviews on Twitter Capital Calls - More concise insights on global finance: ABB takes valid detour around hairy IPO markets Italy’s Meloni will dodge EU collision on budget Messy money manager merger goes from bad to worse Ticketmaster shares spotlight with Taylor Swift Rio swaps wild goose chase for white-knuckle ride (Editing by Una Galani and Thomas Shum) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Reuters Reuters HONG KONG (Reuters Breakingviews) - The $45 billion top Apple supplier Foxconn is trying to resolve its problems in China with cash. Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. | HONG KONG (Reuters Breakingviews) - The $45 billion top Apple supplier Foxconn is trying to resolve its problems in China with cash. Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. Workers demanded bonuses to be paid without delay and, in another unusual move, Foxconn is now offering incentives exceeding a month’s wage to those among its 200,000 workforce at the site who want to leave. | HONG KONG (Reuters Breakingviews) - The $45 billion top Apple supplier Foxconn is trying to resolve its problems in China with cash. Financial fixes can only do so much to tackle a problem stemming from Beijing’s zero-Covid policy. Hon Hai Precision Industry, better known as Foxconn, offered a rare apology on Thursday for what it said was a “technical error” relating to the hiring of new employees after violent protests erupted at its Zhengzhou factory that produces most of the world’s iPhones. | null |
387 | 18,315 | 2022-11-23 00:00:00 UTC | Paramount (PARA) to Stream Top Gun: Maverick on Paramount+ | AAPL | https://www.nasdaq.com/articles/paramount-para-to-stream-top-gun%3A-maverick-on-paramount | null | null | Paramount Global PARA recently announced that it will be streaming Top Gun: Maverick on Paramount+ from Dec 22 in the United States, Canada, Australia, Germany, Switzerland, Austria, Italy, the U.K. and Latin America. In South Korea and France, it will be available from 2023.
Top Gun: Maverick had a blockbuster performance across theatres as it remained in the top five on domestic box office charts for 14 of the 15 weeks since release in America.
The film also set a holiday record with its $160.5 million debut and became Tom Cruise’s first movie to surpass $100 million in a single weekend, as well as his first to cross $1 billion in worldwide ticket sales.
The movie gained traction and received huge support from fans on the big screen and the same is anticipated as it now heads towards its OTT launch.
Paramount+ Aids Growth
Paramount has been focused on setting a strong pipeline of movies and shows for its viewers on the streaming platform.
The company recently unveiled its plans to celebrate the 50th anniversary of hip hop music and culture, for which Paramount+ will offer 50 of the most iconic episodes of MTV Entertainment’s original series Yo! MTV Raps for the first time since it premiered and episodes from the home-makeover series, Hip Hop My House.
Paramount+ also announced the revival of the popular FBI drama, Criminal Minds. This is expected to fuel its fan base, which will pay even bigger returns after adding 4.6 million subscribers in the third quarter of 2022 and gaining 95% in revenues year over year.
Paramount Global Price and Consensus
Paramount Global price-consensus-chart | Paramount Global Quote
Paramount also entered a new multi-year distribution agreement with Virgin Media, under which, Paramount+ will debut on Virgin TV in 2023 and Pluto TV will be more widely distributed on Virgin TV 360 and stream services.
Besides expanding the content library, Paramount+ has also been expanding its footprints globally. It has plans to introduce Paramount+ in Germany, Austria and Switzerland and in France with Canal+ this year.
What Lies Ahead for Paramount?
Despite the wide expansion, Paramount faces certain headwinds. Advertisers continue to deal with macroeconomic challenges like inflation, higher interest rates and unfavourable forex with the U.S. dollar strengthening. This has led to cutbacks in their spending and has hindered the company’s top-line growth.
Paramount is facing stiff competition from the likes of Disney DIS and Apple AAPL in the streaming market, which is currently dominated by Netflix NFLX.
Netflix reported better-than-expected third-quarter 2022 subscriber numbers. It gained 2.41 million paid subscribers globally, higher than its estimate of gaining one million users.
Disney lost 37.9% shares year to date. Disney+ added 12.1 million subscribers in fourth-quarter fiscal 2022.
Both Netflix and Disney are set to launch their ad-tier subscriptions by the end of this year. These low-cost subscription plans are expected to further increase competition for Paramount.
Apple’s streaming service, Apple TV+, continues to gain recognition with its critically acclaimed and popular shows like Ted Lasso.
Paramount shares have outperformed Disney and Netflix on a year-to-date basis, while underperforming Apple.
This Zacks Rank #5 (Strong Sell) company has lost 36.5% of its shares year to date compared with the Zacks Consumer Discretionary space, which fell 35.2% in the same period.
While Apple shares are down 15.4%, Disney and Netflix have dropped 37.9% and 52.4%, respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Paramount is facing stiff competition from the likes of Disney DIS and Apple AAPL in the streaming market, which is currently dominated by Netflix NFLX. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Paramount Global (PARA) : Free Stock Analysis Report To read this article on Zacks.com click here. Paramount Global PARA recently announced that it will be streaming Top Gun: Maverick on Paramount+ from Dec 22 in the United States, Canada, Australia, Germany, Switzerland, Austria, Italy, the U.K. and Latin America. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Paramount Global (PARA) : Free Stock Analysis Report To read this article on Zacks.com click here. Paramount is facing stiff competition from the likes of Disney DIS and Apple AAPL in the streaming market, which is currently dominated by Netflix NFLX. Paramount Global PARA recently announced that it will be streaming Top Gun: Maverick on Paramount+ from Dec 22 in the United States, Canada, Australia, Germany, Switzerland, Austria, Italy, the U.K. and Latin America. | Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Paramount Global (PARA) : Free Stock Analysis Report To read this article on Zacks.com click here. Paramount is facing stiff competition from the likes of Disney DIS and Apple AAPL in the streaming market, which is currently dominated by Netflix NFLX. Paramount Global Price and Consensus Paramount Global price-consensus-chart | Paramount Global Quote Paramount also entered a new multi-year distribution agreement with Virgin Media, under which, Paramount+ will debut on Virgin TV in 2023 and Pluto TV will be more widely distributed on Virgin TV 360 and stream services. | Paramount is facing stiff competition from the likes of Disney DIS and Apple AAPL in the streaming market, which is currently dominated by Netflix NFLX. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Paramount Global (PARA) : Free Stock Analysis Report To read this article on Zacks.com click here. It has plans to introduce Paramount+ in Germany, Austria and Switzerland and in France with Canal+ this year. | null |
388 | 18,342 | 2022-11-22 00:00:00 UTC | UK investigating Apple, Google's mobile browser dominance | AAPL | https://www.nasdaq.com/articles/uk-investigating-apple-googles-mobile-browser-dominance | null | null | Nov 22 (Reuters) - Britain's competition watchdog said on Tuesday it had launched an in-depth investigation into the market dominance of Apple AAPL.O and Google's GOOGL.O mobile browsers, months after the regulator began considering a probe.
