The Nigerian fintech startup, Chipper Cash, recently abolished the roles of 20 workers based in the U.S. and U.K. The CEO Ham Serunjogi said this decision aligns with its goal of maintaining high operational efficiency and moves the startup closer to profitability. Layoffs Set Chipper Cash on Course for Positive Cash Flow in the First […]
Source link
Tesla’s stock closed at a 10-month low last week and has been the S&P 500’s worst performer this year.
Source link
Given his remarkable track record of compounding capital for multiple decades at Berkshire Hathaway, it’s not surprising that individual investors like to look at the Warren Buffett conglomerate’s enormous portfolio to find winning stock ideas. Even small positions can be worthwhile investment candidates.
Among the dozens of Berkshire holdings, investors might want to take a closer look at Visa (V 0.99%) and Mastercard (MA 0.90%). Together, they make up just 1.1% of its portfolio. But that doesn’t mean they don’t have sizable upside.
In fact, these two financial stocks could turn $100,000 into $1 million over the next 20 years.
For a stock to rise 10-fold in 20 years, it would translate to a roughly 12.2% annualized increase. That would be a fantastic return that exceeds the S&P 500‘s long-run average of about 10%. Investors can gain confidence knowing that Visa’s and Mastercard’s shares have climbed 900% in just the past 12 or so years, give or take a few months. So, as we look ahead, investors are expecting the returns to slow a bit.
I think that’s a totally reasonable expectation. These two businesses are worth hundreds of billions of dollars each. Naturally, their future returns probably won’t match the past. But the gains will still be respectable.
Investors should have confidence that these two companies will be top performers in their portfolios. For starters, Visa and Mastercard both have stellar track records of financial performance. In the past five years, despite dealing with a global health crisis and macro headwinds, both companies were able to report double-digit percentage earnings per share growth on an average yearly basis. This points to their durability, which should give shareholders peace of mind.
There’s plenty of reason to believe that the growth will continue for the foreseeable future. Even though Visa handled a whopping $3.9 trillion in payment volume last quarter, and Mastercard processed $2.4 trillion, they continue to benefit from the growth of cashless transactions. There is a lot of opportunity to further penetrate less developed markets around the world, where a higher percentage of the population is underbanked, especially when compared to the U.S. or Western Europe.
Visa and Mastercard face minimal threat of disruption, in my opinion. And the presence of an economic moat raises the chances that both businesses will be thriving two decades from now.
With their massive global two-sided payments networks that connect consumers and merchants, both Visa and Mastercard benefit from powerful network effects. It’s virtually an impossible task for someone to come around and create a new payment platform from scratch that can compete with these two giants. Combined, Visa and Mastercard handle about 75% of all the card payment volume in the U.S.
When looking at stocks to buy, the last thing investors want to do is overpay. Paying too much lowers potential future returns. This doesn’t appear to be the case in this situation.
As of this, Visa and Mastercard trade at forward price-to-earnings ratios of about 29 and 33, respectively. Because of impressive underlying fundamental performance and network effects, it’s worth paying this premium valuation, in my opinion. Add in the fact that Visa and Mastercard post some of the highest operating margins you’ll ever see, and this looks like a no-brainer decision.
Buffett’s Berkshire Hathaway owns dozens of stocks. But if you’re looking to turn $100,000 into $1 million between now and 2044, you’d struggle to find two better choices than Visa and Mastercard.
Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
After a spectacular ascent to record highs, Bitcoin (BTC) is facing a reality check. The past week has seen a dramatic price correction, leaving investors wondering if this is a temporary setback or a sign of a more bearish future.
The world’s most popular cryptocurrency reached an intraday low of $64,620 on March 17th, a significant drop from its recent peak above $73,000. This pullback has triggered a wave of pessimism, with analysts pointing to declining profitability and a drop in daily active addresses on the network.
