In recent times, bitcoin has consistently remained above the $60,000 mark throughout the entire month of March. With its value soaring, many long-standing holders have started to transfer substantial quantities of dormant bitcoins from wallets that have not seen activity for years. March has emerged as a pivotal month for transactions involving these vintage bitcoins. […]
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“I don’t want to make promises I can’t financially live up to. I own my own house and struggle to keep that in order.”
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Over the past week, the stablecoin trueusd (TUSD) experienced a notable decrease in its supply. As of March 19, 2024, the circulation was approximately 1.1 billion TUSD, which then plummeted to just 612 million. Supply Slash Sees TUSD Fall From Top 5 Stablecoin Rankings to 8th Position Previously ranked among the top five dollar-pegged cryptocurrencies […]
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El Salvador continues its daily bitcoin purchases, aiming to keep buying until the cryptocurrency becomes too expensive. The top 10 bitcoin mining rigs of 2024 show significant profit margins due to recent value increases. Blackrock, has submitted a form to the SEC for the initiation of a tokenized investment fund called “BUIDL.” “Rich Dad Poor […]
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Artificial intelligence (AI) has emerged as a force to reckon with in the modern economy and is transforming the lives of people across the world. Not surprisingly, AI has also become a major investment trend and has piqued the interest of seasoned and new investors.
While several companies now boast cutting-edge AI-powered technologies and solutions, it is also essential for investors to consider other aspects such as market share, competitive advantages, and scalability of the business. Companies such as Palantir (PLTR -1.27%) and Meta Platforms (META 0.36%) seem to fit the bill.
If all goes well, these companies can deliver exceptional returns and help build lasting generational wealth for patient investors. Here’s why.
Palantir Technologies, a leading data mining software and machine learning specialist, has seen a remarkable surge in its stock price in the last month. Shares are up by nearly 40% since the company released its fourth-quarter earnings report on Feb. 5.
Once known mainly for helping government agencies in thwarting terrorist plots, Palantir’s commercial segment is now rising to prominence. While government business presently contributes 53% of Palantir’s total revenue, the revenue mix is increasingly shifting toward the commercial segment. This transition is expected to boost Palantir’s margins, since private clients allow for higher pricing flexibility and involve lower regulatory hurdles compared to government clients. Palantir’s focus on developing industry-specific solutions and targeting key verticals such as government, healthcare, pharmaceutical, banking, and automotive has also enabled it to differentiate itself from the competition and build strong relationships with clients. This has ensured a sticky customer base for the company.
Palantir is also seeing solid growth in its overall customer base, thanks to the rapid adoption of the recently launched generative artificial intelligence-powered software suite called AIP (Artificial Intelligence Platform). The company has opted for an effective go-to-market strategy, centered around its Bootcamp approach, to enable existing and prospective customers to quickly grasp AIP’s capabilities. This, in turn, has accelerated the sales cycle and helped successfully convert engagements into lucrative partnerships.
Considering the favorable tilt in revenue mix, entrenched customer relationships, and success of the AIP platform, Palantir can prove to be a smart long-term investment.
Meta Platforms, the owner of wildly famous social media platforms Facebook, Instagram, and WhatsApp, has undergone a remarkable turnaround, with its stock witnessing a staggering surge of nearly 450% from its low in November 2022. The company’s focus on leveraging AI technologies to improve user engagement and ad targeting, and its effort to control costs have been instrumental in this resurgence.
According to Magna, digital ad spending is expected to grow by 7.2% year over year to $913 billion in 2024, driven mainly by improving economic conditions, lowering inflation, and major events such as the U.S. elections and European football. Meta stands to benefit especially from the increasing demand for digital pure-play (DPP) ad formats such as search and e-commerce advertising, social media advertising, and short-form video advertising in 2024.