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli)
((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Nov 22 (Reuters) - Britain's competition watchdog said on Tuesday it had launched an in-depth investigation into the market dominance of Apple AAPL.O and Google's GOOGL.O mobile browsers, months after the regulator began considering a probe. (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Nov 22 (Reuters) - Britain's competition watchdog said on Tuesday it had launched an in-depth investigation into the market dominance of Apple AAPL.O and Google's GOOGL.O mobile browsers, months after the regulator began considering a probe. (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Nov 22 (Reuters) - Britain's competition watchdog said on Tuesday it had launched an in-depth investigation into the market dominance of Apple AAPL.O and Google's GOOGL.O mobile browsers, months after the regulator began considering a probe. (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Nov 22 (Reuters) - Britain's competition watchdog said on Tuesday it had launched an in-depth investigation into the market dominance of Apple AAPL.O and Google's GOOGL.O mobile browsers, months after the regulator began considering a probe. (Reporting by Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli) ((Pushkala.A@thomsonreuters.com; Twitter: @pullthekart; Mobile: +91 852 751 3793 ;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | null |
389 | 18,351 | 2022-11-21 00:00:00 UTC | After Hours Most Active for Nov 21, 2022 : BEKE, BAC, INFY, EXPD, CSX, AAPL, PAGP, TCOM, AMZN, XPEV, EW, YUMC | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-nov-21-2022-%3A-beke-bac-infy-expd-csx-aapl-pagp-tcom-amzn-xpev | null | null | The NASDAQ 100 After Hours Indicator is up 1.58 to 11,555.03. The total After hours volume is currently 87,762,287 shares traded.
The following are the most active stocks for the after hours session:
KE Holdings Inc (BEKE) is unchanged at $14.71, with 4,926,528 shares traded. As reported by Zacks, the current mean recommendation for BEKE is in the "buy range".
Bank of America Corporation (BAC) is unchanged at $37.31, with 3,755,643 shares traded. As reported by Zacks, the current mean recommendation for BAC is in the "buy range".
Infosys Limited (INFY) is unchanged at $19.30, with 3,091,408 shares traded. INFY's current last sale is 96.5% of the target price of $20.
Expeditors International of Washington, Inc. (EXPD) is unchanged at $113.55, with 2,947,122 shares traded. EXPD's current last sale is 117.06% of the target price of $97.
CSX Corporation (CSX) is unchanged at $31.29, with 2,744,398 shares traded. CSX's current last sale is 94.82% of the target price of $33.
Apple Inc. (AAPL) is +0.09 at $148.10, with 2,407,856 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $1.5. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Plains GP Holdings, L.P. (PAGP) is unchanged at $12.74, with 2,233,747 shares traded. As reported by Zacks, the current mean recommendation for PAGP is in the "buy range".
Trip.com Group Limited (TCOM) is unchanged at $27.50, with 2,215,005 shares traded. As reported by Zacks, the current mean recommendation for TCOM is in the "buy range".
Amazon.com, Inc. (AMZN) is unchanged at $92.46, with 2,209,771 shares traded. As reported by Zacks, the current mean recommendation for AMZN is in the "buy range".
XPeng Inc. (XPEV) is +0.05 at $7.37, with 2,138,426 shares traded. XPEV's current last sale is 33.81% of the target price of $21.8.
Edwards Lifesciences Corporation (EW) is unchanged at $74.10, with 2,078,449 shares traded. As reported by Zacks, the current mean recommendation for EW is in the "buy range".
Yum China Holdings, Inc. (YUMC) is unchanged at $52.32, with 1,944,395 shares traded. As reported by Zacks, the current mean recommendation for YUMC is in the "buy range".
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc. (AAPL) is +0.09 at $148.10, with 2,407,856 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Bank of America Corporation (BAC) is unchanged at $37.31, with 3,755,643 shares traded. | Apple Inc. (AAPL) is +0.09 at $148.10, with 2,407,856 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". As reported by Zacks, the current mean recommendation for BEKE is in the "buy range". | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is +0.09 at $148.10, with 2,407,856 shares traded. CSX Corporation (CSX) is unchanged at $31.29, with 2,744,398 shares traded. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is +0.09 at $148.10, with 2,407,856 shares traded. The NASDAQ 100 After Hours Indicator is up 1.58 to 11,555.03. | null |
390 | 18,364 | 2022-11-20 00:00:00 UTC | My Top FAANG Stock For 2023 -- and It Isn't Even Close | AAPL | https://www.nasdaq.com/articles/my-top-faang-stock-for-2023-and-it-isnt-even-close | null | null | Long-time investors are no doubt familiar with the fabled FAANG stocks, which have been some of the most disruptive and wealth-generating companies of the past 10 years:
Facebook parent Meta Platforms (NASDAQ: META)
Apple (NASDAQ: AAPL)
Amazon (NASDAQ: AMZN)
Netflix (NASDAQ: NFLX)
Google, which rebranded as Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG)
Every company on this list is the undisputed leader in its field. Meta Platforms has transformed how consumers interact with social media. Apple has the world's best-selling smartphone. Amazon is the undisputed leader in U.S. e-commerce. Netflix pioneered the field of streaming video. And Google became a verb for its dominance of internet search. As a result, these stocks have generated life-changing gains for investors, ranging from 412% to 2,540% -- even after the recent market decline.
Data by YCharts.
Furthermore, the recent bear market has pummeled technology stocks, with the Nasdaq Composite down a whopping 30% from last year's high. Some of the FAANG stocks have been hit even harder, with these tech titans shedding between 18% and 70% of their value.
With the FAANG stocks each selling at multiyear lows, which of the group is tops to buy for 2023? For my money, Amazon is ripe for the picking. Here's why.
The death of e-commerce has been greatly exaggerated
No conversation about Amazon is possible without discussing the 800-pound gorilla in the room -- e-commerce. After the lockdown-induced growth spurt of 2020, digital retail has experienced rapid deceleration, reverting to historical averages. Investors with a "what have you done for me lately" mindset are convinced that its best days are in the rearview mirror.
Amazon's recent results seemed to confirm investors' worst fears. In the third quarter, net sales of $127 billion grew 15% year over year, a far cry from the 38% growth Amazon generated in 2020.
Yet, it's important to put that slowing growth in context. We're in the throes of the worst economic downturn since 2009. Consumers are having to scale back spending in the face of near 40-year high inflation and rising interest rates. Given time, the economy will no doubt recover -- it always does.
