stock analysis Archives - Page 5 of 23

2 FAANG Stocks Staging A Comeback

Posted on February 1, 2023January 31, 2023 by The MarketClub Team

The fabled group of five large-cap tech businesses, so-called FAANG — Facebook (currently Meta Platforms), Amazon, Apple, Netflix, and Google (currently Alphabet) — dominated the stock market through late 2021.

However, a challenging macroeconomic environment in 2022, characterized by stubborn inflation and removal of Covid restrictions, saw big tech struggling to meet and exceed the high expectations of growth in subscribers/users and advertisement revenues set at the height of the pandemic.

The slump in the performance of these tech businesses was soon reflected in the price action of their stocks. Their dismal year can be summarized by the below snapshot at the end of October 2022.

Source: Forbes

However, the drawdown brought the valuations of these compounders to a more comfortable buying point while they did the needful to recapture lost demand and improve the efficiency of their businesses.

Loading ...

Continue reading →

3 Energy Stocks To Load Up On In 2023

Posted on January 24, 2023January 23, 2023 by The MarketClub Team

While it is broadly expected that the pace of interest rate hikes may be dialed down to 25-basis points, concerns over terminal interest rates being higher than expected and its effect on the U.S. economy have kept markets on edge.

With the likely less aggressive but drawn-out interest rate hikes by the Fed expected to add further stress to subdued corporate performance, the stock market volatility is expected to continue in the foreseeable future.

Hence, it could be wise for investors to increase exposure to instruments and assets whose prospects are robust enough to remain relatively unaffected by the turbulence.

Loading ...

With supply constraints due to turbulent geopolitics and extreme weather events acting to keep demand robust, global energy consumption is expected to grow by 1.3% in 2023 as many countries use fossil fuels to manage their energy transition.

Source: https://www.eia.gov/
Continue reading →

This Airline Stock is Expecting a Strong 2023

Posted on January 22, 2023January 20, 2023 by The MarketClub Team

The last few years have been difficult for the airline industry as it was among the biggest losers when the pandemic first hit in early 2020. However, with lesser restrictions on travel, the airline industry has bounced back strongly and is close to surpassing the pre-pandemic performance levels.

Delta Air Lines, Inc.’s (DAL) earnings and revenue exceeded analyst estimates in the fourth quarter.

Its EPS came 11.9% above the consensus estimate, while its revenue beat the estimate by 6.6%. The company’s operating margin came in at 10.9%, while its adjusted operating margin came in at 11.6%.

DAL’s CEO Ed Bastian said, “Delta people rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance, and I’m looking forward to recognizing their achievements with over $500 million in profit-sharing payments next month.”

Glen Hauenstein, DAL’s President, said, “For the year, we delivered $45.60 billion in adjusted revenue, a $19 billion increase over the prior year, with record unit revenue performance expected to sustain a revenue premium to the industry of more than 110%. Momentum continues in 2023 with strong demand trends, and we expect March quarter adjusted revenue to be 14 to 17% higher than 2019 on capacity that is 1 percent lower.”

The company’s revenue passenger miles for the fourth quarter increased 24.9% year-over-year to 50.47 billion. Its passenger revenue per available seat mile increased 30.8% year-over-year to 18.30 cents.

Also, its total revenue per available seat mile (TRASM) increased 23.4% from the prior-year period to 22.58 cents. In addition, its total passenger revenue increased 50.4% year-over-year to $10.89 billion.

For the fiscal first quarter ending March 31, 2023, DAL expects its total revenue to increase 14% to 17% over the same quarter of 2019 and its operating margin to come in between 4% and 6%. Its EPS is expected to come between $0.15 and $0.40. For fiscal 2023, DAL expects its total revenue to increase 15% to 20% and operating margin to rise 10% to 12% over the previous year. Its EPS is expected to come between $5 to $6.

