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Amazon’s Slowing Cloud-Computing Sales Expected to Linger

(Bloomberg) -- Amazon.com Inc. tempered a recent feel-good period for investors by reporting that consumer demand remains soft and sales in its lucrative cloud-computing division will continue to slow through the year. The shares fell in extended trading.Most Read from BloombergMerck Covid Drug Linked to New Virus Mutations, Study SaysAdani Crisis Deepens as Stock Rout Hits $108 BillionHong Kong to Give Away 500,000 Air Tickets to Revive TourismAdani’s $58 Billion Wealth Wipeout in Six Days Has

Yahoo

Amazon’s Slowing Cloud-Computing Sales Expected to Linger (Bloomberg) -- Amazon.com Inc. tempered a recent feel-good period for investors by reporting that consumer demand remains soft and sales in its lucrative cloud-computing division will continue to slow through the year. The shares fell in extended trading. Most Read from Bloomberg Quake Toll Hits 4,000 in Turkey, Syria as Overseas Aid Flows US Moves to Recover Chinese Balloon While Weighing Retaliation Chinese Balloons Were Spotted Near US Bases During Trump’s Era Ron DeSantis to Take Control of Disney’s District Board in New Bill The company’s core business of selling goods in North America lost money for the fifth straight quarter despite job cuts and a pause in opening new warehouses begun last year. Amazon Web Services is losing its luster with slowing growth and shrinking profit margins after a stellar run during the pandemic. “We expect to see slower growth rates the next few quarters,” Chief Financial Officer Brian Olsavsky said Thursday about the cloud market on a call with reporters. He also said inflation-battered shoppers are opting for less expensive brands and consumer sentiment in Europe and Asia appears harder hit than in the US. It’s a troubling forecast because AWS has long generated most of the company’s profit. Amazon’s division that rents computing power and data storage generated sales of $21.4 billion, an increase of 20% from a year earlier — the fourth straight period of declining growth after a 40% jump in the last quarter of 2021. The unit’s performance fell just short of estimates and followed rival Microsoft Corp.’s disappointing results for its cloud division last week. “The expected deceleration in AWS was even worse than expected and means Amazon can’t rely on that business units’ operating profits as much in coming quarters,” said Andrew Lipsman, an analyst at Insider Intelligence. Chief Executive Officer Andy Jassy is cutting costs after rapid hiring and expansion during the pandemic left Amazon saddled with too many warehouses and employees. The company has slowed the opening of new buildings, abandoned some facilities and started axing experimental teams. The Seattle-based company started a new round of job cuts last month that will eventually total 18,000 employees. “I think probably the No. 1 priority that I spend time on with the team is reducing our costs,” Jassy said on a conference call after the results. Amazon employed 1.54 million full- and part-time workers at the Dec. 31 end of the period — a 4% decline from a year earlier. Fourth-quarter revenue increased 9% to $149.2 billion, topping analysts’ average estimate of $145.8 billion, according to data compiled by Bloomberg. Revenue will be $121 billion to $126 billion in the period ending in March, Amazon said in a statement. Analysts, on average, projected $125.5 billion. Online store sales, however, fell 2% to $64.5 billion, missing analysts’ estimates. It was the fourth of five quarters that revenue declined in Amazon’s main business. Shares fell about 4% in extended trading after closing at $112.91 in New York. The stock gained 34% so far this year after losing half of its value in 2022 — the company’s worst performance in more than a decade. While Amazon’s holiday revenue was better than forecast, the reaction of the stock showed investors expected “blowout results” and were disappointed, said Brendan Witcher, an analyst at Forrester Research Inc. “With Amazon’s stock on a positive 30% run for the past month, expectations were already high,” he said. --With assistance from Matt Day. Most Read from Bloomberg Businessweek That Zoom Meeting Really Could Have Been a Simple Phone Call Activists Return to Big Attacks With $400 Billion Chase List ©2023 Bloomberg L.P.

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Amazon posts biggest ever annual loss as a public company

After two years of blistering profit growth, Amazon reported an annual loss last year for the first time since 2014.

Yahoo

Amazon posts biggest ever annual loss as a public company After two years of blistering profit growth, Amazon reported an annual loss last year for the first time since 2014. After two years of blistering profit growth, Amazon reported an annual loss last year for the first time since 2014.

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Stocks moving in after-hours: Amazon, Alphabet, Apple

Stocks moving in after hours: Amazon, Alphabet, Apple

Yahoo

Stocks moving in after-hours: Amazon, Alphabet, Apple Amazon (AMZN) The online giant's net sales $149.20 billion for the fourth quarter came in above analyst expectations of $145.8 billion. Its adjusted earnings of 3 cents per share came in below estimates of 17 cents. Amazon's AWS cloud unit net sales came in at $21.38 billion, a growth of more than 20% compared to the same period in 2022. Operating income came in at $2.74 billion, beating analyst expectations of $2.51 billion. Shares of Google parent Alphabet are trading 6% lower in after hours. The tech giant reported fourth quarter sales, excluding partner payouts, of $63.1 billion versus analyst expectations of $63.2 billion. Advertising revenue fell by 4% while YouTube revenue dropped 8%, reflecting a challenging ad environment amid a slowing economy. Sundar Pichai, CEO of Alphabet and Google, made reference to the company's AI in its earnings release. “Our long-term investments in deep computer science make us extremely well-positioned as AI reaches an inflection point, and I’m excited by the AI-driven leaps we’re about to unveil in Search and beyond.,” said Pichai. Apple (AAPL) Shares fell about 4% in after hours after the tech giant's quarterly revenue of $117.15 billion declined by 5% year-over-year, missing analyst expectations of $121.14. iPhone sales dropped 8% year-over-year to $65.8 billion, missing estimates of $68.3 billion. The company's earnings per share of $1.88 vs also came in below expectations of $2.10. Apple's production and shipments were impacted last year amid COVID lockdowns in China. Ines is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre Click here for the latest trending stock tickers of the Yahoo Finance platform Click here for the latest stock market news and in-depth analysis, including events that move stocks Read the latest financial and business news from Yahoo Finance Download the Yahoo Finance app for Apple or Android Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube

AMZN

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Amazon bull: Wouldn't be surprised by 'additional headcount reductions'

Nick Jones, JMP Securities Equity Research Analyst, discusses what the Street wants from Amazon and how they can better navigate macroeconomic headwinds. You can see the entire interview here. Key Video Takeaways 0:00 On what Amazon needs to invest in 0:12 On Amazon's strong balance sheet.

Yahoo

Amazon bull: Wouldn't be surprised by 'additional headcount reductions' Nick Jones, JMP Securities Equity Research Analyst, discusses what the Street wants from Amazon and how they can better navigate macroeconomic headwinds. You can see the entire interview here. Key Video Takeaways 0:00 On what Amazon needs to invest in 0:12 On Amazon's strong balance sheet. Video Transcript - They need to make investments in advertising and cloud, continue to make investments in retail to continue to grow those businesses longer term versus kind of dealing with near-term pain. They have a strong balance sheet. They can navigate this. It's really just what the Street wants out of Amazon today. All of that said, would not be surprised to see additional headcount reduction.

AMZN

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Amazon (AMZN) Beats Q4 Earnings and Revenue Estimates

Amazon (AMZN) delivered earnings and revenue surprises of 40% and 2.64%, respectively, for the quarter ended December 2022. Do the numbers hold clues to what lies ahead for the stock?

Yahoo

Amazon (AMZN) Beats Q4 Earnings and Revenue Estimates Amazon (AMZN) came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.15 per share. This compares to earnings of $1.39 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 40%. A quarter ago, it was expected that this online retailer would post earnings of $0.22 per share when it actually produced earnings of $0.20, delivering a surprise of -9.09%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Amazon , which belongs to the Zacks Internet - Commerce industry, posted revenues of $149.2 billion for the quarter ended December 2022, surpassing the Zacks Consensus Estimate by 2.64%. This compares to year-ago revenues of $137.41 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Amazon shares have added about 25.2% since the beginning of the year versus the S&P 500's gain of 7.3%. What's Next for Amazon? While Amazon has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Amazon: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.26 on $124.46 billion in revenues for the coming quarter and $1.58 on $556.57 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Commerce is currently in the top 13% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, PetMed (PETS), is yet to report results for the quarter ended December 2022. The results are expected to be released on February 6. This pet pharmacy company is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. PetMed's revenues are expected to be $63.71 million, up 4.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report PetMed Express, Inc. (PETS) : Free Stock Analysis Report To read this article on Zacks.com click here.

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Tech earnings: Breaking down the big takeaways from Apple, Amazon, Alphabet

Yahoo Finance tech editor Dan Howley joins the Live show to recap the earnings action seen from tech sector leaders.

Yahoo

Tech earnings: Breaking down the big takeaways from Apple, Amazon, Alphabet Yahoo Finance tech editor Dan Howley joins the Live show to recap the earnings action seen from tech sector leaders. Video Transcript [AUDIO LOGO] - Tech stocks are in the red after earnings. Yahoo Finance's Dan Howley here with the biggest takeaways. Dan, perhaps, we start with Apple and then what you took away from that on the earnings release here. DAN HOWLEY: Let's go to it. I mean, the biggest, obviously, was that they saw revenue decline year-over-year. This is one of the biggest declines they've had in quite a while, the first they've had since 2019. I know we were expecting this, but still. IPhone sales, that's really what I'm looking at. That declined 8% year-over-year and missed analyst expectations. We had $65.7 billion on sales. Analysts were looking at $68.3 billion. Mac revenue, that was also off. We were expecting for that to decline as well. Surprisingly, iPad revenue beat expectations, and so did services revenue, but that was just by a hair. So we were expecting this kind of problem with Apple because of the logistical challenges they had in China, as well as the softening demand for smartphones. But still, 8% decline is pretty stark when it comes to this company. - And certainly you see that concern reflected in the after hours action right now.

AMZN

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Amazon warehouse in Aurora slapped with OSHA citation

A warehouse in Aurora is the latest facility operated by Amazon to face scrutiny from the Occupational Safety and Health Administration. In a series of citations issued on Jan. 31 to three different Amazon (Nasdaq: AMZN) facilities in the U.S., OSHA found that the Amazon Fulfillment Center located at 19799 E. 36th Drive in Amazon subjected employees to “a high risk of serious musculoskeletal disorders,” or MSDs, per a warning letter sent to the facility. The citation specified four different parts of the order fulfillment process that required employees to “perform repetitive lifting and carrying, twisting, bending, and long reaches, and combinations thereof” that increased their risk of sustaining lower-back injuries.

Yahoo

Amazon warehouse in Aurora slapped with OSHA citation A warehouse in Aurora is the latest facility operated by Amazon to face scrutiny from the Occupational Safety and Health Administration. In a series of citations issued on Jan. 31 to three different Amazon (Nasdaq: AMZN) facilities in the U.S., OSHA found that the Amazon Fulfillment Center located at 19799 E. 36th Drive in Aurora subjected employees to “a high risk of serious musculoskeletal disorders,” or MSDs, per a warning letter sent to the facility. The citation specified four different parts of the order fulfillment process that required employees to “perform repetitive lifting and carrying, twisting, bending, and long reaches, and combinations thereof” that increased their risk of sustaining lower-back injuries.

AMZN

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Profit On Amazon Moving Either Direction With This Low Cost Strategy

Bullish but cautious on Amazon with earnings on deck. Read more as this option play on AMZN stock can profit no matter which way price action moves.

SeekingAlpha

Profit On Amazon Moving Either Direction With This Low Cost Strategy Summary - Bullish but cautious on Amazon with earnings on deck. - Consumer disposable income is dropping which could lead to headwinds despite the dovish fed announcement. - This option play can profit no matter which way price action moves. Happy earnings week everyone! I don’t know about you, but I am ready for this bear market cycle to ease up. The Fed meeting this week seemed to put the market in good spirits sending the S&P 500 and most major tickers up a percent or two. With this week’s Fed meeting in the books and the next one scheduled for March 21-22, I am working on a strategy to profit on Amazon’s (NASDAQ:AMZN) move to its next consolidation zone. The fed meeting points to a move up, but earnings still have to be announced and the market could still be digesting the news over the next few trading days. Things are looking up but I still want to have some downside protection since of course, anything can happen. Amazon’s weekly chart shows the clear downtrend experienced by the majority of big tech. We have seen a nice rejection multiple times from going lower than $82-85 and being on the right side of the $100 price area is a positive sign. Price is currently entering a strong resistance zone but there is still a chance to run through it with a good earnings report. Being in a support/resistance zone with a news announcement on deck, provides a good opportunity to launch an option strategy that profits in either direction. The fed meeting has provided the first catalyst and now earnings need to deliver as well. Price action has previously chopped in the current $105-112 area for weeks at a time, but this entry has a chance to be different with the earnings event to drive it through or to send it back down. I have identified two key zones price action could be heading. Looking at past earnings announcements, we can expect a 20-25% move during earning week and the week after. Stock price has already moved ~7% this week, but we still have plenty of room for more. The low $120’s will be hard to breach even with a blowout report. That 200 period exponential moving average will act as a floating resistance line and other rallies have stalled out at this point. Also, while Amazon is a lot more than just an e-commerce giant thanks to their juggernaut AWS platform, consumer sentiment can still weigh on stock price and disposable income has reached its lowest level since the Great Depression. With 2/3s of the GDP coming from consumer spending and debt still expensive to come by, I am not ready to take risk off and go long only on any trade. That is where the options market comes in handy. Identifying two likely zones is a good set-up for a double calendar spread. Right now, Amazon’s weekly options expiries go through March 17th which is good timing since the next fed meeting is set for March 21-22 and the trade needs to finish before another catalyst can potentially move it too far through one of our key zones. Calendar spreads are a lower risk options play since you are covered if your short options are in the money and get assigned and typically, the most you can lose is your initial debit amount, which is small thanks to the short portion of the option reducing theta effects and offsetting the long option cost. As it stands now, the double calendar spread +/- 15% from current stock price is ~$46 with a max profit of $233! Trade Idea Buy to Open: 90P and 120C 3/17/23 expiration Sell to Open: 90P and 120C 3/10/23 expiration OptionStrat runs a great platform but always take options calculators with a grain of salt since there are numerous factors and market conditions that can affect premiums especially right now since implied volatility is high with the announcement on deck. Still, it is a useful illustration of how the debit spread could increase or decrease as time and stock price moves. The above shows at expiration of the short option on March 10th, but you don’t have to hold until then to profit! Amazon typically moves well for a week or so after earnings announcements as highlighted earlier and the below shows what the potential profit could be if we move to one of our zones more quickly than expected. This is a bit idealistic but I still like the double calendar spread play to catch some profits with a move in either direction. The fed meeting and earnings in the same week has the potential to lead to a strong move for Amazon’s stock. I like the company and have long shares in my retirement account, but for my active trading account, I am remaining short term cautious and am not going long without downside coverage. The average person’s disposable income greatly declining has me worried that commerce stocks could face some headwinds so for now, I’m going to enter small trades that can profit on a move in either direction. Since Amazon has historically moved well the week following its earnings announcement, I am going to let implied volatility come down some and enter this trade after the announcement. I also will not be holding until expiry most likely and will close if price moves past either the $90 or $120 strike. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (3)

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RPT-UPDATE 2-Amazon's outlook disappoints as customer budgets stay tight

Amazon.com Inc on Thursday forecast operating profit may continue to slump in the current quarter, as mass layoffs at the retailer only dent the financial impact of consumers and cloud customers clamping down on spending.

Reuters

Amazon's outlook disappoints as customer budgets stay tight Feb 2 (Reuters) - Amazon.com Inc (AMZN.O) on Thursday said its operating profit could fall to zero in the current quarter as savings from layoffs do not make up for the financial impact of consumers and cloud customers clamping down on spending. And while Amazon's holiday revenue beat Wall Street's expectations, the company believes sales growth in its long-lucrative cloud business will slow for the next few quarters, its chief financial officer told reporters. Shares fell 5% in after-hours trade, erasing most of their 7% gain before the market's close Thursday. Making a rare appearance on Amazon's quarterly call with financial analysts, Chief Executive Andy Jassy said "virtually every enterprise" was treading carefully on cloud and other costs in light of economic uncertainty. "We're going to help our customers find a way to spend less money," he said. "We're trying to build a set of relationships in business that outlasts all of us." Facing high inflation and recession fears, Jassy has embarked on extensive cost-cutting inside Amazon as well. Last month, the online retailer said more than 18,000 employees particularly in its commerce and human resources divisions would lose their jobs. It booked a $640 million severance charge in the fourth quarter, CFO Brian Olsavsky told reporters. Amazon likewise has scaled back or shut down entire services like its virtual primary care offering for employers. It took another $720 million charge from closing or impairing assets of some grocery stores, among other items, believing it has yet to find the right formula in its long-running supermarket bet. "We're not going to expand the physical Fresh stores until we have that equation, with differentiation and economic value that we like, but we're optimistic that we're going to find that in 2023," Jassy said. Despite this cost-cutting, Amazon forecast it would earn between $0 and $4 billion in operating income this quarter, compared with $3.7 billion in the same period a year prior and $4.04 billion that analysts were expecting, according to research firm FactSet. Olsavsky attributed this to sales growth easing in the cloud, as well as brands pouring money into Amazon ads more slowly now that the holiday shopping season is over. Retail demand is another factor. "We remain nervous as everyone else is about the consumer spending and ... how people will prioritize their budgets moving forward," he said. VALUE SHOPPING An October sale to encourage early holiday shopping on Amazon has helped with retail revenue, to a point. The company's total net sales were $149.2 billion in the fourth quarter, compared with analysts' expectations of $145.4 billion, according to IBES data from Refinitiv. Consumer spending, however, shifted more to value brands in some categories and a greater percentage of sales in home essentials, Olsavsky said. Demand in Europe and the United Kingdom was also hurt by high inflation and the Ukraine war, lowering international growth rates, he said. Amazon has sought new revenue in the meanwhile. The company plans to charge certain grocery delivery fees for U.S. Prime members, on top of recent price hikes to join the loyalty program; it has created an add-on generic-drug subscription to attract business as well. Still, its outlook is particularly tied to the fortunes of its cloud-computing division. Andrew Lipsman, an analyst at Insider Intelligence, called slower growth in cloud and ads "a drag on profits going forward." Tech industry executives, including at rival Microsoft Corp (MSFT.O), have said economic uncertainty has prompted enterprises to rethink how much they're willing to spend on cloud. While AWS is helping customers navigate such terrain, it still has a healthy deal flow and future commitments from customers, making the company optimistic, Amazon CFO Olsavsky said. But "points of weakness" in cloud included financial services as mortgage volumes are down, and there has been less trading in cryptocurrency, he said. For now, the division fell short of estimates of more than $22 billion in fourth-quarter cloud sales. They increased 20% to $21.4 billion. Our Standards: The Thomson Reuters Trust Principles.

AMZN

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Amazon.com, Inc. (AMZN) Q4 2022 Earnings Call Transcript

Amazon.com, Inc. (NASDAQ:NASDAQ:AMZN) Q4 2022 Earnings Conference Call February 2, 2023 5:30 PM ETCompany ParticipantsDave Fildes - Director, IRBrian Olsavsky - SVP & CFOAndrew Jassy -...