Bitcoin down in the last week. Source: Coingecko
According to analysts, investor sentiment has been hurt by a series of descending peaks and failed upturns, while selling pressure remains rampant as we approach the “weekly candle close.” This sentiment is echoed by data from IntoTheBlock, which shows a sharp decline in the number of addresses “In the Money,” signifying a decrease in overall profitability within the Bitcoin network.
Source: IntoTheBlock
However, not everyone is hitting the panic button. Technical analysis suggests a potential support zone for buyers between $60,000 and $67,000. Popular trader Skew highlights this area as a possible turning point, while also acknowledging significant spot selling from major exchanges like Coinbase and Binance.
$BTC Spot Market Data Thread, in partnership @_WOO_X $BTC Binance Spot
Weekend spot buyer hereSpot Supply ($72K – $74K)
Spot Demand ($60K)Interestingly last bounce which was sold into also resulted in a stack of limit bids being quoted lower.
~ Keep an eye on those bids… pic.twitter.com/3PKHyddNlv— Skew Δ (@52kskew) March 17, 2024
While the immediate future appears uncertain, some analysts remain bullish on Bitcoin’s long-term prospects. They view the current correction as a natural and healthy part of any bull run, pointing to historical data where similar pullbacks paved the way for further growth.
Related Reading: Bitcoin Crashes: Dip To $65,000 Triggers Over $400 Million Liquidation Avalanche
Adding fuel to the fire of optimism is the potential return of institutional capital. The recent resumption of buying from US Bitcoin ETFs and the prospect of a significant influx of funds from hedge funds and investment advisors in the coming months are seen as potential catalysts for a rebound.
BTCUSD trading at $68,087 on the weekly chart: TradingView.com
Thomas Fahrer, CEO of Apollo, a decentralized online cryptocurrency platform renowned for its comprehensive crypto reviews and analysis of ETF inflows, echoes sentiments regarding X.
Fahrer characterizes the current state as a “Bear Trap” and pinpoints the resumption of buying from US Bitcoin ETFs on March 18 as a potential catalyst for an upward surge in X’s value.
Related Reading: Forget Dogecoin, Shiba Inu Set To Become The Top Dog: Expert Predicts $100 Billion Market Cap
Emphasizing the significance of increased institutional acceptance, Fahrer anticipates a surge in liquidity within Bitcoin ETFs, suggesting that substantial capital inflows from institutional investors have yet to materialize.
This week will be crucial for Bitcoin. The coming days will be a test of the cryptocurrency’s resilience and its ability to overcome the current selling pressure. If bulls can regain control and positive sentiment prevails, a return to record highs remains a possibility. However, if the downtrend continues, Bitcoin could face a more extended period of correction.
Featured image from Pexels, 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.
It’s been another banner start to the year for Wall Street. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have all firmly placed the 2022 bear market in the rearview mirror and blasted to record-closing highs. While there have been pockets of strength in various sectors and industries, much of the heavy lifting for the current bull market can be attributed to the “Magnificent Seven.”
As their collective name implies, the Magnificent Seven are seven of the largest and most influential publicly traded companies. They’re often industry leaders (sometimes in more than one category) and traditionally on the cutting edge of technological innovation(s). In order of descending market cap, the Magnificent Seven stocks are:
All seven of these companies have overwhelmingly outperformed the benchmark S&P 500 over extended periods. This is a fact that’s not lost on Wall Street’s brightest and most successful institutional money managers.
However, there was a discernible shift in sentiment among billionaire investors during the December-ended quarter concerning the top-performing Magnificent Seven component: Artificial intelligence (AI) leader Nvidia.
Investors who’ve put their money to work in artificial intelligence stocks have been handsomely rewarded — perhaps none more so than Nvidia’s shareholders.
In a little over a year’s time, Nvidia has established itself as the infrastructure foundation of the AI movement. The company’s A100 and H100 graphics processing units (GPUs) account for the lion’s share of GPUs currently in use in AI-accelerated data centers. In fact, many of the company’s top customers are Magnificent Seven members, including Microsoft, Meta Platforms, Amazon, and Alphabet.