Overall, e-commerce growth is stalled, but once the economy recovers, so too will consumer spending. The global e-commerce market is slated to grow from $3.3 trillion this year to $5.4 trillion in 2026, representing 27% of all retail, according to estimates calculated by Morgan Stanley. Amazon commanded 38% of online sales in the U.S. for the first half of 2022 -- more than its next 14 rivals combined. This shows that the company is well positioned to benefit from the inevitable rebound of consumer spending and the continuing growth of e-commerce.
Head in the clouds
Digital retail isn't the only area that Amazon dominates. The company pioneered cloud computing and is still the industry powerhouse, with a market share of 32%, well ahead of Microsoft Azure and Google Cloud, which account for 22% and 9%, respectively, according to Canalys.
AWS has held up remarkably well so far this year, particularly given the state of the economy, as revenue grew 32% year over year in the first nine months of 2022. Some businesses are reining in spending, but a vast opportunity remains. Cloud computing is expected to grow severalfold this decade, climbing from $380 billion in 2021 to $1.6 trillion by 2030. As the undisputed leader in the space, Amazon will no doubt benefit from this ongoing trend.
That's not all
If that weren't enough, over the past several years, Amazon has ascended the ranks to become a digital advertising powerhouse. Not only is Amazon the No. 3 provider of online advertising (behind Alphabet and Meta Platforms), but it also continues to grow much more quickly than its chief rivals.
In the third quarter, Amazon's advertising services revenue grew 25% year over year, outpacing the results by Alphabet, which grew 2%, and Meta Platforms which declined 4%, during the same period.
The fine print
Just to be clear, I'm not badmouthing any of the FAANG companies. I own each and every one of these stocks. As a group, and as of this writing, they represent 29% of my total personal wealth. It's also important to note that I didn't "back up the truck" on any of these, but rather made several modest investments over the past decade and let the companies do the heavy lifting from there.
That said, Amazon represents an amazing opportunity for investors with the resources and patience to see it through. The stock is currently selling for its cheapest valuation since 2015. A reasonable price-to-sales ratio is generally between 1 and 2, a bar Amazon clears with ease, selling for just 1.7 times next year's sales -- making it the cheapest of all the FAANG stocks.
Given its strong position in three growth industries, its vast opportunity, its history of strong growth -- even amid economic headwinds -- and its cheapest valuation in years, Amazon has earned its spot as my top FAANG stock for 2023.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Danny Vena has positions in Alphabet (A shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, and Netflix. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Long-time investors are no doubt familiar with the fabled FAANG stocks, which have been some of the most disruptive and wealth-generating companies of the past 10 years: Facebook parent Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which rebranded as Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) Every company on this list is the undisputed leader in its field. 3 provider of online advertising (behind Alphabet and Meta Platforms), but it also continues to grow much more quickly than its chief rivals. It's also important to note that I didn't "back up the truck" on any of these, but rather made several modest investments over the past decade and let the companies do the heavy lifting from there. | Long-time investors are no doubt familiar with the fabled FAANG stocks, which have been some of the most disruptive and wealth-generating companies of the past 10 years: Facebook parent Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which rebranded as Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) Every company on this list is the undisputed leader in its field. In the third quarter, Amazon's advertising services revenue grew 25% year over year, outpacing the results by Alphabet, which grew 2%, and Meta Platforms which declined 4%, during the same period. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, and Netflix. | Long-time investors are no doubt familiar with the fabled FAANG stocks, which have been some of the most disruptive and wealth-generating companies of the past 10 years: Facebook parent Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which rebranded as Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) Every company on this list is the undisputed leader in its field. Given its strong position in three growth industries, its vast opportunity, its history of strong growth -- even amid economic headwinds -- and its cheapest valuation in years, Amazon has earned its spot as my top FAANG stock for 2023. See the 10 stocks *Stock Advisor returns as of November 7, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. | Long-time investors are no doubt familiar with the fabled FAANG stocks, which have been some of the most disruptive and wealth-generating companies of the past 10 years: Facebook parent Meta Platforms (NASDAQ: META) Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Google, which rebranded as Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) Every company on this list is the undisputed leader in its field. Head in the clouds Digital retail isn't the only area that Amazon dominates. Not only is Amazon the No. | 4 |
391 | 18,368 | 2022-11-19 00:00:00 UTC | 4 High-Yield Dividends to Buy Today | AAPL | https://www.nasdaq.com/articles/4-high-yield-dividends-to-buy-today | null | null | High-dividend yields can power your portfolio for decades, though there are some dividends the market doesn't appreciate right now. In the video below, Travis Hoium covers why Verizon (NYSE: VZ), EPR Properties (NYSE: EPR), NextEra Energy Partners (NYSE: NEP), and Simon Property Group (NYSE: SPG) are top high-yield dividends today.
*Stock prices used were end-of-day prices of Nov. 18, 2022. The video was published on Nov. 19, 2022.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | High-dividend yields can power your portfolio for decades, though there are some dividends the market doesn't appreciate right now. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and EPR Properties wasn't one of them! | In the video below, Travis Hoium covers why Verizon (NYSE: VZ), EPR Properties (NYSE: EPR), NextEra Energy Partners (NYSE: NEP), and Simon Property Group (NYSE: SPG) are top high-yield dividends today. See the 10 stocks *Stock Advisor returns as of November 7, 2022 Travis Hoium has positions in Apple, NextEra Energy Partners, Topgolf Callaway Brands Corp., Verizon Communications, and Walt Disney. The Motley Fool recommends EPR Properties, Simon Property Group, Topgolf Callaway Brands Corp., and Verizon Communications and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | In the video below, Travis Hoium covers why Verizon (NYSE: VZ), EPR Properties (NYSE: EPR), NextEra Energy Partners (NYSE: NEP), and Simon Property Group (NYSE: SPG) are top high-yield dividends today. See the 10 stocks *Stock Advisor returns as of November 7, 2022 Travis Hoium has positions in Apple, NextEra Energy Partners, Topgolf Callaway Brands Corp., Verizon Communications, and Walt Disney. The Motley Fool recommends EPR Properties, Simon Property Group, Topgolf Callaway Brands Corp., and Verizon Communications and recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | See the 10 stocks *Stock Advisor returns as of November 7, 2022 Travis Hoium has positions in Apple, NextEra Energy Partners, Topgolf Callaway Brands Corp., Verizon Communications, and Walt Disney. The Motley Fool has positions in and recommends Apple and Walt Disney. His opinions remain his own and are unaffected by The Motley Fool. | 3 |
392 | 18,384 | 2022-11-18 00:00:00 UTC | 10 Best Tech Stocks to Buy Now in November (High Conviction) | AAPL | https://www.nasdaq.com/articles/10-best-tech-stocks-to-buy-now-in-november-high-conviction | null | null | Today, I provide stock analysis on the 10 best tech stocks to buy now in November with significant long-term upside. I provide a blend of stocks, covering secular growth trends such as artificial intelligence, electric vehicles, the cloud, cybersecurity, big data, and more. These are the 10 best stocks to buy now.