SeekingAlpha

Amazon.com, Inc. (AMZN) Q4 2022 Earnings Call Transcript Amazon.com, Inc. (NASDAQ:AMZN) Q4 2022 Earnings Conference Call February 2, 2023 5:30 PM ET Company Participants Dave Fildes - Director, IR Brian Olsavsky - SVP & CFO Andrew Jassy - President & CEO Conference Call Participants Brian Nowak - Morgan Stanley Douglas Anmuth - JPMorgan Chase & Co. Eric Sheridan - Goldman Sachs Group Justin Post - Bank of America Merrill Lynch Ronald Josey - Citigroup Mark Mahaney - Evercore ISI Operator Thank you for standing by. Good day, everyone, and welcome to the Amazon.com Quarter 4 2022 Financial Results Teleconference. [Operator Instructions]. And for opening remarks, I will be turning the call over to the Vice President of Investor Relations, Dave Fildes. Thank you, sir. Please go ahead. Dave Fildes Hello, and welcome to our Q4 2022 financial results conference call. Joining us today to answer your questions is Andy Jassy, our CEO; and Brian Olsavsky, our CFO. As you listen to today's conference call, we encourage you to have our press release in front of you, which includes our financial results as well as metrics and commentary on the quarter. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2021. Our comments and responses to your questions reflect management's views as of today, February 2, 2023 only, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent annual report on Form 10-K and subsequent filings. During this call, we may discuss certain non-GAAP financial measures. In our press release, slides accompanying this webcast and our filings with the SEC, each of which is posted on our IR website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Our guidance incorporates the order trends that we've seen to date and what we believe today to be appropriate assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including uncertainty regarding the impacts of the COVID-19 pandemic; fluctuations in foreign exchange rates; changes in global economic and geopolitical conditions; and customer demand and spending, including the impact of recessionary fears, inflation, interest rates, regional labor market and global supply chain constraints, world events, the rate of growth of the Internet, online commerce and cloud services and the various factors detailed in our filings with the SEC. Our guidance assumes, among other things, that we don't conclude any additional business acquisitions, restructurings or legal settlements. It's not possible to accurately predict demand for our goods and services and, therefore, our actual results could differ materially from our guidance. And now I'll turn the call over to Brian. Brian Olsavsky Thank you for joining today's call. As Dave mentioned earlier, I'm joined today by Andy Jassy, our CEO. Before we move on to take your questions, I will make some comments about our Q4 results. Let's start with revenue. For the fourth quarter, worldwide net sales were $149.2 billion, representing an increase of 12% year-over-year, excluding approximately 360 basis points of unfavorable impact from changes in foreign exchange rates and above the top end of our Q4 guidance range. We've seen that during periods of economic uncertainty, consumers are very careful about how they allocate their resources and where they choose to spend their money. Throughout Amazon's history, we have found that our focus on the customer helps to set us apart in times like these. This past holiday season, customers came to Amazon for great deals, fast delivery and our widest-ever selection, bolstered by nearly 2 million third-party seller partners who sell on Amazon. Enterprise customers continued their multi-decade shift to the cloud while working closely with our AWS teams to thoughtfully identify opportunities to reduce costs and optimize their work. In our worldwide stores business, with the ongoing economic uncertainty, coupled with the continuation of inflationary pressures, customers remain cautious about their spending behavior. We saw them spend less on discretionary categories and shift to lower-priced items and value brands in categories like electronics. We also saw them continue to spend on everyday essentials, such as consumables, beauty and softlines. Our teams worked hard to offer low prices and secure millions of deals for customers in Q4, including our first-ever Prime Early Access Sale in October and the more traditional Thanksgiving to Cyber Monday holiday weekend. These global sales events outperformed our expectations as customers responded to millions of deals across our growing selection. Third-party sellers remain a key contributor to that expanding selection. In Q4, sellers comprised a record 59% of overall unit sales. Sellers, vendors and brands continue to look to Amazon's advertising capabilities to reach customers in the always competitive holiday season, even as the macro environment required them to scrutinize their own marketing budgets. We saw good growth in advertising revenues in Q4, up 23% year-over-year, excluding the impact of foreign exchange. Prime membership continues to be a great value for our customers, and improving our Prime benefits is a continuous part of our investment strategy. Along with competitive pricing, broad selection and faster delivery speed, we've seen Prime members respond to our expanding entertainment offerings. During the quarter, we completed our first season of The Lord of the Rings: The Rings of Power, the most watched Amazon original series in every region of the world, reaching over 100 million viewers and driving more Prime sign-ups worldwide during its launch window than any previous Prime Video content. We also finished our inaugural season as the exclusive home of Thursday Night Football, reaching the youngest median age audience of any NFL broadcast package since 2013 and increasing viewership by 11% from last year among hard-to-reach 18- to 34-year-olds. In aggregate, we invested approximately $7 billion in 2022 across Amazon Originals, live sports and licensed third-party video content included with Prime. That's up from about $5 billion in 2021. As a reminder, these digital video content costs are included in cost of sales on our income statement. We regularly evaluate the return on the spend and continue to be encouraged by what we see, as video has proven to be a strong driver of Prime member engagement and new Prime member acquisition. Moving on to AWS. Net sales increased $21.4 billion in Q4, up 20% year-over-year and now representing an annualized sales run rate of more than $85 billion. Starting back in the middle of the third quarter of 2022, we saw our year-over-year growth rates slow as enterprises of all sizes evaluated ways to optimize their cloud spending in response to the tough macroeconomic conditions. As expected, these optimization efforts continued into the fourth quarter. Some of the key benefits of being in the cloud compared to managing your own data center are the ability to handle large demand swings and to optimize costs relatively quickly, especially during times of economic uncertainty. Our customers are looking for ways to save money, and we spend a lot of our time trying to help them do so. This customer focus is in our DNA and informs how we think about our customer relationships and how we will partner with them for the long term. As we look ahead, we expect these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters. So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens. That said, stepping back, our new customer pipeline remains healthy and robust, and there are many customers continuing to put plans in place to migrate to the cloud and commit to AWS over the long term. Now let's shift to worldwide operating income. For the quarter, we reported $2.7 billion in operating income. The operating income was negatively impacted by 3 large items, which added approximately $2.7 billion of costs in the quarter. This was related to employee severance, impairments of property and equipment and operating leases and changes in estimates related to self-insurance liabilities. This cost primarily impacted our North America segment. If we had not incurred these charges in Q4, our operating income would have been approximately $5.4 billion. We are encouraged with the progress we continue to make in streamlining the costs in our Amazon stores business. We entered the quarter with labor more appropriately matched to demand across our operations network compared to Q4 of last year, allowing us to have the right labor in the right place at the right time and drive productivity gains. We also saw continued efficiencies across our transportation network, where process and tech improvements resulted in higher Amazon Logistics productivity and improved line haul fill rates. While transportation overperformed expectations in the quarter, we also saw productivity improvements across our fulfillment centers, in line with our plan. We also saw good leverage driven by strong holiday volumes. Overall, it was a strong effort by the operations team, and we look forward to making further headway as we head into 2023. We remain focused on driving cost efficiencies throughout the network and reducing our cost to serve our customers, while ensuring we maintain an outstanding customer experience. Circling back to the 3 large charges during the quarter. Let me share some additional color, starting with the job eliminations we initiated during the fourth quarter. As we consider the ongoing uncertainties of the macroeconomic environment, this led us to the difficult decision to eliminate just over 18,000 roles, primarily impacting our stores and device businesses as well as our human resources teams. As a result, we recorded estimated severance cost of $640 million. These charges were recorded primarily in technology and content, fulfillment and general administration on our income statement. Next, we recorded impairments of property and equipment and operating leases, primarily related to our Amazon Fresh and Amazon Go physical stores. We're continuously refining our store formats to find the ones that will resonate with customers, will build our grocery brand and will allow us to scale meaningfully over time. As such, we periodically access our portfolio of stores and decided to exit certain stores with low growth potential. We'll also take an impairment on capitalized costs and associated values of our leased buildings. The impairment charge in Q4 was $720 million and is included in other operating expense on our income statement. We continue to believe grocery is a significant opportunity, and we're focused on serving customers through multiple channels, whether that's online delivery, pickup or in-store shopping. Lastly, during the quarter, we increased our reserves for general product and automobile self-insurance liabilities, driven by changes in our estimates about the cost of asserted and unasserted claims, resulting in additional expense of $1.3 billion. This impact is primarily recorded in cost of sales on our income statement. As our business has grown quickly over the last several years, particularly as we've built out our fulfillment and transportation network and claim amounts have seen industry-wide inflation, we've continued to evaluate and adjust this reserve for both asserted claims as well as our estimate for unasserted claims. We reported overall net income of $278 million in the fourth quarter. While we primarily focus our comments on operating income, I'd point out that this net income includes a pretax valuation loss of $2.3 billion included in nonoperating income from our common stock investment in Rivian Automotive. As we've noted in recent quarters, this activity is not related to Amazon's ongoing operations but rather the quarter-to-quarter fluctuations in Rivian's stock price. As we head into the new year, we remain heads-down focused on driving a better customer experience. We believe putting customers first is the only reliable way to create lasting value for our shareholders. Andrew Jassy Everybody, this is Andy. Just before we start with the questions, I just wanted to say it's good to be with you all on the call today. I thought I might jump on the calls from time to time moving forward. And given that this last quarter was the end of my first full year in this role, and given some of the unusual parts in the economy and our business, I thought this might be a good one to join. So thanks for having me. Question-and-Answer Session Operator [Operator Instructions]. And our first question comes from the line of Brian Nowak with Morgan Stanley. Brian Nowak I have two. Andy, I want to ask you, just the first one, you've been in the seat for a while. As you sit there, what are your key focal points, product categories or investment priorities that you're most focused on to drive durable multiyear growth in that North America retail segment as we recover? And then the second one, just sort of staying on the North America retail side, how do you think about the potential margin potential of that business over the next few years as you sort of grow into the warehouse? And what are the warehouse network? And what are the efficiency factors to get you to those goals? Brian Olsavsky Brian, this is Brian. First, let me just start with your second question. On the -- sorry, can you hear me? On the expectation for retail margins, especially in North America, what we've said is when we look back to our cost structure pre-pandemic, we were just in the end of 2019, early part of 2020. We're just starting to roll out one-day shipping in North America, and we had an expectation of what our cost structure would look like. That has changed quite a bit in the last 3 years now due to a doubling of our network expansion. I think you've heard me tell this story on different calls. But essentially, we're now trying to, again, regain our cost structure that we've had in the past, balance the -- and get more efficient on the assets we've added in the last 2, 3 years now and also look at all the investment areas that we are working on to drive growth, continuing to look at them where we need to make course corrections, where we need to change things up. And we expect that, again, a lot of the improvement will be in North America operations costs. We made good headway in 2022. We always want to make more, and we're going to be working on this definitely through 2023 and beyond. But we hope to make and expect to make big improvements in 2023. Andrew Jassy Yes. And I'll start just at a broad level, priority-wise, the connective tissue for everything we do across the company, including in stores in North America, is we realize that we exist to make customers' lives better and easier every day and relentlessly went to do so. And being maniacally focused on the customer experiences, always going to be a top priority for us. At the same time, and this is true in North America as well as across the entire business, we're working really hard to streamline our costs and trying to do so at the same time that we don't give up on the long-term strategic investments that we believe can meaningfully change broad customer experiences and change Amazon over the long term. As I addressed directly the North American stores questions, I think our -- probably the #1 priority that I spent time with the team on is reducing our cost to serve in our operations network. And as Brian touched on, it's important to remember that over the last few years, we've -- we took a fulfillment center footprint that we've built over 25 years and doubled it in just a couple of years. And then we, at the same time, built out a transportation network for last mile roughly the size of UPS in a couple of years. And so when you do both of those things to meet the huge surge in demand, you're going to -- just to get those functional, it took everything we had. And so there's a lot to figure out how to optimize and how to make more efficient and more productive. And then I think at the same time, if you think about doubling the number of fulfillment centers you have and then adding a very large transportation network and you realize that all of those facilities have to link together to get products to customers, that's a pretty big expansion in the number of nodes in the network. It becomes a little bit different network. And so to figure out how to be really efficient across all those links and have them be highly utilized and to get the flows in those facilities working the right way, it takes time. So we're working very hard on it. I'm pleased with the progress we made in Q4, and you can see that in some of the results. But that work will extend into '23. So that's first. I think the second thing, priority-wise, I would talk about is just speed. We believe that continuing to get products to customers faster, makes customers happier, and they also converted a higher rate when they can see promises of deliveries that are faster. I think selection will always be a very high area of focus for us. We work with hundreds of thousands in the U.S. and millions overall in the world of selling partners. In this past quarter, 59% of the units sold were from our third-party selling partners, and we work very hard to provide unmatched selection. And that matters a lot to customers. I think pricing being sharp is always important. But particularly in this type of uncertain economy, where customers are very conscious about how much they're spending, having the millions of deals that we put together with our selling partners in the fourth quarter was an important part of the demand that you saw, and we'll continue to work really hard on being sharp on pricing. And then just the customer experience improvements that we're working all the time, whether it's adding Buy with Prime that allows Prime users to use their Prime benefits on other websites than just Amazon; or adding RxPass in the health care space, where our Prime customers for $5 a month can get all the medicines they're using in unlimited fashion; or whether it's just even in our apparel business, where when you're looking clothing you might buy, being able to see virtually your shoes with that outfit to see how it looks and it changes your customer experience, your buying experience, we will continue to work very hard on those customer experiences, and we have a lot more planned. Operator And the next question comes from the line of Doug Anmuth with JPMorgan. Douglas Anmuth Also for Andy, I have two. Just first, how would you evaluate your efforts in grocery thus far? I know you're -- it's a big, huge market. You're attacking it different ways. What are the key steps here that you're focused on to drive greater market share? And then secondly, how should we think about the strategic importance of some of these emerging bets type of areas like health care and Kuiper and autonomous vehicles, among others? Andrew Jassy On the first one on grocery, I'd just start by saying that we think grocery is a really important and strategic area for us. It's a very large market segment, and there's a lot of frequency in how consumers shop for grocery. And we also believe that over time, grocery is going to be omnichannel. There are going to be a lot of people that order their grocery items online and have it delivered to them, and there are going to be a lot of people who continue to buy in physical stores. But you're going to also see a hybrid of those, where people pick out what they want online and pick it up in stores, or people are in stores and there's something that's not in inventory in the stores, so they go to their app or to a kiosk and order it to be delivered from online. And so I think having omnichannel is going to really matter. And I think that we have a pretty significant-sized grocery business. I think people sometimes don't realize that and that we've been building for a long time. It's continuing to accelerate, and I kind of see it broken into a few pieces. If you think about the online grocery offering, we have a very large business there. It looks different from the typical mega physical grocery store. But if you think about the aisles in a grocery store, from packaged food to paper products to canned goods to pet supplies to health and personal care items to consumables, we have a very large business there that continues to grow at a rapid clip and then we think will continue to grow. But it doesn't have a big market segment share in perishables. And if you really want to have significant market segment share in perishables, you typically need physical stores. And we have kind of 2 different offerings there. For what I think is the very best organic physical store experience and selection, we have Whole Foods, which is a very significant-sized business that's continuing to grow. I really like the progress that, that business has made on profitability in the last year. And I like what I see in front of it, and I think that's a very -- it's a premium product, but it's a significant business. It's a good business for us in the grocery space. I think if you want to have a mass physical store offering, you need a different offering. And that's what we've been working on with Amazon Fresh, and we have a few dozen stores so far. We're doing a fair bit of experimentation today in those stores to try to find a format that we think resonates with customers. It's differentiated in some meaningful fashion and where we like the economics. And we've been -- we've decided over the last year or so that we're not going to expand the physical Fresh doors until we have that equation with differentiation and economic value that we like, but we're optimistic that we're going to find that in 2023. We're working hard at it. We see some encouraging signs. And when we do find that equation, we will expand it more expansively. But I think that we have a very significant opportunity in the grocery segment. I think we're building a pretty broad grocery network across online and physical, and you're going to see us continue to work on it. Operator And our next question comes from the line of Eric Sheridan with Goldman Sachs. Eric Sheridan Maybe I'll ask one big picture of Andy and then just a housekeeping matter to Brian, if I can. Andy, keeping on this theme of sort of big picture and strategy and your perspective, I'd love to get your view on the international e-commerce businesses. Obviously, you're in a range of geographies with a wide variance of maturity and different investment cycles. Can you give us your perspective on how you see Amazon's global e-commerce footprint today? And how investors should be thinking about the mix of growth and margin evolution in those international businesses in the years ahead? And maybe, Brian, if I can just ask a quick follow-up. In the Q1 operating income guidance that you gave, I think there's some confusion among investors as to where you might be capturing some of the restructuring charges from the announcements that the company has made on employee count between Q4 and Q1. Can you just clarify what was captured in Q4 versus what might be included in the way you frame the Q1 operating income guidance? Brian Olsavsky Sure, let me start. This is Brian. Let me start with that second part. So as I said earlier, we took a $640 million charge tied to the position elimination that we announced in Q4. A lot of that fell into Q1 into mid to late January. So the way to think about it is for the terminations in January, the salaries for the first 3 weeks are covered in operating results for Q1. But the period after that, where there's weeks or months of severance coverage, job placement, a lot of those costs are what the $640 million charge was in Q4. So I hope that helps. Andrew Jassy And on the question about international e-commerce, we're very enthusiastic about the business we're building there. I think just perspective, if you look at the compounded annual growth rate from 2019 to '21, in the U.K., it was over 30%; in Germany, it was 26%; in Japan, it was 21%. And the fact that we haven't given back that growth, and these are all net of FX, but if you look at even the last couple of quarters where we're continuing to grow and we haven't given back some of that growth, a meaningful amount of market segment share has shifted to our global established e-commerce territories, and we're excited about that. Now we're -- at this stage, we're big enough in our developed international territories that when there's something significant happening in the macro, we're going to be impacted as well. And if you just look in Europe as an example, the inflation is higher than most places, and the impact on Europeans for the war in Ukraine is more significant, and also the energy prices and hikes there are more significant. So you can see that in some of our growth numbers. And then you look at our emerging countries, and these are -- they're all a little bit different in all -- in a little bit different stage as you recognize in the question. But if you look at countries like India and Brazil and the Middle East and Africa and Turkey, Mexico and Australia and a number of those types of countries, we like what we're seeing. They take a certain amount of time. There's a certain amount of fixed investment you have to make when you enter a new geography, and then you have to drive a certain amount of revenue to be able to cover that fixed investment. But they're all on the right trajectory and following trajectories that roughly look like what we saw in North America and our established international geographies, and we think it's the right investment and believe we're going to have a large profitable international e-commerce business. Operator And the next question comes from the line of Justin Post with Bank of America. Justin Post Great. Maybe one for Andy and then one for Brian. AWS, if you look at the revenue growth of mid-teens, it implies it could be flattish and even down this quarter. So maybe talk about what's driving that. Is it workload changes? Are there some clients that are shifting? Anything on the market share you could comment on? And then second, when do you think this could recover? Like what's the time frame? And would you expect margins to come back when revenues reaccelerate? I'll leave it at that. Brian Olsavsky Thanks, Justin, for your question. This is Brian. Let me start with the -- what we're seeing at the customer level. So as I've mentioned, continuing -- it's across all industries. There are some points of weakness, things like financial services, like mortgage companies that do. As mortgage volumes down, some of their compute challenges or compute volumes are down. Crypto is -- lower trading in crypto. And things tied to advertising, as there's lower advertising spend, there's less analytics and compute on advertising spend as well. But -- so there's . But by and large, what we're seeing is just an interest and a priority by our customers to get their spend down as they enter an economic downturn. We're doing the same thing at Amazon, questioning our infrastructure expenses as well as everything else. And we -- there's things you can do. You can defer -- you can switch to lower-cost products. You can run calculations less frequently. There's just -- you can do different types of storage on your data. So there's ways to alter your cost and your bill in a short period of time. I think that's what we're seeing. And as I said, we're working with our customers to help them do that. And again, we're seeing ourselves at Amazon. So I'll let Andy add some color on kind of the general trends in AWS, but that's more what we're seeing at the customer level right now. Andrew Jassy So I would just add -- I mean, I think Brian covered a bunch of it. I think most enterprises right now are acting cautiously. You see it with virtually every enterprise, and we're being very thoughtful about streamlining our costs as well. And when you are being cautious, you look for ways that you can find -- you can spend less money. And where companies can cost optimize or, in some cases, they may be used to doing analysis over 90 days of information and they say, "Well, can I get away with it for 2 weeks, doing 2 weeks' worth," it's not necessarily the best thing long term. But a lot of companies will do that when they're in uncertain economic situation. And the reality is that the way that we've built all our businesses, but AWS in this particular instance, is that we're going to help our customers find a way to spend less money. We are not focused on trying to optimize in any one quarter or any one year, we're trying to build a set of relationships in business that outlast all of us. And so if it's good for our customers to find a way to be more cost effective in an uncertain economy, our team is going to spend a lot of cycles doing that. And it's one of the advantages that we've talked about since we launched AWS in 2006 of the cloud, which is that when it turns out you have a lot more demand than you anticipated, you can seamlessly scale up. But if it turns out that you don't need as much demand as you had, you can give it back to us and stop paying for it. And that elasticity is very unusual. It's something you can't do on-premises, which is one of the many reasons why the cloud is and AWS are very effective for customers. I think -- and I've spent a fair bit of time with the AWS team on this, and we look closely at what we see. We have a very robust, healthy customer pipeline, new customers, migrations that are set to happen. A lot of companies during times of discontinuity like this will step back and think about what they want to change strategically to be in a position to reinvent their businesses and change their customer experiences more quickly as uncertain economies emerge, and that often means moving to the cloud. We see a number of those pieces as well. And we're the only ones that really break out our cloud numbers in a more specific way. So it's always a little bit hard to answer your question about what we see. But we, to our best estimations, when we look at the absolute dollar growth year-over-year, we still have significantly more absolute dollar growth than anybody else we see in this space. And I think some of that's a function of the fact that we just have a lot more capability by a large amount, with stronger security and operational performance and a larger partner ecosystem. So I think it's also useful to remember that 90% to 95% of the global IT spend remains on-premises. And if you believe that, that equation is going to shift and flip, I don't think on-premises will ever go away, but I really do believe in the next 10 to 15 years that most of it will be in the cloud if we continue to have the best customer experience, which we have to work really hard at an event which we're working to do. It means we have a lot of growth in front of us in the AWS business. Operator And our next question comes from the line of Ron Josey with Citi. Ronald Josey Maybe a bigger high-level question here just around Prime member engagement and just seeing third-party seller services growth accelerating in the quarter. And I believe it was mentioned that customer is spending more on everyday essentials, which may be a relatively new use case. Talk just a little bit more, maybe Andy and Brian, just around how engagement is evolving here for Prime members and really how this has grown wallet share over time and where this is going. Brian Olsavsky Yes. Thanks, Ron, for your question. I would say that the Prime membership is -- remains strong and so has the dollars purchased per Prime member. It varies a bit by geography. But in general, if you step back, we had some very large video properties that we had launched last year, Thursday Night Football and Lord of the Rings: Rings of Power. Both of them had record sign-ups for Prime membership. And we know that, again, investments like that will help with not only a new member or new Prime member acquisition, but also retention. And we see a direct link between that type of engagement and higher purchases of everyday products on our Amazon website. So the health of Prime is very strong. As Andy mentioned earlier, we are continuing to work to get our speed of delivery up to get more one-day shipments. And we think that will also be well received by Prime members. But it's a combination of price selection and convenience. I think we've made inroads on all of them, especially with the third-party selection that's been added over the last few years. So I think testament to that is the sales that we had in the fourth quarter. In a very competitive and deal-driven environment, people came, Prime members and others came to Amazon to do their shopping. So we're encouraged by it. Andrew Jassy Just to add really one piece here, which is just, if you step back and think about a lot of subscription programs, there are a number of them that are $14, $15 a month really for entertainment content, which is more than what Prime is today. If you think about the value of Prime, which is less than what I just mentioned, where you get the entertainment content on the Prime Video side and you get the shipping benefit, the fast shipping benefit you can't find elsewhere and you get the music benefit, you get the Prime Gaming benefit and you get the photos benefit and you get the Buy with Prime capability, use your Prime subscription on websites beyond just Amazon and some of the grocery benefits that we provide, and RxPass like we just launched to get a number of medications people take regularly for $5 a month unlimited, that is remarkable value that you just don't find elsewhere. And we will continue to add things to Prime and continue to experiment with lots of different features and benefits. But it's still early days. And as we continue to make the service better and better and fully featured, we see people continuing to spend more at Amazon across our various businesses. So we're optimistic about it. Operator And our final question comes from Mark Mahaney with Evercore ISI. Mark Mahaney Two questions. Brian, just any color on why mid-teens is kind of a holdable growth rate for AWS over the next couple of quarters, given what looks like pretty clearly, continuing deterioration in enterprise demand? And then, Andy, I wonder at a high level if you could just talk about how your priorities may have changed or the company's priorities may have changed over the last year or so as you've been the CEO. And it looks like there's a bit of a peel back on devices, a peel back on physical stores, except for groceries and then maybe a little bit more of a lean in on health. And I'm not quite sure what you're doing with entertainment content spend like that. Maybe it's the same, maybe it's a little bit more. But just at a high level, how would you say your priorities have changed or are different than the prior CEOs? Brian Olsavsky So on the AWS growth rate, I'm not sure I can forecast for you with any level of certainty what is going to happen beyond this quarter. You kind of -- this is a bit uncharted territories economically. And as we mentioned, there's some unique things going on with the customer base that I think many in this industry are all seeing the same thing. So I don't have a crystal ball on that one, but we are going to continue to work for to be there for our customers. And as I said in the earlier comments, we do have new deals. We have new workloads coming to the cloud. The value was there. And whether there's short term, perhaps short-term belt tightening in the infrastructure expense by a lot of companies, I think the long-term trends are still there. And I think the quickest way to save money is to get to the cloud, quite frankly. So there's a lot of long-term positive in tough economic times. Saw that in 2020 when volumes for customers shifted very quickly. It led to a resurgence after that and probably acceleration of people's journeys to the cloud, and we'll just have to see if that happens again with what we're seeing today. Andrew Jassy Yes. I would say I think for any leadership team, each era is different, and it's often meaningfully impacted by what's happening around you. And I think that if you look at the last couple of years with things like the pandemic and the labor shortage in 2021 and the war in Ukraine and inflation and uncertain economy, good leadership teams look around and try to figure out what that means and how they should adjust their businesses. And so if you look at -- in the early part of 2022, I think we realized that as we tried to make sure we met the surge in demand for consumers and sellers and having to make decisions in 2020 for what fulfillment network investments we're going to make in 2022, we just had more capacity than we needed. And you saw us in the early part of 2022 delay some of our builds and mothballed some of our facilities to try and be more economic. And I think when we look at some of our physical business investments, physical store investments, I think there were just some areas where we didn't have conviction that they were going to be big needle movers for Amazon. And so that's why we closed down our 4-Star bookstores. And as we got into the early part of the summer, where we start our operating planning process, we -- and there was a lot of things happening in the macro economy, we started that process with the high-level tenet of we want to find a way to meaningfully streamline our costs in all of our businesses, not just their existing large businesses, but also in some of the investments we're making. We want to actually do a pretty good, thorough look about what we're investing and how much we think we need to, but doing so without having to give up our ability to invest in the key long-term strategic investments that we think could change broad customer experiences and change Amazon over time. And you saw that process led to us choosing to pause on incremental headcount as we tried to assess what was happening in the economy, and we eliminated some programs in fabric.com and Amazon Care and Amazon Glo and Amazon Explore. We decided to go slower on some -- on the physical store expansion in the grocery space until we had a format that we really believed in rolling out and we went a little bit slower on some devices, and until we made the very hard decision that Brian talked about earlier, which was the hardest decision I think we've all been a part of, which was to reduce or eliminate 18,000 roles. And so those were all done with an eye towards trying to streamline our cost but still be able to invest in the things that we think really matter over the long term. Now we have a way of looking at investments that is different maybe from some other companies. I'm not saying it's right or wrong. It's just the way we look at it, which is when we think about big areas to invest in, we ask ourselves a few questions. We ask, if we were successful, could it really be big and move the needle at Amazon, which is a high bar at a place like Amazon? Do we think it's being well served today? Do we have a differentiated approach? And do we have some competence in those areas? And if we don't, can we acquire them quickly? And if we like the answers to those questions, we will invest. Sometimes, that leads to very logical extensions for people. When I got to Amazon 25 years ago, we were a books-only retailer. And when we expanded into music and video and electronics, that seemed pretty natural to people. Amazingly, people were very surprised we were expanding into tools. That seemed far field for people, but it turned out not to be. When we launch something like Buy with Prime, I think people see that as more predictable. That process has also led us to less predictable investments. And I remember, I had a front-row seat in the AWS experience, having worked with the team and led the team from the very start. And I remember both externally and internally, there were a number of people who wondered why we were doing that. It was so different from retail only. But think about how different a company Amazon would be today if we hadn't invested in AWS. And so that informs some of the other meaningful investments we're making beyond our stores, in retail and advertising and AWS businesses. I think that while we've gone slower in some devices and things, we still -- when we look at the answers to those 4 questions, we are very enthusiastic about our investments in streaming entertainment devices, our low Earth orbit satellite and Kuiper, health care and a few other things. And I think that do I think every one of our new investments will be successful? History would say that, that would be a long shot. However, it only takes one or two of them becoming the fourth pillar for Amazon for us to be a very different company over time. So I think it's very worthwhile. We're going to continue to invest. We're going to be very thoughtful about how we streamline our costs, and I think you see a lot of that, but we're also going to continue to invest for the long term. Dave Fildes Thank you for joining us today on the call and for your questions. A replay will be available on our Investor Relations website for at least 3 months. We appreciate your interest in Amazon, and we look forward to talking with you again next quarter. - Read more current AMZN analysis and news - View all earnings call transcripts Comments (4) no AI mention on amzn call, that feels like a well deserved break :p

AMZN

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Amazon beats estimates for quarterly sales

Amazon.com Inc beat Wall Street estimates for quarterly sales on Thursday, as the retailer's marketing blitz during the holiday period helped attract shoppers.

Reuters

Amazon's outlook disappoints as customer budgets stay tight Feb 2 (Reuters) - Amazon.com Inc (AMZN.O) on Thursday said its operating profit could fall to zero in the current quarter as savings from layoffs do not make up for the financial impact of consumers and cloud customers clamping down on spending. And while Amazon's holiday revenue beat Wall Street's expectations, the company believes sales growth in its long-lucrative cloud business will slow for the next few quarters, its chief financial officer told reporters. Shares fell 5% in after-hours trade, erasing most of their 7% gain before the market's close Thursday. Making a rare appearance on Amazon's quarterly call with financial analysts, Chief Executive Andy Jassy said "virtually every enterprise" was treading carefully on cloud and other costs in light of economic uncertainty. "We're going to help our customers find a way to spend less money," he said. "We're trying to build a set of relationships in business that outlasts all of us." Facing high inflation and recession fears, Jassy has embarked on extensive cost-cutting inside Amazon as well. Last month, the online retailer said more than 18,000 employees particularly in its commerce and human resources divisions would lose their jobs. It booked a $640 million severance charge in the fourth quarter, CFO Brian Olsavsky told reporters. Amazon likewise has scaled back or shut down entire services like its virtual primary care offering for employers. It took another $720 million charge from closing or impairing assets of some grocery stores, among other items, believing it has yet to find the right formula in its long-running supermarket bet. "We're not going to expand the physical Fresh stores until we have that equation, with differentiation and economic value that we like, but we're optimistic that we're going to find that in 2023," Jassy said. Despite this cost-cutting, Amazon forecast it would earn between $0 and $4 billion in operating income this quarter, compared with $3.7 billion in the same period a year prior and $4.04 billion that analysts were expecting, according to research firm FactSet. Olsavsky attributed this to sales growth easing in the cloud, as well as brands pouring money into Amazon ads more slowly now that the holiday shopping season is over. Retail demand is another factor. "We remain nervous as everyone else is about the consumer spending and ... how people will prioritize their budgets moving forward," he said. VALUE SHOPPING An October sale to encourage early holiday shopping on Amazon has helped with retail revenue, to a point. The company's total net sales were $149.2 billion in the fourth quarter, compared with analysts' expectations of $145.4 billion, according to IBES data from Refinitiv. Consumer spending, however, shifted more to value brands in some categories and a greater percentage of sales in home essentials, Olsavsky said. Demand in Europe and the United Kingdom was also hurt by high inflation and the Ukraine war, lowering international growth rates, he said. Amazon has sought new revenue in the meanwhile. The company plans to charge certain grocery delivery fees for U.S. Prime members, on top of recent price hikes to join the loyalty program; it has created an add-on generic-drug subscription to attract business as well. Still, its outlook is particularly tied to the fortunes of its cloud-computing division. Andrew Lipsman, an analyst at Insider Intelligence, called slower growth in cloud and ads "a drag on profits going forward." Tech industry executives, including at rival Microsoft Corp (MSFT.O), have said economic uncertainty has prompted enterprises to rethink how much they're willing to spend on cloud. While AWS is helping customers navigate such terrain, it still has a healthy deal flow and future commitments from customers, making the company optimistic, Amazon CFO Olsavsky said. But "points of weakness" in cloud included financial services as mortgage volumes are down, and there has been less trading in cryptocurrency, he said. For now, the division fell short of estimates of more than $22 billion in fourth-quarter cloud sales. They increased 20% to $21.4 billion. Our Standards: The Thomson Reuters Trust Principles.

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Google: My Top Anti-Bubble Pick

After Q4 earnings, Alphabet Inc. remains the cheapest name in my beaten-down 4. See why I think it may be a while before we get deals like this for GOOG stock again.

SeekingAlpha

Google: My Top Anti-Bubble Pick Summary - With tech and IT obliterated and energy gravitated, we are in a tech anti-bubble. - Google stock remains the cheapest name in my beaten-down 4. - With the S&P 500 forming its first Golden Cross since the downturn in stocks, it may be a while before we get deals like this again. The anti-bubble quartet In previous articles addressing the "anti-bubble" framework used by Nick Sleep and Qais Zakaria in the Nomad Letters, this is something I have used as a foundation for happy value hunting. Whilst energy was down in 2020-21, tech was soaring. Now the tables have turned and we should turn to tech to hunt. While energy is certainly not a bubble based on current fundamentals, the underlying cyclical commodity from which they profit may have hit a peak. On the other hand, digital advertising and e-commerce are seeing a downturn leading to a sell-off in my favorite tech names. The quartet includes Alphabet Inc. (NASDAQ:GOOG, NASDAQ:GOOGL) ("Google"), Amazon (AMZN), Meta Platforms (META), and Microsoft Corporation (MSFT). I would throw Apple Inc. (AAPL) in there as well, but that chart is still defying gravity. All of these companies are the cream of the crop when we look back at what management has demonstrated in the allocation of capital. This is easily seen through the lens of ROIC and high-profit margins; when a segment of the market gets hit, I don't have to look far. Give me the best-managed companies at a fair discount to the historical averages. Although META stock has fallen out of my top-end price range of $146, Google is still squarely in it. Alphabet Inc. stock is a buy. Although I'm no chartist, the Golden Cross for the S&P 500 (SP500) is forming, and all boats may be lifted for some time. I hope my chance to accumulate lasts a little longer. Alphabet's story 'til now Alphabet Inc., like Meta, derives a lion's share of its earnings from digital ad revenue. It is my opinion, that until some amazing VC comes up with an acceptable way to put a chip in our heads and beam ads directly to us, digital advertising will continue to grow. Yes, we should expect a pullback in all company marketing expenses when the economy slows, but when it snaps back, look out. Google and Meta will be on a hiring spree again once that fulcrum hits. Top line numbers for Alphabet Inc. are still growing on a TTM basis while the bottom line is slowing. Non-GAAP earnings are still growing as well on the other hand. Google's digital advertising businesses have become so dominant and effective that they are now being sued by the U.S. Government to break up their monopoly. While this is a risk, it is also a reaffirmation that Alphabet has the crème de la crème digital ad portfolio. When the government calls you out, you know you've made it! Hot off the presses, you can also find the Q4 2022 Alphabet top-line numbers above. Total revenues came in slightly ahead of 2021, with ad revenue down a couple of billion dollars and cloud services up a couple of billion to offset that decline. All in all, Google revenue is flat, with the most positive item being the growth in cloud services revenue up 32% yoy. Even with the news of layoffs at Alphabet, they still ended 2022 with 33,734 more employees than in 2021. Management effectiveness Warren Buffett has said on more than one occasion that effective management, creates value with their retained earnings: "For every dollar retained, make sure the company has created at least one dollar of market value." In the case of Alphabet Inc., it has one similarity to Berkshire Hathaway (BRK.B, BRK.A) in that returns to the investor are through retained earnings and the growth of their holdings and businesses. Neither pays a dividend, so we have to trust them with their capital allocation decisions. Very few stocks without a dividend are even worth buying. This, like Berkshire, is one of them. Market cap to retained earnings ratio Charting out the ratio between market value and retained earnings is rather easy. Since retained earnings is a cumulative number on the balance sheet, the most recent TTM number will be your total retained earnings number. Even with the drop, if we look at Alphabet's cumulative retained earnings of $191.48 Billion and a market cap of $1.387 trillion, we get a market cap to retained earnings ratio of 7.26. In other words, over time Alphabet's management has created $7.26 of market value for every dollar of retained earnings. The retained earnings value creation number is astounding. However, Alphabet, Amazon, Meta, and Microsoft also have a secret weapon, an expense called R&D. This is listed as an operating expense, but in essence, is also a part of retained earnings. They get to expense this item, and then you as the investor reap the fruits of the businesses that it spawns from the research and development. Mohnish Pabrai likes to use a framework addressing these companies as "spawners" - and I certainly concur with the analogy. While much of the market value of Alphabet Inc., especially at its peak capitalization, was based on a bubble mentality, you still had the option of realizing a huge return if you chose to do so. Sometimes, promotion and product perception can add as much value as effective capital allocation. Tesla, Inc. (TSLA) is a good example of this. ROIC Including both the debt and equity of the business, ROIC (return on invested capital) is Joel Greenblatt's favorite metric for effective management. According to my brokerage, Alphabet has a return on assets of 22.4%, a return on equity of 32%, and a return on invested capital ROIC of 28.94%. Throw in a gross profit margin of 56.9% and a net of 30% and you can see how Alphabet management has created so much value for its investors with their retained earnings, R&D investments, and acquisitions. This is blue-chip management team through and through. Valuation In my previous article on Alphabet Inc., I used a standard trailing PEG ratio incorporating GAAP earnings to create a price target. At the time, the existing data indicated a GAAP earnings growth rate of 22.74%. Therefore, I used 22.74 as the multiplier and the GAAP EPS as a multiplicand to get my low-end price target of around $96. We can see in the GAAP instance that growth for the TTM is trending lower than the previous year, but if we look at Non-GAAP EBITDA, Google is still growing. The TTM EBITDA numbers for Google/Alphabet are at $93.733 Billion. With 13.242 Billion shares outstanding, that equates to $7.078 in EBITDA per share. The EBITDA CAGR, incorporating the TTM as our terminal value to end 2022, would equal a trailing 5-year growth rate of 17.8%. Using 17.8 as a multiple and $7.078 as our multiplicand, we get a price target of $120.89. This is getting toward our upper-end, but still within value parameters. In spawners with lots of R&D and tax benefits, the non-GAAP under-the-hood methods are my preferred method. Although growth has slowed a bit from my last article, where I pegged the upper-end based on EBIT growth at $143, the price still fits value within the reduced price target. Balance sheet trends The Alphabet balance sheet hasn't changed much since my last article. Still loads of cash at $116 Billion, a debt-to-equity ratio of 11.57%, and a current ratio of 2.52 X. With this enormous cash balance, it certainly helps me sleep well at night knowing the Alphabet will never be in a cash crunch regardless of interest rates. How many stocks do you hold where you could say the same? Truth is, there are only a handful of stocks whose balance sheets I feel supremely confident in, and Google/Alphabet is one of the few. Cash flow trends With a TTM free cash flow ("FCF") of just over $62.5 Billion, the rich get richer. With TTM EBITDA for Alphabet at $93.733 Billion, that's an EBITDA to FCF conversion ratio of 66%. The CAGR in free cash flow from 2018 to TTM is over 22% per annum, more evidence that management is doing an amazing job to help us relax and hold with confidence. Catalysts TikTok ban. While ad revenue and earnings beating estimates are great, a banning of rival TikTok would be all too juicy for the market to digest. The issue is now getting bipartisan support on the Hill. TikTok, owned by China's ByteDance, should be removed from app stores run by Apple Inc and Alphabet's Google because the short video social media app poses a risk to national security, Senator Michael Bennet, a Democrat on the intelligence committee, said in a letter dated Thursday. An all-out ban of the TikTok app would leave Alphabet and Meta as the chief candidates to absorb the business that would be left in TikTok's wake. Both have been optimizing their short video products to match. There should be enough business out there for both to have a nice lunch. Risks There is an anti-trust lawsuit to break up Google's "monopoly" on digital advertising. Below is a summary of the lawsuit. Filed in the U.S. District Court for the Eastern District of Virginia, the complaint alleges that Google monopolizes key digital advertising technologies, collectively referred to as the “ad tech stack,” that website publishers depend on to sell ads and that advertisers rely on to buy ads and reach potential customers. Website publishers use ad tech tools to generate advertising revenue that supports the creation and maintenance of a vibrant open web, providing the public with unprecedented access to ideas, artistic expression, information, goods, and services. Through this monopolization lawsuit, the Justice Department and state Attorneys General seek to restore competition in these important markets and obtain equitable and monetary relief on behalf of the American public. What would a breakup of Alphabet look like? Nobody knows. A slew of spinoffs as from the old AT&T (T) (Baby Bells), maybe. Either way, the digital advertising businesses of Google/Alphabet are invaluable and would receive a much higher multiple to EBITDA than what we pay for Google stock currently in my opinion. Investors will be compensated one way or another. Plus adept lobbyists are certainly working while we speak with defense attorneys hand in hand. I'm not extremely worried, but the price could suffer from perception if action is taken and Google flat-out loses the suit. Conclusion Alphabet Inc. remains one of the best-managed businesses in the world. CEO Sundar Pichai has done wonders, maintaining high-profit margins and ROIC with a lot of sharks in the water. I have moved my focus from energy to tech as my anti-bubble of choice. I do fear that the window may be closing without being able to accumulate enough, but there are certainly worse things in the world than that. I remain unconstrained in where I hunt, and adore value wherever it may be. Google is my favorite anti-bubble stock because it has the strongest balance sheet of the bunch plus one of the more modest GAAP and Non-GAAP valuations. Not as cheap as it used to be, but I reiterate buy for GOOG with a PT of $120. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL, GOOG, AMZN, MSFT, META, AAPL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (47) The first problem is they went from only hiring people with PHDs to a bloated big company. The second problem is they took sides in politics and social issues and alienated a large number of customers. The third problem is their business model relies on spying on their customers which people are becoming less and less accepting.

AMZN

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Apple Misses Earnings, I'm Staying In

Apple just released its first quarter earnings and missed expectations on revenue as well as on earnings per share (EPS). Click here to read my analysis.