Optimists fully expect Nvidia to keep its foot on the accelerator as it ramps production of its prized A100 and H100 GPUs. With supply chain issues easing — including Taiwan Semiconductor Manufacturing boosting its chip-on-wafer-on-substrate capacity — Nvidia should be able to meet demand from more of its customers this year.
However, the Nvidia growth story may not be as picture-perfect as its stock chart would suggest. Aside from well-established valuation concerns, Nvidia is set to face a flurry of operating headwinds. Perhaps that’s what compelled eight billionaires to sell shares of Nvidia during the fourth quarter, including (total shares sold in parentheses):
Israel Englander of Millennium Management (1,689,322 shares)
Jeff Yass of Susquehanna International (1,170,611 shares)
Steven Cohen of Point72 Asset Management (1,088,821 shares)
David Tepper of Appaloosa Management (235,000 shares)
Philippe Laffont of Coatue Management (218,839 shares)
Chase Coleman of Tiger Global Management (142,900 shares)
John Overdeck and David Siegel of Two Sigma Investments (30,663 shares)
Most investors in AI stocks/Nvidia have probably heard all about incoming competition from the likes of Intel and Advanced Micro Devices. Both companies have GPUs they’ve launched or plan to launch this year that are specifically designed to compete with Nvidia in enterprise data centers.
The far bigger concern for Nvidia is that the aforementioned four Magnificent Seven members that account for 40% of its sales — Microsoft, Meta Platforms, Amazon, and Alphabet — are all developing AI chips of their own for use in their data centers. A significant percentage of Nvidia’s sales may go away if these core customers shift to in-house AI chips. At best, Nvidia will see less in the way of purchases from these four juggernauts.
Another kick in the pants for Nvidia is that U.S. regulators are actively restricting exports of high-powered AI GPUs to the world’s No. 2 economy, China. After the first round of restrictions, Nvidia developed toned-down versions of its powerhouse AI GPUs, the A800 and H800, for the Chinese market. However, the newest round of export restrictions affects these models, too.
There’s also a strong likelihood that Nvidia will sap its own gross margin as it increases production of its top-selling GPUs. With data center sales growing many multiples faster than cost of revenue in fiscal 2024 (Nvidia’s fiscal year ended on Jan. 28, 2024), it clearly shows that pricing power, not an increase in units sold, drove the company’s sales higher. As GPU scarcity tapers, so will Nvidia’s otherworldly pricing power.
To be perfectly fair, Nvidia wasn’t the only AI stock and member of the Magnificent Seven that billionaire investors put on the chopping block during the fourth quarter. Prominent billionaire money managers commonly sold Meta Platforms, Alphabet, and even Microsoft stock during the previous quarter.
But there was one exception to this selling: E-commerce and cloud-services frontrunner Amazon. All told, eight high-profile billionaires piled into this multi-industry leader, including (total shares purchased in parentheses):
Ken Griffin of Citadel Advisors (4,321,477 shares)
Jim Simons of Renaissance Technologies (4,296,466 shares)
Chase Coleman of Tiger Global Management (947,440 shares)
Ken Fisher of Fisher Asset Management (888,369 shares)
John Overdeck and David Siegel of Two Sigma Investments (726,854 shares)
Steven Cohen of Point72 Asset Management (462,179 shares)
Israel Englander of Millennium Management (85,532 shares)
The biggest risk for Amazon at the moment is the likelihood of a U.S. recession taking shape in the not-too-distant future. A couple of prominent money-based metrics and predictive tools suggest that the economy may weaken later this year. Since Amazon is the world’s leading online marketplace and generates a sizable percentage of its sales from e-commerce, there’s the logical perception that a recession would be trouble.
Yet what’s interesting about Amazon is that very little of its operating cash flow or net income derives from online retail sales. Rather, the bulk of the company’s cash flow and profits can be traced to its three fast-growing ancillary operating segments: Amazon Web Services (AWS), advertising services, and subscription services.