DAL’s CEO Ed Bastian said, “As we move into 2023, the industry backdrop for air travel remains favorable, and Delta is well positioned to deliver significant earnings and free cash flow growth.” Continue reading "This Airline Stock is Expecting a Strong 2023" →

This Warren Buffett Holding Has Upside Potential

Posted on January 21, 2023January 20, 2023 by The MarketClub Team

With retail sales declining more sharply than expected during the holiday month and the third consecutive month of contraction in industrial activity, there is concern on Wall Street that the Federal Reserve may have overcooked it with respect to interest-rate hikes to cool down and contain inflation.

Amid widespread bearish sentiments, it could be wise to bank on fundamentally strong, profitable, and fairly-priced sector-leading businesses, such as Taiwan Semiconductor Manufacturing Company Limited (TSM).

Headquartered in Hsinchu City, Taiwan, TSM provides integrated circuit manufacturing services globally. This involves manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices.

The super-advanced semiconductor chips that TSM produces are difficult to fabricate due to their high development costs. Hence, this presents a significant barrier to entry into the competition.

On December 29, 2022, TSM held a 3 nanometer (3nm) Volume Production and Capacity Expansion Ceremony at its Fab 18 new construction site in the Southern Taiwan Science Park (STSP).

TSM announced that 3nm technology has successfully entered volume production with good yields. The company estimates that the technology will create end products with a market value of $1.5 trillion within five years of volume production.

On December 6, TSM updated that in addition to its first fab in Arizona, which is scheduled to begin production in 2024, it has also started the construction of a second fab, scheduled to begin production in 2026.

The overall investment for these two fabs will be approximately $40 billion. When complete, TSM Arizona’s two fabs will manufacture over 600,000 wafers annually, with an estimated end-product value of more than $40 billion.

On November 15, it was revealed that Warren Buffett’s Berkshire Hathaway (BRK.B) spent $4.1 billion to acquire a stake in the world’s largest contract chipmaker during the third quarter. According to SEC filings, the fabled conglomerate bought just over 60 million of TSM’s New York-listed American Depositary Shares at an average price of around $68.56.

Mirroring the positive developments, the stock has gained 16.9% over the past month to close the last trading session at $89.47. Continue reading "This Warren Buffett Holding Has Upside Potential" →

2 Tech Stocks That Have Finally Bottomed

Posted on January 19, 2023January 19, 2023 by Taylor Dart

2022 was a year to forget for investors and one of the worst years in history for the 60/40 stock/bond portfolio strategy in history.

This was evidenced by both assets posting double-digit declines, with the S&P 500 (SPY) actually performing the best with a 20% decline for the year, which says a lot about the magnitude of the decline in bonds.

Fortunately, 2023 is off to a better start, and while the S&P 500 entered the year in rough shape, the Nasdaq Composite was over 30%, with sentiment for the tech sector arguably the worst it’s been in nearly a decade.

This has set up some oversold buying opportunities, and some tech names have ~65% of their value, placing them in an interesting position from a valuation standpoint.

In this update, we’ll look at two tech stocks that look to have finally bottomed and where investors could find some value in buying the dip.

Crowdstrike (CRWD)

Crowdstrike (CRWD) is a $24 billion company in the cybersecurity space, and it continues to be one of the fastest-growing companies globally, increasing annual revenue from $119 million in FY2018 to $1.45 billion in FY2022, and sales estimates are sitting at $3.8 billion for FY2025.

The company is currently the market leader in endpoint security. Its flagship product is the Falcon Platform, with continuous AI analytics on trillions of signals helping to defend the thousands of customers on its platform.

As of the company’s most recent quarter, it has 15 of the top 20 US banks on its platform, 537 of the Global 2000 companies, and 21,100 customers in total.

Notably, the company is certainly not seeing a slowdown in line with other S&P 500 companies in this recessionary environment, growing customers by 44% year-over-year and revenue by 53% to $580.9 million.

The result is that Crowdstrike is set to grow annual EPS yet again this year by a market-leading 130%, with annual EPS estimates sitting at $1.54, up from $0.67 last year. This growth is expected to continue in FY2024, with annual EPS set to come in at $2.02. Continue reading "2 Tech Stocks That Have Finally Bottomed" →

Tag: stock analysis