SeekingAlpha

Apple Misses Earnings, I'm Staying In Summary - Apple just released its earnings and missed expectations. - The release missed expectations on revenue as well as on earnings per share ("EPS"). - Prior to the release, Tim Cook took a voluntary pay cut, leading many to speculate that the release would be bad. - The release confirmed rumors to be true. - I personally plan to keep holding Apple stock, as I think a turnaround is likely, but I'm reducing my rating to 'hold' as short-term investors could get burned here. Apple (NASDAQ:AAPL) just released its fiscal first quarter earnings and missed on both the top and bottom lines. The release came in $4 billion short on revenue and $0.07 short on earnings per share. On the operational front, Apple revealed that major supply constraints (likely Chinese factory closures) held back its sales. Overall it was a mixed quarter. There was a lot of speculation about what Apple would reveal prior to its earnings release. Tim Cook took a 40% pay cut before the release came out, leading to speculation that the company would miss estimates. With the release out, we now know that Apple did indeed miss. However, there were some bright spots in the report, including continued positive earnings growth in services. The revenue picture was undeniably bad, mainly due to currency impacts. I have been bullish on Apple stock for most of the last 12 months. The stock got expensive during the 2021 tech bubble, but it came down quite a bit this year. At today’s prices, it is not exactly cheap but, as I will show in later sections, has an economic moat that justifies a premium price. Apple’s Q1 release has not changed my opinion on the stock. As usual, the company is highly profitable, seeing modest revenue growth, and continues growing its services business. For these reasons I remain personally bullish on AAPL. However, I’m reducing my rating to ‘hold,’ mainly due to the likelihood that short-term oriented investors could lose money on it in the aftermath of the Q1 earnings. Earnings Recap In its most recent earnings release, Apple delivered lukewarm results. Some highlight metrics included: $117 billion in revenue, down 5% (about flat on a constant currency basis). $36 billion in operating income (“EBIT”), down 13%. $29.9 in net income, down 12.7%. $1.88 in diluted EPS, down 10.5%. Additionally, Apple posted the following segment results: iPhone: $65.7 billion, down 8.2%. Wearables: $13.4 billion, down 8.2%. Services: $20.7 billion, up 6.2%. It was a pretty lukewarm quarter. Services were a bright spot, but apart from that, it was misses all around. If you’re a short-term trader, I definitely would not go buying Apple calls hoping for a jump tomorrow. I’d have to imagine the short-term reaction to this release will be negative. However, I remain optimistic about Apple in the long term, for reasons I’ll outline below. Competitive Landscape One of the reasons why I was bullish on Apple heading into its first quarter earnings release is because the company has a strong competitive position. I’ve covered this topic extensively in past articles, but to summarize, Apple has: The strongest brand in the world as measured by leading several marketing research firms. #1 market share in tablets and smart watches. #2 market share in mobile operating systems by installations. #1 market share in mobile operating systems by revenue. How does Apple manage to enjoy such a dominant market position in so many different verticals? It comes down to the first bullet point: brand strength. Apple’s brand is associated with premium quality and creativity. As a result, many people think that Apple products are “cool.” The company enjoys a good reputation with Gen Z consumers, 83% of whom own iPhones. That latter point bodes well for the future, because consumption habits formed young tend to last. Another competitive advantage Apple has is an interconnected ecosystem. There are various software tie-ins that connect MacBooks, iPhones, iPads and Apple Watches together. For example, if you use Apple Watch to track your heart rate, the data is immediately available in Apple fitness on your iPhone. This interconnectedness incentivizes buying multiple Apple products instead of just one. The only other company that does this is Alphabet (GOOG) (GOOGL), which technically has an ecosystem; however, not many people use the Pixelbook, so one component of the “Google ecosystem” is missing in practice. This leaves Apple mostly unchallenged as a tech ecosystem company. Valuation Having looked at Apple’s most recent earnings release and its long-term competitive position, we can now turn to its valuation. At today’s prices, prior to the Q4 earnings release, Apple traded at: 23.8 times earnings. 5.98 times sales. 45 times book value. 18.8 times operating cash flow. The book value multiple might look frighteningly high, but remember that Apple is far from a future bankruptcy case where you’re thinking about its value in liquidation. It’s very much a going concern. Apart from that, Apple’s multiples were low prior to the Q4 release. Speaking of which: since the Q4 release showed declines, the multiples above are now higher using today’s closing price of $150 as the “P.” So, we might expect the stock to fall tomorrow, unless investors’ approach to valuation fundamentally changes. As for free cash flow: In the three quarters prior to today’s release, Apple had $1.30, $1.29 and $1.58 in free cash flow per share. Those amounts sum to $4.17. Q4’s cash flow came in at $34 billion, which is $2.09 per share. So we’ve got $6.26 in 12 month cash flows per share. Assuming no future growth, the terminal value estimates here are: $179 at the current 10 year treasury yield of 3.5%. $78.25 at an 8% discount rate (treasury yield plus a large risk premium). So, we get a pretty wide range of estimates here. Averaging them out, we get the sense that Apple is fairly valued. It therefore makes sense to pay attention to interest rates when investing in a stock like AAPL. Just slightly higher interest rates would make an investment in this stock a lot less sensible. Risks and Challenges As we’ve seen, Apple is a high quality company with a strong competitive position that’s putting out so-so earnings. It looks like a good stock. Indeed, for me it is, as I continue holding my AAPL shares. Nevertheless, there are many risks and challenges for investors to look out for, including: Slowing growth. Apple is simply so big at this point that it’s hard to imagine really high growth will continue indefinitely. There’s a concept in economics called “diminishing marginal returns” which says that at some point extra investment ceases to increase marginal profit. Additionally, simple math says that it takes more dollar growth to achieve a given amount of percentage growth, after a certain amount of dollar growth has already occurred. As we saw in the first quarter release, AAPL’s growth even on a constant currency basis was near 0%. That’s to be expected given its size plus the slowing economic climate. Apple is the biggest company in the world by market cap, and one of the biggest by revenue. So, truly rapid price appreciation from this point onward is unlikely. The supply chain. Apple’s single biggest supplier, Foxconn, is located in China, and U.S./China relations are icy right now. The two countries strongly disagree on the status of Taiwan. China wants Taiwan to become part of itself, America wants Taiwan to remain quasi-independent like it is now. Sometimes this dispute leads to real military concerns. For example, just Yesterday, Taiwan scrambled its fighter jets after China allegedly crossed into its territorial waters. Were the Taiwan issues to spill over into all-out war, it would be hard to imagine the U.S. simply allowing Apple’s open trade with China to continue unimpeded. So, geopolitical tensions with China are a risk for Apple. Anti-trust. Anti-trust lawsuits have been a concern for Apple for much of its history. As mentioned in the section on competitive dynamics, the company has high market shares in several verticals. This is in principle a good thing, but it does increase anti-trust risk. Current FTC Chair Lina Khan is known to be an anti-trust hawk. She has launched numerous actions against Meta Platforms, and has strongly criticized Amazon (AMZN). Apple is not in the crosshairs just yet, but there’s nothing to say it can’t find itself in them. The Bottom Line The bottom line about Apple’s Q1 release is that it just confirmed what investors have always known about the company: That it’s a highly profitable organization with great brand loyalty and a moderate level of growth. At this point, it would be unwise to expect Apple to keep up its past rates of growth and returns going forward. As Warren Buffett likes to say, “size is the anchor of performance.” However, the company is at least profitable, which stands out by the standards of tech companies in 2023. Overall, I’m quite happy holding Apple stock. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL, GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (78) -- "@Immer if you're cutting apple losses, that means you overpaid." -- **Actually, it means he wasn't a long-term investor. My average AAPL cost basis is under $12/share and yours is probably less. same

AMZN

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Amazon: Mean Reversion Or Sector Median Drawdown

Amazon.com, Inc. closed 2022 on a minor note, while the AWS segment on a stand-alone remained resilient. Here's my take on AMZN Q4 earnings.

SeekingAlpha

Amazon: Mean Reversion Or Sector Median Drawdown Summary - Amazon reported Q4 earnings and closed 2022 on a minor note, while the AWS segment on a stand-alone basis remained resilient. - Following the strong growth in data center systems, the focus of global IT expenditures is now expected to shift to cloud solutions, benefiting the AWS business. - E-commerce activity might seem normalizing since the pandemic boom, but the secular drivers remain intact. - The valuation of Amazon is in the middle point now, and I believe we could still evidence a reversion up to the historic mean, rather than down to the current sector's median. Amazon.com, Inc. (NASDAQ:AMZN) has disappointed investors with its Q4 2022 earnings by exhibiting lower growth amid worsening macro indicators. This has led to a drawdown in operating profit against the aggressive growth in the past few years. Additionally, depreciation of the investment in Rivian Automotive, Inc. (RIVN) also hurt AMZN’s net income. The strong long-term focus, evidenced by CAPEX outlays, secures the company with a wide moat for driving dominance in the cloud market with the AWS division in one arm, and meets the growing online commerce behavior with a solid e-commerce business in the other. I believe Amazon could ride the tailwind, succeed in cost control, and achieve improvements in profitability going forward. Overview and outlook Amazon’s management is well-known for placing its long-term growth and profitability focus in the forefront, which in turn exerts pressure on quarterly financial results. Investing in the promising areas to maintain a leadership role in the market unquestionably improves the company’s long-term prospects, but it doesn’t mean that quarterly results can be sacrificed to achieve the longer-term goals. Typing an Amazon in the browser search bar gives the following: However, the company itself needs to Spend less in order to make the investment community Smile more when looking at financial results. The solid top-line growth in the last 2 years was accompanied by elevated capital expenditures and staff expansion. CAPEX increased by 3.6x in 2021 compared to the pre-pandemic year, as the infrastructure for e-commerce wasn’t able to cope with a pandemic-induced e-commerce surge. The increased fixed costs led to deterioration in the efficiency of the e-commerce business due to over-investment in logistics and order fulfillment systems. At the end of 2022, order fulfillment costs accounted for 25% of e-commerce revenue, while in the 2018-2019 period, this parameter was around 20.5%. Considering the low profitability of the retail business, such an increase restrained the operating profitability, and needs significant optimization to strengthen the e-com business going forward. In addition, macro forecasts weighed on operating profit because of the decreased purchasing power and a strengthening dollar. For 2022, Amazon marked a 9% YoY increase in net sales, while operating profit halved to a $12.2 billion. On the bottom-line, AMZM finished 2022 with a $2.7 billion loss, of $0.27 per share, compared to $3.24 per share a year ago. However, I believe that the long-term investment secures the company a strong moat against the competition, and should pay out with the secular trend in e-commerce of shifting consumer preferences. I will share some thoughts about e-commerce prospects from my piece on DHL: While the reasons for the rise of e-commerce during the first year of Covid in 2020 are apparent, in my view, the shift to shopping online is a behavior that almost everyone could evidence in himself. On the one hand, the sales are normalizing and stabilizing compared to the exceptional Covid year, while on the other hand, consumers should be more careful with their spending. Nevertheless, thanks to the development of payments and logistic infrastructure which improves the consumer experience, online sales account for nearly 20% of all retail activity in 2022 worldwide. But the growth is not done, and the share is expected to increase sustainably up to 24% going further. We witnessed not only the e-com increase, but spending on digital business initiatives in response to the economic turmoil. The table shows that there was a significant increase in Amazon data center systems spending in 2022, which outperformed the software ones. Software spending rate increased by 8% in 2022 and is expected to follow with 11.3% growth in 2023. This represents a good prospect for Amazon Web Services ("AWS"), since the widened moat, excavated by significant investments, is well-positioned to meet the increased demand for software and cloud solutions. Valuation When switching to the AMZN valuation screener on Seeking Alpha, the obvious inference is that everything is quite red. Indeed, Amazon is trading at about 2x across all the valuation measures compared to sectors’ median multiples. The only bright point here is that AMZN is quoted well below its 5Y history. The current P/S ratio of 2.1x implies that the company is trading at a more than 30% historical discount. The same is relevant for Enterprise value ratios (to EBITDA or Sales) as well. The reversion to the historical mean values could result in a significant upside gain from current levels, and I believe there are some trigger points for that. OPEX. Improving the efficiency of fixed costs and reducing the rate of hiring will help strengthen the profitability of e-commerce, hence the company as a whole. Since the beginning of the year, Amazon has slowed down the pace of hiring, even reducing the staff to optimize costs. Going forward, as far as the company manages its logistics capacity in line with the secular tailwind, e-commerce performance could improve. CAPEX. A slowdown in capital expenditure growth will help bring free cash flow back to the positive levels. The total CAPEX in 2022 was slightly higher than last year ($63.6 billion; +4.2% YoY). However, Amazon management plans to reduce investments in e-commerce infrastructure in favor of IT spending, which will support the high-margin AWS that is now generating operating income. Revenue mix. Increasing the share of services in revenue will strengthen profitability and will allow AMZN to fuel the top-line through the fast-growing AWS segment, which occupies more than 30% of the global IaaS segment. The prospects for the IaaS sector will be associated with emerging technologies like metaverse, which aim to improve customer experience and will require significant infrastructure to meet the growing demand for storage and compute power. The company has never paid a dividend in its history, but in March 2022 it announced a share buyback, and doubled the repurchase cap to $10 billion, replacing the $5 billion authorization announced in 2016. Since the beginning of 2022, Amazon has bought back its own shares worth $6 billion, which broke the many years of returning capital to operations, trying shareholder patience. This is a signal that Amazon is ready to spend more of its profits on shareholders now after years of putting it back into operations. Risk factors The large portion of risk to the prospect of Amazon relates to the highly competitive landscape in the retail and IT services segment. Further decrease in purchasing power due to high inflation could switch consumer’s preferences (e.g., to discounters) and restrain AMZN’s e-commerce business. In addition, the labor cost exhibits a significant pressure on the company’s operating profitability, since Amazon is among the largest employers in the world. Also, the dilution risk shouldn’t be ruled out. Conclusion The strong long-term focus has pushed Amazon into a favorable position to benefit from the growth trends in e-commerce and cloud business. With operating profitability coming primarily from the AWS segment now, improvement in the macroeconomic environment should reinforce AMZN’s e-com segment and profitability on the EBIT line. After a strong fulfillment network expansion, investments in new technology, services, and staff, Amazon.com, Inc. appears to have passed through the peak of the capital spending cycle and shifted its focus to balancing operational investment with shareholder returns, thus offsetting incremental dilution every year. I am for a Buy, as I believe that Amazon.com, Inc. is more likely at the foothill of the historical mean, rather than at the steep mountainside of the sector's median level. This article was written by Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (23) They will sail off into a distant sunset somewhere beyond imagination. Meantime, they will make more money than most governments, perhaps all. Long-term, you just can't go wrong with this company. Short term, you better like getting spanked as much as Jeff Bezos does.

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Amazon Q4 2022 Quick Take: 2 Immediate Risks In AWS

Amazon.com, Inc. delivered mixed Q4 2022 results, combining an impressive revenue beat and an EPS miss. Click here for our take on what this means for AMZN stock.

SeekingAlpha

Amazon Q4 2022 Quick Take: 2 Immediate Risks In AWS Summary - Amazon.com, Inc. delivered mixed fourth quarter results, combining an impressive revenue beat that was supportive of a resilient holiday shopping season, and an EPS miss that was indicative of AWS challenges. - In addition to continued pressure from its Rivian investment and restructuring charges, Amazon's most profitable cloud-computing business continued to decelerate at a faster pace than expected. - The latest results indicate a shift in the cloud demand environment, raising two critical risks at AWS that will continue to overshadow improvements in e-commerce and Amazon's burgeoning ad business. - Looking for more investing ideas like this one? Get them exclusively at Livy Investment Research. Learn More » Amazon.com, Inc. (NASDAQ:AMZN) reported an impressive revenue beat in the fourth quarter despite the tough operating backdrop due to rapidly deteriorating macroeconomic conditions. However, earnings missed by a “wide margin,” underscoring how recent cost-optimization initiatives implemented have likely yet to flow through its results. Adding to pressure on the Amazon bottom-line remains its investment in Rivian Automotive, Inc. (RIVN), which drove a “pre-tax valuation loss of $2.3 billion,” as well as other restructuring charges that have likely occurred in the quarter to account for the recent reduction in force (“RIF”) as well as ongoing facility footprint optimization efforts. Although Amazon's forward outlook came in tepid (+4% y/y to +8% y/y) when compared to previous March quarters, it remained in line with market expectations given elevated uncertainty in the consumer. This will likely become more prevalently felt across corporate America – at least through the first half of the year. Since mid-July, analysts have cut 2023 consensus earnings-per-share estimates by nearly 8%, with the lion’s share coming during the two most recent earnings season. Each quarter, the cuts have become progressively deeper…If the trend continues, analysts’ downward revisions this quarter should be expected to be even steeper than they have been in the past, translating into consensus 2023 EPS outlook cuts of as much as 5% to $215 by the end of February. Source: Bloomberg News. Admittedly, the bar was set low for Amazon, too, especially given the pace of slowdown observed in recent quarters. Investors have largely held onto cautious optimism, bracing for results from an uncertain fourth quarter holiday season at Amazon’s e-commerce segment due to the subdued consumer that looks to be taking a turn for the worse soon, as well as anticipation for greater calls for “cloud optimization” that could weigh on Amazon Web Services ("AWS") demand. Meanwhile, advertising sales continued to be a growing bright spot for the company, as we had expected, expanding 19% y/y. In addition to macroeconomic headwinds and other industry-specific challenges such as pulled-forward demand during the pandemic that will continue to unwind and normalize within the foreseeable future across both e-commerce and cloud-computing, AWS – the key source of Amazon’s cash flows – also faces an inevitable trajectory of deceleration as it grapples with two looming threats – namely, the combination of growing cloud optimization calls from customers and the sheer size its market share has grown into in general. However, Amazon’s moat in not only e-commerce, but also AWS. Its industry-leading margins are likely to cushion some of the impact and usher the company through a sustained path of structural expansion without losing out meaningfully to competition. With cash flows generated from AWS alone likely the core driver of Amazon’s consolidated market cap today, and a durable secular growth backdrop in which the cloud segment remains poised to capitalize on, AMZN stock continues to exhibit promising longer-term upside potential from current levels. AWS Deceleration AWS revenues grew 9% y/y (+12% y/y cc) in the fourth quarter to $149.2 billion, with a moderate guidance for the current quarter indicating further deceleration ahead. However, AWS sales – where Amazon’s bread and butter is at – decelerated substantially, growing only 20% y/y to $21.4 billion, underperforming consensus estimates of 23% y/y growth. This was already downward-adjusted based on the currently challenging macroeconomic environment, as well as key competitor Azure’s (MSFT) caution of looming weakness last week. As discussed in our previous coverage on AMZN stock, gradual deceleration at AWS from here on out is largely the consensus call among investors, despite broad-based digitization and cloud migration trends still in the early innings. Specifically, the sheer size of AWS’ leading market share, combined with a shift in corporate narratives towards a more cautious strategy in migrating workloads to the cloud (e.g., growing calls for optimization; increasing multi-cloud strategy adoption) supports the narrative that “the last mile is always the hardest.” Today, AWS holds a leading 34% share in the global market for public cloud-computing solutions, leading Azure’s 21% and Google Cloud Platform’s (GOOG, GOOGL) 10% by wide margins still. Yet, it is more likely than not for that gap to narrow going forward due to challenges facing the sheer size of AWS’ operations. To put into perspective, AWS has been expanding at a 5-year CAGR in the 20%-range, while competitors like Azure and GCP have been catching up in the high 30% to 40% range. This has accordingly raised concerns in recent quarters over whether the segment can achieve the level of growth that market has priced into the stock. Meanwhile, the growing shift in customer demands for an enhanced cloud migration strategy has also made it more difficult for AWS, as well as the broader cloud-computing industry, to penetrate new opportunities. Specifically, the pricing power that hyperscale once held due to the industry’s previously limited expertise in supporting seamless cloud migration strategies have now shifted to customers who are more aware of their options (thanks to growing competition in the field) and demand an optimized balance between performance and cost (discussed further in the following section) in ongoing digitization efforts. For instance, the growing adoption of a multi-cloud strategy makes an immediate risk to AWS by diluting its upcoming share of as much as 30% of corporate IT budgets that will be allocated to building out their respective cloud infrastructure alone. This is because AWS has long been a primary cloud service provider in the industry already, making it potentially more difficult for the segment to partake in customers’ expansion efforts. And normalizing growth rates at AWS in recent quarters is likely reflective of this new reality. Given AWS is already the dominant public cloud service vendor on the market, it is hard for it to take further advantage of increasing multi-cloud momentum. In a recent sentiment check survey performed by RBC Capital Markets, about 57% of corporates looking to ramp up investments in cloud have noted AWS as a potential beneficiary over the next 12 months, compared with 73% for GCP and 71% for Azure. AWS is also starting to lose share to key rival Azure amongst large enterprise cloud spending – the latter has taken over AWS as the leading public cloud service provider for enterprises generating more than $5 billion in annual revenues, acquiring more than 50% share in the cohort while AWS only captures a little more than 30%. Source: “Is Amazon a Buy After Q3 2022 Earnings? The Cloud is Dissipating.” And the looming macroeconomic challenges are also compounding pains ahead, risking a tightening of the cash flow tap at AWS. However, while the next mile for AWS on capitalizing on enterprise cloud adoption growth – the largest cloud spending segment – will likely become more difficult, growing AI momentum could potentially re-accelerate the industry’s total addressable market ("TAM") expansion and compensate for the near-term challenges. Specifically, demand from the high performance computing (“HPC”) segment continues to exhibit robust momentum, especially with the recent frenzy created by OpenAI’s ChatGPT that has raised awareness of how seemingly complex AI models can now be applied in mass market use cases. This will likely further fuel an “exascale AI era” in which AWS is ready to take on. The cloud-computing unit already facilitates multiple exascale computing offerings on its marketplace to capitalize on the next era of AI opportunities, while also continuously improving its in-house designed processors to address growing performance demand required by the increasingly complex workloads. AWS’ launch of the Graviton3 server processor last year, which powers its EC2 (or Elastic Compute Cloud) instances, has been designed to optimize performance for increasingly complex computing workloads, spanning: “application servers, microservices, HPC, CPU-based machine learning inference, video encoding, electronic design automation, gaming, open-source databases, and in-memory caches.” The latest generation boasts “up to 25% better compute performance” when compared to its predecessor, the Graviton2, and addresses the demanding requirements of HPC applications that could potentially overtake the currently dominant enterprise cloud spending segment and drive AWS’ double-digit growth trajectory over the coming years. Cloud Optimization Meanwhile, the growing discord on cloud optimization across the broader enterprise cloud spending segment will likely become the next-greatest challenge to AWS and the broader cloud-computing industry. Specifically, “cloud spend optimization,” which refers to customers’ growing demand to “enhance applications, performance, and business needs in the cloud while eliminating costs and inefficiencies”, will likely compound the near-term macro-related challenges (e.g., higher energy costs; FX headwinds) and add more structural pressure to AWS’ margins. With the ongoing macroeconomic uncertainties we’ve seen an uptick in AWS customers focused on controlling costs, and we’re proactively working to help customers cost-optimize, just as we’ve done throughout AWS’ history, especially in periods of economic uncertainty. Source: Amazon 3Q22 Earnings Call Transcript. This is consistent with the slight narrowing in AWS’ operating margins in the fourth quarter, which went from 26% in the third quarter and 30% in 4Q21 to 24% in the three months through December 2022. While Amazon management had previously pinned the deceleration to expected “[fluctuations] over time as [AWS balances] investments versus renegotiating pricing with the long-term customer commitments…, offset by increasing productivity and efficiencies in [its] data centers," the continuing downward trend in the segment’s profitability, though still attractive, underscores new structural cost challenges ahead. While we expect the related cost headwinds to further eat into AWS’s margins over the near- to mid-term, the segment continues to exhibit sustained scalability across its operations that would potentially lead to moderation of related impacts on longer-term profitability. Continued innovation, such as the incorporation of the Graviton3 processors into its EC2 instances, will not only allow AWS to further penetrate cloud spending opportunities across wide-ranging verticals, but also help it enable customers to do more with less and address the growing demand for cloud spending optimization. And in return, ensuing scale would accordingly help AWS restore “great cost for performance ratios” over time to reinforce the segment’s attractive margins that have long been a driving force in the stock’s uptrend. I would say this is [one of the] real valuable points about cloud computing is that it’s turning fixed cost into variable for many of our customers. And we help them save money either through alternative services or Graviton3 chips. There’s many ways that we have to help them lower their spending and still get great cost for performance ratios. Source: Amazon 3Q22 Earnings Call Transcript. This is also consistent with CEO Andy Jassy’s reaffirmation on his optimism “about the long-term opportunities for Amazon,” bolstered by its continued commitment to investing prudently in order to capitalize on future secular growth trends: In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon. The vast majority of total market segment share in both Global Retail and IT still reside in physical stores and on-premises datacentres; and as this equation steadily flips, we believe our leading customer experiences in these areas along with the results of our continued hard work and invention to improve every day, will lead to significant growth in the coming years. When you also factor in our investments and innovation in several other broad customer experiences (e.g. streaming entertainment, customer-first healthcare, broadband satellite connectivity for more communities globally), there’s additional reason to feel optimistic about what the future holds”. Source: Amazon 4Q22 Earnings Results. The Bottom Line Despite the two looming risks to AWS’s forward performance, Amazon’s cloud-computing unit will likely continue to boast a strong competitive advantage to peers. Specifically, the unit’s double-digit profit margins still makes it easier to cushion the impact when compared to peers like GCP – which is still unprofitable – and absorb the near-term cost headwinds and challenges stemming from the shift in enterprise demands. Amazon's robust operating cash flows, which increased by 1% y/y to total $46.8 billion during full year 2022, also allows AWS to further its moat in building out hyperscale capacity to address cloud-computing opportunities from verticals beyond the maturing enterprise spending segment. Paired with improving utilization in its retail arm, positive margin impacts from recently implemented cost-cutting initiatives flowing through the broader business as the year progresses, and supportive longer-term secular growth trends, Amazon stock remains primed for sustained upside potential from current levels. Thank you for reading my analysis. If you are interested in interacting with me directly in chat, more research content and tools designed for growth investing, and joining a community of like-minded investors, please take a moment to review my Marketplace service Livy Investment Research. Our service's key offerings include: - A subscription to our weekly tech and market news recap - Full access to our portfolio of research coverage and complementary editing-enabled financial models - A compilation of growth-focused industry primers and peer comps Feel free to check it out risk-free through the two-week free trial. I hope to see you there! This article was written by Boutique investment research shop providing professional coverage on disruptive thematic equities. Our analysis provides a deep dive on growth drivers present in the secular market to identify outperforming investments. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (23) Optimize Your Existing... · Automated Instance Type... · Autoscaling"

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Amazon workers in Barcelona strike over warehouse closure

Workers at an Amazon logistics centre on the outskirts of Barcelona protested on Thursday on the second day of an indefinite strike sparked by the company's plans to shut down the warehouse and relocate employees to other provinces.

Reuters

Amazon workers in Barcelona strike over warehouse closure MADRID, Feb 2 (Reuters) - Workers at an Amazon (AMZN.O) logistics centre on the outskirts of Barcelona protested on Thursday on the second day of an indefinite strike sparked by the company's plans to shut down the warehouse and relocate employees to other provinces. They have staged pickets at the entrances to the warehouse, but union leaders said they were allowing truck drivers to enter and leave the centre where 800 people work and accused Amazon of acting "in bad faith" by calling riot police to clear the area on the first day. Amazon declined to comment on the ongoing dispute. On Jan. 11, the delivery giant announced it would close the warehouse in the Martorelles suburb and shift its activity to the city of Zaragoza, some 300 km (186 miles) west of Barcelona. While Amazon said all employees would be transferred to other logistics centres in Spain without any job losses, trade unions described the move as "disguised layoffs" and said the collective bargaining deals in other provinces would result in worse pay conditions for workers. "Does Amazon really need to make more profit? It has more millions than entire countries," Elisenda Mas, a spokesperson for Spain's largest union CCOO, told Reuters. "It's shameful." She said that Amazon's latest offer for employees willing to move to Zaragoza or to Figueres in the neighbouring province of Girona - located 125 km north of Barcelona - was a one-off relocation bonus of 3,000 euros ($3,280) plus an unspecified amount spread out in 12 monthly instalments. But the separate collective bargaining agreement in those provinces would entail a pay cut of at least 700 euros per month, she said, adding that moving away from Barcelona, where her husband works and her child attends school, was not a viable option. Striking workers are asking to be relocated to other Amazon warehouses within the province of Barcelona. Last month, Amazon announced more than 18,000 job cuts globally, mainly impacting its e-commerce and human resources divisions, amid similar moves by tech companies such as Meta (META.O) or Alphabet (GOOGL.O). ($1 = 0.9147 euros) Our Standards: The Thomson Reuters Trust Principles.

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Apple FQ1 2023: More Gloom And Doom Awaits

Apple Inc. F1Q23 revenue staged a miss by a whopping $4.5 billion, underscoring the worsening burdens on the tech giant. Click for more analysis of AAPL earnings.

SeekingAlpha

Apple FQ1 2023: More Gloom And Doom Awaits Summary - Apple Inc. F1Q23 revenue staged a rare miss by a whopping $4.5 billion, underscoring the worsening burden of not only supply constraints but also deteriorating consumer spending. - Earnings also came in under consensus expectations, adding to investors' subdued confidence in the stock amid this year's rally given the lack of margin preservation initiatives taken by Apple. - While Apple may benefit from some partially offsetting tailwinds still up its sleeves this quarter, things are likely to deteriorate in tandem with continued consumer weakness as macro challenges evolve. - Looking for more investing ideas like this one? Get them exclusively at Livy Investment Research. Learn More » Apple Inc.’s (NASDAQ:AAPL) fiscal first quarter results suggest a slump. They were in line with the supply-constrained holiday shopping season for its best-selling premium iPhones, and a deteriorating consumer backdrop. The tech giant reported revenue of more than $117 billion, underperforming consensus estimates of $122 billion; earnings rolled in at $1.88 per share, also missing consensus estimates slightly by $0.07. What mattered more for investors, though, was management’s commentary on the near-term outlook, given mixed data on where mounting macroeconomic uncertainties from last year might be headed. In the previous quarter, Apple CFO Luca Maestri had already warned of headwinds in the macroeconomic environment that would continue to impact the company’s consumer-centric business heading into the new year, in addition to persistent FX challenges as well as a tough PY comp that had benefitted from the launch of new MacBook Pros fitted with the M1 chips. And things have likely remained largely consistent with management’s previous conservatism. Looking ahead, Apple’s near-term demand environment remains blighted by the weakening consumer, though few moderate tailwinds have surfaced, including a weakening dollar as the pace of monetary policy tightening slows, and a product upgrade cycle that could boost sales and complement a softer PY comp later in the year. But on a net basis, growth is likely expected to decelerate further and remain subdued in much more moderate levels from the pandemic era boom. While a consistent revenue mix shift to the higher-margin services segment should continue to reinforce the tech giant’s bottom line, the company likely faces near-term cost inefficiencies stemming from ongoing investments into new technology (e.g., in-house silicon; mixed reality headsets) as well as the gradual diversification of its supply chain. The lack of significant cost-optimizing efforts observed from the tech giant so far – other than axing the size of CEO Tim Cook’s compensation package and staying cautious on hiring new talent – paired with the stock’s valuation premium still makes it less appealing to investors that have largely turned risk-on towards those that have actively sought to bolster the bottom-line through reduction in forces (“RIFs”) and project cancellations without materially compromising performance. Admittedly, it has been a phenomenal couple of quarters for Apple, being the most exposed to the weakening consumer, yet also the most resilient among peers, underscoring the strength of its ecosystem and commanding installed base. However, the anticipated continuation of consumer weakness over the coming months will remain an overhang on both of Apple’s products and services segments, despite growing evidence that inflation pressures are back on track down to the Fed’s target 2% range and supportive of easing financial conditions. Essentially, the after-effect of the Fed’s aggressive inflation-reining campaign over the past year that is likely to play out with further deterioration in the consumer over coming months will likely cap Apple’s near-term sales. This effectively elevates demand risks facing the company, creating a tough operating backdrop for the tech giant that could further expose the stock’s vulnerability to looming macroeconomic uncertainties that remain on the horizon. Fading Resilience Among the Slowing Consumer While recent economic data continues to support that peak inflation is now behind us and onto a consistent path back towards the Fed’s target 2% range, which has markets speculating that the Fed’s recent acknowledgement that inflation has showed “a welcome reduction” and decision to slow the pace of rate hikes further could be supportive of a pivot before the end of the year, consumer spending is likely to deteriorate further as aggressive monetary policy tightening prescribed over the past year continues to work through the economy. Over the past year, we have taken forceful actions to tighten the stance of monetary policy. We have covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt. Source: Transcript of Chair Powell’s Press Conference Opening Statement February 1, 2023. And Fed Chair Powell could be right on this. Household savings have rapidly declined towards a record-low rate in the low 2% range, while consumer debt continues to climb towards new heights. The combination has economists expecting an economic contraction in the second and third quarters of the current year at an annualized rate of -0.6% and -0.3%, respectively, as the simultaneous burden of lingering inflation and surging interest rates cool consumption further. And the Fed’s call-out on the labor market as being still “extremely tight” could very well mean that borrowing costs will stay elevated for some time, and weigh further on consumer spending within the foreseeable future. iPhone For the iPhone, while the supply constrained environment experienced over the holiday shopping season due to COVID disruptions at its key manufacturing hub in Zhengzhou, China have recovered, continued consumer weakness paired with the seasonal March-quarter slowdown likely may mean elevated demand risks ahead. This is corroborated by the already weaker take-rates on the standard iPhone 14 models so far, which had far less upgrades from its predecessor compared with the premium Pro line-up. During the December quarter, iPhone sales neared $66 billion (-8% y/y), inclusive of prevalent FX headwinds during the period, missing already guided down consensus estimates of $67.9 billion (-5% y/y). The muted results are also consistent with the global slump in smartphone sales to levels never seen before – global December quarter smartphone shipments fell by more than 18% y/y to “a little over 300 million units,” with all of the industry leaders suffering “double-digit setbacks” during the period. Yet, there are a couple of partially offsetting tailwinds in Apple’s favor still, which it could potentially take advantage of to maintain resilience among the deteriorating macroeconomic backdrop. As mentioned in the earlier section, demand for the premium iPhone 14 Pro line-up has largely held up better than the standard models, causing the previous supply-constrained environment observed in the December quarter to have pushed some of the sales into the current period, which could potentially offset seasonal March-quarter weakness. The recovering Chinese economy coming out of a years-long COVID Zero approach is also likely to drive a rebound in demand from the region after it recorded smartphone shipments in CY/2022 that dipped below 300 million units for the first time in 10 years. And Apple appears to have stayed in the forefront of this potential tailwind, surfacing as the biggest smartphone seller in the country for the first time during the December quarter, commanding close to a 24% share of the market. Despite still having incurred shipment declines, they were “smaller than those of domestic rivals like Vivo, Oppo and Xiaomi,” with the iPhone “becoming the [second best-selling smartphone] in the country on an annualized basis for the first time.” With Beijing prioritizing economic growth this year, a gradual reopening and recovery could unleash $1.8 trillion in household savings accumulated over the past two years, and drive strong tailwinds in one of the iPhone segment’s core sales regions. Mac Meanwhile, the global PC slump continues to worsen, with constituents across the supply chain warning of further deterioration as consumer spending weakens. Specifically, global PC shipments accelerated a decline to -28.5% in the fourth quarter from -19.5% in the third quarter, -12.6% in the second quarter, and -6.8% in the first quarter; full-year 2022 PC shipments dropped 16.2% y/y, the steepest level from data dating back to the mid-1990s, underscoring the weight of worsening consumer weakness. Yet, strangely, Apple has climbed on top over the same timespan while rival PC makers continue to reel from an upended industry. Although Mac sales declined substantially in the December quarter to $7.7 billion (-29% y/y), which was in line with management’s previous guidance given the benefit of the M1-powered MacBook Pro launched during the same period in 2021, the line-up of personal workstations had steadily climbed to a position of leading market share over the past year. Although Apple remains in fourth place in terms of global workstation sales, rival PC makers have ceded a meaningful share of their respective markets to Macs over the past year. Specifically, Apple commanded more than 17% of PC sales in the U.S. during the December quarter, while its global market share sits steadily at more than 13%, up from 8% in 2021. The segment likely benefits from the continued refresh of the Mac line-up with in-house designed silicon, which boasts impressive improvements in performance. And the early-month kick-off of an upgraded MacBook Pro and Mac mini, fitted with the latest M2-series silicon, is likely to bolster demand stemming from potential upgrades and switches, and offset some of the near-term macro challenges. Specifically, the latest Mac mini update marks the first in two years, transitioning from the previous Intel chips to the most recent Apple-developed M2-series silicon that boasts significantly better performance and power efficiency: Mac mini with M2 and M2 Pro delivers faster performance, even more unified memory, and advanced connectivity, including support for up to two displays on the M2 model, and up to three displays on the M2 Pro model…Compared to the previous-generation Mac mini, M2 and M2 Pro bring a faster next-generation CPU and GPU, much higher memory bandwidth, and a more powerful media engine to Mac mini, delivering extraordinary performance and industry-leading power efficiency. Source: apple.com. The update is likely to incentivize a greater volume of upgrades – and potentially switches – given the device’s outperformance against rival workstations currently available in the market, and extend Apple’s reputation as a share gainer despite the weak industry backdrop. The price drop, from $699 for the previous version to now $599 for the upgraded version, will likely be another plus in bolstering demand. Meanwhile, the 14” and 16” MacBook Pros will also graduate to the M2 Pro and M2 Max chips, boasting up to double the performance for graphics, and significant speed, storage, and battery life improvements. The new line-up of the premium laptops will also feature “Wi-Fi 6E” to facilitate faster wireless connectivity, as well as “Bluetooth 5.3” to enable further improvements to latency. As mentioned in several of our previous coverages on the stock, Apple’s transition of its workstation line-up to in-house silicon has been favorable in attracting demand from the enterprise sector as well, given significant improvements to performance that is now aiding the brand’s growing presence in an environment that has long been dominated by PCs running on Windows and other operating systems. Despite growing uncertainty on enterprise IT budgets due to the looming risks of an economic downturn, added commercial demand continues to be welcomed, nonetheless, as Apple’s Mac segment expands beyond consumer end-markets to penetrate a greater TAM. Services As discussed in our previous coverage on the stock, Apple’s services segment continues to play a critical role in expanding monetization of the company’s sprawling installed base. The segment’s higher-margin sales has also been key to supporting bottom-line resilience for Apple, despite rising input costs over the past year. Despite the challenging consumer backdrop, services sales totaled $20.8 billion in the December quarter, up more than 6% y/y and setting an “all-time revenue record” for the segment. This represents the sole bright spot that actually outperformed consensus estimates of $20.67 billion (+5.9% y/y) as well. In addition to App Store sales, which likely represents the “lion’s share” of the segment’s revenues, Apple’s video streaming and advertising businesses are also becoming increasingly bullish. For instance, the recent price hike implemented for Apple TV+ subscriptions from $4.99 to $6.99 remains a competitive offering against rivals that offer similar ad-free on-demand content viewing but at a much steeper price (especially after a slew of similar price hikes). This is further corroborated by positive feedback from recent sentiment checks for streaming services. Specifically, video streaming now commands the bulk of TV view time, exceeding 38%. And Apple is gradually gaining prominence within the increasingly saturated landscape, with its market share likely rising beyond 6% in recent years, thanks to a slew of “award-winning and broadly acclaimed” content. Based on a recent sentiment check conducted by RBC Capital Markets on 500 consumers across the U.S., about a quarter are already signed up on Apple TV+, with demand most prominent in the 18-29 age group. Apple’s streaming platform also received the highest ranking (26%) among respondents regarding the subscription they are most likely to add in 2023, outpacing rival services including Disney’s Hulu and Disney+ (DIS), as well as Amazon’s Prime Video (AMZN) and Netflix (NFLX). And, likely thanks to Apple TV+’s competitive pricing, most current users of the service surveyed indicated a preference for an ad-free subscription (42%) versus an ad-supported subscription (16%), while the majority of users on other streaming platforms indicated their preference would depend on pricing. While the unit is likely unprofitable still – as most streaming services are, with the exception of Netflix – Apple’s continued investment into growing its content library, and inadvertently, subscriber reach, remains critical to supporting other verticals of its services segment, such as its other profit-generating branded apps as well as advertising. For instance, the Apple One bundle introduced in fiscal 2021, which includes Apple TV+, has been a key driver of Apple’s service subscription volumes in recent years. The offering, which extends a bundle discount for up to six service subscriptions, is currently priced between $14.95 to $32.95 a month, depending on the number of subscribers and services selected. It has been a key feature in bolstering services revenue growth and helping the company preserve its margins by mitigating risks of churn and optimizing monetization across its devices installed base. Meanwhile, on advertising, Apple TV+’s growing reach also sets up future opportunities to penetrate the AVOD industry while also boosting pricing on its currently ad-free SVOD offering to bolster the business’ margins. Specifically, AVOD is not only a highly demand offering among users of video streaming platforms, but it is also poised to become the fastest growing digital ad distribution channel over the coming years. Boosting Apple TV+’s reach over the longer-term will likely be a key driver of Apple’s expansion of its footprint in the higher-margin digital advertising medium, in which it is currently estimated to generate an annual sales run rate of about $4 billion. Despite the advertising industry’s inherent sensitivity to macroeconomic challenges, connected TV (“CTV”) ads will continue to benefit from accelerated demand within both the near and longer term as a result of the format’s growing reach…Specifically, CTV market share erosion against linear TV is expected to accelerate within the foreseeable future, expanding from 1.7% share of combined TV ad spend in 2015, to 21.1% by 2027. This would be categorized by a CTV ads sales CAGR of 13.5% between 2021 to 2027, outpacing the global ad spend CAGR of 5.7% over the same period. Source: “Netflix: Ending Q4 With A ‘Tudum’ In Sales And Subscriptions. But Is It Enough? While Apple’s partial resilience across its core products and services categories will likely stay within the foreseeable future, helped by a mix of shifting consumer preference, timing of supply availability, and new product launches that exhibit an innovative advantage over rival offerings, sales will remain subdued on a net basis due to rapid deterioration in its core consumer end-markets. Although said resilience, alongside its robust cash flows, have helped the stock weather the aggressive market rout over the past year, it will likely be insufficient to maintain investors’ confidence over the coming months as fears of consumer weakness take precedence, which is corroborated by the stock’s post-earnings slump this evening (-4.2% at the time of writing). Specifically, Apple’s elevated exposure to the slowing consumer adds to growing demand risks at Apple, and further the stock’s vulnerability to market volatility as the economy continues to work out uncertainties spanning persistent inflation, surging rates, an uncertain China recovery, and a looming global recession, and geopolitical tensions. While Apple Inc.'s underlying business remains relatively resilient and continues to generate robust cash flows, the macro set-up is deviating further from its advantage, making AAPL stock increasingly vulnerable to still-fragile market sentiment and encouraging a “wait and see” stance for the shares. Thank you for reading my analysis. If you are interested in interacting with me directly in chat, more research content and tools designed for growth investing, and joining a community of like-minded investors, please take a moment to review my Marketplace service Livy Investment Research. Our service's key offerings include: - A subscription to our weekly tech and market news recap - Full access to our portfolio of research coverage and complementary editing-enabled financial models - A compilation of growth-focused industry primers and peer comps Feel free to check it out risk-free through the two-week free trial. I hope to see you there! This article was written by Boutique investment research shop providing professional coverage on disruptive thematic equities. Our analysis provides a deep dive on growth drivers present in the secular market to identify outperforming investments. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (25)