Besides secular tailwinds in the digital advertising space, Meta also benefits from its exceptional customer reach. With 3.2 billion people using at least one of the social media platforms (family of apps) daily (which amounts to nearly 40% of the global population), Meta enjoys a formidable position in the digital advertising market. The company’s short-form video format Reels is helping drive engagement across both Instagram and Facebook. Since reels are now reshared 3.5 billion times every day, Reels ads can also emerge as a major revenue contributor in the coming years.
Meta’s AI-driven recommendations system is helping improve user engagement by suggesting more personalized content. Furthermore, the company is also helping advertisers craft targeted campaigns and measure advertising performance with its portfolio of AI- and ML-powered tools such as Advantage+, A/B Testing, and Conversions API. These AI initiatives drove up both ad impressions and average price per ad in the fourth quarter of fiscal 2023 (ending Dec. 31, 2023), translating into solid financial performance for the company.
It is undeniable that Meta’s Reality Labs division remains loss-making even in 2023. Yet, its losses have been more than offset by the company’s social media advertising business. Meta Platforms is currently trading at 24.8 times forward 2024 earnings. Although higher than its historical valuation, it is still lower than the valuation multiples of the remaining “Magnificent Seven” stocks except for Alphabet. Yet, excluding Nvidia, Meta’s stock has performed better than all other Magnificent Seven stocks in the past year.
Hence, based on its solid fundamentals and reasonable growth-adjusted valuation, Meta Platforms seems to be an attractive big tech pick in 2024.
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. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
The price performance of Bitcoin over the past week has been a source of concern for the majority of the crypto community. This has pretty much been the case for other cryptocurrencies in the market, with several large-cap tokens reversing their recently-accrued profits.
However, some investors are treating the recent price decline as a rare opportunity in the bull market as they continue to load their bags with assets of their choice. Specifically, the latest on-chain data shows significant buying activity amongst a certain class of investors.
Prominent crypto pundit Ali Martinez revealed, via a post on X, that more than 25,000 BTC (valued at approximately $1.6 billion) was moved to accumulation addresses on Friday, March 22. This figure represents the highest amount transferred to these wallets in a single day so far in 2023.
The metric of interest here is the Inflow to Accumulation Addresses on the Bitcoin blockchain. For context, a Bitcoin accumulation address refers to an address that has zero outgoing transactions and maintains a balance of at least 10 BTC.
A chart showing the inflows to Bitcoin accumulation addresses | Source: Ali_charts/X
This classification, however, excludes digital wallets linked to centralized exchanges and miners and has less than 2 non-dust incoming transfers. Also, it doesn’t include addresses that have not seen any activity in more than seven years.
The increased flow of coins into this class of wallet addresses is evidence of substantial BTC accumulation by entities who view the crypto as a long-term investment. It signals that certain big-money players are amassing Bitcoin in anticipation of potential value appreciation.
What’s more, this significant acquisition by long-term investors emphasizes the increasing adoption of Bitcoin as a store of value. Meanwhile, it might be an indicator of bullish price movement in the short term.
As of this writing, Bitcoin is valued at $64,636, reflecting a mere 1% price increase in the past 24 hours. This price change is somewhat negligible, considering the deep retracement of the premier cryptocurrency earlier in the week.
According to data from CoinGecko, the price of BTC is down by 2.4% over the past week. Meanwhile, the market leader is currently about 13% from its record high of $73,798.
However, it has been an overall positive performance for the Bitcoin price in March, having surpassed this previous all-time high of $69,000 a little over a week ago. And, with a market cap of $1.26 trillion, BTC retains its position as the largest cryptocurrency in the sector.
The price of Bitcoin struggles to hold above $64,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
If you’re going to do something, do it big. That appears to be the mindset of Chipotle Mexican Grill‘s (CMG -0.79%) board of directors.
Last Tuesday, Chipotle announced that its board approved a 50-for-1 stock split. It’s not a done deal just yet. Shareholders must approve the stock split at the annual meeting scheduled for June 6. However, assuming there are no roadblocks, the Mexican restaurant chain will split its shares after the market closes on June 25. Should you buy Chipotle stock before its ginormous 50-for-1 stock split?