A strong argument can be made that AWS is the single most important puzzle piece at Amazon. Enterprise cloud spending is still relatively early in its ramp, and AWS accounted for close to a third of global cloud infrastructure service spending during the September-ended quarter. In other words, a sustained double-digit growth rate should be the expectation for this high-margin segment.
Don’t overlook the importance of advertising services, either. Amazon is one of the most visited social sites in the world, with 2.3 billion to 2.7 billion aggregate visitors each month from July 2023 through December 2023. These are predominantly motivated shoppers, which makes Amazon a logical go-to for merchants wanting to target users with their message.
With regard to subscription services, Amazon surpassed 200 million worldwide Prime subscribers in April 2021, according to then-CEO Jeff Bezos. The addition of Thursday Night Football as exclusive content has likely only added to this figure.
Although Amazon may not appear cheap based on traditional fundamental metrics, such as the price-to-earnings ratio, it’s valued at a historically inexpensive multiple relative to its future cash flow. Billionaire investors recognize a long-term value when they see one.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 11, 2024
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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sean Williams has positions in Alphabet, Amazon, Intel, and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Forget Nvidia: Billionaires Are Selling It and Buying This “Magnificent Seven” Stock Instead was originally published by The Motley Fool
As great of an investment as Eli Lilly (NYSE: LLY) is during the age of Zepbound, its newest and hottest weight-loss drug, there are many other magnificent opportunities out there right now, and it’d be a disservice to your portfolio to ignore them entirely.
Take Iovance Biotherapeutics (NASDAQ: IOVA), for example. Its shares are up by 110% over the last 12 months, and if you can adopt a long-term mindset, the party could be just getting started. Here’s why it’s worth thinking about buying.
Iovance’s golden goose will soon be its freshly launched cell therapy, Amtagvi, for advanced or unresectable melanoma. It’s the only medicine with approval from the Food and Drug Administration (FDA) for advanced melanoma, so its chances of finding a home in the market are very favorable.
The treatment is also under investigation in late-stage clinical trials for its applicability in treating cervical cancer. Eventually, it’ll be examined to see if it could be useful as a first line of treatment instead of being confined to second-line usage.
For now, Iovance will start to stake out as much market share as it can with Amtagvi. If the average estimate of the analysts on Wall Street are right, Iovance could bring in around $160 million in sales this year, with well over twice that sum slated for 2025. Realizing that quick pace of revenue growth over the coming quarters would power its stock upward.
The company is also hard at work developing a smattering of other mid-to-late-stage candidates for non-small cell lung cancer (NSCLC), and head and neck squamous cell carcinoma (HNSCC). Its ultimate goal is to compete vigorously in the market for treating solid tumors, which affect 1.8 million people in the U.S. each year. That ambition will take at least a few years to play out, assuming that its clinical trials proceed swimmingly.
On deck for the rest of 2024 is the company’s international regulatory submissions, which could well be accepted within the year. Overall, the picture for the stock is very positive. But this year is not guaranteed to be all positive catalysts, as there’s a bit of a challenge that Iovance will be tested against.
Iovance could have one drag on its ability to perform for its shareholders. In short, manufacturing and administering Amtagvi is going to be quite expensive. Patients need to have a biopsy of their tumor at an authorized treatment center (ATC). (There are plans to spin up locations to reach a total of 50 ATCs in the U.S. within the coming months.)
The sample from the biopsy is then shipped to a central manufacturing site where a specific type of the patient’s immune cells present in the tumor — the tumor-infiltrating lymphocytes (TILs) — are isolated. After isolation, the biotech stimulates the TILs to grow into a large and uniform population of cells. Then, the finished therapy product is shipped back to be infused into the patient, who hopefully becomes much healthier than before.
The process sounds complicated because it is complicated. And complicated biotech processes are expensive as a rule, even before taking into account the need to administer the drug product at specialized locations with additional overhead costs. Iovance has floated charging as much as $515,000 per dose to make the math work. If it can get insurers to cover most or all of that cost, and it probably will, it won’t be a barrier to adoption of the therapy, but if it can’t, all bets are off.