AMZN

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Roblox, Logging Off

We like Roblox’s business model and metaverse-like platform, but we don’t see the company growing meaningfully in the near term amid weakened consumer spending. Read more here.

SeekingAlpha

Roblox, Logging Off Summary - We’re bearish on the multiplayer online gaming platform Roblox. - We expect Roblox to continue seeing slower revenue growth as the company comes off its pandemic growth catalyst and adjusts to the current macroeconomic environment. - While Roblox’s 3Q22 earnings report was less disappointing than the previous quarter, we expect the company to continue underperforming the peer group in the near term. - We like Roblox’s business model and metaverse-like platform, but we don’t see the company growing meaningfully in the near term amid weakened consumer spending. - Roblox stock is down nearly 37% over the past year and is not cheap, trading at 5.4x EV/C2024 Sales compared to the peer group average of 2.9x. We're sell-rated on Roblox (NYSE:RBLX). We believe the multiplayer online gaming platform is experiencing normalizing demand as it losses its pandemic growth catalyst and maneuvers through a rough macro environment. We're fans of the online gaming platform; Roblox offers users an online world and the ability to customize avatars, operate in-game cryptocurrency tokens (Robux), and choose from a content library with over 50 million games. Roblox also enables developers to create and share gaming experiences with friends and strangers with autonomy and lets developers exchange their Robux to USD with specific developer exchange fees. We believe a major part of Roblox's online world is the "Roblox economy." We believe Roblox boomed during the pandemic, driven by the entertainment-from-home environment and higher consumer spending. In the near term, we expect the company to be under pressure as it recovers from losing the pandemic catalyst and faces a harsher macro environment that has slowed the consumer spending of Robux. Roblox is down nearly 37% over the past year, and we believe the stock will continue to drop in 1H23. The company's 3Q22 earnings report showed revenue slowdown from $591.2M in 2Q22 to $517.7M a quarter later but still up nearly 2% Y/Y. We don't believe Roblox's immersive 3D online platform and the excitement about its metaverse-like nature can offset the weakness of the current macro environment. We recommend investors sell the stock as we see more downside in 1H23 before the stock can meaningfully recover. The following graph shows Roblox's revenue since 4Q18. Switching from pandemic catalyst to macro headwinds We like Roblox's position within the broader online gaming space, but we believe the macro environment is not working in the company's favor. Roblox reported a 24% increase in daily active users (DAUs) Y/Y and a 10% increase sequentially. It's no surprise that DAU growth is slower than during the pandemic; our bearish sentiment is driven by our belief that Roblox still hasn't figured out to reliably and consistently retain previous growth levels post-pandemic. We believe the slower-growing DAU is putting a dent in the company's profitability; Roblox came in short of EPS expectations for the fifth consecutive quarter in 3Q22. Even when we turn to the company's Bookings metric, which refers to the virtual currency, Robux, spent in-game, we see a visible normalization in Bookings' growth compared to its levels during the pandemic. The following graph shows Roblox's bookings over the past several quarters. We believe the impact of the current inflationary pressures and rise in interest rates have been reflected in weaker consumer spending, even in a metaverse-like platform such as Roblox. We believe fewer users are incentivized to spend Robux in-game. Despite its wide popularity among children and teens, we believe the weaker spending environment combined with an effort to recover from losing the pandemic catalyst will weigh the stock down in the near term. A strong user base equals a lucrative ad platform. Roblox built a user base of more than 58M individuals; we believe the company's venture into online ads will be highly lucrative. Roblox has been experimenting with online ads but announced in the September annual developer conference that it would begin in-gaming advertising. We're constructive on Roblox's efforts to diversify revenues beyond Bookings or virtual goods in games. We believe Roblox has the customer base to enter the ad space successfully; Roblox's 3Q22 recorded 13.4B hours of user engagement, which averages 227 hours per DAU. We believe the company can successfully leverage its platform to get a slice of the digital ad market, which is forecasted to grow at a CAGR of 13.1% between 2023-2028. We expect Roblox will follow the lead of tech platforms with massive user bases that generate substantial revenue via ads, namely Amazon (AMZN) and Alphabet (GOOG). Still, we expect the company will be underperforming in the near term as the macro headwinds have also slowed ad spending globally. Interpublic Group of Companies Inc's (IPG) Magna Global reported that the U.S. ad economy was sluggish in 2022 and expects this to continue into 2023, with the overall industry growing but at a slower pace than in 2021. Stock (under)performance Roblox stock is down nearly 47% since going public, underperforming the SPY Index, which grew roughly 6% during the same time. Roblox stock is down almost 37% over the past year alone. Roblox saw its highest highs during the pandemic as the entertainment-from-home environment necessitated by the lockdown restrictions boosted demand. Roblox has underperformed its competition over the past year, with Take-Two Interactive Software Inc (TTWO) dropping 29%, Bilibili Inc (BILI) declining around 18%, respectively, and Capcom Co (OTCPK:CCOEY) rising 37%. We expect Roblox to continue to underperform the peer group in the near term and recommend investors exit the stock. The following graphs outline RBLX's stock performance since going public and over the past year. Valuation We believe Roblox is overvalued, trading at 5.4x EV/C2024 Sales compared to the peer group average of 2.9x. While Roblox is one of the world's largest multiplayer online gaming platforms, we recommend investors against buying the stock just yet. Instead, we believe investors should wait for the valuation to get compressed before considering entry points on the stock. We don't believe Roblox's high valuation is justified for the near-term headwinds pressuring the company. The following table outlines the company's valuation compared to the peer group. Word on Wall Street Wall Street is divided over Roblox's rating. Of the 31 analysts covering the stock, 12 are buy-rated, 11 are hold-rated, and the remaining are sell-rated. The stock is currently trading at $36 per share. The median sell-side price target is $35, while the mean is $36, with a potential -1% to 2% upside. The following tables outline Roblox's sell-side ratings and price targets. What to do with the stock We are bearish on Roblox. Despite being a household name with a massive user base, we don't expect Roblox to grow meaningfully in the near term. We believe the company is still figuring out how to boost and maintain demand post-pandemic and is doing this amid a weak spending environment. We believe the stock is highly valued at the moment and hence doesn't provide a favorable entry point. We expect Roblox will continue to face churn from the rough macroeconomic environment as consumer spending slows. We recommend investors exit the stock as we expect things will get worse before they get better. This article was written by Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (20)

AMZN

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Alphabet: Don't Underestimate The Power Of Ads. Moving To Hold

Alphabet stock is down nearly 28% over the past year, underperforming the SPY Index. Click here to read why we're moving GOOG stock to a hold.

SeekingAlpha

Alphabet: Don't Underestimate The Power Of Ads. Moving To Hold Summary - We're moving Alphabet to a hold. - We believe the weaker ad spending and soft cloud demand amid current macro headwinds will pressure the company’s main revenue streams in the near term. - Alphabet stock is down nearly 28% over the past year, underperforming the SPY Index. We expect the company to continue underperforming expectations in 1H23. - We recommend investors wait for a better entry point as we expect the stock will drop further before it provides the once-in-a-decade buy opportunity. We're going against the current and moving Alphabet (NASDAQ:GOOG) to hold. Our bearish sentiment on the stock is driven by our belief that Alphabet is not immune to the current economic downturn. We believe Alphabet's main revenue, advertising, and long-term growth driver, Google Cloud, will be under pressure in 1H23 due to macroeconomic headwinds. Alphabet underperformed the S&P 500 Index over the past year, dropping nearly 28%. We expect the stock to continue to dip in the near term as the macro headwinds of 2022 spill into this year. We're bullish on Alphabet in the long run but don't see any clear growth catalyst for the stock's recovery in the near term. We don't believe the once-in-a-decade entry point on Alphabet stock has appeared yet, and hence recommend investors wait on the sidelines for the downside to be factored into the stock. Between a rock and a hard place in advertising Alphabet derives most of its revenues from advertising, accounting for almost 79% of total revenues in 3Q22. Our bearish sentiment on the stock is based on our belief that Alphabet's ad revenue is taking a hit as global companies cut ad budgets due to inflationary pressures and rising interest rates. Alphabet has planted its ad revenue streams in multiple segments: YouTube ads roughly account for 10.2% of revenue, Google Network ads for 11.4%, and ads from Google Search & other properties for 57.2%. Alphabet's 3Q22 earnings report illustrated weaker ad revenue Y/Y in YouTube ads and Google Network ads, with Google Search and other ads growing only slightly by 4% Y/Y. We don't believe the slow growth of ad revenue is due to any shortcomings from Alphabet; instead, we expect the company's ad revenue to be frozen between global ad spending cuts and intensifying competition in the ad space. 1. Harsh macro environment causing weaker ad spending We expect ad spending is declining as companies worldwide cut ad budgets amid the global economic slowdown - we believe this will take a toll on Alphabet's ad revenue in the near term. Alphabet has built a virtual monopoly over the search engine market, with a 90% market share. We believe Alphabet's ad-dependent nature has driven growth in the past, but we're concerned about its growth in the near term. Insider Intelligence slashed global forecasts for ad spending during 2022 from 15.6% Y/Y growth to 8.5%. We believe the slowdown in ad spending is spilling into 2023, with Insider Intelligence forecasting digital ad spending to decelerate to 10.5% Y/Y growth this year. Multinational media and entertainment company, Paramount (PARA) fell short of revenue expectations for their third quarter of 2022 because of weaker ad spending, with the company's ad revenue declining 2% in the quarter. We expect Alphabet to suffer similar impacts from slower ad spending. Advertising agencies lowered 2023 digital media market forecasts in December; Interpublic Group of Companies' (IPG) Magna reported revising growth estimates for the global ad industry to 5% growth in 2023, down from 7.5% in its June report. According to a World Federation of Advertisers' (WFA) survey of 43 multinational companies, 30% of "major advertisers say they're cutting their ad budgets" in 2023. We believe the weaker ad spending will impact Alphabet's ad revenue in the near term. The following graph outlines the worldwide slowdown in digital ad spending projected between 2021-2026. 2. Race for the biggest slice of the $321B digital ad market The global digital advertising and marketing market is estimated to grow at a CAGR of 13.1% between 2023-2028; we believe everyone is trying to get a slice of the profits. Since 2014, the digital ad space has been dominated by Meta Platforms (META), formerly known as Facebook, and Alphabet, which combined made up more than 50% of the market share. Recently, we have seen competition from Amazon (AMZN), TikTok, Microsoft (MSFT), and Apple (AAPL), among others, penetrate the market, visibly shrinking Alphabet and Meta's market share. Alphabet and Meta's U.S. ad revenues are projected to drop to a 43.9% market share in 2024, down from a 54.7% share in 2017. We believe Amazon is among the best positioned to grow its digital ad market share meaningfully, with ad revenues soaring from $1B in 2015 to nearly $38B last year. The following graph outlines Meta and Alphabet's shrinking market share in the U.S. digital ad market. Alphabet's ad business also faces pressure from a legal standpoint, with the U.S. Justice Department filing its second anti-trust lawsuit in two years against the company. The lawsuit accuses Alphabet's advertising business of playing on all sides of the market- "buying, selling and an ad exchange." The Justice Department argues that Alphabet is becoming "the be-all and end-all location for all ad serving," insinuating that the company is forming a monopoly over the ad space through its broad ownership. This isn't the only antitrust lawsuit facing Alphabet; the company also faces three other lawsuits. We believe this only thickens the company's near-term grunt. Google Cloud for the long-run According to Gartner, Alphabet's Google Cloud is catching up to the top players in the cloud-computing space. Google Cloud is ranked the third-largest player in the global public cloud market after Amazon's AWS and Microsoft's Azure. We believe Google Cloud will serve as a long-term growth driver, despite only accounting for roughly 10% of total revenues in the third quarter of 2022. Google Cloud revenue grew significantly compared to Alphabet's ad revenue, increasing 38% Y/Y, which is more than Microsoft Azure's 24% growth. We believe Google Cloud still has to expand its base to become a more meaningful global player but believe it's headed in the right direction for long-term growth. Still, we expect Google Cloud to be pressured by the weaker spending environment. Canalys, a tech market analyst firm, reported that inflation and rising interest rates are causing companies to reduce spending on cloud infrastructure. We believe this will harm cloud providers as companies are more hesitant about their IT spending amid market uncertainty; the annual growth rate for cloud infrastructure services fell below 30% for the first time, according to Canalys. We believe Alphabet is facing the grunt of the harsh macro environment on multiple fronts, and Google Cloud is no exception. Valuation Alphabet stock is relatively cheap, trading at 16.1x C2024 EPS $6.09 on a P/E basis compared to the peer group average of 19.5x. The stock is trading at 3.4x EV/C2024 sales versus the peer group average of 4.4x. We believe the stock will face more downside in 1H23 on account of the weaker spending environment; hence, we recommend investors wait for a better entry point on the stock. The following table outlines Alphabet's valuation compared to the peer group. Word on Wall Street Wall Street is overwhelmingly bullish on the stock. Of the 48 analysts covering the stock, 44 are buy-rated, and four are hold-rated. We attribute Wall Street's bullish sentiment on the stock to the widespread belief that Alphabet is the last FANG standing after the peer group took a beating last year. At the time this report was constructed, GOOG stock was trading at $97. The median and mean sell-side price targets are $124, for a potential upside of 28%. The following tables outline Alphabet's sell-side ratings and price targets. What to do with the stock We're bearish on Alphabet as we believe its ad business will be pressured in the near term due to ad budget cuts and intensifying competition. We also believe Google Cloud will feel softer demand in the near term due to macroeconomic headwinds. Alphabet's 3Q22 report missed expectations for top and bottom-line growth, with revenues growing a modest 6% short of the expectation of 8.5%. To top it off, Alphabet announced it'll cut 6% of its workforce, amounting to 12,000 employees. We expect Alphabet to continue missing expectations in 1H23 amid the weak spending market. We recommend investors wait on the sidelines of Alphabet stock as we see more downside ahead. This article was written by Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (10) Lisa Su- CEO. AMD - “Over the next several years, one of our largest growth opportunities is in AI, which is in the early stages of transforming virtually every industry service and product. We expect AI adoption will accelerate significantly over the coming years”Mark Zuckerberg - CEO. Meta "Our priorities haven’t changed since last year. The two major technological waves driving our roadmap are AI today and over the longer term, the metaverse. So first, let’s talk about our AI discovery engine. Facebook and Instagram are shifting from being organized solely around people and accounts you follow to increasingly showing more relevant content recommended by our AI systems. And this covers every content format"So Mark has now put AI ahead of his metaverse developments.Microsoft is investing another 10 billion in OpenAI and we can assume they will seek to enhance their search offering.The NASDAQ is up 3% at the moment.C3.AI is currently up 50% in 5 daysEvery company is now asking the question: "Where is this AI stuff gonna go and what do we need to do about it and how can we use it?"So then.. do you think Google won't respond? Do you think they have nothing to offer here? Do you think they will just sit back and let others in digital advertising apply the new tech to their advertising offerings without a challenge? Who has more data than to AI on than Google? Who has the data histories that defined human behavior better than Google? Who is better positioned to collect data intelligence for AI in real time as the world moves forward than Google?Do you think that advertisers will sit on their budgets while Google (and others) bring out new exciting granular AI based media buying and AD strategies?I don't think so... but that's me.So.. if you should think like I do.. do you really want to wait until after Google makes their AI announcement to buy the stock, or do you want to get in before the pop?

AMZN

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Big Tech Earnings Preview - Google, Apple, And Amazon

The mega cap stocks are offering rare and deep discounts.

SeekingAlpha

Big Tech Earnings Preview - Google, Apple, And Amazon Summary - The mega cap stocks are offering rare and deep discounts. - We believe it’s prudent to watch these names closely, as generally speaking, they have strong balance sheets, healthy margins and defensible competitive positioning. - Below we discuss the nuances to each company’s fundamentals. It can take a lot of data to draw conclusions during a time of market uncertainty. - Looking for a helping hand in the market? Members of Tech Insider Network get exclusive ideas and guidance to navigate any climate. Learn More » The mega cap stocks are offering rare and deep discounts since Amazon (AMZN) is trading 47% off its all-time high. Similarly, Alphabet (GOOG) (GOOGL) is trading significantly lower to its historical average valuation. We believe it’s prudent to watch these names closely, as generally speaking, they have strong balance sheets, healthy margins and defensible competitive positioning. This week, the majority of the FAANG stocks will report earnings with Apple (AAPL), Amazon, and Alphabet reporting results AMC on February 02nd. Microsoft (MSFT) results last week were in line across the board, except the Personal Computing segment reported a slight miss on the top line. Notably, Personal Computing missed this quarter and is causing enough uncertainty that the CFO did not provide a fiscal year guide, which is out of character for Microsoft. Azure posted slightly better-than-expected growth of 38% compared to guidance of 37% -- despite this December quarter beat, Microsoft is forecasting a notable slowdown in Azure to 31% to 30% -- or an 8-point deceleration sequentially. With an eye toward fundamentals, Microsoft’s report is likely to be a reflection of what’s to come. Over this past year, Microsoft was one of the strongest FAAMGs due to its ability to drive down costs for enterprises, yet even this advantage is beginning to erode. According to Satya Nadella on the December quarter earnings call: “There is only one law of gravity that I think all of us are subject to, which is inflation-adjusted economic growth." In other words, even the best companies and strong growth will slow down the longer inflation remains high. As investors, it’s not our job to control inflation or the Fed’s response, rather, we should be seeking out the highest quality companies and determining when they may bottom. Due to the market being forward-looking, the time to do that research is now with the goal of building long-term positions throughout 2023. Below, we discuss the nuances to each company’s fundamentals. It can take a lot of data to draw conclusions during a time of market uncertainty. We’ve bolded what we think are the most important takeaways. Revenue Estimates for the next four quarters Apple’s Q3 revenue grew by 8.1% YoY to $90.15 billion. Its revenue in Q4 is expected to fall 1.53% YoY to $122.05 billion and the analysts have lowered their estimates by 0.83% in the past month. Apple’s revenue decline will be the first since the March 2019 quarter. The consumer weakness might weigh on the upcoming results along with Covid-related production delays in China. Apple was the only one among the three companies to beat on the top-line and bottom-line estimates in Q3. Looking forward, in Q1, the revenue is expected to grow 0.36% YoY to $97.63 billion and grow 4.5% and 4.7% in the following quarters. This will mark another weak growth quarter for Apple although we’ve argued in the past, the stock should be viewed as a value stock when we said “Apple has been very consistent with its margins and cash flows.” Amazon’s Q3 revenue grew by 14.7% YoY to $127.1 billion. The more important news was that Amazon offered weak Q4 guidance of $140 billion to $148 billion, which was well below the analysts' estimate of $155.37 billion at the time of Q3 results, and this led to the stock selling off after the report. Analyst consensus is for revenue growth of 6.03% YoY to $145.70 billion. With that said, pending no more surprises come Thursday, Amazon’s growth should incrementally improve over the next four quarters. Alphabet’s Q3 revenue grew by 6.1% YoY to $69.09 billion. Analyst consensus expects Q4 revenue growth of 1.54% YoY for revenue of $76.49 billion. The company’s CEO Sundar Pichai said in the Q3 earnings call: “Our financial results for the third quarter reflect healthy fundamental growth in Search and momentum in Cloud. Our reported results reflect the effect of foreign exchange. The growth in our advertising revenues was also impacted by lapping last year’s elevated growth levels and the challenging macro climate.” Similar to Amazon, Alphabet is expected to incrementally improve revenue growth throughout 2023. Due to Azure’s deceleration, there will be emphasis on both AWS and Google Cloud revenue. Notably, Google Cloud accelerated last quarter while both AWS and Azure decelerated. Adjusted EPS estimates for the next four quarters Apple’s bottom line continues to shine with minimal contraction compared to its peers. Although a return to bottom line growth is forecast for Q3 for many of the FAAMG stocks, it will greatly depend on what is stated on the upcoming earnings calls including the fiscal year guides. Microsoft pulling fiscal year guidance with only two quarters left in its fiscal year is a great example of how quickly things can change. As stated, it’s out of character for Microsoft to not guide for fiscal year, yet due to unique levers that Microsoft can pull, the company expects its operating margins to remain consistent. EPS Overview: - Apple’s Q3 adj. EPS came at $1.29. Analysts expect adj. EPS of $1.96 in the next quarter. - Amazon’s adj. EPS came at $0.28 in Q3 and beat estimates by 35.5%. They expect Q4 adj. EPS of $0.17 and have lowered estimates by 12.5% in the past month. - Alphabet’s Q3 adj. EPS came at $1.06 and missed estimates by 16%. The analysts expect Q4 adj. EPS to be $1.20. Apple is the only company on the list that has not announced job cuts. Price Action and Valuation Overview: Apple stock has the highest return of 84% in the past three years, as can be seen in the above chart for the period from 01/29/2020 till 01/27/2023. Alphabet has a return of 38% and Amazon has a return of 10%. YTD Amazon has the highest return of 23%, compared to 12% for Alphabet, and 10% for Apple. P/S and P/E Ratio Apple has a P/S ratio of 5.92, compared to 4.69 for Alphabet, and 2.11 for Amazon. Apple has a five-year average P/S ratio of 5.57, compared to 6.41 for Alphabet, and 3.71 for Amazon. Amazon has a P/E ratio of 94.84, compared to 23.40 for Apple, and 19.77 for Alphabet. Amazon has a five-year average P/E ratio of 97.10, compared to 24.05 for Apple, and 30.99 for Alphabet. Free Cash Flow Margin Alphabet and Apple have the highest free cash flow margin of 23.27% and 23.12%, respectively. Operating Margin Apple has the highest operating margin of 27.62%, followed by Alphabet with an operating margin of 24.80%. Amazon’s margins have declined from 5.29% to 1.99% during this period, while Apple’s operating margin rose from 22.04% to 27.62% and Alphabet’s from 19.38% to 24.80%. Analyst Notes: We have bolded quantitative takeaways from the analyst comments. Ahead of Apple's quarterly results, Credit Suisse maintains its quarter estimates including revenue of $121.6B and EPS of $1.92, which the firm lowered on December 9 primarily for iPhone shortages. Further, Credit Suisse sees potential upside to its estimates which are below the Street given weakening of the USD throughout the quarter which benefits revenue from a translation perspective and could benefit margins given Apple raised pricing in many countries as an offset to the strong dollar; and Q1 2022 is a relatively easy comp as quarterly results were constrained by over $6B of backlog including iPhone, Mac and iPad. The firm has an Outperform rating on the shares with a price target of $184. With Apple's shares up 12% year-to-date and signs of increasing consumer demand weakness, Wells Fargo is near-term cautious on the name into the company's upcoming Q1 earnings. The firm moves 2023 revenue and EBIT estimates to 5%/8% below Street, respectively. Wells Fargo has an Overweight rating on the stock with a price target of $185. Credit Suisse analyst Stephen Ju raised the firm's price target on Amazon.com to $171 from $142 and kept an Outperform rating on the shares ahead of quarterly results. The firm believes Amazon can drive the most efficiency over time in shipping costs, and thinks 2023 will mark the moderation of Shipping Cost inefficiencies - from an operational perspective, this will mean less miles driven per package as well as more packages per delivery run; from a financial perspective, this will show up in the form of slower Shipping Cost versus gross merchandise value growth. After conducting a deep dive on Alphabet, Jefferies analyst Brent Thill remains tactically cautious in the near term given intensifying macro headwinds, but sees attractive value for "investors looking past the looming recession." The stock currently trades at an EV/EBITDA multiple "materially below" its historical average and "not far from the 7x trough hit in '08 and '12," Jefferies tells investors. The firm, which expects the stock to rebound ahead of revenues, as it did during '08-'09 Great Financial Crisis, calls out easing comps, possible further cost actions and share buybacks as potential catalysts past the near-term macro hit. Jefferies kept Buy rating and $125 price target on Alphabet shares. Royston Roche, Equity Analyst at the Tech Insider Network, contributed to this article. Check out my premium service "Tech Insider Research" Providing high conviction analysis to give your tech portfolio an edge. Most analysts on Seeking Alpha are financial analysts who only study balance sheets and technical charts yet know very little about technology. The issue is this provides no competitive edge as everyone has access to the exact same information. Based in San Francisco, I have analyzed thousands of companies in the private and public technology sector, and outperform due to hands-on experience with tech products. My analysis is the most in-depth you will find in tech. For more information, please click here. This article was written by Beth Kindig is the CEO and Lead Tech Analyst for the I/O Fund and Tech Insider Network, delivering weekly in-depth tech stock analysis and active portfolio management. Utilizing nearly two decades of tech industry experience in Silicon Valley, Tech Insider Network combines fundamental and technical analysis, to consistently beat top-performing Wall Street tech funds such as ARKK and QQQ. Beth is a regular at top tech conferences including Android Developers Conference, GamesBeat, Advertising Week NYC, Tech Week Chicago, and BlackHat. In addition to her regular analysis at Seeking Alpha, she has appeared in Forbes, MarketWatch, Venture Beat, MediaPost, AdExchanger, and the International Association of Privacy Professionals. She is also a regular on the TV and podcast circuit including on Fox Business News, CNBC, TDAmeritrade, CoinDesk, NPR, Bloomberg TV Asia, Motley Fool podcast, This Week in Startups. Learn more about Tech Insider Network here. Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (3)

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Retail, layoffs, Big Tech — The biggest takeaways from earnings season

The Yahoo Finance Live team discusses the biggest takeaways from the first earnings season of 2023.