*Stock prices used in the below video were during the trading day of Nov. 17, 2022. The video was published on Nov. 17, 2022.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Cuka has positions in Advanced Micro Devices, Alphabet (A shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Eric Cuka is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | I provide a blend of stocks, covering secular growth trends such as artificial intelligence, electric vehicles, the cloud, cybersecurity, big data, and more. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Eric Cuka has positions in Advanced Micro Devices, Alphabet (A shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. | Eric Cuka has positions in Advanced Micro Devices, Alphabet (A shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Today, I provide stock analysis on the 10 best tech stocks to buy now in November with significant long-term upside. See the 10 stocks *Stock Advisor returns as of November 7, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. | These are the 10 best stocks to buy now. See the 10 stocks *Stock Advisor returns as of November 7, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, CrowdStrike Holdings, Inc., Datadog, Microsoft, Nvidia, Snowflake Inc., Tesla, and Zscaler. | 3 |
393 | 18,399 | 2022-11-17 00:00:00 UTC | FTX Customers Are Out Billions. Here's What That Means for Crypto Investors. | AAPL | https://www.nasdaq.com/articles/ftx-customers-are-out-billions.-heres-what-that-means-for-crypto-investors. | null | null | The biggest news in the financial world in the past two weeks has been the collapse of the previously renowned cryptocurrency exchange FTX. Founded by Sam Bankman-Fried in 2019, the exchange shot up in value after venture capitalists poured billions of dollars into the business. At one point, Bankman-Fried was valued at $16 billion, making him one of the wealthiest people in the world on paper. Now, Bankman-Fried is estimated to have a net worth of zero after FTX collapsed amid allegations that he may have transferred billions in customer funds to cover losses at his hedge fund Alameda Research. Customers who deposited funds at FTX may never get their money back.
Here's why the cryptocurrency exchange FTX imploded and what it means for both FTX customers and crypto investors.
What happened with FTX?
This story is still unfolding and extremely complicated, so here are the nuts and bolts. Bankman-Fried founded and owns two companies: FTX and Alameda Research. FTX is an offshore cryptocurrency exchange based in the Bahamas where people could buy and sell crypto tokens like Bitcoin or Ethereum. Alameda Research is a market-making hedge fund for cryptocurrencies.
According to The Wall Street Journal and other news outlets, FTX may have shifted as much as $10 billion in customer funds to Alameda Research to plug losses that occurred when the crypto markets started to crumble this spring. This move left FTX in a vulnerable position. Understanding this, Changpeng Zhao -- head of rival cryptocurrency exchange Binance, which also had an investment in FTX -- said he would be selling FTX's FTT cryptocurrency coins. This triggered a wave of customers trying to pull money out of FTX. Zhao then went to Bankman-Fried with a proposed buyout for FTX, most likely at a bargain price, but pulled out after looking at FTX's books.
FTX soon filed for bankruptcy with customers clamoring for withdrawals, which is not a surprising development after the reports of transfers of customer funds to Alameda Research. Because FTX is based in the Bahamas, where there's no insurance fund as there is in the U.S. for banks or stock brokerages, the thousands of people who deposited money at FTX will likely never get their funds back.
This is a sad day for investors who put large sums into cryptocurrencies via FTX. But there are safer ways to invest in cryptocurrencies that don't involve depositing money in offshore exchanges.
How to stay safe with crypto
The surest way to avoid a cryptocurrency implosion, of course, is to not put any money into these tokens in the first place. Cryptocurrencies -- unlike stocks -- are not ownership stakes in businesses that generate a profit. They therefore have little or no intrinsic or fundamental value for investors. This means they are much riskier to buy even when compared to speculative stocks, never mind blue-chip companies like Apple or Microsoft.
However, if you really want to dabble in crypto, I'd recommend avoiding offshore exchanges like FTX. Stick to publicly traded and audited exchanges like Coinbase Global or Robinhood Markets, which are under more stringent regulations because they are incorporated in the U.S. and have stocks themselves that are monitored by the Securities and Exchange Commission. Does wrongdoing in public and regulated markets take place in the U.S.? History has shown that it does and it will surely happen again. But the likelihood of this occurring is much lower at Coinbase, compared to an exchange in a location where there's no oversight.
Of course, just because an exchange is running on the up and up does not mean you will make money buying its listed securities. Still, cryptocurrencies are much riskier than stocks because they lack the financial fundamentals that give shares intrinsic value. Plus, there's no government backstop. That's something to keep in mind no matter where you decide to invest your savings.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bitcoin, Coinbase Global, Inc., Ethereum, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Founded by Sam Bankman-Fried in 2019, the exchange shot up in value after venture capitalists poured billions of dollars into the business. FTX is an offshore cryptocurrency exchange based in the Bahamas where people could buy and sell crypto tokens like Bitcoin or Ethereum. According to The Wall Street Journal and other news outlets, FTX may have shifted as much as $10 billion in customer funds to Alameda Research to plug losses that occurred when the crypto markets started to crumble this spring. | Now, Bankman-Fried is estimated to have a net worth of zero after FTX collapsed amid allegations that he may have transferred billions in customer funds to cover losses at his hedge fund Alameda Research. FTX is an offshore cryptocurrency exchange based in the Bahamas where people could buy and sell crypto tokens like Bitcoin or Ethereum. The Motley Fool has positions in and recommends Apple, Bitcoin, Coinbase Global, Inc., Ethereum, and Microsoft. | Here's why the cryptocurrency exchange FTX imploded and what it means for both FTX customers and crypto investors. Understanding this, Changpeng Zhao -- head of rival cryptocurrency exchange Binance, which also had an investment in FTX -- said he would be selling FTX's FTT cryptocurrency coins. Because FTX is based in the Bahamas, where there's no insurance fund as there is in the U.S. for banks or stock brokerages, the thousands of people who deposited money at FTX will likely never get their funds back. | Here's why the cryptocurrency exchange FTX imploded and what it means for both FTX customers and crypto investors. This means they are much riskier to buy even when compared to speculative stocks, never mind blue-chip companies like Apple or Microsoft. The Motley Fool has positions in and recommends Apple, Bitcoin, Coinbase Global, Inc., Ethereum, and Microsoft. | 3 |
394 | 18,402 | 2022-11-16 00:00:00 UTC | After Hours Most Active for Nov 16, 2022 : VTRS, UBER, DBX, PYPL, QQQ, MDT, CSCO, AAPL, CCL, PBF, C, BNED | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-nov-16-2022-%3A-vtrs-uber-dbx-pypl-qqq-mdt-csco-aapl-ccl-pbf-c | null | null | The NASDAQ 100 After Hours Indicator is up 31.22 to 11,730.31. The total After hours volume is currently 126,264,973 shares traded.
