Tag: Midweek Matchup

Weighing Two Drug Titans Against Each Other

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…

According to recent reports, the World Health Organization (WHO) may for the first time include drugs that combat obesity on its “essential medicines list,” which is used to guide government purchasing decisions in low- and middle-income countries.

This will only add to the buzz around these drugs, which is approaching the levels surrounding artificial intelligence (AI) and chatbots like GPT-4.

Despite the hype, we believe investors are right to be excited about the drugs.

These drugs will find a quickly growing market from expanding waistlines. That’s because obesity is growing in tandem with rising global prosperity. A bad side effect of prosperity is that consumption of not-so-healthy foods rises a lot, as does the prevalence of occupations requiring less physical work.

Obesity already affects about 650 million people around the world. America’s waistline is among those rapidly expanding—almost half of Americans will be obese by 2030, a Harvard study found. It also estimated that about 18% of healthcare spending would then go to related conditions of obesity.

No wonder, then, that Morgan Stanley thinks the market for weight-management medicines could reach $54 billion in just seven years—with $31.5 billion of this from the U.S. alone.

Companies behind the new obesity drug treatments are flying high:

Novo Nordisk (NVO) — the dominant player in diabetes treatments — generated $2.4 billion in sales from obesity treatments last year. And it has barely started to widely distribute its new obesity drug, Wegovy. Its shares are up 43% over the past year, and 15% year-to-date.

Eli Lilly (LLY), whose diabetes drug, tirzepatide, should get regulatory approval to treat weight loss this year, has seen its stock price rise 17.5% over the last year, although it is down 7% year-to-date.

So, we thought we’d do a comparison of the companies. The easiest way to do that is to ask Magnifi Personal to do it for us. It’s as simple as asking this investing AI to “Compare NVO to LLY” and selecting a three-year timeframe. Continue reading "Weighing Two Drug Titans Against Each Other" →

Finding A Good REIT For Today's Market

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…

Real estate investment trusts, or REITs, have existed here in the U.S. since the 1960s. The mature American market means there are some interesting subsectors where investors can gain exposure.

One such asset class is infrastructure. American Tower (AMT), Crown Castle (CCI), and SBA Communications (SBAC) are the second-, fourth- and 11th-largest U.S. REITs. All three own communication towers across the country, which are leased out to mobile phone services providers, radio and TV broadcasters, government bodies, and other companies.

The other type of infrastructure popular in the REIT space is data centers. The third- and 10th-largest REITs, Equinix (EQIX) and Digital Realty (DLR), both own and lease data centers to technology companies requiring immense amounts of digital storage space.

However, the data center REITs have come under criticism. In 2022, well-known short seller Jim Chanos said he was raising money to bet against such companies, predicting that the tech giants currently renting the space would look to develop their own data centers going forward.

As Chanos put it, “…although the cloud is growing, the cloud is their enemy, not their business. Value is accruing to the cloud companies, not the bricks-and-mortar legacy data centers.”

Chanos also pointed to a wider issue in the REIT space: the risk that many are overvalued.

According to numbers compiled by FactSet, the average S&P 1500 REIT is priced at 2.39 times net asset value (NAV) and 40.2 times earnings. Also, the average S&P 1500 REIT’s net debt is 1.36 times its NAV.

However, the high multiples on REIT shares come from the fact that they have lots of exposure to high-growth sub-sectors, such as self-storage, healthcare, student accommodation, and the aforementioned infrastructure.

What we want to do this week is to compare a REIT in the sub-sector that Chanos doesn’t like — Digital Realty — and the largest of the communications tower REITs, American Tower.

The easiest way to do that is to ask Magnifi Personal to do it for us. It’s as simple as asking this investing AI to “Compare AMT to DLR.” Continue reading "Finding A Good REIT For Today's Market" →

The Port We Need In This Market Storm

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…

When markets turn as volatile and uncertain as they’ve been this week, it’s a good idea to look for sectors you’d want to be invested in no matter where the markets go.

Healthcare is one such sector.

It encompasses two contrasting types of businesses. The first is boring, large-cap stocks in the pharmaceutical and healthcare services sectors. These traditionally provide some defensive qualities if the economy starts to slow. That’s true because a lot of healthcare spending is not dependent on cycles in the economy. People get sick no matter the economy.