Yahoo

Retail, layoffs, Big Tech — The biggest takeaways from earnings season The Yahoo Finance Live team discusses the biggest takeaways from the first earnings season of 2023. Video Transcript [MUSIC PLAYING] DAVE BRIGGS: Welcome back to Yahoo Finance Live. I'm Dave Briggs with Seana Smith. For the next hour, we'll have special coverage of the Q4 earnings season, from record profits to unexpected losses. A lot to unpack from this quarter, but let's kick things off with our three biggest takeaways from this earnings season, Seana. SEANA SMITH: And, Dave, we got to start with the consumer. There was so much focus on the health of the consumer, how big of a pullback we are seeing as we do face inflation that still remains very stubborn. And it was clear from this most recent quarter that retailers are hurting and are seeing a change in terms of spending patterns from their consumer. Let's start with Target because Target was one of those companies that said their private label brand is now worth more than $30 billion in annual sales. Well, they're investing more in that because more of their consumers are trading down, trading down meaning that a lot of these private label brands are cheaper than the alternatives that are sold in the store. So that was a trend that Target was seeing in this most recent quarter. Private label sales growing 18% in 2022, outpacing Target's overall sales. And they're going to capitalize on this. They're going to launch more brands, expand some of the private label ones that they have. A total of 10 private brands is what they are working with here. And that lower cost, that strategy seems to be working for some of these retailers. DAVE BRIGGS: Yeah, talked about private label brands, probably the single biggest trend in Q4 across all of retail. It's not just Target. It's Walmart. It's Kroger. It's grocery it really has been reflected across the entire sector. And I want to focus in on Walmart, of course. You can see the stock basically flat on the day. They exceeded expectations because, of course, Walmart can lean into groceries. You can see, again, the consumer with Walmart earnings trading down. Inflation, higher prices really began to impact them. And their CFO talked about a, quote, "pressured consumer." And that's another term we heard across most retail companies. The other one was cautious consumers. That was the description from most CFOs. They leaned into that grocery, but they also said fewer discretionary purchases from the consumer. And if there's one interesting sound bite, it came from CEO Doug McMillon saying, "We're gaining share across income cohorts, and here's the key-- including at the higher end, which made up nearly half of our gains in the US this quarter." So the higher income consumer trading down to Walmart, and that's where they saw their biggest increase in terms of market share. Cautious consumer is, I guess, what we saw across all retail. SEANA SMITH: Yeah, and I think that that is-- might be a trend here that's going to stick for the current quarter and maybe even into the second quarter of the year and into the second half of the year, as we still don't see too much improvement in inflation. So we'll see. DAVE BRIGGS: And starting to see some signs of a recession in the second half. Layoffs plagued Wall Street. Meta, Amazon, Google-- you really have to focus in on those huge names. You see 84,714 layoffs in the tech sector. And I focus in on those big three because Amazon, in the fourth quarter, announced their layoffs of 18,000. They, of course, are the biggest because the term is rightsizing. And it's an icky term when it comes to layoffs, but it really is accurate when you look at Amazon, Meta, and Google, because they had to get back toward the right size. They overhired, compensating for that pandemic boom. It was not going to continue, but they hired like it was going to. And Andy Jassy had very little choice scaling down, cutting down on some of those warehouses. Meta laid off 11,000. We heard just a few days ago, they will layoff a few thousand more. And Google laid off 12,000 employees as they rightsize toward where they ought to be. They should have probably known those COVID gains couldn't continue, but now they're forced with reality. SEANA SMITH: Yeah, they're forced with reality. You mentioned some of those bigger tech names there. Also, Salesforce was one that made a lot of headlines. And they didn't exactly announce this on their earnings call, the 10% cut that the company announced in January, but there was some talk about how Salesforce is evolving. And we know Salesforce has been under a tremendous amount of pressure from a number of activist investors in the latest round of these cuts that are still ongoing, that 10% reduction in the workforce. Sales and marketing roles are now reportedly being affected within that cut, but Salesforce saying on their earnings release, on their earnings call, CFO Amy Weaver, that it is a new day at Salesforce. Profitability is certainly front and center. And then also over, in the payment space, Affirm, the job cuts there really across the tech sector at large. A firm announcing 19% of its workforce would be cut. That amounts to about 500 jobs. And we had founder and CEO Max Levchin. He was joining-- he joined Yahoo Finance earlier in the quarter, talking about these job cuts. Let's take a listen to what he had to say and why the company's doing it. MAX LEVCHIN: Like a lot of Silicon Valley, we had hired more people that we were reasonably able to support given the revenue growth. As the economy slows down, you can reasonably expect more slowing. SEANA SMITH: Reasonably expect more slowing. And Levchin also adding that tens of millions of dollars of operating expenses were taken out as part of those cuts.

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Amazon Selling NFTs: How Will It Impact Marketplace?

Amazon is reportedly launching an NFT marketplace next month -- a move widely lauded in the industry as it further cements the increasing adoption of the digital assets. The effort follows that of...

Yahoo

Amazon Selling NFTs: How Will It Impact Marketplace? Amazon is reportedly launching an NFT marketplace next month — a move widely lauded in the industry as it further cements the increasing adoption of the digital assets. The effort follows that of other mainstream companies dipping their toes in the space, including GameStop and Reddit. Check Out: 3 Things You Must Do When Your Savings Reach $50,000 Live Richer Podcast: How To Leverage Your Investments According to Blockworks, Amazon customers will be able to buy NFTs tied to real-world assets. The company will alert U.S. Amazon Prime customers of its digital collectibles plan once it goes live. The marketplace — set to go live on April 24 — will start offering 15 NFT collections, which will be available on Amazon’s website and can be seen by clicking the “Amazon Digital Marketplace” tab, Coingape reported. Customers won’t need crypto wallets to buy NFTs on Amazon. See 15 of the best NFT projects this year. Amazon ‘a Trusted Intermediary’ Amazon’s entry into NFTs is significant for two key reasons, said Christopher Alexander, chief communications officer for Liberty Blockchain. “The first is brand related,” he said. “Amazon is well known and trusted by more than 200 million customers with Prime Memberships. Amazon can serve as a trusted intermediary for experiencing Web3 for the first time. Second, Amazon brings significant lobbying heft to a crypto industry fighting on multiple fronts on the Hill.” Live Richer Podcast: How To Leverage Your Investments Other companies that have entered the space include GameStop and Reddit. GameStop launched an NFT marketplace with ImmutableX Pty Limited in October 2022. Reddit started its collection last July and has onboarded nearly 6.9 million people to Web3 since, according to a Hype Partners tweet. CJ Reim, a contributor at Core DAO, explained that Amazon’s news underscores how there’s still momentum for more non-crypto technology firms to experiment with NFTs and crypto more broadly. “It’s important to note that this sort of experimentation will help to familiarize the large customer bases of these companies with Web3 technology.” Reim said. “But, again, we’re still in the early stages here and it will take time for more companies and brands to incorporate digital assets into their existing technology stack.” A Look at the NFT Market The NFT space has taken a beating — just like the crypto space at large — since the collapse of TerraUSD/Luna in May 2022, the ensuing platform busts and the infamous FTX debacle. Yet, it seems to be rebounding. DappRadar noted in its February industry report: NFT trading volume spiked to $2 billion for the first time since last May, up 117% from the previous month, largely driven by Blur — the zero-fee marketplace launched last October. Now, whether Amazon will compete with “pure” NFT marketplaces such as OpenSea remains to be seen, but experts agree there is room for competition in a space that is fairly nascent. Indeed, trading of NFTs on the major marketplaces continues apace, even if floor prices are down when compared to the bull run days, said Anthony Georgiades, co-founder of Pastel Network. “But, knowing Amazon, what they have in store for their reported marketplace will likely differ markedly from, say, what OpenSea has on offer,” he added. “I wouldn’t be surprised if Amazon tries to incorporate NFT tech into their current business operations, perhaps tying them to the sale of physical goods. It’s still too early to tell exactly what is planned, but it is indeed exciting to see a Web2 giant dip its toes into the crypto world.” Another factor that might be in Amazon’s favor is the retail giant’s distribution network, some experts say. While it is still too early to tell whether Amazon’s NFT marketplace aims to compete with OpenSea, they could well co-exist, said Mo Shaikh, co-founder and CEO of Aptos Labs. “But with the distribution power that Amazon has,” Shaikh said, “we can expect to see real utility, something other marketplaces and other infrastructure can’t handle.” More From GOBankingRates Financial Insight in Your Inbox: Sign Up for GBR's Daily Newsletter This article originally appeared on GOBankingRates.com: Amazon Selling NFTs: How Will It Impact Marketplace?

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Walmart+ vs. Amazon Prime: ‘Convenience is something consumers value,’ analyst says

TD Cowen Senior Research Analyst Oliver Chen joins Yahoo Finance Live to discuss Walmart’s battle with Amazon and how the rail giant is aiming to attract customers to its online subscription service Walmart+, consumer trends, and the outlook for Amazon as it pushes brick-and-mortar strategy.

Yahoo

Walmart+ vs. Amazon Prime: ‘Convenience is something consumers value,’ analyst says TD Cowen Senior Research Analyst Oliver Chen joins Yahoo Finance Live to discuss Walmart’s battle with Amazon and how the rail giant is aiming to attract customers to its online subscription service Walmart+, consumer trends, and the outlook for Amazon as it pushes brick-and-mortar strategy. Video Transcript JARED BLIKRE: Walmart closing the gap in its battle to-- battle with Amazon to attract customers to its online subscription service by cashing in on higher-income households. Joining us now is TD Cowan senior research analyst Oliver Chen. Oliver, thank you for joining us here today. So let me get this straight. So we know that Walmart+ has been kind of encroaching on Walmart-- Amazon in terms of e-commerce and their piece of the pie there. What is the latest, and how far have they made inroads into this? OLIVER CHEN: Yeah, Jared, we are excited about the Walmart story. The bottom line is 90% of America is within 10 miles of a Walmart, so thousands of locations are very strategically competitive in terms of what's happening in retail. And the future of retail, in our view, is bricks plus clicks. So the Walmart thesis is playing out, and Walmart+ is a very key competitive advantage in terms of Walmart having its own membership program to compete with Amazon Prime. What's really happened at Walmart is increased convenience, and that's happened with curbside pickup; buy online, pickup in store delivery. And shoppers this year are going back to stores too. Walmart is one of the US's biggest grocers as well with over 55% of revenue being grocery at Walmart, and that's a very helpful topic too in terms of frequency, scale, and the Walmart ecosystem. The other point on Walmart+ is you get a gas discount, and everybody loves that. JARED BLIKRE: Yes and let me just get back to the groceries for a second because Walmart+ offers free delivery on orders more than $35. Amazon has raised that same threshold to $150. Just wondering if that's making a dent in the numbers yet. OLIVER CHEN: Yeah, consumers right now are looking for value across the board, and Walmart has the advantage of scale and also extremely efficient operations in stores and curbside pickup and really staffing that appropriately. The longer-term basis, Walmart is thinking about micro fulfillment centers. But you're 100% correct in terms of what customers are looking for. Inflation is a hot and important topic taking money away from consumer dollars, so everybody's looking for value. And don't forget, zooming out, Walmart's focused on everyday low prices. That's a core competency for many, many years of the Walmart story. JARED BLIKRE: And let me ask you how that jives with the demographic, I guess, stats that I'm looking at here. It looks like Walmart+ very much skewed towards younger people, the 35-- we have the 25 to 34, 35 to 44. Those are getting about 25% of the market share. Then you go up. On the flip side, you have Amazon in the 65-plus group. They get 17.5%. That dwarfs what Walmart+ is getting right now. So if these trends remain in place, what does this say about the future of these services for Amazon and Walmart? OLIVER CHEN: Yeah, we're excited that Walmart has really embraced a younger customer and also the higher-income customer through partnerships with American Express and others. Convenience is something all consumers value. So if you think about curbside pickup, very, very high customer satisfaction, Net Promoter Scores, and time is a luxury. So Walmart enabling you to save time. So skewing with younger customers, attracting higher-household-income customers, those are all very strong positives for retail, and all of retail is really looking for this in different ways. So the future is bright. What's happening over time with Walmart+ is the company is likely to add more convenience and more services. And Walmart in America plays a big role. I grew up in Natchitoches, Louisiana, and Walmart, the supercenter, was a big hub of the whole community. You know, I got vaccinated at the Walmart pharmacy. Thinking about Walmart and financial services, this is a much more holistic global view, and Walmart's DNA is stores, having these stores and having that fixed expense base. Leveraging that is very powerful for the long term. JARED BLIKRE: And that something, stores, is not in Amazon's DNA. Of course, they own Whole Foods, huge footprint there. But I read-- I think it was two weeks ago they're closing certain Amazon Go locations. Now, it's not like they had a huge network of these stores. That's where you can pop in and pick anything off the shelf you want and just exit without a cashier experience. But what does that say about Amazon's push into the brick and mortar? OLIVER CHEN: Well, it's very tough to run stores. Also what's happened with stocks and cost of capital is an important focus on profitability. That is Walmart's core competency in terms of retail and stores. And even running these very efficiently, it's not a high-margin business. So lots of developments here in terms of the future, but the future is digital, moving more physical with a lot of the changes we're seeing. Also, grocery is a very fragmented industry, but we're looking at a lot of technology. We like what Walmart is doing with artificial intelligence and image recognition and inventory management. And what we look at in terms of Amazon is a work in progress with what's happening there. I don't cover the stock, but they're great points you're making. JARED BLIKRE: All right, got to leave it there. TD Cowen senior research analyst Oliver Chen, thank you.

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Amazon.com Inc. stock falls Friday, underperforms market

Shares of Amazon.com Inc. shed 1.65% to $90.73 Friday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500 Index...

MarketWatch

Shares of Amazon.com Inc. AMZN, +1.30% shed 1.65% to $90.73 Friday, on what proved to be an all-around poor trading session for the stock market, with the S&P 500 Index SPX, +0.67% falling 1.45% to 3,861.59 and Dow Jones Industrial Average DJIA, +0.93% falling 1.07% to 31,909.64. This was the stock's second consecutive day of losses. Amazon.com Inc. closed $80.10 below its 52-week high ($170.83), which the company reached on March 29th. The stock demonstrated a mixed performance when compared to some of its competitors Friday, as Apple Inc. AAPL, -0.28% fell 1.39% to $148.50, Microsoft Corp. MSFT, +0.19% fell 1.48% to $248.59, and Alphabet Inc. Cl C GOOG, +0.72% fell 1.78% to $91.01. Trading volume (69.3 M) remained 406,991 below its 50-day average volume of 69.7 M. Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.

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Marc Benioff Is Fighting to Put Salesforce Back on Top. The Ultimate Salesman Has to Learn a New Game.

As Salesforce growth slows, the pioneering CEO has a new sales pitch: making money. The stock still has some catching up to do.

MarketWatch

Marc Benioff is texting me, which is curious to begin with, but even more so given the timing. Benioff, of course, is the indefatigable CEO of Salesforce, the high-profile enterprise software company that just dropped a boffo earnings report. Benioff is, at this very moment, reading his presentation on the call—and text-bragging me simultaneously: “Delivering great results” “I love everyone [heart emoji]” Wait, how is that even possible? As it turns out, the CEO’s portion of the call is recorded. Still, Benioff’s texting demonstrates just how juiced he is by his company’s numbers and how unorthodox his management style is—never mind his penchant for trying to seduce reporters. Zooming with me the next day from his home in San Francisco in front of a Mickalene Thomas painting—“It’s a great work of art; she’s a really nice lady”—Benioff continued his Salesforce (ticker: CRM) flex: “I just did deliver the best quarter in the history of software. We’re really at another level and we’re really excited about that level of performance.” It’s no wonder Benioff was so hyped—leaving aside that he’s an excitable guy to begin with. The earnings report and accompanying guidance was a shot back at Wall Street and, to Benioff’s mind, a vindication of his efforts to right the Salesforce ship, which has been listing. “We needed that,” a Salesforce executive said to me after the earnings report, with palpable relief in his voice. Quick back story here: For years, Salesforce was the ultimate “software as a service,” or SaaS, stock, delivering stellar returns. It also served as a platform for the Big Benioff—a Golden State Goliath of a man (6 feet 5 inches, 300 pounds) with a larger-than-life personality to match—and his vision of stakeholder capitalism. Salesforce, which pioneered cloud-based customer-relationship-management software (hence the CRM ticker) that helps companies manage their sales relationships and businesses writ large, has been a fun-loving, purpose-driven place that made employees and shareholders rich. What drove the Salesforce narrative was top-line, or revenue, growth. Following the well-worn Silicon Valley playbook, Benioff focused on scaling his company—in Salesforce’s case, through acquisitions, rewarding employees and especially marketing. “Monetizing,” or focusing on net income and profitability, would come later. (Though non-GAAP operating margin has climbed recently, for much of the past 10 years that key metric was almost an afterthought and hovered in the low teens.) Investors cheered Benioff’s modus operandi because it worked. Since the company went public in 2004, annual revenue has grown from $176 million to $31.4 billion in its just-ended fiscal year. At the stock’s peak of $310 in November 2021, shares had gained 11,171% since the initial public offering—up more than 100-fold, or an annualized 31%. Even after accounting for the stock’s near halving since then—it recently traded at $179—it’s still up an annualized 25% versus the S&P 500 index’s 9%. Salesforce is still small relative to, say, Microsoft (MSFT), which is six times bigger in sales and 10 times bigger in market value. But it now sits just one rung below megacap tech— Apple (AAPL), Microsoft, Amazon.com (AMZN), Alphabet (GOOGL), and Meta Platforms (META)—in the Silicon Valley ecosystem. Salesforce, unlike Meta, Amazon, and Alphabet, is even in the Dow Jones Industrial Average. But Salesforce recently hit a serious wall. By this past summer, Wall Street analysts became concerned about sales growth, focusing in part on a possible slowdown in what is known as current remaining performance obligations, or CRPO—essentially future bookings—which foreshadows a drop in revenue. On the cost side, Wall Street was concerned about Salesforce’s head count, which had increased along with those of other tech companies. The company added 30,000 employees through the pandemic era, a 60% increase. And there were worries about Salesforce’s big, breakneck mergers-and-acquisition strategy. “It began with Salesforce being interested in buying Twitter in 2016,” says Sarah Hindlian-Bowler, head of U.S. tech research at Macquarie Group, who has an Outperform rating on the stock. That was a proposed $20 billion deal. “And then with its purchase of MuleSoft [for $6.5 billion] and Tableau [for $15.7 billion] and especially Slack [for $27.7 billion],” she says, noting that she thinks Salesforce overpaid for the last two. “Wall Street went from asking, ‘Are you going to grow at any cost?’ to ‘Wait, they are growing at any cost.’ ” The doubts grew just as interest rates began dragging down the market, and tech stocks in particular. Salesforce tumbled 59% from that November 2021 peak to its bottom in December of $128 a share. Salesforce, a favorite of short sellers in its early days, had now attracted a shiver of sharks. No fewer than six activists bought Salesforce stock, agitating for change. While they haven’t been acting in concert particularly, they all basically want the same thing: to see Salesforce stock move back up. And in a slower growth environment, there was one way to accomplish that: higher profit margins. That meant Benioff needed to cut costs and get spending under control. Through the winter months, Benioff began to do just that. He met with the activists (and added one, Mason Morfit, to Salesforce’s board of directors), implemented some of their plans to realign the business, and hired Bain to help. He also laid off 8,000 employees. Meanwhile, top executives such as Stewart Butterfield, CEO of Slack, and Benioff’s co-CEO, Bret Taylor—who had simultaneously been chairman of Twitter’s board—left the company. Then, in the latest earnings report, Benioff revealed the fruits of his labor, giving investors exactly what they wanted to hear. Yes, revenue growth was down year over year and the company guided to just 10% growth for the current fiscal year, but those numbers beat expectations. What really excited investors, though, was the company’s 22.5% operating margin, and guidance for 27% next year; a pledge to terminate M&A; and the ever-popular, albeit controversial, panacea—a mega stock buyback. Salesforce stock spiked on the news, and it’s up nearly 35% year to date, handily outperforming the broader indexes. No wonder Benioff is crowing. But Salesforce still trails the market over the past one-, three- and five-year periods. In other words, this is only the beginning for Benioff. He has his work cut out for him: To get back ahead of the market, Benioff needs to continue on his new profit-making path. The big questions—and the activist investors—remain. To wit: Is this truly an inflection point for Salesforce, going from a growth play to a margin-expansion play? And, if so, can Marc Benioff change his stripes to execute this transition? When I asked Benioff the inflection point question, he sounded a bit equivocal: “I would say that we adjust the company’s financial strategy based on the economic conditions and the market opportunity. But while market conditions change, our core values never change.” When I asked him if he could be the margin-expansion guy, he seemed more certain: “I am one of the highest-performing software executives of all time, and we just expanded our margin to one of the very highest of all the cloud software,” he says. “So, I would say I think that the numbers speak for themselves.” Benioff, 58, has always been the consummate salesman, and as such, making an about-face to focus on profits, or even sales and profit, may prove more difficult than he thinks. Benioff began his career as a wunderkind salesman at Oracle (ORCL). He was the company’s rookie of the year at age 23 and became its youngest vice president three years later. Benioff learned from his mentor, Oracle co-founder and former CEO Larry Ellison, how to motivate the troops—and then took it to another level. Benioff’s genius has been to recognize that enterprise software is one of the most boring businesses on the planet. Getting customers, employees, and shareholders excited about customer-relationship-management software is, well, next to impossible. So, Benioff set out to get people stoked about Salesforce, not the business. And he did it in myriad ways: by sending out strong messages about values and focusing full-bore on top-line growth and screaming about his success from the treetops. Most important, Benioff put Salesforce on the map by spending billions on marketing. Just one example is the company’s annual Dreamforce conference in San Francisco. Billed as the largest software conference in the world, it now draws 150,000 attendees and celebrities such as the Obamas, Megan Rapinoe, Bono, and Matthew McConaughey. (Salesforce’s generous sponsorship pay package to McConaughey has been in the news lately.) There’s also Benioff’s persona and profile. Silicon Valley has had its share of big personalities, from Steve Jobs to Marc Andreessen, but even among this cohort, Benioff stands out. A native San Franciscan, Benioff erected the 61-story Salesforce Tower, the biggest building in the city. He and his wife, Lynne, bought Time magazine for $190 million. The author of four books, he is a liberal who is outspoken on social issues and highly visible at Davos. He’s philanthropic, too. Leaving aside the $600 million of giving from Salesforce, the Benioffs have donated well over half a billion dollars to improving healthcare, fighting climate change, and combating homelessness. Benioff peppers his conversations with “mahalo” and “ohana,” a nod to his growing multimillion-dollar real estate residences and holdings in Hawaii. Benioff also courts reporters, though sometimes in awkward ways. In 2008, at a Fortune Brainstorm Tech Conference in Half Moon Bay, Calif., Benioff saw me through a hotel room window ironing my pants. For years afterward, Benioff ribbed me about it. (Hey, Marc, reporters got to iron, OK?) “Oh, that’s part of the Benioff retention device,” a former executive says to me when I tell him the ironing story. The same executive describes working for Benioff as an always-on proposition. “Marc is hard-charging and passionate, but he doesn’t rule by terror. It’s true the clock doesn’t rule his schedule. When Marc is on your calendar, you put a sideways wormhole in your schedule.” Those quirks and strong personality may have something to do with why Benioff has taken the rare step of not just naming co-CEOs on two occasions, but also outlasting them both. Keith Block left as co-CEO almost exactly three years before Bret Taylor’s departure. Benioff says that Taylor “got a twinkle in his eye and came to me and said he’s going to pursue his entrepreneurial pursuit.” “I like Marc,” a CEO of a Fortune 100 company told me. “I talk to him late in the day. He’s a good guy, built a great company, with a great product. We use it.” As for Benioff’s recent travails, the exec says, “He did get a little bit over his skis.” Benioff is the 301st richest person on the planet, according to the Bloomberg billionaires list. He owns 27.8 million shares of Salesforce, worth roughly $5 billion. “I think I own more stock than all the activists combined,” Benioff tells me. “That doesn’t mean that I subordinate them or not listen to them. If you own one share of the stock, I will pick up the phone and call you and talk to you. That’s how I am. I believe in that kind of democratization and equanimity.” Just how effective is Benioff’s singular stew of braggadocio, sincerity, and hyperbole? Consider the difference in visibility and buzz between Salesforce and Adobe (ADBE), two similar-size enterprise software companies. Adobe has actually been a much better stock over the past decade, but Salesforce has a much higher profile—a profile that might have helped it land in the Dow Jones 30, for instance. That’s all Benioff. A paradox here is that while Benioff might be the paradigm of a modern, stakeholder-capitalism CEO, perhaps even helping to bend our economic system, right now it is Benioff who is being schooled by the inexorable life cycle of a company, the tyranny of large numbers (meaning growth becomes tougher as a company gets bigger), and the economic cycle. “People forget that 10 years ago, Marc showed the levers he could pull, the day when top-line growth slowed to below 20%,” says Macquarie’s Hindlian-Bowler. Time to dust off that deck, Marc. That day is now. And who knows, another co-CEO may be in the offing as well. Third time’s a charm, right? I’ve always thought there was some P.T. Barnum in Marc Benioff, which might seem wholly pejorative, but Barnum, huckster though he was, was a shrewd businessman. Barnum didn’t form his namesake circus until he was 60 years old, in 1870. After 146 years, Ringling Bros. and Barnum & Bailey shut down in 2017, but it hasn’t disappeared. The circus is returning later this year with a new show, minus the animals. Even the circus had to change its stripes. Bottom line: Underestimating the power of hype coupled with shrewdness is probably done at your peril. I remember being skeptical about Benioff 10 years ago, when his stock was $40. He had things to figure out then, and he did. For Benioff today, it’s another decade, another challenge. Speaking of which, he has accomplished something that has eluded most other tech founders: gaining membership into the market’s most exclusive blue-chip club. It was late August 2020 when the Dow replaced Exxon Mobil (XOM) with Salesforce. Since then, the oil giant has produced a total return of 205% while Salesforce has lost 34%. He hasn’t just disappointed shareholders of late; Benioff is now losing to an oil company. As if the big guy needed more motivation for his next big act. Write to Andy Serwer at andy.serwer@barrons.com

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Walmart Starts Making Inroads In Amazon's Forte By Transforming Business Model; Targets Affluent Customers

Walmart Inc’s (NYSE: WMT) online subscription service Walmart+ met success with inflation-sensitive higher-income households as the retailer prioritizes the segment in a tectonic change to its reputation as a destination for lower- and middle-income shoppers. Walmart sees e-commerce as a big selling point, Bloomberg reports. At $98 a year, Walmart+ is cheaper by $41 than Amazon.Com Inc (NASDAQ: AMZN) Prime with similar perks, like shipping discounts and video streaming. Walmart’s subscription se

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Walmart Starts Making Inroads In Amazon's Forte By Transforming Business Model; Targets Affluent Customers Walmart Inc’s (NYSE: WMT) online subscription service Walmart+ met success with inflation-sensitive higher-income households as the retailer prioritizes the segment in a tectonic change to its reputation as a destination for lower- and middle-income shoppers. Walmart sees e-commerce as a big selling point, Bloomberg reports. At $98 a year, Walmart+ is cheaper by $41 than Amazon.Com Inc (NASDAQ: AMZN) Prime with similar perks, like shipping discounts and video streaming. Walmart’s subscription service also includes benefits, including discounted fuel at gas stations around the U.S. In February, 28% of U.S. households with an annual income of at least $150,000 were members of Walmart+, up from 13% a year earlier, according to Prosper Insights & Analytics. Still, Amazon Prime has a commanding lead with 77% of those households, up 700 bps from the previous year. As Walmart attracts more shoppers, it draws more brands, multiplying the number of shoppers, benefiting from the same “flywheel” effect Amazon experienced when it launched Prime in 2005. Besides borrowing Amazon’s online playbook, Walmart is capitalizing on a network of stores within 10 miles of 90% of Americans. America’s largest grocer also has a lead in fresh food, a market Amazon has been trying to decrypt for years. Walmart+ offers members free delivery on orders of at least $35. In February, Amazon raised its free grocery delivery threshold to orders of at least $150. “Walmart is eating into Amazon’s e-commerce market share and legitimately becoming a competitor,” said Alasdair McLean-Foreman, founder and CEO of Teikametrics, which helps merchants buy advertising on Amazon, Walmart. According to Insider Intelligence, Walmart will likely have 6.3% of the U.S. online market this year, a fraction of Amazon’s estimated 37.6% share. Walmart.com is also less crowded than Amazon.com, with about 135,000 merchants compared with some 2 million on Amazon. He said that makes it easier for brands to stand out on Walmart. About 65% of Walmart+ members are between 18 and 44 years old, versus 51% for Amazon Prime, according to Prosper, a promising trend for Walmart. Walmart+ has plenty of room to grow. According to a Morgan Stanley February survey, about 11 million U.S. shoppers are “very likely” to subscribe to the service, adding to the approximately 18.5 million existing members. Meanwhile, according to Consumer Intelligence Research Partners, Amazon Prime had 168 million members in the U.S. as of December, unchanged from a year earlier. Price Action: WMT shares traded higher by 0.57% at $137.94 premarket on the last check Friday. Photo via Wikimedia Commons Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better. This article Walmart Starts Making Inroads In Amazon's Forte By Transforming Business Model; Targets Affluent Customers originally appeared on Benzinga.com . © 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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11 Best Long-term Growth Stocks for Strong Returns

In this article, we take a look at 11 best long-term growth stocks for strong returns. If you want to see more best long-term growth stocks for strong returns, go directly to 5 Best Long-term Growth Stocks for Strong Returns. It is impossible to know the future. As such, it isn’t possible to know stocks […]

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11 Best Long-term Growth Stocks for Strong Returns In this article, we take a look at 11 best long-term growth stocks for strong returns. If you want to see more best long-term growth stocks for strong returns, go directly to 5 Best Long-term Growth Stocks for Strong Returns. It is impossible to know the future. As such, it isn't possible to know stocks that will generate strong returns for sure. Nevertheless, there are leading companies that benefit from secular growth trends that could potentially generate substantial profits in the future. Leading companies have a lot of scale and competitive advantages. Some leading companies are tech giants that benefit from the increasing popularity of AI. Companies like Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) own leading cloud infrastructure businesses that will likely realize more demand from AI processing as AI apps grow. Some leading companies benefit from increases in the broader market, which could increase demand for asset management services such as BlackRock, Inc. (NYSE:BLK) and Goldman Sachs Group, Inc. (NYSE:GS). Some leading companies such as Meta Platforms, Inc. (NASDAQ:META) could benefit from the metaverse trend if it achieves the potential that some bulls think it can in the future. For those of you interested, check out 10 Most Promising Metaverse Stocks to Buy. In the near term, things are uncertain as the economy is currently strong but inflation is higher than the U.S. central bank would like. As a result, the Federal Reserve will likely continue to raise interest rates further and this could slow economic growth. If economic growth slows too much, demand for many companies might weaken more than expected and the job market might weaken. On March 9, the S&P 500 fell 1.8%, the Dow Jones Industrial Average declined by 1.6%, and the Nasdaq Composite retreated 2% due to a steep drop in SVB Financial which pressured banking stocks and also the weekly report on initial filings for unemployment insurance showing 211,000 claims were filed last week, up 21,000 from the previous week. Given the near term uncertainty and considering one company might not do well in the long term for any number of reasons, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors. Photo by floriane vita on Unsplash Methodology For our list of 11 Best Long-term Growth Stocks for Strong Returns, we picked 11 stocks with competitive advantages that have long term growth potential. We ranked each stock based on the number of hedge funds in our database of 943 funds that owned shares of the same stock at the end of Q4. For those of you interested check out 13 Best Annual Dividend Stocks to Buy Now. 11 Best Long-term Growth Stocks for Strong Returns 11. BlackRock, Inc. (NYSE:BLK) Number of Hedge Fund Holders: 49 BlackRock, Inc. (NYSE:BLK) is a leading asset manager that benefits from the secular trend of the long term increase in the broader market such as the S&P 500. With inflation, productivity increases, and population growth, the broader market will likely increase in the long term, and BlackRock, Inc. (NYSE:BLK)'s AUM could potentially increase in the long term if it maintains its market share. In addition to broader market growth, BlackRock, Inc. (NYSE:BLK) has benefited from inflows as well. In January, the company reported it had $146 billion of quarterly long term net inflows. Alongside Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT), BlackRock, Inc. (NYSE:BLK) is one of the high quality long term growth stocks that many hedge funds in our database owned at the end of Q4. 10. The Home Depot, Inc. (NYSE:HD) Number of Hedge Fund Holders: 62 The Home Depot, Inc. (NYSE:HD) is the world's largest home improvement retailer that benefits from the secular growth of the home improvement market. In fiscal 2022, the Home Depot, Inc. (NYSE:HD) achieved $157.4 billion in sales, and the company's diluted earnings per share rose 7.5% year over year. Over a three year period, the company has grown sales by more than $47 billion and delivered diluted EPS growth of over 60%. Given many homes are aging and worth on average 40% more than they were before the beginning of the pandemic, demand for home improvement could remain fairly strong in the near future. In the long term, The Home Depot, Inc. (NYSE:HD) could also potentially expand further if mortgage rates normalize. 9. Lowe's Companies, Inc. (NYSE:LOW) Number of Hedge Fund Holders: 68 Lowe's Companies, Inc. (NYSE:LOW) ranks #9 on our list of 11 Best Long-term Growth Stocks for Strong Returns given 68 hedge funds in our database owned shares of the leading home improvement retailer at the end of Q4. Although shares of Lowe's Companies, Inc. (NYSE:LOW) are down slightly year to date, they trade for a forward P/E of 13.44 as of March 9 and the company also benefits from secular tailwinds. Lowe's Companies, Inc. (NYSE:LOW) management described its tailwinds in March of this year, "Consumer savings are still roughly $1.5 trillion higher than pre-pandemic, with 85% concentrated in the top 40% of income owners who are more likely to be homeowners. Homeowners continue to enjoy record levels of equity in their homes, nearly $330,000 on average. Even if there is a modest decline in home prices, the level of equity built up during the pandemic would not be meaningfully eroded. And the housing stock continues to age with 50% of U.S. homes over 41 years old, the oldest since World War II. These factors, along with strong millennial household formation, baby boomers' increasing preference to age in place, and more widespread remote work will continue to be tailwinds for our business." 8. NIKE, Inc. (NYSE:NKE) Number of Hedge Fund Holders: 71 NIKE, Inc. (NYSE:NKE) is a leading sport apparel maker that benefits from the secular popularity in sports such as the NBA. As the NBA grows in popularity, the athletes in the league that NIKE, Inc. (NYSE:NKE) sponsors could also grow in popularity and potentially generate more business for the company. NIKE, Inc. (NYSE:NKE) also benefits from the secular growth in incomes which helps more consumers be able to afford its apparel. As of March 9, shares trade for a forward P/E of 29.65, indicating that the market expects more earnings growth in the future. Although a recession or economic slowdown could be near term headwinds, the company has long term growth potential. 7. Goldman Sachs Group, Inc. (NYSE:GS) Number of Hedge Fund Holders: 74 Goldman Sachs Group, Inc. (NYSE:GS) is the most prestigious investment bank on Wall Street that could benefit from the secular growth in the broader market. If the broader market is bigger in the long term, demand for investment banking services and asset management could increase, and Goldman Sachs Group, Inc. (NYSE:GS) could potentially benefit given its leading reputation and world class workforce. For 2022, the company maintained its number one league table position in completed M&A as it has for 23 of the last 24 years. The company also ranked second in equity and equity related underwriting. 74 hedge funds in our database owned shares of Goldman Sachs Group, Inc. (NYSE:GS) at the end of Q4, ranking the stock #7 on our list of 11 Best Long-term Growth Stocks for Strong Returns. For those of you interested check out 17 Biggest Finance Companies in the World. 6. Johnson & Johnson (NYSE:JNJ) Number of Hedge Fund Holders: 84 Johnson & Johnson (NYSE:JNJ) is a leading healthcare giant that benefits from the secular growth in healthcare given a growing older population and rising incomes. Given it is the largest and most diversified healthcare products company in the world, Johnson & Johnson (NYSE:JNJ) has substantial resources to continue to innovate and deliver in demand healthcare products. In 2022, the company invested almost $15 billion or over 15% of sales into R&D, which could help it with long term growth and value creation. As of March 9, the stock has a forward P/E ratio of 13.88 and a dividend yield of 2.99%. Like Johnson & Johnson (NYSE:JNJ), Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT) are high quality long term growth stocks that many hedge funds in our database owned at the end of Q4. Click to continue reading and see 5 Best Long-term Growth Stocks for Strong Returns. Suggested articles: Disclosure: None. 11 Best Long-term Growth Stocks for Strong Returns is originally published on Insider Monkey.