The following are the most active stocks for the after hours session:
Viatris Inc. (VTRS) is unchanged at $11.08, with 4,124,960 shares traded. VTRS's current last sale is 85.23% of the target price of $13.
Uber Technologies, Inc. (UBER) is +0.21 at $30.25, with 4,091,421 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. The consensus EPS forecast is $-0.19. As reported by Zacks, the current mean recommendation for UBER is in the "buy range".
Dropbox, Inc. (DBX) is unchanged at $22.43, with 3,961,804 shares traded. DBX's current last sale is 80.11% of the target price of $28.
PayPal Holdings, Inc. (PYPL) is +0.1733 at $87.21, with 3,382,557 shares traded. Over the last four weeks they have had 8 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. The consensus EPS forecast is $0.97. As reported by Zacks, the current mean recommendation for PYPL is in the "buy range".
Invesco QQQ Trust, Series 1 (QQQ) is +1.31 at $286.75, with 2,859,509 shares traded. This represents a 12.78% increase from its 52 Week Low.
Medtronic plc (MDT) is unchanged at $81.78, with 2,614,300 shares traded.MDT is scheduled to provide an earnings report on 11/22/2022, for the fiscal quarter ending Oct2022. The consensus earnings per share forecast is 1.28 per share, which represents a 132 percent increase over the EPS one Year Ago
Cisco Systems, Inc. (CSCO) is +2.14 at $46.53, with 2,581,681 shares traded. Smarter Analyst Reports: Understanding Lumen Technologies’ Newly Added Risk Factors
Apple Inc. (AAPL) is +0.59 at $149.38, with 2,355,782 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $1.5. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Carnival Corporation (CCL) is +0.01 at $9.64, with 1,682,058 shares traded. CCL's current last sale is 104.22% of the target price of $9.25.
PBF Energy Inc. (PBF) is unchanged at $46.77, with 1,490,440 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. The consensus EPS forecast is $5.19. PBF's current last sale is 103.93% of the target price of $45.
Citigroup Inc. (C) is +0.07 at $48.44, with 1,427,327 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $1.47. C's current last sale is 84.98% of the target price of $57.
Barnes & Noble Education, Inc (BNED) is unchanged at $2.81, with 1,350,137 shares traded.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc. (AAPL) is +0.59 at $149.38, with 2,355,782 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Medtronic plc (MDT) is unchanged at $81.78, with 2,614,300 shares traded.MDT is scheduled to provide an earnings report on 11/22/2022, for the fiscal quarter ending Oct2022. | Apple Inc. (AAPL) is +0.59 at $149.38, with 2,355,782 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. | Apple Inc. (AAPL) is +0.59 at $149.38, with 2,355,782 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. | Apple Inc. (AAPL) is +0.59 at $149.38, with 2,355,782 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. | 4 |
395 | 18,418 | 2022-11-15 00:00:00 UTC | Warren Buffett Is Living Off These Five Stocks | AAPL | https://www.nasdaq.com/articles/warren-buffett-is-living-off-these-five-stocks | null | null | In this video, I will break down the top 5 dividend stocks that pay Warren Buffett the largest dividend payments. Apple (NASDAQ: AAPL) may be Berkshire Hathaway's (NYSE: BRK.B) largest holding, but they are not the largest dividend payer.
Check out this short video to learn more, consider subscribing to the channel, and check out the special offer in the link below.
*Stock prices used were end-of-day prices of Nov. 13, 2022. The video was published on Nov. 14, 2022.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Mark Roussin, CPA has positions in Bank of America, Berkshire Hathaway (B shares), and Coca-Cola. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (NASDAQ: AAPL) may be Berkshire Hathaway's (NYSE: BRK.B) largest holding, but they are not the largest dividend payer. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Mark Roussin, CPA has positions in Bank of America, Berkshire Hathaway (B shares), and Coca-Cola. | Apple (NASDAQ: AAPL) may be Berkshire Hathaway's (NYSE: BRK.B) largest holding, but they are not the largest dividend payer. Mark Roussin, CPA has positions in Bank of America, Berkshire Hathaway (B shares), and Coca-Cola. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). | Apple (NASDAQ: AAPL) may be Berkshire Hathaway's (NYSE: BRK.B) largest holding, but they are not the largest dividend payer. See the 10 stocks *Stock Advisor returns as of November 7, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). | Apple (NASDAQ: AAPL) may be Berkshire Hathaway's (NYSE: BRK.B) largest holding, but they are not the largest dividend payer. That's right -- they think these 10 stocks are even better buys. Mark Roussin, CPA has positions in Bank of America, Berkshire Hathaway (B shares), and Coca-Cola. | 4 |
396 | 18,438 | 2022-11-14 00:00:00 UTC | Should Vanguard Russell 1000 Growth ETF (VONG) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-vanguard-russell-1000-growth-etf-vong-be-on-your-investing-radar-4 | null | null | If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG), a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $8.32 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.88%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 43.40% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 46.85% of total assets under management.
Performance and Risk
VONG seeks to match the performance of the Russell 1000 Growth Index before fees and expenses. The Russell 1000 Growth Index measures the performance of large-capitalization growth stocks in the United States.
The ETF has lost about -25.39% so far this year and is down about -23.30% in the last one year (as of 11/14/2022). In the past 52-week period, it has traded between $53.17 and $79.55.
The ETF has a beta of 1.07 and standard deviation of 27.94% for the trailing three-year period, making it a medium risk choice in the space. With about 518 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 1000 Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VONG is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $71.11 billion in assets, Invesco QQQ has $156.88 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $8.32 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG), a passively managed exchange traded fund launched on 09/22/2010. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG), a passively managed exchange traded fund launched on 09/22/2010. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 12.57% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Vanguard Russell 1000 Growth ETF (VONG), a passively managed exchange traded fund launched on 09/22/2010. | 4 |
397 | 18,441 | 2022-11-13 00:00:00 UTC | Top Stock Investing Lessons Learned from Q3 Earnings | AAPL | https://www.nasdaq.com/articles/top-stock-investing-lessons-learned-from-q3-earnings | null | null | The third-quarter (Q3) earnings season was quite turbulent, with even some mega-cap blue-chip stocks showing dents in their armor. Undoubtedly, FAANG stocks (with the exception of Apple (NASDAQ: AAPL)) have fallen flat this earnings season, with forward-looking guidance weighing them down. Indeed, it's discouraging to see big tech show such fragility after holding their own through past periods of turbulence.