The more exciting part of the healthcare sector is very growth-oriented, with high valuation multiples. This is the biotechnology sector, with exciting fields like genomics, CRSPR gene-editing machines, and cures for cancer.

And even beyond biotech, there are also other growth segments in this healthcare sector, including medical data businesses and medical equipment suppliers. All of these are riding long-term trends such as aging and increased healthcare spending, along with big data and AI.

The safer pharma sector looks especially enticing for more conservative investors. Vincent Deluard, strategist at StoneX, has run numbers showing pharmaceuticals have maintained 15% to 20% margins over the past 40 years. He told the Financial Times: “They have almost no exposure to energy and basic material costs: their main expenses are research and development, marketing and lobbying… Inflation in drugs prices and medical services has been twice that of the broad consumer price index in the past 40 years.”

But for the adventurous among you, putting money into the more exciting biotech small caps may be the way to go. Valuations are cheap, with a substantial upside.

So, I asked Magnifi Personal to compare an ETF from each healthcare segment - pharma and biotech. I didn’t even have to find the right ETFs. Continue reading "The Port We Need In This Market Storm" →

How to Steer Clear of the Silicon Valley Bank Meltdown

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…

Bank stocks have dropped and markets are still spooked after last week’s collapse of Silicon Valley Bank, and it’s unclear how far the fallout will reach.

But amid all the talk of how many other banks are in trouble, the effects on a related industry has gotten very little attention.

We're talking about the mortgage-backed bond markets. See, according to an article from the Financial Times' Alphaville team, Silicon Valley Bank is still sitting on a $50 billion book of MBS (mortgage-backed securities). It is likely government regulators that have taken over Silicon Valley Bank will need to dump those bonds to help cover the cost of giving depositors all of their money back.

That possibility caused mayhem in the U.S. mortgage market on March 10, as investors rushed to get ahead of getting squashed by the bank’s potential MBS dump. Therefore, mortgage spreads sharply widened on that day as Silicon Valley Bank circled the drain.

So today, we're going to use the Magnifi Personal investing AI to compare the most important MBS-trading companies and see if there are any opportunities here - or if the risk is too high.

Doing this was simple. we asked Magnifi Personal to “Compare AGNC, STWD, and BXMT” and it did all the work.

To have the investing AI run similar comparisons for you, or to dive deeper into this one and compare other banks or REITs, we’re offering 90 days of free access to Magnifi Personal - just click here!

This ability to have an investing AI pore over reams of data for you in seconds and spit out an easy-to-understand comparison of two or more stocks is an invaluable tool in deciding where to invest next.

I highly recommend you try it out. Click here to see how you can do it today, free-of-charge.

Here’s what Magnifi Personal showed me after we asked it to in “Compare AGNC, STWD, and BXMT”: Continue reading "How to Steer Clear of the Silicon Valley Bank Meltdown" →

Semiconductors Are Heating Up - Here's The Best One

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…

The never-ending demand for more technology creates long-term growth trends for semiconductor businesses. In the short term, however, they are vulnerable to wider economic pressures – demand for chips will fall off as the economy slows down.

In fact, as far as the chip industry is concerned, the world is already in a recession.

For the past three decades, a globalized production model has created a series of semiconductor giants across the world. In other words, in this sector, bigger has been better. Despite recent struggles, the stocks of all the semiconductor companies market caps have at least doubled in the past five years.

Many on Wall Street believe investors are already starting to look beyond the prospect of a recession. The market is becoming more desensitized to negative estimate revisions, as the focus begins to shift towards signs of recovery.

So let’s look past the possible coming recession, and see what semiconductor designer stocks are the most attractive right now. To do that, we used Magnifi Personal’s Compare function to compare Advanced Micro Devices (AMD) and Nvidia (NVDA).

All we had to do was type in “Compare AMD and NVDA.”

To join in, ask for more details, or expand the search by asking something like “Compare AMD to its competitors,” just click here to get a free trial of Magnifi Personal.

Instead of having to pore over financial statements and earnings reports yourself, Magnifi Personal can do this kind of research for you. Here’s what it showed me when I asked it to “Compare AMD and NVDA.” Continue reading "Semiconductors Are Heating Up - Here's The Best One" →