Before we address whether to buy Chipotle stock, let’s first look at the historic nature of the company’s upcoming move. Chipotle noted in its press release last week, “This would be one of the biggest stock splits in New York Stock Exchange (NYSE) history.”
Why is Chipotle’s stock-split ratio so unusually high? For one thing, the restaurant chain has never conducted a stock split in its 30 years of operations. Companies that conduct stock splits more frequently typically will have lower stock-split ratios.
The main reason, though, is simply that Chipotle stock has skyrocketed over the years. Its share price currently hovers at a little under $3,000. Such a high share price makes a 50-for-1 stock split practical.
Chipotle’s motivation for splitting its shares isn’t surprising. Chief Financial and Administrative Officer Jack Hartung said, “[W]e believe this will make our stock more accessible to employees as well as a broader range of investors.”
Should those Chipotle employees and other investors consider buying the stock? There are several reasons the answer could be “yes.”
Chipotle’s business is booming. In the fourth quarter of 2023, the company’s revenue jumped 15.4% year over year to $2.5 billion. This increase wasn’t just the result of Chipotle opening a record number of new restaurants. Same-store sales at its existing restaurants rose 8.4%.
The company’s adjusted earnings per share soared 25% higher in Q4. This performance was made possible in part by an impressive improvement in operating margins at the corporate and restaurant levels.
Investors should also like that Chipotle is expanding into international markets. The company opened its first restaurant in Calgary, Canada, in 2023. It plans to open between 10 and 14 new restaurants in Canada this year. Chipotle also signed its first international partnership in 2023, teaming up with Alshaya Group to open restaurants in the Middle East.
However, the primary growth opportunity for Chipotle is still in North America. CEO Brian Niccol said in the Q4 earnings call that he believes the company will be able to “more than double our restaurants in North America” over the long term. He also thinks that Chipotle will be able to further increase its industry-leading profit margins.
There were two glaring omissions from the reasons I mentioned for buying Chipotle stock. One is the upcoming stock split. I think it’s possible that the split could cause shares to jump even more than they already have. But even if shares rise, the impact will likely only be temporary. Stock splits change nothing about the fundamentals of a company’s business or prospects.
The other thing not referenced above is Chipotle’s valuation. The stock currently trades at a forward price-to-earnings ratio of 52.6. Although Chipotle continues to deliver strong growth, it’s not growing fast enough to justify that premium multiple, in my view.
I don’t think investors should buy Chipotle stock before its ginormous 50-for-1 stock split. I don’t think they should buy the stock after a split, either. There are too many other stocks that offer better bang for the buck.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
One of the best ways to support portfolio growth is to invest in high-quality dividend stocks. But with so many dividend stocks, trying to choose the best opportunity can be daunting.
Recent moves from management could suggest that Altria (MO -2.25%) is a good buy right now. Let’s find out if the stock is undervalued and assess if Altria deserves a spot in your portfolio.
For the 12 months ended Dec. 31, 2023, the cigarette industry at large experienced an 8% volume decline. On the surface, this isn’t entirely surprising. The last few years have been rough for the cigarette maker as consumer preferences shifted due to rising interest in health and wellness, as well as a tough macroeconomy featuring unusually high inflation.
In the midst of the changing landscape for tobacco, Altria has made some savvy acquisitions. The company bolstered its cigarette portfolio to include nicotine pouch brand On, as well as vaping company Njoy.
Last year Altria expanded Njoy’s distribution to 75,000 brick-and-mortar locations, surpassing the initial goal by 5,000 locations.
Nicotine pouches fall under the classification of oral tobacco. Despite waning trends in cigarettes, shipping volumes in the oral tobacco industry increased 7.5% in the U.S. for the last six months of 2023. By comparison, volumes only rose by 1% during the last six months of 2022. These trends could be an encouraging sign that Altria is making progress beyond its legacy cigarette brands, and could be on a path to reignite growth.
Image source: Getty Images.
Altria is part of the Dividend Kings — an established list of companies that have raised their dividends for at least 50 years. But given Altria’s challenges at the moment, some investors might be wondering if the dividend is at risk.