It could take a few years for Iovance to become profitable. Even if it takes longer than expected, investors could still make out like bandits in the meantime. Just be aware that if you buy this stock today and the Amtagvi rollout looks to be even more expensive than anticipated, there is a risk of getting your shares diluted by new share issuance to raise capital.
Should you invest $1,000 in Iovance Biotherapeutics right now?
Before you buy stock in Iovance Biotherapeutics, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Iovance Biotherapeutics wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of March 11, 2024
Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Iovance Biotherapeutics. The Motley Fool has a disclosure policy.
Forget Eli Lilly. Buy This Magnificent Biotech Stock Instead was originally published by The Motley Fool
Personal finance expert and best-selling author Dave Ramsey says he agrees with Berkshire Hathaway CEO Warren Buffett regarding bitcoin. Viewing the crypto as a currency whose value is based on “thin air,” Ramsey stressed: “I wouldn’t wish bitcoin investments on somebody I really dislike.” Dave Ramsey on Bitcoin: ‘It’s Still Thin Air’ Personal finance guru […]
Source link
“I have taken care of his first child from another marriage for 12 years.”
Source link
The housing market is showing signs of a recovery as the spring home-buying season gets underway.
Mortgage rates fell for the second week in a row, declining to the lowest level in more than a month. The average rate on the benchmark 30-year fixed mortgage fell to 6.74% from 6.88% the week prior, per Freddie Mac.
And as mortgage rates decline, supply is starting to rebound. New listings hit a 17-month high in February, while the total number of homes for sale rose to the highest level in a year, according to Redfin (RDFN).
Read more: Mortgage rates hover around 7% — is this a good time to buy a house?
It’s an improvement from last year’s depressed levels, but supply-demand remains far from balanced. The culprit: Side effects of the Fed’s aggressive rate-hiking campaign.
Top economist Gary Shilling told Yahoo Finance that the Fed’s change in interest rate policy created a “perfect storm” for the industry, with higher rates prompting would-be sellers to stay put, as many have locked in ultra-low rates during the pandemic or in the years prior.
The giant gap between current and past mortgage rates is creating “artificial tightness” in the housing market. “It won’t continue indefinitely, but it certainly is disruptive right now,” Shilling said.
Redfin CEO Glenn Kelman expects the Fed’s recent moves to affect the housing sector for decades, warning it will take years to work through the aftershocks of the central bank’s aggressive rate-hiking campaign.
“There’s going to be low supply for a long time to come,” Kelman told Yahoo Finance. “What the Fed did … will have a 30-year tail on it.”
Lackluster supply has kept home prices elevated. The median price of previously owned homes rose 5.1% in January from a year ago, with all four US regions showing price growth, according to the National Association of Realtors.
Any hope of relief for the housing sector may be postponed. A series of hotter-than-expected inflation prints has bolstered the case for policymakers to delay rate cuts, according to Oppenheimer’s John Stoltzfus. He told Yahoo Finance Live that he thinks the Fed won’t cut rates until at least its June meeting.
A delayed rate cut suggests, at least in the near term, that mortgage rates are unlikely to fall much further, potentially postponing a more substantial rebound in the housing market.
“We need more supply. The real gate on home sales has been the number of homes for sale,” Kelman explained. “If interest rates don’t come down significantly, we’ll see a modest uptick in inventory, but to see a big gain, you’re going to have to see a real drop in mortgage interest rates.”
Moody’s Analytics expects a total housing deficit of 1.5 million to 2 million units this year, with a shortfall of up to 1.2 million for single-family homes.
Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.
Click here for real estate and housing market news, reports, and analysis to inform your investing decisions.
The latest statistics on bitcoin reserves from the nine new spot bitcoin exchange-traded funds (ETFs) reveal they currently possess 453,503.98 bitcoins, valued at approximately $30.29 billion based on the current exchange rates. The 9 New ETFs Hold Nearly a Half Million Bitcoin Since their inception on Jan. 11, 2024, these nine spot bitcoin ETFs have […]
Source link