With downbeat guidance enticing analysts to lower the bar on coming quarterly results, expectations are now very muted for most firms. Though recession storm clouds will be moving in, such lowered expectations may set the stage for better-than-expected quarters moving forward. Indeed, it's hard to be bullish on anything these days as blue chips begin to sink.
This third quarter may have been painful for most portfolios, but there were lessons to be learned. In this piece, we'll go through two key takeaways from one of the most jittery and stomach-churning earnings seasons in recent memory.
Don't Bet Against Apple Stock, Even as its Peers Sink
FAANG companies really failed to deliver in the latest quarter. Even the firms that surpassed expectations were met with steep selling activity following downbeat guidance. With a recession on the way and inflation headwinds lingering, I'd say it's only prudent to be cautious with any such guidance. Indeed, things could get more turbulent from here as we learn just how much consumers can tighten their wallets. Despite the seemingly endless post-earnings tumbles for big tech companies, Apple, which reported after many of its big-tech peers, delivered a beat, punishing the short-sellers who thought it'd also fumble.
Indeed, the best was saved for last when it came to the FAANG group!
There was chatter about muted iPhone deliveries, but at the end of the day, Apple pulled it off and was able to scrape out a strong, albeit short-lived gain, widening the gap with its +$1 trillion peers.
Going into Apple's quarter, it seemed like a sure thing that Apple would flop. If all of its FAANG rivals fell flat, it would have been forgivable for Apple to clock in a stinker for once. The fact that it didn't shows how powerful a firm Apple can be in the face of profound pressures.
Indeed, CEO Tim Cook deserves a round of applause for surprising to the upside. Eventually, the post-earnings gains were lost as markets sunk on the back of broader market fears.
In any case, Apple's quarterly performance shows that wonderful firms can pull off surprises even when the odds are stacked against them. As it turned out, Apple wasn't the last domino to tumble.
Earnings Results Can Drastically Overshoot
We've seen some horrific double-digit plunges from mega-caps this year. Meta Platforms (NASDAQ: META) is a stock that's crumbled on the back of weak results that probably weren't as abysmal as post-earnings moves suggested. Indeed, reaction to earnings can be extreme, leading to overswings in both directions.
In Q3, the gravitational pull has been to the downside. Expectations were already muted, making the consequences for missing that much more severe. Guidance downgrades have also added to the gloom. Such post-earnings moves show the high stakes of betting on firms going into earnings results.
Since clocking in terrible results, it's been a downhill slide for Meta stock. Eventually, the sellers ran out of steam, and the stock went on to rally about 30% from its low of around $88 per share. Indeed, the odds were stacked against Meta, but there were promising takeaways from the quarter. Most notably, Meta's Reels is starting to pick up traction. As economic storm clouds begin to fade, Meta could begin to flex its muscles as it looks to get back into growth mode.
The Takeaway
In the third quarter, many mighty firms have fallen. Still, the mightiest (Apple) has been able to buck the trend and shows that some firms are more capable than others in overcoming profound headwinds weighing heavily on most other companies.
Betting for or against companies has become that much riskier in today's volatile environment. However, arming yourself with premium website traffic data available on TipRanks may help investors gain an edge before earnings reports to better deal with the choppiness in the face of a recession.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Undoubtedly, FAANG stocks (with the exception of Apple (NASDAQ: AAPL)) have fallen flat this earnings season, with forward-looking guidance weighing them down. Despite the seemingly endless post-earnings tumbles for big tech companies, Apple, which reported after many of its big-tech peers, delivered a beat, punishing the short-sellers who thought it'd also fumble. There was chatter about muted iPhone deliveries, but at the end of the day, Apple pulled it off and was able to scrape out a strong, albeit short-lived gain, widening the gap with its +$1 trillion peers. | Undoubtedly, FAANG stocks (with the exception of Apple (NASDAQ: AAPL)) have fallen flat this earnings season, with forward-looking guidance weighing them down. Don't Bet Against Apple Stock, Even as its Peers Sink FAANG companies really failed to deliver in the latest quarter. Despite the seemingly endless post-earnings tumbles for big tech companies, Apple, which reported after many of its big-tech peers, delivered a beat, punishing the short-sellers who thought it'd also fumble. | Undoubtedly, FAANG stocks (with the exception of Apple (NASDAQ: AAPL)) have fallen flat this earnings season, with forward-looking guidance weighing them down. Don't Bet Against Apple Stock, Even as its Peers Sink FAANG companies really failed to deliver in the latest quarter. In any case, Apple's quarterly performance shows that wonderful firms can pull off surprises even when the odds are stacked against them. | Undoubtedly, FAANG stocks (with the exception of Apple (NASDAQ: AAPL)) have fallen flat this earnings season, with forward-looking guidance weighing them down. Don't Bet Against Apple Stock, Even as its Peers Sink FAANG companies really failed to deliver in the latest quarter. In any case, Apple's quarterly performance shows that wonderful firms can pull off surprises even when the odds are stacked against them. | 4 |
398 | 18,444 | 2022-11-12 00:00:00 UTC | 7 No-Brainer Blue-Chip Stocks to Buy for 2023 and Beyond | AAPL | https://www.nasdaq.com/articles/7-no-brainer-blue-chip-stocks-to-buy-for-2023-and-beyond | null | null | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
While it’s tempting to target the flavors of the week during a market correction, investors ought to spare some time for no-brainer blue-chip stocks to buy for 2023 and beyond. Indeed, the broader market and economic dynamics encourage retail investors to think about value and stability over growth.
Earlier, I laid out the monetary backdrop that should guide investing principles in the new normal. “In the trailing five years since September 2022, the real M2 money stock expanded over 30%. Put another way, money was “cheap” (or inflationary), so it incentivized business growth. However, in the trailing year, M2 declined over 5%, making money “expensive” (deflationary).”
Put another way, companies with deeply established track records should gain significant relevance. You couldn’t ask for a better framework for no-brainer blue-chip stocks to buy. Below are some compelling ideas to consider.
AAPL Apple $149.70
MSFT Microsoft $247.11
ABT Abbott Laboratories $104.09
VEEV Veeva Systems $191.02
ROST Ross Stores $96.17
CTSH Cognizant Technology $58.42
BF-B Brown-Forman $69.64
Apple (AAPL)
Source: Vytautas Kielaitis / Shutterstock.com
Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Recently, the company generated buzz when its market performance for the Nov. 10 session added $190.9 billion in market value, a record for a U.S.-listed company. At the time of writing, Apple had a market capitalization of $2.38 trillion, making it the world’s most valuable company.
To be fair, broadly weak consumer sentiment data suggests that companies like Apple should be having a rough time. Not surprisingly, AAPL is down over 19% on a year-to-date basis. However, the fundamentals remain strong. For instance, the company benefited from strong results from its latest product rollout. Therefore, Apple facilitates a powerful case for no-brainer blue-chip stocks to buy.