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Walmart's CFO Just Dropped a Bombshell Reason to Buy The Stock

Yes, Walmart (NYSE: WMT) is doing more online sales every year, but that's not its biggest evolution taking shape right now. Rather, the company's most game-changing initiative currently underway is the advent of its digital advertising business -- called Walmart Connect -- driven by online-shopping traffic at Walmart.com. Walmart only saw $2.7 billion worth of this ad business last fiscal year (ended in January) versus company-wide revenue of $611 billion.

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Walmart's CFO Just Dropped a Bombshell Reason to Buy The Stock Yes, Walmart (NYSE: WMT) is doing more online sales every year, but that's not its biggest evolution taking shape right now. Rather, the company's most game-changing initiative currently underway is the advent of its digital advertising business -- called Walmart Connect -- driven by online-shopping traffic at Walmart.com. Walmart only saw $2.7 billion worth of this ad business last fiscal year (ended in January) versus company-wide revenue of $611 billion.

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DeSantis first-week memoir sales far outpace books by Trump, Pence, Clinton and Obama

Florida Gov. Ron DeSantis' memoir outpaces first-week sales of titles by Donald Trump, Barack Obama, Hillary Clinton, Mike Pence, Nikki Haley and Mike Pompeo.

CNBC

- Florida Gov. Ron DeSantis' new book sold 94,300 U.S. print copies in its first week, according to BookScan. - That far outpaces the book former President Donald Trump released during his successful 2016 presidential bid, as well as similar books by former President Barack Obama and former Democratic presidential nominee Hillary Clinton. - DeSantis is in the midst of a book tour that took him to Iowa, the first-in-the-nation presidential caucus state. Florida Gov. Ron DeSantis has yet to announce his likely 2024 presidential campaign, but he's already leading the political field by one metric: political memoir sales. The Republican's book, "The Courage to Be Free: Florida's Blueprint for America's Survival," sold 94,300 copies in its first week, according to BookScan, a U.S. print book data service. It was the top-selling book for the week it came out, BookScan found. The memoir was released on Feb. 28. That figure trumps the first-week sales of other major politicians' memoirs — including a 2015 effort by former President Donald Trump, who is currently seen as a leading candidate in the prospective 2024 Republican primary field. That book, "Crippled America," sold 27,687 copies in its first week, according to BookScan. The data service, owned by market research giant NPD Group, told CNBC it covers approximately 85% of trade print books sold in the U.S. Its data is based on weekly reporting from major retailers including Amazon, Barnes & Noble, Walmart, Target and independent bookstores, among other sources. DeSantis' conservative culture warfare on issues ranging from Covid-19 safety measures to classroom discussion of LGBTQ issues has made him a top figure in the GOP. The Florida governor is in the midst of a book tour that on Friday took him to Iowa, the first-in-the-nation presidential caucus state. DeSantis' book sales also appeared to far outpace recently published memoirs by a handful of other Republicans who have either launched 2024 presidential campaigns or are considering it, according to BookScan. Former Vice President Mike Pence's "So Help Me God," released last November, sold 37,600 print copies in the first week, while "Never Give an Inch: Fighting for the America I Love" by former Secretary of State Mike Pompeo sold 34,600. Former South Carolina Gov. Nikki Haley sold just 7,900 copies of her book "If You Want Something Done: Leadership Lessons from Bold Women," the first week after its publication last October. Haley became Trump's first major primary challenger when she threw her hat in the ring last month. Of course, book sales alone don't guarantee a politician's future success. Former Democratic presidential nominee Hillary Clinton sold 86,200 print copies of her 2014 book "Hard Choices" in the first week, BookScan data showed. But Clinton would go on to lose to Trump in the 2016 election. Meanwhile, BookScan said former President Barack Obama's book "The Audacity of Hope," which preceded his history-making 2008 White House run, sold 67,500 print copies in its first week. Publishing a strategically timed memoir can often be a precursor to a political run, with the books helping introduce a would-be candidate to a new audience. They also can be lucrative for politicians, yielding significantly more money than their salaries. But the books are often derided for presenting a sanitized version of a politician, revealing little about their past or personal life and offering a self-serving primer on their record and policy views. The New York Times' searing review of DeSantis' new book, for instance, said it made the governor seem like a "mechanical try-hard" exuding a "bullying sense of superiority." On Friday, DeSantis' book was listed No. 1 in the hardcover nonfiction category of the Times bestsellers' list. In 2011, DeSantis published "Dreams From Our Founding Fathers: First Principles in the Age of Obama" with High-Pitched Hum Publishing, reportedly a Jacksonville, Florida-based company that authors pay to print their books. "The Courage to Be Free" was published by Broadside Books, a conservative imprint of HarperCollins, which is owned by Rupert Murdoch's News Corp. Meanwhile, DeSantis' potential rival, Trump, is about to go back into the book market. This week, he announced "Letters to Trump," a photo book compiling his correspondence with a wide range of celebrities over several decades. Trump's second photo book since he left the White House in 2021 is set for release on April 25. In a social media post Friday evening, Trump accused DeSantis, without providing evidence, of having "groups buying his book in order to inflate sales." DeSantis' political team did not reply to CNBC's request for comment on the sales figures.

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3 Index Funds to Buy for March

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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Q4 2022 Aterian Inc Earnings Call

Q4 2022 Aterian Inc Earnings Call

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Q4 2022 Aterian Inc Earnings Call Participants Arturo Rodriguez; CFO; Aterian, Inc. Ilya Grozovsky; Director of IR & Corporate Development; Aterian, Inc. Yaniv Zion Sarig; Co-Founder, President, CEO & Chairman; Aterian, Inc. Alex Joseph Fuhrman; Senior Research Analyst; Craig-Hallum Capital Group LLC, Research Division Brian David Kinstlinger; Head of TMT Research, MD & Senior Technology Analyst; Alliance Global Partners, Research Division Marvin Milton Fong; Director & E-commerce Analyst; BTIG, LLC, Research Division Michael David Zabran; Research Associate; ROTH MKM Partners, LLC, Research Division Presentation Operator Good afternoon, and welcome to the Aterian, Inc. 2022 Fourth Quarter and Full Year Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded. I'd now like to turn the conference over to Ilya Grozovsky, Vice President of Investor Relations and Corporate Development. Please go ahead. Ilya Grozovsky Thank you for joining us today to discuss Aterian's fourth quarter and full year 2022 earnings results. On today's call are Yaniv Sarig, Co-Founder and CEO; and Arturo Rodriguez, our Chief Financial Officer. A copy of today's press release is available on the Investor Relations section of Aterian's website at aterian.io. I would like to remind you that certain statements we will make in this presentation are forward-looking statements, and these forward-looking statements reflect Aterian's judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting Aterian's business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our fourth quarter and full year earnings release as well as our filings with the SEC. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, the company may refer to certain non-GAAP metrics on this call. Explanation of these metrics can be found in the earnings release filed earlier today. With that, I will turn the call over to Yaniv. Yaniv Zion Sarig Thank you, Ilya, and thanks everyone on the call. Today, I'm going to go over the following topics. I'll start with a quick introduction of Aterian, for those who are new to our story, I'll then review key takeaways from our fourth quarter of last year, and I'll discuss our goals for 2023. Lastly, I'll address the long-term prospects for Aterian and share why we believe in our vision for the consumer product platform in the future. For those who are new to the story, here's what you need to know about our company. Aterian is part of a new breed of technology-enabled consumer product companies. We focus on building, acquiring and partnering with e-commerce brands online. Aterian owns and operates several consumer brands selling products across various categories on channels such as Amazon, Walmart, Shopify and eBay, both domestically and internationally. To allow us to scale, we've invested in building our own proprietary platform called AIMEE. AIMEE enables our team to manage our business more efficiently by injecting technology into processes that would otherwise have to be executed manually and will require hiring an unscalable and unsustainable workforce. Through its ability to analyze vast amounts of data and automate daily recurring tasks, AIMEE allows our team to find new product opportunities we can launch under our brands, manage these products at scale effectively across various channels, automate certain marketing and fulfillment task and much more. Our goal in the long term is to become one of the most efficient consumer companies in the world, expanding our footprint globally while continuing to invest in technology and an agile supply chain to drive scale and profitability. I'll now take a few moments to speak about our Q4 results as well as our goals for 2023. As we shared previously, our goal was, first and foremost, a discount and sell through high-cost inventory. As a reminder, due to the shipping container cost skyrocketing in 2021 and 2022, consumer brands across our industry were forced to ship goods at an average cost of [$17,000] per container to stay in business. These additional costs forced us to increase our product prices by an average of 20%, only to generate an average of 8% contribution margin, with some of our products seeing as low as 6% contribution margin versus our target of 15% at a normal price. As we saw the cost of shipping finally coming down, we took advantage of Q4 of last year and the demand that was generated by the holidays, discount our inventory to cycle through our existing goods so that we can replenish inventory at a lower cost basis, benefiting from pre-pandemic rates of shipping. What we're seeing now is an average cost of container that's closer to $4,000 per container. While our adjusted EBITDA took a hit, the decision to liquidate the long inventory now puts us on track to get back to stronger contribution margin starting in Q1 and Q2 of this year, and leading to our guidance of turning adjusted EBITDA profitable in the second half of 2023. This decision was also critical to preserve the competitive advantage of our product and avoid getting undercut by competitors who would benefit from the lower shipping rates. It's important to understand that our discounting and inventory liquidation efforts do not reflect a weak portfolio. In fact, some of our best products were part of the strategic efforts, all to make room for inventory at a lower cost basis. I'm happy to report our overall inventory position has been reduced from $76 million back when we started our normalization efforts in June of last year to $43 million in Q4. And the risky inventory has improved by $3 million, and we expect additional normalization to happen in Q1 with another $3 million to $4 million of inventory cycle through. This cash generation improves our balance sheet heading into '23. Our entire team feels now that Aterian has surmounted a very difficult period. And putting aside remaining inventory normalization we need to accomplish in Q1, we can finally look to pursue growth and profitability again. The energy and motivation we have comes from the relief and satisfaction of navigating complex challenges, but also from a continued belief in our vision. So what does the road ahead look like? I want to outline some of our goals in the next few months and explain how they tie into our vision. First and foremost, in line with the Q4 efforts, we're laser focused on achieving adjusted EBITDA profitability in the second half of the -- for our core business. This effort is primarily based on getting our cost basis of products back to pre early pandemic levels and executing well on our marketing strategies. Separately, many of our competitors have not been able to navigate out of the difficult macro level environment, and we're in the process of assessing several significant M&A opportunities to acquire assets from other Amazon aggregators. This is an ongoing effort and while we cannot guarantee its results, we're very optimistic about our ability to bolt on substantial amounts of additional contribution margin that will accelerate churning full year profitable in 2024. We're also finally going back to launch new products. And while we have already over 20 new products being developed, we're also looking to take our model a step further by starting to develop more differentiated and unique products. While we don't expect to become a hardware company by any means, we believe that the insights from our data-driven approach can provide the opportunity to work closely with manufacturers to design more advanced differentiated features through a bootstrap approach. We're also very much focused on continuing our international expansion. Recently, we made great progress with our European expansion, and our goal is to be as optimally positioned with our existing portfolio in Europe in 2024. Finally, I want to speak briefly about the long-term prospects for Aterian. We launched this company back in 2014 because we believe that e-commerce adoption will grow steadily year-on-year and marketplaces will dominate the lion's share of GMV globally. We were accurate about that prediction and a focus on building a company that can manage and scale brands and products with a marketplace for [doctrine]. According to research by [Essential], third-party sales through online marketplaces will account for 59% of all global commerce by 2027. We also realized at an inception that marketplaces will allow retailers to delegate a lot of their work to the brand, using -- to the brands that use them, which makes it difficult for those brands to scale. Just to look at the composition of sellers on Amazon tells a pretty remarkable story. While Amazon is not publishing this figure, Industry estimates are that third-party sellers on its marketplace generate approximately $390 billion of GMV. Of the 1 million plus active sellers out there, industry estimates point to massive fragmentation, only 60,000 sellers passing the $1 million a year revenue threshold in approximately 50 businesses only crossing the $100 million mark. So marketplaces of the future and have removed the barriers of entry that exist in traditional brick-and-mortar retail, allowing almost anyone to sell their products to hundreds of millions of buyers, but this comes at a price. Brands must manage all aspects of the business themselves. This includes forecasting, managing inventory, managing prices and discounts, managing marketing. This is where technology comes in. We always believe since inception, that the only way to scale a consumer company on marketplaces was to inject technology into its operations to automate the daily task required. Today, we use machine learning to help us reduce the cost of forecasting media buying and pricing optimization, recent exciting developments in AI should be eye-opening for any business leader out there. Aterian is already leveraging large language models such as ChatGPT to help synthesize sentiment in reviews, and we're looking to extend our use of AI rapidly to further improve our efficiency. Aterian is a consumer product company, not an AI company, but all consumer product companies out there, I believe -- from all companies out there, I believe that we have the DNA, the expertise and the culture to leverage technology to achieve a market-leading position in our industry over the long term. In general, I believe that the world will rapidly see 2 types of businesses forming. Those have built the internal expertise to harness AI as a powerful force that drives efficiency and competitive edge, and those who will be remembered in history books as not agile enough to adapt. Aterian does not only wish to be part of the first group. It's already one of the most sophisticated companies when it comes to applying technology to drive the value chain of e-commerce consumer brands. With that, I'll pass it on to Arty. Arturo Rodriguez Thanks, Yaniv, and good day, everyone. Here are the financial performance details of our fourth quarter. For the fourth quarter of '22, net revenue declined 13.3% to $54.9 million from $63.3 million in the year ago quarter, primarily due to reduced consumer demand, offset by a strategy of liquidating high-cost inventory. The fourth quarter net revenue of $54.9 million is comprised primarily of $52.3 million of our organic business, a nominal amount of revenue from our most recent acquisition and $2.6 million of wholesale revenue. The year ago quarter net revenue of $63.3 million was comprised primarily of $31.3 million of our organic business, $27.6 million of net revenue from our acquisitions and $4.4 million of wholesale revenue. Our organic revenue increased by $21 million due to classification of our past acquisition revenue going into organic revenue, our strategy to sell off higher-priced inventory and normalized inventory levels, offset by reduced consumer demand in the period. Our M&A revenue decreased approximately $27 million as all our material acquisitions have now been known for over a year, and that revenue has shifted into the organic revenue categorization. Our Q4 acquisition, while nominal from a financial perspective, was strategic and designed to leverage a competitor and drive sales to one of our other leading brand, and we are pleased with the progress of this strategy to date. Looking at our fourth quarter net revenue by phase, the $54.9 million broke down as follows: $40.8 million in sustain, $0.1 million in launch and $13 million in liquidate and inventory normalization. The year ago quarter net revenues of $63.3 million by phase broke down as follows: $52.7 million in sustain, $2.6 million in launch and $8 million in liquidate and inventory normalization. Our sustain decrease of $12 million relates to revenue shifting into liquidation phase and general consumer softness. Our liquidation increased by $5 million from our strategic initiative to sell off higher price inventory and normalized inventory levels. Finally, on revenue, our launch revenue declined as we previously disclosed, are pausing of launching new products in '22. The current launch revenues primarily attributed new valuations of existing products in the quarter. We are currently planning new product introductions for '23, though the timing will be opportunistic. Overall gross margin for the fourth quarter declined to 37.1% from 45.6% in the year ago quarter and decreased from 45.5% in Q3 '22, primarily attributed to our strategic initiative to sell off higher-priced inventory normalized inventory levels. Our overall Q4 '22 contribution margin, as defined in our earnings release, was negative 11.5% which decreased compared to the prior year CM of 7.9%, which is directly attributed to higher liquidation revenue from our strategic initiative to sell off higher priced inventory to normalized inventory level. Our Q4 2022 saw our sustain product contribution margin decreased to 8.3% versus 16.1% in Q4 '21 as we also reduced pricing to normalized inventory levels and other listing management initiatives. We do expect our sustained contribution margin to improve as we progress in 2023. Looking deeper into contribution margin for Q4 '22, our variable sales and distribution expenses as a percentage of net revenue increased to 51.6% as compared to 40.1% in the year ago quarter. This increase was primarily due to higher cost supply chain, including last-mile fulfillment and our product mix, including liquidation and normalization of inventory, offset by reduced storage costs. We do expect our sales and distribution expenses as a percentage of net revenue to improve as we progress in 2023. Our operating loss for the quarter of $22.8 million includes a reserve for barter credits of $1.6 million, $2.7 million of noncash stock compensation and a noncash loss on goodwill of $0.5 million. Our net loss for the quarter of $20.3 million includes a reserve for barter credits of $1.6 million, $2.7 million in noncash stock compensation, a noncash loss of goodwill of $0.5 million and a gain on fair value of warrant liability of $2.8 million. Adjusted EBITDA, as defined in our earnings release, for the fourth quarter of 2022 was a loss of $16.2 million compared to a loss of $3 million in the fourth quarter of '21. Our strategic decision of liquidating higher cost inventory and normalizing our inventory levels impacted our adjusted EBITDA in the period. However, this was a very important effort leading us to improve our core business and putting us on track to get back to stronger contribution margins in '23 and strengthening our balance sheet as we headed into the new year. Turning to the balance sheet. At December 31, we had cash of approximately $43.6 million compared with $26 million at the end of September 30. The increase in cash is primarily driven by the previously reported $20 million capital raised in early October, positive changes in working capital, offset by our net losses in the period. Our working capital improvement was part of our goal to strengthen the balance sheet, driven by moving out our more expensive long inventory and at December 31 inventory landed at $43.3 million, we have made great strides in Q3 and Q4 of improving our inventory composition and reducing our overall inventory as we expect to be completed with this process by mid-Q2 '23. Our credit facility balance landed at $21 million, which is down almost $3 million from the sequential quarter and down almost $12 million from December 31, '21. As our cash position has improved from capital raise and as we continue to normalize inventory, this reduced balance also resulted in lower interest expense. As we look at Q1 '23, which is typically our lowest revenue quarter and taking into account the current global environment inflation, we believe net revenue will be between $32 million and $36 million. Our adjusted EBITDA guidance is beginning to show improvement as we progress towards adjusted EBITDA profitability in the second half of '23. For the first quarter of '23, we expect adjusted EBITDA loss to be in the range of $4.8 million to $5.8 million, anticipating continued impact of inventory liquidation. This Q1 '23 adjusted EBITDA guidance on average is a 70% improvement from our Q4 '22 reported adjusted EBITDA and on average of 40% improvement from Q3 '22 adjusted EBITDA as we are beginning to see the results of our strategic efforts of liquidating high-cost inventory and normalizing our inventory level. In closing, '22 was a challenging year, but we have persevered through global supply chain disruptions and a challenging macroeconomic conditions. We have significantly reduced our inventory by moving on high-cost inventory and normalizing our inventory levels, which we believe puts us in a position to be adjusted EBITDA profitable in the second half of '23. We have also strengthened our balance sheet in '22, which gives us flexibility to navigate the current macroeconomic environment as it continues to unfold and allowing us to be laser focused on driving our core business. We are excited and proud of the company we are building. Aterian continues to have a very strong brand and many of our products continue to be some of the best sellers on Amazon. We continue to have industry-leading technology and logistics, and most importantly, our dedicated and hard-working people continue to do extraordinary work. As such, we are very confident and optimistic about Aterian's future. With that, I'll turn it back to the operator to open the call up to questions. Question and Answer Session Operator (Operator Instructions) Our first question will come from Alex Fuhrman with Craig-Hallum Capital Group. Alex Joseph Fuhrman Congratulations on what looks like a strong success, clearing some of the inventory that you'd been hoping to. I was wondering if you could talk about which categories you've seen the most demand for both during Q4 and now that we've got a couple of months of 2023 under your belt, where you're seeing the most demand? And is that informing where you're looking for M&A? Or are you really looking at all different categories for that? Yaniv Zion Sarig Alex, Yaniv here. I'll take that question. Good question. Overall, as we mentioned, overall consumer demand is a little softer, right? But because of all the efforts we've done on liquidation, we've got more success across pretty much the Board when it comes to the categories as typical with the seasonality of Q4 versus Q1, Q2 Q3, not a big difference there. I think I'd say to the second part of your question, the -- where we're looking for when it comes to acquisitions, I said in general, we probably want to diversify our portfolio a little bit. If possible, right, M&A is more opportunistic, but as much as possible from, I think, the supply chains that have hurt us in the last few years. So we're definitely tending to set our eyes a little more towards consumer product companies that are making their goods not necessarily in Asia, but maybe in the U.S. or Eastern Europe, South America. But of course, we're looking and leaving our eyes open to any of the opportunities. But again, if possible, we would -- the main goal potentially with the future M&A would be as much as possible, diversify from a supply chain perspective. Alex Joseph Fuhrman Okay. That's really helpful. And then can you give us a little bit more color on the bridge of how you get from what you just reported and what you're guiding to in Q1 to being adjusted EBITDA positive in the second half of the year. It looks like what you're guiding to for profitability in Q1 is better than -- I was expecting at least a much smaller than expected loss. How do you walk us from that in Q1 to being positive in the second half of the year? Is it primarily gross margin as you start to sell through inventory that wasn't brought in at insane container rates? Yaniv Zion Sarig Yes. I'll let Arty add. Go ahead, Arty. Arturo Rodriguez Yes. Thanks, Yaniv. No, Alex, I think you nailed it right at the end. I think -- as we said previously, it's taking us a couple of quarters here to get rid of this really expensive inventory that we brought in strategically back pre late 2021, but we had to take the impact, unfortunately, and pay those container rates. As you move that through, you're going to get back to a place where you can get back to target type CMs, right? And with that, you should drive into profitability. Obviously, consumer spend is always a question mark, but we do feel very confident that I think once we move through this more expensive inventory and the inventory that we're bringing in that's starting to land in April and May. For Q3 and even parts of our Q2 seasonal sales will be at better margins. And that's why we can sort of feel pretty confident in what we're seeing. Operator Our next question will come from Brian Kinstlinger with Alliance Global Partners. Brian David Kinstlinger Sorry, I joined late, if you answered this in your prepared remarks, but with the company releasing new SKUs now, maybe you can update us on how many SKUs were released in the fourth quarter, maybe how many you're expecting in the first quarter and maybe for the full year rough numbers. You don't have the exact number, but -- and then how is the weak consumer spending environment changing the pace of SKU launches? Yaniv Zion Sarig Brian, just to clarify, we're starting to launch products, but as you know, we're at -- that process takes time. And so my comment was on the fact that we have over 20 products that have been worked on and will be launched some of it this year, some of it next year. I think the impact you'll see is that through this year, we will continue to develop and launch products and most of it will come in 2024. So as you remember, right, the main reason we paused launching products was because of the unreliability of supply chains, both in terms of good arriving on time with all the delays that we've seen in the past but also very importantly, right, the fluctuations in cost of shipping were so unpredictable that it just creates a situation where you plan to launch a product and by the time it arrives, your cost basis is higher than you expected, and that's just not leading towards a good launch, right? So we essentially paused that for quite a while now. And now that we're finally seeing that stability in the supply chain, both in terms of the price of shipping but also the reliability, we're getting confident to go back to get and launch these products. But most of that the impact of these products and the launches happening will happen again second half of this year and mostly the impact will be felt in 2024. Brian David Kinstlinger Okay. And so are there any in the first -- in the fourth quarter and expected in the first quarter? Or are they all in process right now? Yaniv Zion Sarig So if there were any in the fourth quarter, there would have been products that would be what we call variations which means we kind of like to think of them as another version of an existing product. That's where we would have felt more comfortable. I don't -- it's not as material as when we typically do the launches that you're thinking about. And so again, I think that the answer is that with the efforts that we're putting on now, we'll be able to do it at least in the next few months, give a little more clarity on the time line that we're seeing around those launches happening. Brian David Kinstlinger And then as I've read more so in the private market, I think some -- there's some undercapitalized fulfilled by Amazon companies that are struggling. Are you beginning to see any fire sales and how aggressive can you when do you expect to be this year in 2023 in M&A? Yaniv Zion Sarig Yes, it's a great question, and you're absolutely right there. There's a lot of companies out there that are struggling, going through a lot of the challenges we went through in the last 1.5 years, let's say, right? And again, some of them are really in a very difficult situation. So we're very active talking to a lot of these competitors, exploring different opportunities, spending a lot of time with this. And as I mentioned in my remarks, we can't guarantee any outcome, but with the amount of effort that we're putting out there and the things we're seeing, we were overall quite optimistic that we'll be able to find some opportunities with distressed assets that are actually quite good, right? I mean I think a lot of the things we're seeing, obviously, it goes through the spectrum, right? But there's a lot of really good assets out there that we're basically dealing with the same situation where the demand of COVID and on the other side, the pressure of supply chain caused the perfect storm that put these great assets in a challenging position. And so we're, as I mentioned, quite active talking to all these companies and looking for these opportunities. We're hoping to have an exciting thing to share with everyone, but it's still work in progress at this point. Brian David Kinstlinger Last question I've got is when you first went public, there was a very pronounced seasonality to your business. Help us understand today how we should think about seasonality for the year in the different quarters. Yaniv Zion Sarig Yes. So I think the big difference from when we first IPO-ed and today, right, was at the time, I think Q2 and Q3 were kind of like the 2 strongest quarters and Q1 and Q4 were quite like behind. I think given the profile of the acquisitions we've done and some changes to our portfolio, Q4 now is becoming a much stronger quarter, right, and I think has the potential in a more normalized environment to see us even doing better over time. Q1 still is the one lag behind, but it's really -- it's really, again, just the composition of the portfolio that we have. And so you're still in a position where Q2 and Q3 are the strongest Q4 right behind there, and then Q1 is still behind the 3 of them right when you compare it to back when we IPO-ed. Operator Our next question will come from Marvin Fong with BTIG. Marvin Milton Fong I guess my first question, just on the first quarter revenue outlook down maybe something like 20% year-over-year. Just wondering if you could help us understand, I mean, how much of that is the consumer demand softness that you alluded to? Or is any of it just that you're entering the quarter with a little bit less inventory than you were in the same quarter last year? I just wanted to understand that dynamic a little bit better. Yaniv Zion Sarig Yes. Maybe I'll start and see if Arty wants to add anything. But just in general, Marvin, one of the, I think, maybe benefits of how we run our business and the different brands that we have across different categories, is that as opposed to probably other companies who are maybe just active in one category, we have a little bit more wider visibility on demand. And the answer is, as you kind of mentioned yourself, right, is really mainly driven by consumer demand being soft, right? I think that's no surprise given the overall economic outlook around us. But again, what's really good that we're seeing so far when it comes to our businesses, we're always kind of looking at that demand in the context of the entire category, and we have good visibility to the fact that it's not that we're losing market share, but more of that just a soft demand across the board, right? Arty, I don't know if you want to add anything, but that's kind of like overall how we are looking at this. Arturo Rodriguez Yes. No, that's right, Yaniv. I think that's why we're seeing that. I still think we still feel very confident on the year. I think we pointed in the past about being overall kind of flattish on the revenue side. So I just think a little bit -- we're seeing some of the consumer demand softness early in the year and then it should pick up back to where we believe will be stronger Q3 and Q4 revenues for us. I think the other side of that Marvin is even at that lower amount, you could see the adjusted EBITDA guidance improvement, right? It's a good testament of how we've really focused on clearing out the inventory that really set us up for a good 2023. And I think that's the other part of it, even though the revenue is low, you sort of see already the improvement based on the guide of the adjusted EBITDA on the profitability of the quarter. Marvin Milton Fong Yes. I mean you guys kind of basically touched on my next question, which was sort of you're reiterating reaching EBITDA breakeven in the second half of the year, you guys feel good in the sense that the consumer remains weak or even gets a little bit weaker, that you've stress tested it and you still feel good that you can hit that even if the consumer is softer. Yaniv Zion Sarig Yes. I mean I think -- yes, I think you're right. First of all, the category -- the consumer softness across the board, right? But I think also our experience with some of the categories and the positioning that we have on those in Q2, Q3 is giving us a lot of comfort around that. But again, the most important point here is really the cost base of the product, right? The contribution margin expansion that we were expecting is due to the fact that the efforts that we put in Q4 to make room for that inventory at a lower cost basis is going to create that margin expansion. And our logistics team has done a great job of securing a very significant amount of the inventory we needed for the second half at a lower cost, which also gives us a lot of comfort around that, right? I guess there was a lot of challenges, again, as I mentioned in the last 1.5 years, right, not just about the price of shipping but also the ability to even get your goods on a ship. And so now we feel quite confident in our projections given the fact that we were able to secure a position on the ship at a lower cost, and then we made room for that inventory to replace the older inventory, right? All these things combined give us that comfort with our prediction. Marvin Milton Fong Got you. And I guess my last question, maybe a more fun topic is you mentioned leveraging ChatGPT and OpenAI and that sort of thing. And also curious, I think you guys had always employed some form of AI looking at reviews and helping guide your business decisions and product decisions. Could you just kind of expand on what capabilities you're achieving now or expect to achieve in the near future with these new large language models that maybe you weren't able to efficiently in the past? Yaniv Zion Sarig Yes. Absolutely. So we use machine learning and automation across many different aspects of our business. I think if you really want to bucket in the 2 kind of big areas. One is understanding the consumer, their sentiment, what they think about other products, they think about our products. And the other side of it is just managing the complex quantitative day-to-day effort of managing the products, right, which includes, for example, forecasting, which is where we have developed our own machine learning base forecast and things like media buying and pricing, they use automation as well, right? So when it comes to what you mentioned with ChatGPT and large language model, I mean, I think the excitement obviously for us is huge. And as I mentioned in my comments before, we already started looking at -- I mean, not looking, we are already using ChatGPT to, in a way, actually augment some of the efforts that we've had with our own code around sentiment analysis on reviews. But Marvin, the most important thing that I think a lot of people that are not necessarily in the weeds on AI don't realize is that, the hardest thing about AI is actually having good data. And when I say that, what I mean is a lot of organization, except -- especially in the consumer product industry that is not necessarily a fact driven, right, not necessarily designed or have the DNA or have the systems and infrastructure and access -- and their own data in a way set up for AI, right? And that's something that really gives us some advantage, right? Because we -- we're a consumer company, right, but we're a consumer company that uses all our technology and things like a technology company, we have put us in a position through the years of effort that we put that we are set up to use AI across the board in many different ways. And again, with the large language models, I think that we'll see in the next few years, a lot of disruption across many different functions of business but I think only companies that actually have put the effort to prepare themselves to put that data, to normalize it, to make it available to these models are going to be the ones benefiting from it, right? And I think that's where again, both with our proprietary software and all the efforts that we've made to kind of make the data available to our own algorithms, we have the ability now to relate these advances of technology and get even more efficiency across many different functions, right? So we're very excited about everything that's happening out there, and we're really happy that we again set ourselves for success by always seeing that future and preparing for it and not waiting for it to happen, actually putting it to work with our own hands, right? So really excited about all that stuff and what it could do for us in the future. Operator (Operator Instructions) Our next question will come from Matt Koranda with ROTH MKM. Michael David Zabran It's Mike Zabran on for Matt. So the recent heavy discounting makes a lot of sense even on the more premier products, but just any visibility on when we can expect a halt or even a reduction in the level of discounting? And to what extent is pulling back on that heavy discounting factored into the second half EBITDA profitability expectation? Yaniv Zion Sarig Arty, I'll let you take that? Arturo Rodriguez Yes. Yes. No, I think again, if you follow discounting and pricing on Amazon, it's a bit dynamic, right? But the point here was if we can clear out all this expensive inventory and normalize our inventory levels, we can bring back to product at normal costing because now we're back to like pre-pandemic pricing from a shipping container perspective. And so as such, the view we've been saying is that as we enter the second half of the year, all that should be normalized. So we should be back to more normalized pricing along with normalized costing to get to a normalized contribution margin or starting to see a good chunk of that in Q3 and into Q4. So that's why we're really pointing towards that same half point. We could get that a little bit earlier into Q2, but we're really not -- we can't really say on that. So that's why we're really focused on the second half right now. Michael David Zabran Okay. So normal level of competitive discounting in the second half of the year, but first half of the year, we should get through all of the discounting to clear the excess inventory. Am I understanding that correct? Arturo Rodriguez Yes, yes. I mean you're always doing some form of discounting and price adjustments just to stay at the competitive landscape depending on the season. That's normal, yes. But yes, you're right. You should see more normal pricing type position as we enter the second half, for sure. Michael David Zabran Got it. That makes sense. Just one more for me. How are we circumventing the Amazon FBA fees? So I understand you guys have 3PL sites and FBA at your disposal, but maybe just speak to how we're optimizing between using Amazon versus 3PL sites to get products to customers. Yaniv Zion Sarig That's actually a great question. And really, the answer is, as you know, Mike, like we put a lot of effort in building a network of 3PLs that's connected to our AIMEE platform which, as you remember, we used to do our own fulfillment for the larger items, but also for the smaller items, which typically gets fulfilled through FBA, we store those items in our own 3PL before we send them to FBA to go to going in fulfilled, right? And the answer to your question relies on really how can we optimize the 3PL distribution of the products that go to FBA to reduce the cost of FBA, meaning if you have -- again, we have, I think, at this point, over 19 3PLs, maybe 1 less because we're optimizing all the time. When our logistics department receives containers, they actually use a bunch of different models that we put together to figure out what's the optimal way to send those inventories to the 3PL. And the goal there for that inventory is to be as close as possible to the FBA warehouses to which we ship them so that we can, a, have less inventory in FBA; and b, spend less money sending it to FBA, which then offsets a little bit some of those kind of higher FBA fees that we're seeing recently, right? So again, our network of warehouses doesn't only give us an advantage when it comes to oversized items because our fulfillment there is quite competitive with FBA. But also for the smaller items, where the fulfillment will happen to FBA, the distribution to be as soon as possible to the FBA centers helped a lot. Operator It appears there are no further questions. This concludes your question-and-answer session. I would like to turn the conference back over to Ilya Grozovsky for any closing remarks. Ilya Grozovsky Thanks. As part of our shareholder Perks Program, which, as a reminder, investors can sign up for at www.aterian.io/perks, participants have the ability to ask management questions on our earnings calls. I want to thank all of the shareholder Perks participants for their loyalty, their participation in program and for their questions. I have picked a few of the most popular questions this quarter and that they have sent in. So here they are. First question is, when do you intend to be fully operational in Europe and do you plan to cover more European countries in the future? Yaniv Zion Sarig Thanks, Ilya. So obviously, we're really excited about Europe. It's been something that we wanted to do for a while, but the supply chain crisis was preventing us from making moves a little earlier. But in general, as we mentioned in the prior press release, we already have good infrastructure set up in some of the most important countries. And we currently don't expect to go into further countries in Europe. But really, it's about maximizing what we're already in, which are the biggest markets and just sending more of our products there, right? That's the big effort here in 2023 is now that the supply chain issues are cleared. We're focused on making sure that we can maximize the amount of our existing portfolio products that are not yet in Europe that we can bring to market in Europe, which again, should have a significant effect on 2024, right? Once we've achieved that, we could then look at other countries in Europe, but there's no current plan to do that at this point. There's enough work with what we're doing. Ilya Grozovsky Great. Next question was, when do you expect to clear inventory purchased during COVID and start benefiting from the lower shipping costs? Yaniv Zion Sarig Yes. So as already mentioned as well, right, we made great progress on reducing the inventory. I mean, it was almost -- it was probably $73 million back in June, down to $43 million. We still have a bit of inventory on the balance sheet that remains longer, and we're going to clear it out through the end of the second quarter at most. And really, our target is to get to less than 5% long inventory, which I think at this point is quite achievable based on the progress we've made in Q4 and continuous work in Q1. Ilya Grozovsky Great. Okay. And the last question was what was the health and wellness brand that you acquired in October of 2022? And how will that come to market? Yaniv Zion Sarig Yes. So there was a lot of interest in this. And here's what we want to share, right? So we bought a small competitor to Squatty Potty. It was a competitor that had a product specifically that was competing against that brand and was actually undercutting our price and hurting our sales at the Squatty Potty level. We had the opportunity to acquire this very small brand because they were like a lot of other consumer companies in a difficult position. And we did it really just because we wanted to take control the listing and stop undercutting Squatty Potty, which is a long-term investment, right? Because if we -- if that competitor has gone through the challenges that they had and continue to invest in their business, they could have further chips at our Squatty Potty brand. And so we just took advantage of that and brought that product in, so that they're not a long-term issue for us, right? So... Ilya Grozovsky Got it. Great. This concludes the Q&A portion of the call. In terms of upcoming calendar, Aterian management will be participating in the 35th Annual ROTH Conference, March 12 through 14 in Laguna Niguel, California. We look forward to speaking with you on future calls. This ends our call, and you may now disconnect. Thank you. Operator The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Most Active Equity Options For Midday - Friday, March 10