Keep in mind that this isn’t the first time Altria faced challenges in the macroeconomic environment and a shift in consumer preferences. Meanwhile, a recent filing with the Securities and Exchange Commission (SEC) unveiled Altria’s plan to sustain the dividend and continue rewarding shareholders.
Altria is planning to sell part of its stake in beverage giant Anheuser-Busch InBev. Per the terms of the deal, Altria should expect to generate about $2.4 billion of proceeds.
Additionally, the filing reveals that Altria will be using the proceeds to accelerate its share repurchase program. This could suggest that management believes Altria stock is undervalued.
Moreover, by repurchasing shares, Altria is also helping solidify its ability to sustain the dividend for years to come.
As of the time of this article, Altria boasts a price-to-earnings (P/E) ratio of 9.8 — far below the S&P 500‘s P/E of 28.4.
When it comes to investing in Altria, there are some important things to consider. On the one hand, the core cigarette business is on the decline — and this is a trend that could very well continue. Moreover, while the company’s moves into nicotine pouches and vaping could help turn the ship around, these growth drivers are in early innings.
On the other hand, it’s hard to ignore management’s plan to buy back shares and ensure a sustained dividend. With Altria stock barely trading above three-year lows, now could be a tempting opportunity to scoop up shares at an 8.8% dividend yield.
I see Altria as a good opportunity overall, especially for investors looking for some reliable passive income at a discount to the market.
Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
It’s that time again — and I’m not talking about earnings season.
In a little over seven months, Americans across the country will head to the polls or mail in their ballots to determine who’ll lead the country over the coming four years. Although there are plenty of aspects of politics that have no bearing on Wall Street, fiscal policy changes that originate in Washington, D.C., and are signed into law by the president of the United States, can ultimately impact corporate earnings and the health of the U.S. economy.
With nearly 2,500 delegates in the ongoing primaries, incumbent Joe Biden is the presumptive nominee for president from the Democratic Party. Since Biden took office as the 46th president on Jan. 20, 2021, the ageless Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and growth-fueled Nasdaq Composite (NASDAQINDEX: ^IXIC), have respectively gained 28%, 36%, and 22%. All three major stock indexes have also achieved fresh all-time highs since the year began.
But could a second term of Joe Biden at the helm cause stocks to plunge? Let’s take a closer look at some of the downside catalysts that could lie ahead and let history be the ultimate judge.
Regardless of who’s president, Wall Street is always contending with headwinds. Should Joe Biden get the nod from voters in November, a combination of policy proposals (if signed into law) and macroeconomic factors have the potential to push the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite off of their respective pedestals.
One of the more concerning proposals, from an investment perspective, is Biden’s recent call to raise the tax on stock buybacks from the current 1% to 4%. This may not sound like much, but S&P 500 companies are estimated to have repurchased in the neighborhood of $800 billion worth of their common stock in 2023.
For businesses with steady or growing net income, share repurchase programs that lower their outstanding share count can have a positive impact on earnings per share (EPS). In other words, companies enacting buybacks can appear more attractive to fundamentally focused investors. Quadrupling the buyback tax could make share repurchase programs less attractive, thereby slowing EPS growth.
Additionally, President Biden has called for an increase to the corporate alternative minimum tax rate to 21% from the current rate of 15% for businesses with at least $1 billion in profits, and has proposed increasing the peak U.S. corporate income tax rate to 28% from 21%. On paper, taxing corporate profits at a higher rate would be expected to reduce spending on innovation, hiring, and acquisitions.
However, it’s not just policy proposals from President Biden that could give Wall Street the jitters. A couple of money-based metrics and recession-predicting tools suggest a second term for Biden could involve meaningful downside for the Dow, S&P 500, and Nasdaq Composite.
WARNING: the Money Supply is officially contracting. 📉
This has only happened 4 previous times in last 150 years.