Financially, AAPL brings excellent value for what you get. The company enjoys blistering performance states for growth and profitability. In addition, Apple provides stability in the balance sheet, particularly its Altman Z-Score of 6.45 reflecting low bankruptcy risk.
Microsoft (MSFT)
Source: Asif Islam / Shutterstock.com
Headquartered in Redmond, Washington, Microsoft (NASDAQ:MSFT) is a software and technology powerhouse. In addition, the company also carved a huge name for itself as a console video game manufacturer. Therefore, the company enjoys a wide canvas of relevancies. At the moment, MSFT features a market cap of $1.84 trillion, making it one of the elites among blue-chip stocks to buy.
Fundamentally, what investors should focus on regarding MSFT is that the underlying company dominates the business ecosystem. For example, it owns 76% of the desktop operating system market share. In other words, if you want to get anything done in the professional realm, you have to be familiar with Microsoft Windows and its business applications.
Financially, Gurufocus.com considers MSFT a modestly undervalued investment based on its proprietary calculations. It’s difficult to argue with this notion. Microsoft enjoys strong revenue growth metrics along with excellent profitability margins that dominate the underlying sector. Additionally, it features a stable balance sheet based on its 7.36 Altman Z-Score.
Abbott Laboratories (ABT)
Source: venusvi / Shutterstock.com
Headquartered in Chicago, Illinois, Abbott Laboratories (NYSE:ABT) is a multinational medical device and health care company. Currently, Abbott sells medical devices, diagnostics, branded generic medicines, and nutritional products. At the time of writing, the enterprise commands a market cap of nearly $181.4 billion. Since the start of the year, ABT dropped 25% in equity value.
To be sure, Abbott carries much baggage. From its baby formula recall to weak medical device sales, the company can’t say it doesn’t deserve any market loss. At the same time, near-term momentum has been picking up. In the trailing five days since the close of the Nov. 10 session, ABT gained 6.5% in value.
Against the bigger picture financially, ABT certainly makes a strong case for blue-chip stocks to buy. Mainly, the company enjoys excellent profit margins. For example, its net margin stands at 17.5%, beating out 82% of the competition. Also, its return on equity (ROE) is 22% compared to the industry median of 0.2%.
Veeva Systems (VEEV)
Source: Blackboard / Shutterstock
Founded in 2007, Veeva Systems (NYSE:VEEV) operates out of Pleasanton, California. Veeva is a cloud-computing company focused on pharmaceutical and life sciences industry applications. At the moment, the enterprise features a market cap of $29.66 billion. Since the beginning of this year, VEEV gave up nearly 27% of its equity value. However, shares are making a comeback, gaining nearly 16% over the trailing month.
Admittedly, the fallout in the market this year has not been kind, especially toward the tech segment. However, with recent data on inflation coming in lighter than expected, it’s possible that the Federal Reserve could relax its monetary tightening policy. If so, that might encourage badly beaten-up investors to consider tech plays like VEEV.
Now, what makes Veeva one of the blue-chip stocks to buy centers on its financial resilience. Primarily, the company enjoys a stout balance sheet. For instance, its cash-to-debt ratio stands at 46 times, ranked better than 87% of its rivals. Also, the enterprise carries outstanding profit margins that also rank among the sector’s elite.
Ross Stores (ROST)
Source: Rawpixel.com / Shutterstock
Headquartered in Dublin, California, Ross Stores (NASDAQ:ROST) is a chain of discount department stores. Per its public profile, the company is the largest off-price retailer in the U.S. Presently, Ross Stores carries a market cap of $33.38 billion. Since the start of the year, ROST slipped more than 14%. Still, the stock is outperforming the benchmark S&P 500 index.
Obviously, the big concern for ROST that works against its inclusion among the blue-chip stocks to buy centers on sentiment. With the consumer taking a beating from high inflation and now rising layoffs, not too many folks are interested in opening their wallets unnecessarily. However, with remote work facing a possible paradigm shift as employees lose leverage to employers, many folks might be forced to upgrade their professional wardrobes.
Cynically, that’s a big plus for Ross Stores. While it’s a tricky narrative, it’s still worth considering for blue-chip stocks to buy. On a final note, the company impresses on the income statement, particularly its strong operating and net margins.
Cognizant Technology (CTSH)
Source: Peshkova / Shutterstock
Based in New Jersey, Cognizant Technology (NASDAQ:CTSH) is an American multinational information technology services and consulting company. Cognizant provides myriad solutions, including business process services, cloud-computing applications, industrial automation, and artificial intelligence. At the time of writing, Cognizant carries a market cap of $30 billion.
Since the January opener, CTSH stock gave up 36% of its equity value. As with other tech-related blue-chip stocks to buy, macroeconomic headwinds imposed a dark cloud over the broader industry. Nevertheless, enthusiasm is finally returning to the space, with CTSH gaining nearly 9% over the trailing five days. While it still has a ways to go, this might be the start of something interesting.
Financially, CTSH will likely attract investors seeking blue-chip stocks to buy because it’s deeply undervalued. Shares trade at 12.2 times forward earnings, comparing favorably to the industry median of 22.2 times. Also, the company features a stable balance sheet with an Altman Z-Score of over 6, reflecting low bankruptcy risk.
Brown-Forman (BF-B)
Source: Shutterstock
Headquartered in Louisville, Kentucky, Brown-Forman (NYSE:BF-B) is one of the largest companies in the spirits and wine industry. It features some iconic brands including Jack Daniel’s, Old Forester, and Woodford Reserve. At the time of writing, Brown-Forman commands a market cap of $33.48 billion. Since the start of the year, BF.B declined by 2.4% in the charts.
Interestingly, though, over the trailing month, BF.B gained 8%. At least some of this enthusiasm might be traced to the underlying fundamentals. According to TipRanks, “during a recession, consumers are likely to increase alcohol consumption at home, while companies in the space retain fantastic pricing power during such periods.” Further, with people likely to seek escapism from troubling headlines, Brown-Forman could jump higher on cynical catalysts.
