Tag: Magnifi

The Best of the Best in Big Pharma

Posted on by The INO.com Team

Two of the world’s major listed drugmakers - AstraZeneca (AZN) and GSK (GSK) - both celebrated a strong start to 2023 and confirmed their forecasts for the rest of the year.

However, the two stocks are valued very differently by Wall Street. AstraZeneca shareholders are willing to pay 20 times forward earnings per share for 2023, while GSK’s shareholders are willing to pay a mere 10 times earnings.

These investors may be missing a huge opportunity. Last year, GSK completed its biggest restructuring in 20 years. It spun off its consumer health division Haleon (HLN), which sells over-the-counter medicines.

It is using the $8.78 billion bounty from the split to make acquisitions to fill its pipeline.

GSK’s vaccine division is the company’s star. It has developed the first ever vaccine for the common infection respiratory syncytial virus (RSV), which it believes presents a similar sized market opportunity to its shingles vaccine, which generated over $1 billion in sales in the first quarter alone. This vaccine was the first to ever be approved against RSV just a few days ago.

The company also has a leadership position in infectious diseases, which account for two-thirds of the drugs in its pipeline target.

Meanwhile, AstraZeneca has benefited from fortuitous timing, investing in oncology just as the science made great leaps forward over the past decade. The company then built on its success, so it now has a pipeline with drugs based on every current promising approach to cancer.

So, we have two very successful pharma giants. How do we pick which one to invest in? The quick and easy way to do this is to ask Magnifi to run the comparison for us. It’s as simple as asking Magnifi to “Compare AZN to GSK.”

Compare AZN to GSK

This is an example of a response using Magnifi. This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including INO.com’s relationship with Magnifi. Continue reading "The Best of the Best in Big Pharma" →

Dollar Stores Change As Inflation Rises

Posted on by The INO.com Team

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Dollar stores - the no-frills discount retailers - were known for catering to the most cash-strapped consumers. These chains expanded rapidly to meet the needs of that demographic, with more than 19,000 Dollar General stores and more than 16,000 Dollar Tree and Family Dollar outlets now in North America.

But now, dollar stores’ demographic is changing, as inflation drives more and more middle-income consumers through their doors. One primary factor behind this trend is U.S. grocery prices, which were up 8.5% from March of 2022.

This emerging trend has led the industry’s two biggest chains - Dollar General (DG) and Dollar Tree (DLTR) - to both announce plans to remodel almost twice as many stores as they will open this year. Dollar General and Dollar Tree will increase the number of refitted stores by 11.4% and 25.6% from last year, respectively.

Both are investing heavily in freezers and coolers to meet growing demand for groceries from U.S. consumers who have shifted more spending from discretionary items to essential items like food.

Dollar General will increase capital spending by 22% this year, to $1.9 billion—about 142% above what it spent in the pre-pandemic fiscal year to January 2020. Dollar Tree is increasing its capital expenditure this year by about 60% to $2 billion, nearly double what it spent in the fiscal year to February 2020.

However, profit margins are lower for groceries than other items, so dollar stores have little incentive to push too far into the terrain of the likes of Walmart (WMT). UBS notes that dollar stores’ operating margins were more than double those of grocery chains last year. So, the number of food items available at dollar stores will be limited.

With that in mind, let's compare the largest of the dollar stores, Dollar General, against Walmart over this past volatile and inflationary year. The quick and easy way to do this to ask Magnifi Personal to run the comparison for us. It’s as simple as asking this investing AI to: “Compare DG to WMT.” Continue reading "Dollar Stores Change As Inflation Rises" →

Cruising To Profits

Posted on by The INO.com Team

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Demand is picking up again for the cruise industry, especially among the over-60 crowd. This demographic typically makes up a third of cruise passengers.

The Cruise Lines International Association (CLIA) expects the number of cruise passengers to reach 31.5 million this year, a 6% uplift on pre-pandemic levels, according to its annual forecast. And on a first-quarter earnings call last month, Josh Weinstein, CEO of Carnival Corporation (CCL), said bookings for the peak 2023 cruise season had been "phenomenal."

Carnival, the world's biggest cruise line operator, operates more than 90 ships, and reported customer deposits of $5.7 billion for the three months ending February 28 - well ahead of its previous first-quarter record of $4.9 billion in 2019. This meant it generated a positive cash flow from operations for the first time in almost three years!

The world's second-biggest cruise line, Royal Caribbean (RCL), also said in February it was seeing "record-breaking" bookings, with all seven of the strongest weeks in the company's history occurring since November 2022. The company, which operates 64 ships, expects its cash profit (EBITDA) in 2023 to exceed 2019 levels of around $3.3 billion, as it raises prices to reflect both higher demand and costs.