Each time a Depression with double-digit unemployment rates followed. 😬 pic.twitter.com/j3FE532oac
— Nick Gerli (@nickgerli1) March 8, 2023
For example, U.S. M2 money supply is declining by more than 2% from its all-time high for only the fifth time when back-tested more than 150 years, and the first time since the Great Depression, as highlighted in the post above by Reventure Consulting CEO Nick Gerli. M2 money supply accounts for everything in M1 (cash and coins in circulation, along with demand deposits in a checking account) and adds in savings accounts, money market accounts, and certificates of deposit (CDs) below $100,000.
The previous four times M2 money supply notably declined occurred in 1878, 1893, 1921, and 1931-1933. All four of these instances are associated with deflationary depressions and high periods of unemployment. While fiscal and monetary tools make it highly unlikely that we’d see a depression materialize today, a sizable decline in M2 money supply does suggest consumers and businesses will make fewer discretionary purchases.
Other predictive tools, such as the Conference Board’s Leading Economic Index, and the Federal Reserve Bank of New York’s recession probability measure, suggest economic weakness is in the cards.
On paper, a stock market plunge can’t be ruled out, regardless of who’s in the Oval Office come Jan. 20, 2025. But there’s another side to history that should have patient investors excited about the future.
Historically speaking, the stock market has averaged a positive annualized return with both Democrats and Republicans as president. But since 1945, Democrats in the Oval Office have outperformed Republicans.
According to an analysis from independent financial intelligence company CFRA Research in 2020 (i.e., prior to Biden taking office), Democrat presidents have overseen an 11.2% annualized return in the S&P 500, compared to 6.9% for their Republican counterparts. For instance, Bill Clinton and Barack Obama oversaw respective annualized gains of 15.2% and 13.8% during their eight-year terms.
While there have been a few Republican presidents that have been in office during a rough period for Wall Street — e.g., the S&P 500 shed 5.6% on an annualized basis while George W. Bush was in office — Republican Calvin Coolidge oversaw the best stock market performance of any president. In the roughly 5-1/2 years Coolidge was president during the Roaring Twenties, the market delivered a blistering annualized return of 26.1%!
The point being that, over long periods, it doesn’t matter which party finds itself in the Oval Office. Although budget proposals from presidential candidates can occasionally stir the pot and upset Wall Street, these events tend to be very short-lived.
Widening the lens beyond four- and eight-year presidential terms yields even more encouraging results for patient investors.
Last June, analysts at market insights firm Bespoke Investment Group published a data set that examined the length of bear and bull markets in the S&P 500 dating back to the start of the Great Depression in September 1929. What they found was a milewide disparity between optimism and pessimism on Wall Street.
Over the past 94 years, the 27 bear markets the S&P 500 has worked its way through cleared in an average of 286 calendar days, or about 9.5 months. By comparison, the typical bull market has lasted 1,011 calendar days, or 3.5 times as long.
A separate study conducted by Crestmont Research looked back even further. Since the components of the S&P could be found in other major stock indexes prior to the creation of the S&P in 1923, Crestmont was able to back-test its return data to 1900.
What the researchers at Crestmont did was analyze the rolling 20-year total returns (I.e., including dividends paid) of the S&P 500 since 1900. This yielded 105 unique periods of rolling 20-year total returns (1919-2023).
Here’s the kicker: All 105 rolling 20-year periods produced a positive total return. Regardless of which party controls the White House, hypothetically holding an S&P 500 tracking index for 20 years has been a foolproof investment strategy for more than a century.
To add, these weren’t paltry gains, either. Whereas you can count on one hand how many rolling 20-year timelines produced annualized total returns of between 3.1% and 5%, more than 50 of these 105 rolling 20-year time frames generated annualized total returns of between 9% and 17.1%.
If Joe Biden wins a second term as president, history suggests long-term investors are going to be well-positioned to grow their wealth on Wall Street.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Are Stocks Going to Plunge if Joe Biden Wins a Second Term? Here’s What History Says About Stock Market Returns When Democrats Win. was originally published by The Motley Fool
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