Financially, what may impress market observers the most is the company’s high business quality. It features an ROE of 32.7%, beating out more than 90% of its competitors. Also, it has a return on assets of 13.9%, above more than 86% of the industry.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
The post 7 No-Brainer Blue-Chip Stocks to Buy for 2023 and Beyond appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | AAPL Apple $149.70 MSFT Microsoft $247.11 ABT Abbott Laboratories $104.09 VEEV Veeva Systems $191.02 ROST Ross Stores $96.17 CTSH Cognizant Technology $58.42 BF-B Brown-Forman $69.64 Apple (AAPL) Source: Vytautas Kielaitis / Shutterstock.com Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Not surprisingly, AAPL is down over 19% on a year-to-date basis. Financially, AAPL brings excellent value for what you get. | AAPL Apple $149.70 MSFT Microsoft $247.11 ABT Abbott Laboratories $104.09 VEEV Veeva Systems $191.02 ROST Ross Stores $96.17 CTSH Cognizant Technology $58.42 BF-B Brown-Forman $69.64 Apple (AAPL) Source: Vytautas Kielaitis / Shutterstock.com Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Not surprisingly, AAPL is down over 19% on a year-to-date basis. Financially, AAPL brings excellent value for what you get. | AAPL Apple $149.70 MSFT Microsoft $247.11 ABT Abbott Laboratories $104.09 VEEV Veeva Systems $191.02 ROST Ross Stores $96.17 CTSH Cognizant Technology $58.42 BF-B Brown-Forman $69.64 Apple (AAPL) Source: Vytautas Kielaitis / Shutterstock.com Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Not surprisingly, AAPL is down over 19% on a year-to-date basis. Financially, AAPL brings excellent value for what you get. | AAPL Apple $149.70 MSFT Microsoft $247.11 ABT Abbott Laboratories $104.09 VEEV Veeva Systems $191.02 ROST Ross Stores $96.17 CTSH Cognizant Technology $58.42 BF-B Brown-Forman $69.64 Apple (AAPL) Source: Vytautas Kielaitis / Shutterstock.com Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Not surprisingly, AAPL is down over 19% on a year-to-date basis. Financially, AAPL brings excellent value for what you get. | 4 |
399 | 18,452 | 2022-11-11 00:00:00 UTC | US STOCKS-Nasdaq and S&P 500 add to rally, stoked by inflation optimism | AAPL | https://www.nasdaq.com/articles/us-stocks-nasdaq-and-sp-500-add-to-rally-stoked-by-inflation-optimism | null | null | By Noel Randewich and Sruthi Shankar
Nov 11 (Reuters) - The S&P 500 and Nasdaq rose on Friday, extending a rally started the day before after a soft inflation reading raised hopes the Federal Reserve would get less aggressive with U.S. interest rate hikes.
Amazon AMZN.O jumped 4.5%, with Apple AAPL.O and Microsoft MSFT.O up more than 1% each and contributing to the Nasdaq's strong gain.
On Thursday, the S&P 500 and the Nasdaq racked up their biggest daily percentage gains in more than 2-1/2 years as annual inflation slipped below 8% for the first time in eight months.
Declines in healthcare stocks weighed on the Dow Jones Industrial Average, with UnitedHealth Group UNH.N losing more than 5%.
The S&P 500 growth index .IGX, which includes interest rate-sensitive technology stocks, rose 1.4%, while the value index .IVX was mostly unchanged.
"What we're really seeing today is simply a follow-through on yesterday. There's a lot of cash sitting on the sidelines that is being put to work," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
"Perhaps it signals some type of bottom being put in the market, some type of line drawn in the sand. But even if we put in a bottom, we're a long way away from setting new highs,” Ghriskey said.
Of the 11 S&P 500 sector indexes, seven rose, led by energy .SPNY, up 2.84%, followed by a 2.48% gain in communication services .SPLRCL.
Investors see a 81% chance of a 50-basis point rate hike in December and a 19% chance of a 75-basis point hike, according to CME Fedwatch tool.
Adding some nervousness on Wall Street, crypto exchange FTX said it would start U.S. bankruptcy proceedings and that CEO Sam Bankman-Fried resigned due to a liquidity crisis that prompted intervention from regulators around the world.
In afternoon trading, the S&P 500 was up 0.82% at 3,988.77 points.
The Nasdaq gained 1.84% to 11,318.39 points, while the Dow Jones Industrial Average was down 0.15% at 33,664.89 points.
The S&P 500 has gained over 6% in the past two sessions, while the Nasdaq has added about 9%.
Worries about an economic downturn have hammered Wall Street this year. The S&P 500 remains down about 16% year to date, on course for its biggest annual decline since 2008.
U.S.-listed shares of Chinese companies rose, with Alibaba Group Holding Ltd BABA.Ngaining 1.9% afterChina eased some of its strict COVID-19 rules.
Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 1.6-to-one ratio.
The S&P 500 posted 22 new highs and no new lows; the Nasdaq recorded 84 new highs and 90 new lows.
(Reporting by Shubham Batra, Sruthi Shankar, Devik Jain, Bansari Mayur Kamdar and Shashwat Chauhan in Bengaluru, and by Noel Randewich in Oakland, California; Editing by Shounak Dasgupta, Arun Koyyur and David Gregorio)
((noel.randewich@tr.com; Twitter: @randewich))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Amazon AMZN.O jumped 4.5%, with Apple AAPL.O and Microsoft MSFT.O up more than 1% each and contributing to the Nasdaq's strong gain. By Noel Randewich and Sruthi Shankar Nov 11 (Reuters) - The S&P 500 and Nasdaq rose on Friday, extending a rally started the day before after a soft inflation reading raised hopes the Federal Reserve would get less aggressive with U.S. interest rate hikes. Adding some nervousness on Wall Street, crypto exchange FTX said it would start U.S. bankruptcy proceedings and that CEO Sam Bankman-Fried resigned due to a liquidity crisis that prompted intervention from regulators around the world. | Amazon AMZN.O jumped 4.5%, with Apple AAPL.O and Microsoft MSFT.O up more than 1% each and contributing to the Nasdaq's strong gain. By Noel Randewich and Sruthi Shankar Nov 11 (Reuters) - The S&P 500 and Nasdaq rose on Friday, extending a rally started the day before after a soft inflation reading raised hopes the Federal Reserve would get less aggressive with U.S. interest rate hikes. Declines in healthcare stocks weighed on the Dow Jones Industrial Average, with UnitedHealth Group UNH.N losing more than 5%. | Amazon AMZN.O jumped 4.5%, with Apple AAPL.O and Microsoft MSFT.O up more than 1% each and contributing to the Nasdaq's strong gain. By Noel Randewich and Sruthi Shankar Nov 11 (Reuters) - The S&P 500 and Nasdaq rose on Friday, extending a rally started the day before after a soft inflation reading raised hopes the Federal Reserve would get less aggressive with U.S. interest rate hikes. The Nasdaq gained 1.84% to 11,318.39 points, while the Dow Jones Industrial Average was down 0.15% at 33,664.89 points. | Amazon AMZN.O jumped 4.5%, with Apple AAPL.O and Microsoft MSFT.O up more than 1% each and contributing to the Nasdaq's strong gain. But even if we put in a bottom, we're a long way away from setting new highs,” Ghriskey said. The Nasdaq gained 1.84% to 11,318.39 points, while the Dow Jones Industrial Average was down 0.15% at 33,664.89 points. | 4 |
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