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TQQQ: Still Waiting And Watching

TQQQ is a leveraged ETF that has been on my watchlist. Read why I don't think the valuations for most of the largest stocks in the index are attractive today.

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TQQQ: Still Waiting And Watching Summary - TQQQ is a leveraged ETF that has been on my watchlist, but I don't think the valuations for most of the largest stocks in the index are attractive today. - I talk a bit about inflation and how I think commodities, energy, and real assets will outperform the tech sector. - Of the top 10, I only find Amazon and Broadcom attractive today, and I actually bought a put option on Tesla after its massive share price run to start 2023. While I typically avoid ETFs due to the fees, an ETF that has been on my watchlist for more than a year is the ProShares UltraPro QQQ ETF (NASDAQ:TQQQ). I have seen comments asking when I plan to buy, or if I bought any steep declines like the one last fall. I want to talk briefly about some of the characteristics of TQQQ (and other leveraged ETFs) before getting into the largest holdings. My plan for potentially buying a tiny position of TQQQ would probably have a one to six-month timeframe, basically a short- to medium-term strategy. I would probably be looking for another 20% decline (or more) in the major indices before buying TQQQ. If we see that, combined with a potential return of the Federal Reserve money gun, TQQQ could be an interesting short-term trade. TQQQ offers more speculative upside than QQQ on a smaller position size, and I would rather buy TQQQ than use leverage to buy QQQ. You pay the ETF management fees, but I think it's more attractive than borrowing to buy QQQ at current margin rates. Disclaimer The risks with TQQQ include beta slippage, but also short-term volatility that can be stomach-turning. For example, a big market decline can cut an investment in TQQQ by 20% or 30% in a week, so investors should go into an investment in TQQQ with eyes wide open to those risks. Investors that are unfamiliar with the potential risks might want to spend a couple of minutes to read what the SEC has to say about leveraged ETFs. ProShares UltraPro QQQ® (the "Fund") seeks daily investment results, before fees and expenses, that correspond to three times (3x) the return of the Nasdaq-100® Index (the "Index") for a single day, not for any other period. A "single day" is measured from the time the Fund calculates its net asset value ("NAV") to the time of the Fund's next NAV calculation. The return of the Fund for periods longer than a single day will be the result of its return for each day compounded over the period. The Fund's returns for periods longer than a single day will very likely differ in amount, and possibly even direction, from the Fund's stated multiple (3x) times the return of the Index for the same period. For periods longer than a single day, the Fund will lose money if the Index's performance is flat, and it is possible that the Fund will lose money even if the level of the Index rises. Longer holding periods, higher Index volatility, and greater leveraged exposure each exacerbate the impact of compounding on an investor's returns. During periods of higher Index volatility, the volatility of the Index may affect the Fund's return as much as or more than the return of the Index. The Fund presents different risks than other types of funds. The Fund uses leverage and is riskier than similarly benchmarked funds that do not use leverage. The Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the consequences of seeking daily leveraged (3x) investment results of the Index, including the impact of compounding on Fund performance. Investors in the Fund should actively manage and monitor their investments, as frequently as daily. An investor in the Fund could potentially lose the full value of their investment within a single day. Inflation & The Next Decade The biggest problem I see with TQQQ is the concentration in the large tech companies, which is also a problem for Invesco QQQ ETF (QQQ), which TQQQ follows. While that worked great for investors until late 2021, I think markets have begun to shift over the last couple of years. I'm of the opinion that commodities, energy, and companies with real assets will outperform over the next decade. I was watching for inflation starting in 2020 for several reasons, but I think the idea that inflation will come down to where it was over the last decade is wishful thinking. That doesn't mean I'm predicting hyperinflation or anything drastic like that, but I think we will see inflation stop and start for years, and I think inflation will probably be 5% or higher for years. That's just CPI, and if you want to go down the rabbit hole on inflation, you should check out shadowstats.com. Their website tracks inflation using old measurements, which shows how understated CPI is compared to actual inflation. I will do brief overviews of each company in the top 10, but on the whole, I don't think the largest parts of TQQQ represent attractive risk/reward prospects today. Apple & Microsoft Like any market cap weighted index or ETF, Apple (AAPL) and Microsoft (MSFT) will make up a large portion of the fund. While this is true for S&P 500 indices like (SPY) or (VOO), these two companies have an even larger weighting in TQQQ. Both have well over 10% weightings, but I'm not going to go into too much detail because I wrote articles on both in the last couple of months (here and here). Apple has a market cap of $2.4T, while Microsoft has a market cap of $1.9T, which will probably be a drag on forward returns. I don't find either attractive simply due to the valuations, which I talked about in those articles, and I have my doubts on how much either can grow from here. Another thing that I'm not a huge fan of is how both companies continue to buy back large amounts of stock regardless of the valuation. Amazon Amazon (AMZN) and its $972B market cap account for another 6% of the ETF. I have been bullish on Amazon because of AWS, but I have been wondering if it might be worth selling my small position in Amazon to buy something else. I still think the company is in a good position with their core businesses, especially AWS, but if the right opportunity comes along, I might part ways with my Amazon shares. Of the largest components of TQQQ, I think Amazon is still the most attractive today. The Ad Giants - Google & Meta These two are companies I'm not really interested in owning for several reasons, but I don't think the coming years are going to be a great environment for advertising businesses like Google (GOOG) (GOOGL) and Meta (META). Google has a P/E of 20.5x and a market cap of $1.2T, and accounts for about 7.5% of TQQQ. I'm curious to see how ChatGPT and other developments, including smaller video platform competitors for YouTube, impact Google's search engine monopoly, but I don't think the next decade will be as good for their business as the last one was. Meta has had a massive run since the beginning of November, and shares now trade at an earnings multiple of 21x. This puts the market cap at $480B and is 2.5% of TQQQ. I have my doubts about the Metaverse strategy, and I have been critical of the company's buybacks a couple of years ago as the CEO was dumping a huge number of shares. Like Google, I think the next decade will not be like the last one for Meta. Pie In The Sky Valuations - Nvidia & Tesla Both these companies have had massive runs to start 2023, and I think the valuation is so rich that I would honestly rather be short these two than own them. I actually bought a put option on Tesla (TSLA) when shares were around $205, so we will see if that pays off. The contract expires near the end of April with a strike of $150. I don't gamble much, but I watched the absurd move Tesla made to start the year, and it looked like short-covering and speculative buying instead of an actual fundamental improvement in the business. If shares keep dropping, I will probably look to exit the trade in the next couple of weeks. Nvidia (NVDA) also had its own massive move, including a large jump after earnings. They can talk all they want about AI in their earnings calls, but I don't see how investors owning Nvidia today generate attractive forward returns. I could be wrong, but unless Nvidia can grow rapidly through the next couple of cycles for the semiconductor industry, buying at the current valuation is not attractive in my opinion. Between the two companies, they account for about 6% of TQQQ, which means there is another sizable chunk of the ETF that find unattractive. Rounding Out The Top 10 - Pepsi & Broadcom Pepsi (PEP) is the only non-tech company in the top 10, with a 2.3% weight. While I don't think the downside is as big as some of the other stocks in the top 10, it's not a business I would pay over 25x earnings for, despite a 2.7% dividend. It's a slow-growth business, and I don't find their business mix to be all that attractive. It's basically just a mix of different junk foods and drinks, and I think people will start to pay more attention to their diet and health in the coming years. Broadcom (AVGO) would probably be my first choice to buy in the top 10 today, but it only accounts for just over 2% of the ETF. The company has a P/E of just over 16x and a dividend yield of 2.9%, and a history of being a very successful operator in the semiconductor industry. They operate in a different part of the industry than Nvidia, but the valuation is much more attractive. The market cap is $264B, so they might not grow as fast as the last decade, but Broadcom is a solid dividend growth stock. Conclusion I'm sure some commenters will talk about their trades in TQQQ (which I love to hear about, by the way), but I'm just not at a point where I'm comfortable buying the ETF today. TQQQ has a different risk profile than QQQ, including potential systemic issues and massive volatility with leveraged ETFs, but if your timing is good, you get a lot more bang for your buck buying the leveraged TQQQ ETF. I have said in the past that I'm looking for capitulation and panic, but I will still look elsewhere as long as the valuations for the largest stocks in the index stay rich. There are only a couple of stocks in the top 10 I find attractive today, but TQQQ could still have a huge run if the market takes off. While TQQQ is still on my watchlist, it is staying on the backburner while I focus on other sectors that I find more attractive today. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Also short TSLA via put options. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (18) TQQQ is great macro play setup right now. Interest rate hikes will be done shortly. Pause on deck and with slowing growth and weak GDP on deck that means they will then start to lower rates maybe as early as the end of this year, or 2024 for sure. Will be fun to revisit articles and comments when the end of 2023 rolls around. The announcement of just a pause from Powell could send TQQQ up substantially in a very short time. 21.02 +0.14 (+0.67%) After hours: 05:09PM ESTManaged to buy right into this bear action yesterday @ 22.85. Made .41 cents selling calls. Been waiting months for the 'coming recession'. Not sure if it's happening now.I'll be selling more calls next week.

AMZN

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Recession Fears Impacted Amazon.com (AMZN) in Q4

Weitz Investment Management, an investment management firm, released its “Partners III Opportunity Fund” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund’s Institutional Class returned +5.45% compared to a +7.18% return for the Russell 3000 Index. For the full year, the fund returned -22.46% compared to […]

Yahoo

Recession Fears Impacted Amazon.com (AMZN) in Q4 Weitz Investment Management, an investment management firm, released its “Partners III Opportunity Fund” fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund’s Institutional Class returned +5.45% compared to a +7.18% return for the Russell 3000 Index. For the full year, the fund returned -22.46% compared to -19.21% for the benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022. Weitz Partners III Opportunity Fund highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the Q4 2022 investor letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products and subscriptions. On March 9, 2023, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $92.25 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -5.49%, and its shares lost 36.61% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $945.313 billion. Weitz Partners III Opportunity Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2022 investor letter: "Amazon.com, Inc. (NASDAQ:AMZN), perhaps the ultimate “COVID beneficiary,” has seen its shares dip below pre-pandemic levels as investors brace for a potential recession's impact both on retail spending as well as slowing adoption of Amazon's cloud infrastructure service, Amazon Web Services. Meta, Alphabet, Amazon and CarMax were all top detractors for the quarter and calendar year periods (FIS and Liberty Broadband, respectively, complete the quarterly and calendar-year detractor lists.) To varying degrees, each is managing through cyclical challenges during a period of substantial investor pessimism. Drawdowns of this magnitude are painful, and it may be prudent for management to moderate the pace of some investments, but we remain encouraged by their long-term focus. In the short run, cutting spending indiscriminately to “defend earnings” may lessen the pain of a drawdown, but it seldom grows a company's business value — the ultimate prize." Photo by Sunrise King on Unsplash Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 240 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the fourth quarter which was 269 in the previous quarter. We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared the list of best stocks under $100. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors. Suggested Articles: Disclosure: None. This article is originally published at Insider Monkey.

AMZN

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SXSW 2023: Austin becomes the global center for AI & deep tech

There’s something in the air in Austin, Texas, and it’s not the sound of fans cheering on the Longhorns, the twang of a country guitar, or the smell of Texas BBQ. It’s South by Southwest, an annual celebration that’s billed as both a conference and a festival, or somewhere in the middle, but as organizers and veterans will tell you, ‘you just have to be there.’ It’s a mashup of film, music, tech, and culture. A place where you can watch Ironman lecture a crowd on cyber-security, receive healthcare advice from the Jonas Brothers, and watch a movie premiere in virtual reality, all in one afternoon. But why is this happening? And who’s going? Well, everyone- fans, entrepreneurs, thrill seekers, investors, and they’re all going for the same reason- they’re looking for the next big thing. For the first time in a long time, the tech sector is experiencing a transformation. You’ve read about it in the news, heard about it in the break room, and you’ve seen it with your own eyes on social media. I’m talking about AI and what some are calling “deep tech” – those scientific advancements which include innovations in areas like virtual reality and robotics. Between star studded conversations and out-of-this-world exhibits, SXSW will give us a sneak peak into the future and how these new technologies will change our economy and our world, from the way we work, to the way we play. We’ll be speaking to the top thinkers and up and coming entrepreneurs about what all of this means for both businesses and consumers, because we’re on the edge of a brand new era in modern technology, and SXSW is the main stage. Over the past few years, there’s been a shift in how we think about the tech industry and the emergence of a new capital city for American business. Tesla (TSLA), Apple (AAPL), Google (GOOGL), Oracle (ORCL)— why are the world’s most valuable companies all moving to Austin, Texas? Could it be the weather? The taxes? The food? Or maybe it’s the vibe? The answer lies at South by Southwest: Austin’s coming out party, at the conference and the festival, or somewhere in the middle.

Yahoo

SXSW 2023: Austin becomes the global center for AI & deep tech There’s something in the air in Austin, Texas, and it’s not the sound of fans cheering on the Longhorns, the twang of a country guitar, or the smell of Texas BBQ. It’s South by Southwest, an annual celebration that’s billed as both a conference and a festival, or somewhere in the middle, but as organizers and veterans will tell you, ‘you just have to be there.’ It’s a mashup of film, music, tech, and culture. A place where you can watch Ironman lecture a crowd on cyber-security, receive healthcare advice from the Jonas Brothers, and watch a movie premiere in virtual reality, all in one afternoon. But why is this happening? And who’s going? Well, everyone- fans, entrepreneurs, thrill seekers, investors, and they’re all going for the same reason- they’re looking for the next big thing. For the first time in a long time, the tech sector is experiencing a transformation. You’ve read about it in the news, heard about it in the break room, and you’ve seen it with your own eyes on social media. I’m talking about AI and what some are calling “deep tech” – those scientific advancements which include innovations in areas like virtual reality and robotics. Between star studded conversations and out-of-this-world exhibits, SXSW will give us a sneak peak into the future and how these new technologies will change our economy and our world, from the way we work, to the way we play. We’ll be speaking to the top thinkers and up and coming entrepreneurs about what all of this means for both businesses and consumers, because we’re on the edge of a brand new era in modern technology, and SXSW is the main stage. Over the past few years, there’s been a shift in how we think about the tech industry and the emergence of a new capital city for American business. Tesla (TSLA), Apple (AAPL), Google (GOOGL), Oracle (ORCL)— why are the world’s most valuable companies all moving to Austin, Texas? Could it be the weather? The taxes? The food? Or maybe it’s the vibe? The answer lies at South by Southwest: Austin’s coming out party, at the conference and the festival, or somewhere in the middle.

AMZN

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ChatGPT Says These 5 Tech Stocks Can Make You Rich in 5 Years

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

InvestorPlace

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

AMZN

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Want a Stock That Can Double? Focus on Free Cash Flow

The thought of doubling your money in the stock market sounds good, doesn't it? Achieving this goal isn't all that hard if you can hold onto your investments for a long enough period of time. Even at a relatively low annualized growth rate of 4%, an investment would increase by 100% in value in around 18 years.

Yahoo

Want a Stock That Can Double? Focus on Free Cash Flow The thought of doubling your money in the stock market sounds good, doesn't it? Achieving this goal isn't all that hard if you can hold onto your investments for a long enough period of time. Even at a relatively low annualized growth rate of 4%, an investment would increase by 100% in value in around 18 years.

AMZN

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Why Amazon, Disney, and Alphabet Are No-Brainer Buys Right Now

Amazon (NASDAQ: AMZN), Disney (NYSE: DIS), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) each have substantial market shares in industries that are on the rise. Since then, its market cap grew to $959.1 billion, making it the fifth-largest public company in the world. Its success primarily came from its leading 37.8% market share in e-commerce, with the company a major reason why online retail skyrocketed over the last decade.

Yahoo

Why Amazon, Disney, and Alphabet Are No-Brainer Buys Right Now Amazon (NASDAQ: AMZN), Disney (NYSE: DIS), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) each have substantial market shares in industries that are on the rise. Since then, its market cap grew to $959.1 billion, making it the fifth-largest public company in the world. Its success primarily came from its leading 37.8% market share in e-commerce, with the company a major reason why online retail skyrocketed over the last decade.

AMZN

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Meta Platforms Up 104.12% Since November And Could Have Strong Upside

Based on a FCF valuation analysis of 32 of the largest companies in the S&P 500, Meta is at least 30% undervalued. See more analysis of META stock here.

SeekingAlpha

Meta Platforms Up 104.12% Since November And Could Have Strong Upside Summary - Based on a FCF valuation analysis of 32 of the largest companies in the S&P 500, Meta is at least 30% undervalued. - Meta Platforms continues to see engagement increase across its platforms, and more than 1/3rd of the global population utilizes its applications. - META has some tailwinds including $40 billion of authorized buybacks which could boost EPS and a ban on TikTok which could be a revenue driver. Meta Platforms (NASDAQ:META) was a market favorite over the past decade, appreciating by 1,192.92% from its IPO in June 2012 to the fall of 2021. Despite negative headlines and being hauled in front of congress and congressional committees, shares of META appreciated from $31.91 to $380.66. Over the next 13 months, from September 2021 to October 2022, the wheels came off, and META lost -76.94% of its value, falling from $382.05 to $88.09 for a loss of $293.96 per share. The downward decline was immense and unpleasant for many shareholders, such as myself. Things have been looking positive for META lately, as Mr. Zuckerberg has been making tough decisions regarding costs, slashing prices for VR headsets, and realigning his focus on profits. The market has been receptive, and over the past 4 months, shares of META have appreciated 104.12% as they have gone from $88.91 to $181.43 for an increase of $92.57 per share. Despite shares more than doubling, they are still off their highs by a considerable amount, and I feel shares are at least 30% undervalued and could finish 2023 well above $250 per share. META produced a solid Q4 which consisted of increased engagement Facebook isn't dead, Instagram isn't slowing, and WhatsApp is still utilized. META reached more than 3.7 billion people monthly across its family of apps in 2022. Meta's Family Daily Active People (DAP) increased by 1.02% QoQ to 2.96 billion people, while Family Monthly Active People (MAP) increased by 0.81% to 3.74 billion people. From an active user perspective, Daily Active Users (DAU) increased by 0.81% to 2 billion people, while Monthly Active Users (MAU) increased to 2.96 billion, up 0.17% MoM. There is no shortage of engagement across META's family of apps, as more than 1/3rd of the global population utilizes its platforms each month. In Q4 2022, ad impressions delivered across META's apps increased 23% YoY. In 2022 META saw its Ad impressions increase 18% YoY. These numbers illustrate how embedded META's family of applications continues to be throughout our civilization. More than a decade later of going public, engagement is still growing at META. META is a global brand that continues to play a critical role in how communication and connection is achieved in 2023. If there was a drop off in engagement, there would be a serious issue because that could correlate to lower revenue and earnings potential. That's not the case , and over the previous 2 years, META has gained 155 million users. With the looming TikTok ban META's applications could see a boost in engagement in both time spent using their platforms in addition to an increased user count in the U.S. This would probably provide a boost to their earnings potential as 46.27% of their advertising revenue ($52.58 billion / $113.64 billion) came from the U.S ad Canada in 2022. META is taking its medicine and focusing on profitability On the Q4 conference call, Mr. Zuckerberg was clear that 2023 would be the year of efficiencies. META closed out 2022 with a large round of layoffs and restructured some teams to optimize their operations. Mr. Zuckerberg went as far as to indicate that this would be the beginning of META's focus ad not the end regarding efficiency. The next step would be flattening META's org structure and removing layers of middle management in addition to deploying A.I. tools to boost productivity from engineering. META will also focus on capital allocation regarding CapEx ad be proactive about cutting projects that aren't performing. Recently on March 6th 2023, a report was released that META is set to cut thousands of additional jobs as part of a newly planned round of layoffs. META had cut 13% of its workforce, roughly 11,000 people in November of 2022, and thousands of more employees will supposedly be let go as early as this week. META has reportedly asked directors and V.P.s for lists of employees that could be cut and are tied to financial targets senior leadership has put in place. META is projecting that in Q1 of 2023, they will generate between $26 billion to $28.5 billion in revenue, which takes into consideration approximately 2% headwind in foreign currency due to exchange rates. In Q1 2022, META generated $27 billion in revenue, so if they are able to achieve $28 billion in Q1 of 2023, that would be a YoY increase of 3.7%. What's interesting is that META has provided full-year guidance on the expenses side. META has lowered their total expense guidance from $94 billion to $100 billion to $89 billion to $95 billion due to slower anticipated growth in payroll expenses and cost of revenue. META has also lowered its CapEx spending from $34 billion to $37 billion to $30 billion to $33 billion. For all of the negative publicity in 2022, META was still wildly profitable, driving net income of $23.2 billion, which is a profit margin of 19.9%. Currently, how large of a success VR/AR and the Metaverse will be is purely speculation. What isn't speculation is that there are now over 200 apps running on META's V.R. devices that have generated in excess of $1 million in revenue. META plans on bringing its discovery engine, ads, business messaging, and generative A.I. to the future platforms for the Metaverse. META has also cut the price of the Quest Pro to about $999 and reduced the price of the Quest 2 256 GB model to about $429. The Metaverse won't be a winner take all situation, but it could be a winner-take-most scenario. META is a clear leader in the space, and with the amount of capital their allocating, Reality Labs could be a huge success in the future. I believe META is undervalued by roughly -32% built a model on how I like to determine a company's fair market value. Some may agree, and some may not. I start with the total equity of a company. Total equity is simply total assets minus total liabilities. This is my baseline because if a company was to dissolve itself, theoretically, the total equity is what would be left for the shareholders to chop up among themselves after all liabilities are zeroed out. After the baseline for total equity is established, I look toward profitability, specifically FCF. I look at the closest peers, and similar-sized companies to find the average multiple on FCF the market is valuing companies at. Then I will add the total equity by the company's current FCF multiplied by the market multiple to determine a fair value for the company to determine if it's under or overvalued. In META's immediate peer group of Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Tesla (TSLA), and NVIDIA Corporation (NVDA), the average price to FCF is 55.79x. I didn't use Amazon (AMZN) because they have negative FCF. META trades at the 2nd lowest price to FCF at 25.18x of this peer group. Using the average P/FCF plus equity, META should have a market cap of $1.19 trillion, making it -59.64% undervalued based on its current market cap. Now, I want to also look at META vs. the largest companies in the S&P 500, so I compared META in the same fashion to 32 of the largest companies. In addition to the immediate peer group I added Berkshire Hathaway (BRK.B), Visa (V), Exxon Mobil (XOM), UnitedHealth (UNH), JPMorgan Chase (JPM), Johnson & Johnson (JNJ), Walmart (WMT), Mastercard (MA), Procter and Gamble (PG), Chevron Corporation (CVX), Home Depot (HD), Eli Lilly (LLY), AbbVie (ABBV), Merck & Co. (MRK), Broadcom (AVGO), Coca-Cola Company (KO), Oracle (ORCL), PepsiCo (PEP), Thermo Fisher (TMO), McDonald's (MCD), Salesforce (CRM), Danaher (DHR), Abbott Labs (ABT), Linde (LIN), and Wells Fargo (WFC) to my analysis. The larger peer group has an average P/FCF of 30.49x, significantly lower than the immediate peer group average of 55.79x. META currently trades at a -18.64% discount to the peer group average P/FCF as their P/FCF is 25.18x. When META's equity is combined with the average P/FCF multiple it creates a market cap of $715.12 billion which puts its current market cap at a -32.94% discount. I have selected companies across each sector, and there is little to no reason in my mind why META should be trading at this large of a discount. $40 billion in buybacks will increase shareholder value and should increase EPS In Q4 of 2022, META repurchased $6.91 billion of their common shares, bringing their repurchases to $27.93 billion in 2022. META announced they were increasing their buyback authorization by $40 billion. With a current market cap of $479.56 billion, META would be repurchasing an additional 8.34% of its common shares. At the rate META repurchased shares in 2022, they could fulfill this repurchase authorization over the next 2 years. When people think about value they usually associate it with price per share. Another way to look at it is what your shares represent. In 2022, META generated $8.63 per share of EPS and had 2.61 billion shares outstanding. If META buys back 8.34% of the common shares and still generates the same earnings as they did in 2022, their EPS would increase to $9.68 without adding a single dollar of earnings. This is why buybacks are so powerful because they increase EPS and increase the amount of revenue and EPS that each share is entitled to, granted that revenue and earnings don't decline YoY. The analysts are already estimating that META will generate $9.29 of EPS in 2023 and $11.35 of EPS in 2024. Depending on how quickly META repurchases shares, these estimates could be low and META could be setting up for some interesting earnings beats in the future. Conclusion I believe shares of META are undervalued by at least 30%. When I look at the largest companies in the S&P 500, the average P/FCF is 30.49x, and META trades at 25.18x. META still generates over $20 billion annually of pure profit, and Mr. Zuckerberg has made it clear that profitability is front and center. Between cost efficacy measures such as layoffs and prioritization of projects in addition to $40 billion of additional buybacks, META could exceed analyst estimates for EPS, causing the share price to increase. If TikTok gets banned in the U.S it will create a huge tailwind for shares of META. As it stands, I think Meta is at least 30% undervalued prior to any growth in 2023. Engagement clearly isn't declining, and META is an exciting name for the remainder of the year. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of META, AAPL, GOOGL, TSLA, AMZN, XOM, KO, VZ, ABBV, ORCL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (18) And I still think Whatsapp is going to be huge for META in the next 5 years with regards to revenue.

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Magnite`s SpringServe joins Amazon Publisher Services Ad Server Certification

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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Should You Finally Cancel Your Amazon Prime Membership?

Such may be the case with Amazon Prime. The cost of a Prime membership is $14.99 a month, but if you pay for a year of the service at a time, your cost will be just $139. As such, you may want to consider cutting ties with your Amazon Prime membership.

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Should You Finally Cancel Your Amazon Prime Membership? Such may be the case with Amazon Prime. The cost of a Prime membership is $14.99 a month, but if you pay for a year of the service at a time, your cost will be just $139. As such, you may want to consider cutting ties with your Amazon Prime membership.

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Amazon's Brilliant Move to Revolutionize Computer Networks

In this video, I'll explain how Amazon (NASDAQ: AMZN) plans to use diamonds and how it could affect the future of technology. *Stock prices used were from the trading day of April 6, 2023. The video was published on April 7, 2023.

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Amazon's Brilliant Move to Revolutionize Computer Networks In this video, I'll explain how Amazon (NASDAQ: AMZN) plans to use diamonds and how it could affect the future of technology. *Stock prices used were from the trading day of April 6, 2023. The video was published on April 7, 2023.

