INO.com Contributors Archives - Page 271 of 393

Fed Takes On Gold Unintentionally

Posted on September 25, 2017September 25, 2017 by Aibek Burabayev

In my previous Gold & Silver post published earlier this month, I promised to update a long-term chart of Gold as I observed some interesting price behavior in a related instrument. But before I do that, let me speak about the Fed’s decision last Wednesday and that “related to gold” instrument first.

The positive dynamics of the US economy underpinned the Fed’s decision to finally start to trim its huge balance sheet next month, besides that there is a big chance of another rate hike this December. It wasn’t a shock to the market, and some big players already started their game weeks before the Fed moved from rhetoric to action.

The Fed’s decision could have a double impact on US interest rates as falling US Treasury notes increase the yields, and the impending rate hike could secure that situation. I was writing about the high possibility of this almost a month ago and last Wednesday we received a first-hand confirmation from the Fed. Continue reading "Fed Takes On Gold Unintentionally" →

HealthEquity Strikes Again

Posted on September 23, 2017September 22, 2017 by Noah Kiedrowski

HealthEquity – Delivering Robust Numbers

I highlighted HealthEquity Inc. (NASDAQ:HQY) earlier this year as a great growth play in the ever-expanding Health Savings Accounts (HSAs) space. HealthEquity just reported big beats on both the top and bottom line, posting 28.8% year-over-year growth in revenue. HealthEquity’s IPO was in 2014, and since then the stock has returned 160% moving from ~$17 to currently ~$43 and touching $55 earlier this year. HealthEquity has been riding this secular growth market since its IPO and based on its recent string of earnings; the company is continuing this performance. Over the four quarters including the most recent earnings announcement, HealthEquity has beaten on both EPS and revenue while posting double-digit growth. HealthEquity posted annual revenue growth of 44% when comparing FY2016 to FY2017. The company has already posted robust revenue growth of 56% when comparing 1H2017 to 1H2018 (Figure 1). The sustainability of this growth will likely move in lock-step with the growth in the HSA market while optimizing revenues extracted from the investments within these accounts via offering investment advising, collecting fees from the investment line-up and its newly announced 401k with paired HSA offerings. I feel that HealthEquity will continue to post strong growth as it services the double-digit HSA growth market and manages more assets and investments within these accounts. As HealthEquity rolls out additional products such as the launch of its own 401k offerings paired with HSA accounts, revenue will continue to accelerate.

HQY Quarterly Revenue Growth
Figure 1 – Previous quarterly earnings for HealthEquity, posting double-digit growth

HealthEquity’s Q2 Earnings and Future Growth

HealthEquity reported another great quarter and the stock responded by appreciating by 12% after opening the next morning, jumping from $42 to $47. HealthEquity reported EPS of $0.21 and revenue of $56.9 million compared to last quarter with EPS of $0.23 and revenue of $55.4 million. These EPS and revenue figures beat estimates by $0.06 per share and $1.24 million with the latter revenue figure posting 28.8% year-over-year growth. Continue reading "HealthEquity Strikes Again" →

What Oil Price Band Do The Saudis Want?

Posted on September 21, 2017 by Robert Boslego

Robert Boslego - INO.com Contributor - Energies

Back in December, I deduced that the Saudis had budgeted a little less than $53 for oil in 2017. Their budget was based on their belief that they didn't expect to see any U.S. shale oil production response in 2017. Saudi Energy Minister Khalid A. Al-Falih said it in answer to a question in the press conference after the OPEC/non-OPEC meeting (see video starting at 51:35). He backed-up his belief basing it on the time lag of when oil prices had peaked in 2014 and when production peaked in 2015.

After the deals went into effect on January 1st, oil prices remained above $50 per barrel. According to the EIA’s weekly production data, U.S. crude production rose by 318,000 b/d between the last week of December and the week ending March 3rd, just before Al-Fahil’s speech in Houston during on March 7th.

U.S. Crude Production

He said he is optimistic about the global oil market in the weeks and months ahead, but "I caution that my optimism should not tip investors into 'irrational exuberance' or wishful thinking that OPEC or the Kingdom will underwrite the investments of others at our own expense." Continue reading "What Oil Price Band Do The Saudis Want?" →

A Tumbling Copper Could Hit The Floor

Posted on September 19, 2017September 19, 2017 by Aibek Burabayev

Greed is one of the strongest human motivators. It is easy to get greedy, but it is hard to push it down after it gets extreme. The main point of my previous update in August was to focus your attention on the price action in the $3 area as the price could hit this psychological level and then retreat. My advice was to book profits and wait to see what would happen next.

I hope that you heeded my advice and didn’t get greedy as copper was pushed down below the $3 level very quickly.

In the same post, I thought that this upside move in the metal that had started last year could just be a consolidation before another drop down. In the chart below I go into more details about it.

Chart 1. Copper Monthly

Chart courtesy of tradingview.com
Continue reading "A Tumbling Copper Could Hit The Floor" →

What's Behind the Fed's Inflation Obsession?

Posted on September 18, 2017 by George Yacik

George Yacik - INO.com Contributor - Fed & Interest Rates

The battle lines are being drawn for the Federal Reserve’s monetary policy meeting this week. The prevailing market consensus right now is that no resolution of the debate – which mainly concerns inflation – will happen at the meeting, meaning there will be no change in interest rates, and may not be before the end of this year.

One side of the issue, which seems to be the prevailing view at the central bank, was recently promulgated by Fed governor Lael Brainard at a meeting of the Economic Club of New York. “My own view is that we should be cautious about tightening policy further until we are confident inflation is on track to achieve our target,” she said. “We have been falling short of our inflation objective not just in the past year, but over a longer period as well. What is troubling is five straight years in which inflation fell short of our target despite a sharp improvement in resource utilization.”

The other side, which appears to be the minority opinion, is represented by William Dudley, the president of the New York Fed, who isn’t overly concerned about the current level of inflation. “Even though inflation is currently somewhat below our longer-run objective, I judge that it is still appropriate” to raise interest rates soon, he said recently. “I expect that we will continue to gradually remove monetary policy accommodation.” Continue reading "What's Behind the Fed's Inflation Obsession?" →

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