The industry expects the growth trend to continue.

More than half of the 71 ships currently on order are the mega-vessels capable of carrying more than 4,500 passengers, compared with just 12% of the active fleet. To fill that expanding capacity, the cruise industry will have to grow faster than other tourism sectors. But keep in mind that ship owners are retiring their older vessels, and the bigger ships are much more profitable in terms of accommodation, food, and service costs per passenger.

These bigger ships contain more family-focused attractions such as zip lines, water parks and more event venues, meaning there's a lot more to do onboard. The days when the experiences were all at port and the cruise ship was just your transport between destinations are long gone.

So, we thought we'd do a comparison of these two cruise companies - CCL and RCL - over this past, very volatile, year. The quick and easy way to do this is to ask Magnifi Personal to run the comparison for us. It's as simple as asking this investing AI to "Compare CCL to RCL." Continue reading "Cruising To Profits" →

Two ETFs Set To Gain The Most In May

Posted on by The INO.com Team

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

It was an outstanding month for inflows into exchange traded funds (ETFs) in March.

Flows into ETFs almost tripled to $62.1 billion last month—with the bulk of the money heading into safe assets like government debt—as investors sought shelter from the recent banking crisis.

Developed market government bond ETFs soaked up a record $33.2 billion of the money, eclipsing the previous monthly peak of $27.4 billion set in May 2022, according to data from BlackRock.

Todd Rosenbluth, head of research at consultancy VettaFi, told the Financial Times, “In March, while net inflows to ETFs were strong, nearly all of the money U.S. ETFs gathered was in fixed income ETFs, led by Treasury products, as investors sought safety amid the banking crisis and the uncertainty of the Federal Reserve’s next move.”

It was interesting to note how expectations of two interest rate cuts by the Federal Reserve that might come later in 2023 affected the ETF flows. Investors betting on this would gravitate toward longer-term Treasuries versus those (like me) that prefer the safety of shorter-term Treasuries.

The $28.6 billion of net inflows into U.S. Treasury bond ETFs was divided almost equally between those focused on the short end, middle, and long end of the yield curve.

This divergence in views was visible in iShares 7-10 Year Treasury ETF (IEF), which gathered $6.1 billion in March. Meanwhile, at the other end of the maturity scale the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) pulled in $3.8 billion according to VettaFi data. And the iShares US Treasury Bond ETF (GOVT), with an effective duration of 6.3 years, was just behind at $3.7 billion.

Let's do a comparison of the two ETFs on the two duration ends of the yield curve - BIL and GOVT - over the past very volatile year. The quick and easy way to do this to ask Magnifi Personal to run the comparison for us. It’s as simple as asking this investing AI to “Compare BIL to GOVT.”

Not surprisingly, BIL is vastly superior. Not only is it less volatile, but the return was superior. Continue reading "Two ETFs Set To Gain The Most In May" →

How To Profit Now That Gold Is Back

Posted on by The INO.com Team

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Investors are betting on further increases in the price of gold after it touched a 12-month high in late March.

The reasons are twofold: first, the Federal Reserve’s cycle of interest rate rises appears to be over (despite oil rising again), and second, gold makes for a safe haven during banking sector turmoil.

Aakash Doshi, head of commodities for North America at Citigroup, told the Financial Times there had been a surge in investor activity in recent weeks. “The big catalyst has been the stress in the regional banking system in the U.S.… [and] it has been pretty much one-directional buying,” he said.

March was set to be the first month of net inflows into gold ETFs for 10 months. In addition, the volume of bullish options bets tied to gold funds has approached record levels.

Call options are a bullish bet that give investors the right to buy assets at a set price at a later date. By late March, the five-day rolling volume of call options on the SPDR Gold Trust ETF (GLD) had surged more than five-fold since the start of the month.

There was a similar increase in interest in CME’s gold futures and options tied to them, including deep “out-of-the-money” options, which would only pay out if the gold price hits new all-time highs.

And it’s not smaller investors or speculators jumping onto the gold bandwagon. Over the past few years, a key source of demand has been central bank buying. Between 2020 and 2022, central bank purchases went up 4.5 times!

Financial advisors sometimes recommend having some gold as an insurance policy against financial markets calamities.

So, let’s say you do want to add some gold to your portfolio. Then you face the choice between whether to go with a physical gold ETF or with an ETF that focuses on gold stocks.

Our colleague Serge Berger discussed this recently — is physical gold better, or gold stocks? Continue reading "How To Profit Now That Gold Is Back" →