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Credit Suisse’s 12 Highest-Conviction Top Picks

In this article, we’re going to take a closer look at Credit Suisse’s 12 Highest-Conviction Top Picks. In order to skip ahead, take a look at the Credit Suisse’s Top 5 Highest Conviction Picks. Swiss bank Credit Suisse Group AG (NYSE:CS) has always been on the radars due to the fact that it’s one of […]

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Credit Suisse’s 12 Highest-Conviction Top Picks In this article, we’re going to take a closer look at Credit Suisse’s 12 Highest-Conviction Top Picks. In order to skip ahead, take a look at the Credit Suisse’s Top 5 Highest Conviction Picks. Swiss bank Credit Suisse Group AG (NYSE:CS) has always been on the radars due to the fact that it’s one of the oldest and largest banks in Switzerland, which also classifies as a SIFI (systemically important financial institution). However, in the past few months the bank has been in the limelight for totally different reasons. The bank has been struggling financially and in February 2023, Credit Suisse Group AG (NYSE:CS) reported an annual loss of CHF 7.3 billion ($7.95 billion), the biggest loss since the 2008 financial crisis. Later in March, the financial institution published its 2022 annual report, in which it stated that it had identified “material weaknesses” in controls over financial reporting. “The material weaknesses that have been identified relate to the failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements in its financial statements and the failure to design and maintain effective monitoring activities relating to (i) providing sufficient management oversight over the internal control evaluation process to support the Group’s internal control objectives; (ii) involving appropriate and sufficient management resources to support the risk assessment and monitoring objectives; and (iii) assessing and communicating the severity of deficiencies in a timely manner to those parties responsible for taking corrective action.” As a result, Credit Suisse Group AG (NYSE:CS) had to revise its consolidated financial statements for the three years ended December 31, 2021. pichetw/Shutterstock.com On the back of the financial struggles, Credit Suisse Group AG (NYSE:CS)’s stock price has declined by more than 71% since the beginning of the year, including a 64.5% drop recorded since March 14, when the annual report was published. The drop was further fueled by the bank’s largest investor, Saudi National Bank, stating that it wouldn’t be able to provide more financial aid. Despite Credit Suisse borrowing an additional CHF 50 billion from the Swiss National Bank and attempting to undertake other measures, the panic among its clients and investors was unstoppable. On March 19, another Swiss bank, UBS Group AG (NYSE:UBS) announced a deal to acquire Credit Suisse Group AG (NYSE:CS) for around $3.25 billion, which represented a 60% discount to the stock’s last closing price. In an attempt to halt the financial crisis triggered by the failure of two American Banks, Silicon Valley Bank and Signature Bank, the Swiss government even changed the laws to fast track the acquisition by excluding the requirement of shareholders’ approval. However, the completion of the deal is still clouded in uncertainty after on April 2, Swiss Federal Prosecutor’s office announced that it had opened an investigation into possible illegal activity related to the takeover and, in particular, the government’s support for the deal. Credit Suisse’s Highest-Conviction Top Picks: In Retrospect Nevertheless, as stated earlier, prior to its untimely demise, Credit Suisse was one of the most watched financial institutions in the world and it has been regularly issuing reports in which it outlined some of its top conviction stock picks. At Insider Monkey, we have taken Credit Suisse Group AG (NYSE:CS)’s US Top Picks from July 2022 and decided to look into their performance since then. Out of 38 stocks that the bank highlighted in the report, we selected 12 companies that Credit Suisse mentioned as “above consensus calls”. Moreover, 5 of these stocks made it to the bank’s so-called “top of the crop” list, as they not only are ranked as “Outperform”, but also have least demanding market expectations. These stocks can be found under Credit Suisse’s Top 5 Highest Conviction Picks. Without any further ado, let’s dive in and see how Credit Suisse’s 12 Highest-Conviction Top Picks have fared since the bank highlighted them in July 2022. 12. American Tower Corp (NYSE:AMT) Stock performance since July 2022: -20.92% Number of Bullish Hedge Funds: 61 Let’s kick off with American Tower Corp (NYSE:AMT), on which Swiss bank had a price target of $313 in July 2022, which at the time implied an upside potential of around 22.5%. Analysts suggested that American Tower Corp (NYSE:AMT) was well positioned to benefit from growth in capital expenditures of US carriers, as well as improving dynamics in Europe, which could position the operator of wireless communications infrastructure for further expansion in that market. In the meantime, American Tower Corp (NYSE:AMT)’s stock has slumped by nearly 21%, failing to deliver on Credit Suisse’s target. In February, the Real Estate Investment Trust reported a net loss of $1.47 per share, missing the estimates by $2.52, although the revenue of $2.71 billion was slightly higher than expected. All in all, analysts remain bullish on American Tower Corp (NYSE:AMT) in the long-run, with most having a ‘Buy’ rating on the stock. In addition, being a REIT, American Tower Corp pays a solid quarterly dividend of $1.56 per share, ranking among our selection of 10 Best Stocks for Dividends. Among hedge funds followed by Insider Monkey, 61 reported long positions in American Tower Corp (NYSE:AMT) as of the end of 2022, with a cumulative value of $3.38 billion. 11. Amazon.com, Inc. (NASDAQ:AMZN) Stock performance since July 2022: -5.72% Number of Bullish Hedge Funds: 240 Next in our list of Credit Suisse’s 12 Highest-Conviction Top Picks is tech behemoth Amazon.com, Inc. (NASDAQ:AMZN), whose stock edged down by 5.72% since July 2022. Credit Suisse believed that Amazon is positioned to return to “historical levels of fulfillment center efficiency by 2024, certainly by 2025.” Therefore, analysts had a price target of $185 per share, which following some updates has recently been restated down to $171, although the bank continues to maintain an Outperform rating on the stock. Amazon.com, Inc. (NASDAQ:AMZN) is one of the highest-conviction picks not just at Credit Suisse, as confirmed by the fact that the company is one of the most popular among hedge funds, with a whooping 240 smart money investors in our database having amassed $27.54 billion worth of shares at the end of the last year. Among the most notable shareholders of Amazon.com, Inc. (NASDAQ:AMZN) are Warren Buffett’s Berkshire Hathaway and George Soros’ Soros Fund Management, each holding 10.67 million shares and 901,500 shares, respectively. In its fourth-quarter investor letter, Baron Opportunity Fund also highlighted Amazon.com, Inc. (NASDAQ:AMZN), saying: We believe that Amazon is well positioned to improve profitability back to historical levels, particularly in its core North American retail division. We have already seen some of this play out with reports of Amazon’s increased cost discipline and broad-based layoffs. Particularly within the internet and software sectors, we believe Amazon can sustain premium growth compared to the rest of the market, given its competitive strengths and scale. Longer term, Amazon has substantially more room to grow in e-commerce, where it has less than 15% penetration in its TAM [Total Available Market], and cloud, where it is a clear leader in the vast and growing cloud infrastructure market.” 10. Chipotle Mexican Grill, Inc. (NYSE:CMG) Stock performance since July 2022: 30.72% Number of Bullish Hedge Funds: 42 Then there’s Chipotle Mexican Grill, Inc. (NYSE:CMG), on which Credit Suisse was bullish saying that the company was on track to exceed its margins and accelerate unit growth. The stock of the fast food chain operator surged by more than 30% since July 2022, but is still below the bank’s price target of $2,200. During Chipotle Mexican Grill, Inc. (NYSE:CMG)’s earnings call for 2022, CEO Brian Niccol said that the company had delivered strong results the previous year, expanding its Average Unit Volume and restaurant-level margins, "despite facing one of the highest inflationary periods on record and an uncertain macro environment." “These results demonstrate Chipotle’s resiliency driven by our talented teams, delicious food made fresh daily, convenience, customization, and of course, our tremendous value.” Overall, Chipotle Mexican Grill, Inc. (NYSE:CMG) posted 2022 sales of $8.6 billion, up by 14% on the year, but slightly lower than analysts had predicted. The company’s EPS of $8.29 missed the consensus by $0.60. There were 45 hedge funds in our database long Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of December, which held $2.81 billion worth of shares, according to the latest round of 13F filings. 9. International Game Technology PLC (NYSE:IGT) Stock performance since July 2022: 38.86% Number of Bullish Hedge Funds: 27 On International Game Technology PLC (NYSE:IGT), Credit Suisse had a price target of $62 back in July 2022 and earlier this year it has revised it higher to $66, which is one of the highest price targets on the Street. By comparison, Deutsche Bank has a price target of $33. Even though the stock of the gambling technology company has gained 39% since July 2022, it still has to more than double in value to achieve Credit Suisse’s target. The Swiss bank considers that International Game Technology PLC (NYSE:IGT) deserves the Outperform rating due to lottery market strength from which the company is expected to benefit. In addition, International Game Technology PLC (NYSE:IGT) announced back in 2021 that it planned to spin off its digital and betting segments, and Credit Suisse considered that the potential transaction was not reflected in the company’s price back in July. Being a fairly small company (market cap around $5.2 billion), International Game Technology PLC (NYSE:IGT) was included in the portfolios of just 27 hedge funds at the end of 2022 , with largest position being held by Ken Griffin’s Citadel Investment Group (2.53 million shares worth $57.38 million). Another investor in the company, Palm Harbour Capital mentioned IGT in its fourth-quarter letter, saying: “It is worth noting that management hit their 2025 leverage target more than two years in advance, while returning $224 million to shareholders through mid-October 2022. Management confirmed the upper half of their fiscal year 2022 guidance which combined with an improved credit profile drove the share price higher. We still find the steady cashflows and low valuation very compelling.” 8. Ventas, Inc. (NYSE:VTR) Stock performance since July 2022: -17.80% Number of Bullish Hedge Funds: 22 With just 22 funds holding long positions as of the end of 22, Ventas, Inc. (NYSE:VTR) is the least popular stock among Credit Suisse’s 12 Highest-Conviction Top Picks. Shares of the REIT are down by 18% since July 2022. In its report, Credit Suisse said that it believed that Ventas, Inc. (NYSE:VTR) was positioned to see an increase in its senior housing segment to pre-COVID levels in 2023 and to continue to grow. Another investor bullish on Ventas, Inc. (NYSE:VTR) is Baron Funds, which highlighted the REIT in its “Baron Real Estate Income Fund” investor letter for the fourth quarter: “The company’s scale allows it to swiftly act on large investment opportunities. We believe the company’s senior housing portfolio, which represents approximately 45% of assets, should deliver improved operating results in the next few years. […] The long-term demand outlook is favorable, driven in part by growth of the 80-plus population which is expected to accelerate in the years ahead.” In March, Ventas, Inc. (NYSE:VTR) declared a quarterly dividend of $0.45 per share, unchanged from the previous, which gives the stock a forward dividend yield of 4.22%. 7. T-Mobile Us Inc (NYSE:TMUS) Stock performance since July 2022: 5.87% Number of Bullish Hedge Funds: 94 Telecom T-Mobile Us Inc (NYSE:TMUS) also made the list of Credit Suisse’s 12 Highest-Conviction Top Picks in its July 2022 report, with the bank’s analysts having set a price target of $188 amid belief that the company would continue to gain market share and benefit from synergies from the 2020 merger with Sprint Corporation. Last month, T-Mobile Us Inc (NYSE:TMUS) announced that it would acquire Mint Mobile, a budget mobile carrier that is partially owned by renowned actor Ryan Reynolds. The deal valued at up to $1.35 billion is expected to close later this year and is subject to Mint’s performance. There were 94 funds tracked by Insider Monkey with long positions in T-Mobile Us Inc (NYSE:TMUS), including Warren Buffett’s Berkshire Hathaway, which disclosed a $733.88 million stake in its latest 13F filing. This ranks T-Mobile Us Inc (NYSE:TMUS) among the 5 Best Communication Stocks to Buy Now. 6. Goldman Sachs (NYSE:GS) Stock performance since July 2022: 9.32% Number of Bullish Hedge Funds: 74 Goldman Sachs (NYSE:GS) has seen its stock gain more than 9% since July 2022 and it's still below the Swiss bank’s price target of $430. In its report, Credit Suisse said that it believed Goldman Sachs’s business were growth businesses and its investments will provide returns through a more resilient earnings stream. Amid the decline of the whole banking segment triggered by the collapse of Silicon Valley Bank and Signature Bank, the depreciation of Goldman Sachs (NYSE:GS)’s shares put it at a P/E of 10.86 making it quite attractive at these levels. The stock also has a forward dividend yield of 3.06%, which justifies Goldman Sachs (NYSE:GS) ranking among 5 Cheap Dividend Stocks to Buy. At the end of 2022, there were 74 funds in our database that held shares of Goldman Sachs (NYSE:GS) with a total value of $4.90 billion. Click to continue reading and see Credit Suisse’s 5 Highest-Conviction Top Picks. Suggested articles: Disclosure: None. Credit Suisse’s 12 Highest-Conviction Top Picks is originally published on Insider Monkey.

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The Super Rich Are Worried. Should You Be?

Sharply higher interest rates and the recent banking sector meltdown are making life difficult not only for common folk, but for masters of the universe, as...

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It was one of those Manhattan society soirees that suggests that all’s right with this cozy, wealthy world. The Boys’ Club of New York annual luncheon was honoring a lion of Wall Street, Julian Robertson, the late founder of hedge fund Tiger Management and his wife, Josie, for their 60-plus years of support. Held this past Tuesday at 583 Park Ave. (a 1923 landmark building and now an event space boasting “the highest staff-to-guest ratio in New York City”), the lunch raised some $2.5 million—much of it from sponsor Morgan Stanley (ticker: MS), with which Robertson had close ties. The entertainment (such as it is at this type of affair) was provided by a streak of so-called tiger cubs, acolytes of Robertson, who happen to be some of the most prominent hedge fund managers on the planet: moderator John Griffin, founder of Blue Ridge Capital, “in conversation” with Lee Ainslie, founder of Maverick Capital; Chase Coleman, founder of Tiger Global; and Robert Pitts, founder of Steadfast Capital. Griffin’s questioning was gentle, yet even so, there was more than a little left unsaid. Like the fact that a number of the cubs on stage and in the audience are licking their wounds from haywire economic conditions and a brutal stock market beatdown last year, especially the once-highflying Coleman, whose flagship funds lost some 50% last year, which contributed to a loss in assets in the neighborhood of $40 billion, mostly from long tech investments, as well as redemptions and asset valuation markdowns. Ironically, that decline dwarfs the roughly $15 billion that his mentor Robertson lost in assets in the late 1990s in part from shorting tech stocks, causing Robertson to shutter his funds. When asked by a 16-year-old Boys’ Club member which stocks to buy, Coleman told him that technology is interesting again and recommended that the young man buy the FAANGs—Facebook parent Meta Platforms (META), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX), and Google parent Alphabet (GOOGL). Ehhhh. Don’t let the abundance of high-end designer wear adorning the Wall Street spouses in attendance fool you. Despite a rebound in stocks in the first quarter, it isn’t like the environment is now any easier to navigate. Sharply higher interest rates and the recent banking sector meltdown are making life difficult not only for common folk but for masters of the universe, as well. Speaking with a group of the latter at an impromptu roundtable in a Midtown skyscraper, it’s clear that their world is actually not quite right. “Commercial real estate in Midtown Manhattan, the office market, is in the toilet,” says the scion of a major New York City real estate family. “That building and that building and that one,” he says pointing out the window, “you can see the vacancies, and it isn’t getting better.” Work from home, layoffs, rising rates, and mortgage refinancings coming due are all taking their toll. A Wells Fargo report this past week notes that the capitalization rate (a rate-of-return and risk indicator) for office properties spiked from 6.1% to 6.9% in the fourth quarter. “In our view, property valuations appear to have further to fall,” writes Wells senior economist Charlie Dougherty. “It’s like we’re all swimming in a fishbowl and God or whoever shakes it,” says a veteran Wall Street trader. “If you’re in the middle of the bowl, you’re OK. If you’re on the edge, in other words with lots of leverage or risk, you smash into the glass. That hurts. The water is still shaking, and I have no idea what the cost of risk-free capital is.” “It’s a goat rodeo,” adds a wealthy high-profile British investor who thinks we are “not at the midpoint yet” in the rate upcycle and ensuing problems. Amusing as it was to hear a Brit speak of rodeos—goat or otherwise—I was intrigued to hear that this investor, who owns a bank in the United Kingdom, is now looking to buy banks in the U.S., the prices of which are “beginning to look interesting.” Ah yes, the U.S. banking sector. No question that there is still sorting out to be done there. An academic paper, “Monetary Tightening and U.S. Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?” published last month warned that 186 banks “are at a potential risk of impairment to insured depositors” because of “asset exposure to a recent rise in the interest rates.” Guess what? Those problems haven’t gone away. Even if we are through the very worst of the bank jitters, we’re just now discovering how dicey it was in mid-March. Consider this from a little-noticed report put out this past Tuesday by the Federal Home Loan Bank of New York: “March 10, 2023, started...as a typically quiet Friday morning...with the usual low transaction volumes...[but] quickly became a full-throttled national liquidity crisis by early afternoon.” The following week was characterized by “market volatility not experienced since the depths of the 2008 financial crisis.” The national Home Loan Bank System issued a record $304 billion in liquidity for the week of March 13. Gulp. Meanwhile, in his voluminous (some 17,500 words) and more-interesting-than-usual annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon cautioned lawmakers against a rush to regulate. He wrote that Silicon Valley Bank’s problems (“interest rate exposure, the fair value of held-to-maturity portfolios, and the amount of SVB’s uninsured deposits”) were “hiding in plain sight.” But, Dimon added, “the unknown risk was that SVB’s over 35,000 corporate clients—and activity within them—were controlled by a small number of venture-capital companies [that] moved their deposits in lockstep. It is unlikely that any recent change in regulatory requirements would have made a difference in what followed.” (My emphasis added.) To my mind, Dimon is essentially making the point that no amount of regulation can ever anticipate or mitigate humankind’s ability to make mistakes and get into trouble—intentionally or not. And that got me thinking about John Maynard Keynes and his notion of “animal spirits: “Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits—of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.” In other words, we human beings act irrationally, which makes for bursts of creativity in the arts and, yes, even on Wall Street, but inevitably precipitates overexuberance in capital markets and bank runs. It also means that there is probably some limit on the marginal utility of incremental units of regulation, I suppose. But does that mean we can never tame these spirits? I recently put that to Sallie Krawcheck, co-founder and CEO of Ellevest, an investing platform for women, as it pertains to our recent bank troubles. This isn’t Krawcheck’s first rodeo, of any sort. She was previously a bank analyst and head of research at Sanford Bernstein, then became CEO of Citigroup’s (C) Smith Barney unit, then chief financial officer of Citigroup, then head of that bank’s wealth management division, and later ran Merrill Lynch Wealth Management and U.S. Trust when they became part of Bank of America (BAC). Krawcheck noted that one possible, partial solution is to look at compensation. “Banks are bundles of risk that are leveraged, and we pay the executive in equity,” she says. “If you’re getting paid in equity, you typically want to take more risk to get the equity to go up. And generally, that’s the right thing to do because the economy grows, credit grows, and companies get started. Until it isn’t and until you hit some big downturn, like what we’ve seen. What if, instead, we said these are forms of utility and we paid some portion of compensation in bonds? And then your stance is, let me not take as much risk because all I’m getting is 100 cents on the dollar. I want to protect that as opposed to [getting] the downside. So, you could fundamentally shift how to compensate and fundamentally shift the risk-taking of the entity.” It’s far-fetched to believe Krawcheck’s plan would ever be legislated. (I can just hear the “Oh, it will reduce risk-taking” moaning.) And even if it were, some wily banker would figure out that issuing junk bonds could fill the risk/reward breach quite nicely. Stepping back a bit and speaking in my capacity as a charter member of the “first rough draft of history” club, I suspect that Federal Reserve Chairman Jerome Powell is OK with how his credit-tightening cycle is going. After all, you don’t jack up the effective federal-funds rate from 0.08% to 4.83% in 12 months without knowing that you will break some eggs, particularly of the vulnerable financial institution variety. Getting bankers to pull in their lending horns, which will inhibit companies from expanding, which will slow them from hiring, which will put less money in the hands of consumers, which will make them spend less, which will put downward pressure on prices, is what he has in mind, no? If a few go-go hedge funds and outlier banks fail along the way, well, that kind of collateral damage is acceptable—as long as it isn’t systemic. I do wonder though, what Powell thinks of Chase Coleman telling a teenager to buy tech stocks right now. This is an ongoing state of affairs not likely to go away anytime soon. However—and with apologies to readers from New Jersey, as I’ve never been one of those fanatical Bruce Springsteen fans—I do think the Boss was on to something when he sang (in “Rosalita”) that “someday we’ll look back on this and it will all seem funny.” None of us are laughing yet, though. Not even the rich folks. Write to Andy Serwer at andy.serwer@barrons.com

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4 Green Flags for Rivian Automotive's Future

Rivian Automotive (NASDAQ: RIVN) has disappointed a lot of investors since its IPO in November 2021. Rivian initially attracted a lot of attention because it was backed by Amazon and Ford Motor, and it aimed to produce 50,000 vehicles in 2022. Its production target for 50,000 vehicles in 2023 has also fallen short of the consensus forecast for at least 62,000 vehicles -- and it quietly stopped updating its total R1 pre-orders in the fourth quarter of 2022.

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4 Green Flags for Rivian Automotive's Future Rivian Automotive (NASDAQ: RIVN) has disappointed a lot of investors since its IPO in November 2021. Rivian initially attracted a lot of attention because it was backed by Amazon and Ford Motor, and it aimed to produce 50,000 vehicles in 2022. Its production target for 50,000 vehicles in 2023 has also fallen short of the consensus forecast for at least 62,000 vehicles -- and it quietly stopped updating its total R1 pre-orders in the fourth quarter of 2022.

AMZN

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With the unemployment rate now at 3.5%, is this this your last chance to jump ship?

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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With the unemployment rate now down to 3.5%, is this this your last chance to jump ship?

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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U.S. economy added jobs again in March. Is this your last chance to jump ship?

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

MarketWatch

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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Airbnb: The Bear Cave Strikes With A Short Report

Airbnb (ABNB) got hammered into the close yesterday, as The Bear Cave issued a short report. See why we move to the sidelines after our Sell rating in February.

SeekingAlpha

Airbnb: The Bear Cave Strikes With A Short Report Summary - Airbnb got hammered into the close yesterday, as The Bear Cave issued a short report. - The short report highlighted the competitive threats from professional hosts building their platform and undercutting Airbnb. - ABNB investors must assess whether it could impact the company's near- and medium-term profitability. - The valuation gap with arch-rival Booking Holdings stock has closed as BKNG surged toward its 2022 highs. However, investors' sentiments toward ABNB remain uncertain. - With ABNB down nearly 25% from its February highs, we move to the sidelines from here after our Sell rating in February. - I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More » The Bear Cave's Edwin Dorsey initiated a bearish report on Airbnb, Inc. (NASDAQ:ABNB) yesterday (April 6), which sent ABNB tumbling nearly 5% to close yesterday's session. Dorsey is a well-followed investigative writer who digs deep into significant problems that could plague the underlying thesis of companies in his report. He also wrote a bearish report against Roblox (RBLX) in early 2022, impacting investors' sentiments. However, his decision to target CEO Brian Chesky & team yesterday was likely a surprise. Airbnb is an emerging leader in the short-term vacation rental market, as it competes with traditional OTAs such as Booking Holdings (BKNG) and Expedia (EXPE). Moreover, it's no longer a new upstart that's still struggling for traction and achieved its first full year of GAAP EPS profitability in FY22. Airbnb is also free cash flow or FCF profitable and expected to remain so over the next three years. Therefore, it was a surprise revelation as Dorsey attempted to uncover cracks in Airbnb's business model. The Bear Cave highlighted that Airbnb faces competition from its "top professional hosts." These hosts are developing "their own booking platforms and offering cheaper deals to cut out Airbnb." As such, the thesis is that they can undercut Airbnb's lucrative take rates, leaving less for the company moving ahead and impacting its underlying profitability growth. Notably, The Bear Cave highlighted that "professional hosts represent 1% of all vacation rental hosts." However, these pros "manage 23% of available listings, which generate 35% of total revenue." In other words, professional hosts could be disruptive for Airbnb if they can undercut Airbnb successfully, taking share away from the emerging leader and eroding its ability to maintain its moat. However, management sees the move toward developing a closer relationship with property managers as quite different from what Dorsey presented. Chesky highlighted at Airbnb's FQ4'22 earnings call that the company is building more momentum with these professional hosts because Airbnb "started getting a lot of inbound from real estate developers." Accordingly, management articulated that these property managers see a strong value proposition in Airbnb's customer segment, as Chesky highlighted: And [the property managers] started saying if we made our buildings Airbnb friendly, would it make the building more appealing, especially to young people that are moving to markets in certain cities? And so we did a partnership. We started with working with Greystar, Equity Residential, and over 10 other companies, and we've launched. (Airbnb FQ4'22 earnings call) However, Dorsey's thesis has a valid point. These managers have a bigger scale, wherewithal, and know-how that individual hosts don't possess. As such, it makes sense that if they can build and scale a platform successfully, they could take share in the process. Hence, investors will need to assess whether Airbnb's scale and supply listings which took the company more than 15 years to build, could fall prey to heightened competition. We think it's premature to suggest that Airbnb is doomed. The company has over 4M hosts on the platform, accumulating "1.4B arrivals through 2022." As such, it has inherent "network advantages" that help it to defend its moat against these professional upstarts. It's important to remember that Airbnb is not new to tough competition. It competes against the traditional OTAs while also fending off competition against Google (GOOGL) (GOOG) and Amazon (AMZN) as they encroach into the OTA market. Hence, the importance of continuing to innovate new tools to enhance the value proposition for its hosts and guests will likely help to keep Airbnb ahead. Chesky also highlighted in a recent conference that Airbnb will continue to make hosting more attractive, "[giving] away more value than they're charging and to make it feel cheaper to be a host every year." Hence, the company remains committed to its "huge opportunity for a suite of services that [Airbnb] will give away for free to get the moat deeper." ABNB's valuation has fallen markedly since our Sell rating in February as we urged investors to avoid buying the surge. Accordingly, ABNB fell nearly 25% from its post-earnings February highs, as astute sellers took profit against the late buyers chasing momentum. The valuation gap between ABNB and BKNG has also closed, as BKNG has recovered remarkably, closing in against its 2022 highs. Hence, we believe it's appropriate for us to move to the sidelines from here, as our Sell thesis has played out accordingly. Investors waiting to add exposure should remain patient, as we have yet to glean a lower-risk entry point, and its valuation is still too expensive. Rating: Hold (Revised from Sell). Important note: Investors are reminded to do their own due diligence and not rely on the information provided as financial advice. The rating is also not intended to time a specific entry/exit at the point of writing unless otherwise specified. We Want To Hear From You Have you spotted a critical gap in our thesis? Saw something important that we didn’t? Agree or disagree? Comment below and let us know why, and help everyone to learn better! A Unique Price Action-based Growth Investing Service - We believe price action is a leading indicator. - We called the TSLA top in late 2021. - We then picked TSLA's bottom in December 2022. - We updated members that the NASDAQ had long-term bearish price action signals in November 2021. - We told members that the S&P 500 likely bottomed in October 2022. - Members navigated the turning points of the market confidently in our service. - Members tuned out the noise in the financial media and focused on what really matters: Price Action. Sign up now for a Risk-Free 14-Day free trial! This article was written by Ultimate Growth Investing, led by founder JR Research, helps investors better understand a range of investment sectors with a focus on technology. JR specializes in growth investments, utilizing a price action-based approach backed by actionable fundamental analysis. With a powerful toolkit, JR also provides insights into market sentiments, generating actionable market-leading indicators. In addition to tech and growth, JR also offers general stock analysis across a wide range of sectors and industries, with short- to medium-term stock analysis that includes a combination of long and short setups. Join the community today to improve your investment strategy and start experiencing the quality of our service. Seeking Alpha features JR Research as one of its Top Analysts to Follow for the Technology, Software, and the Internet category, as well as for the Growth and GARP categories. JR Research was featured as one of Seeking Alpha's leading contributors in 2022. About JR: He was previously an Executive Director with a global financial services corporation and led company-wide, award-winning wealth management teams consistently ranked among the best in the company. He graduated with an Economics Degree from Asia's top-ranked National University of Singapore (NUS). NUS is also ranked among the top ten universities globally. I currently hold the rank of Major as a Commissioned Officer (Reservist) with the Singapore Armed Forces. Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMZN, GOOGL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (29) Unmatched brand power in the travel sector. I won't let the debbie-downers get me down on it. long ABNB. I find it much less useful than before and I used to be a very big Airbnb fan no position EXPE What? The oversupply that affects all platforms (even, of course, direct bookings) will eventually work itself out. Airbnb is not going away.

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Consumer Discretionary ETFs: Luxury Leisurely Takes Lead

From an investing perspective, consumer discretionary stocks have performed relatively strongly this year even through market volatility.

SeekingAlpha

Consumer Discretionary ETFs: Luxury Leisurely Takes Lead Summary - From an investing perspective, consumer discretionary stocks have performed relatively strongly this year even through market volatility. - XLY is up 14.5% YTD compared to XLP, which is up 0.5% YTD. - Consumers with higher incomes are less sensitive to changes in the market environment and may be less likely to change spending habits. While consumer spending data has cooled, the retail consumer still remains relatively resilient — especially when it comes to higher-end, discretionary items that have strong brand recognition. Looking at broader economic data, it’s difficult to separate out luxury apparel and accessories versus clothing necessities, but certain categories that are heavily tilted toward discretionary/luxury spending like cosmetics, perfumes, bath, and nail products have continued to grow in real dollars through February 2023 despite significant inflation in food and housing and higher interest rates. This can possibly be explained by the fact that higher income consumers typically spend throughout economic cycles — but it is likely that consumer culture in general is becoming more influenced by internet and social media, and leisure goods with a strong, unique brand awareness will continue to carry pricing power during tough economic times. From an investing perspective, consumer discretionary stocks have performed relatively strongly this year even through market volatility. Consumer discretionary stocks are generally nonessential items that are associated with leisure or entertainment. Examples of stocks in the Consumer Discretionary Select Sector SPDR Fund (XLY) include Amazon (AMZN), Home Depot (HD), Nike (NKE), and McDonald's (MCD). In contrast, consumer staples stocks are generally essential items like food, hygiene, and other household products. Examples of stocks in the Consumer Staples Select Sector SPDR Fund (XLP) include Procter & Gamble (PG), Coca-Cola (KO), Costco (COST), and Walmart (WMT). XLY is up 14.5% YTD compared to XLP, which is up 0.5% YTD. The top performers in XLY include Tesla (TSLA), which is up 56.3% YTD, and several travel stocks including Wynn Resorts (WYNN), MGM Resorts (MGM), and Booking Holdings (BKNG) which are benefiting from continuing demand for “revenge travel” post-pandemic. Among consumer discretionary, I think luxury and other higher-end goods/services will continue to stand out for higher-income consumers who continue to spend through all phases of the economy, but also for middle-income consumers who are influenced by internet and social media branding. Consumers will continue to spend money, and much of that will be driven by luxury and leisure stocks First of all, what is a luxury good? There is an economic definition of luxury goods which basically says that if you earn more money, demand for certain goods will increase. This typically includes companies within the retail, automotive, and technology sectors like LVMH Moet Hennessy Louis Vuitton (MC PAR) (OTCPK:LVMHF)(OTCPK:LVMUY), Mercedes Benz (MBG) (OTCPK:MBGAF)(OTCPK:MBGYY), and Tesla. These stocks are mostly consumer discretionary stocks, but lines between industry classifications can sometimes be blurry. For example, the S&P Global Luxury Index includes stocks like Estee Lauder (EL) and other cosmetics brands which are classified as consumer staples even though they contain some luxury product segments. There are also “luxury-light” products that aren’t necessarily high end and appeal to a broader range of consumers. I believe these stocks are generally less sensitive to income — meaning that if you make less income in a year, you may not necessarily cut out these products given their lower price points. These stocks could include Nike, Lululemon (LULU), and Starbucks (SBUX). Luxury companies typically perform well for several reasons. First of all, consumers with higher incomes are less sensitive to changes in the market environment and may be less likely to change spending habits (see this note for more details). Second, many luxury products are big-ticket items like cars, purses, or jewelry which are purchased only once every few years. And lastly, even consumers in average income brackets are likely to continue to buy luxury-light products due to their relatively lower price points and strong brand awareness. Younger generations, like Millennials and Gen Zers, tend to have shopping habits linked to influencers and other social media trends. Last week, for example, Lululemon reported that its 4Q same-store sales increased by 27% y/y and attributed much of its success to unaided brand awareness. Price-sensitive consumers may be the most likely to cut back on discretionary spending; however, they may continue to shop smarter instead of harder while looking for deals and discounts through e-commerce shopping and online channels (see this note for more details). Investors have options for consumer discretionary ETFs, including broad sector ETFs and thematic ETFs For consumer discretionary ETFs, investors have several options including XLY and the S&P 500 Equal Weight Consumer Discretionary ETF (RCD). But for investors that want more exposure to luxury stocks, there are currently no dedicated luxury good ETFs in the U.S. The Emles Luxury Goods ETF (LUXE) was launched November 2020, but shut down just short of its two-year anniversary in October 2022. The previously-mentioned S&P Global Luxury Index is only linked to three different ETFs — all of which are non-US ETFs. For reference, these three ETFs are: Amundi IS S&P Global Luxury ETF-C EUR (OTC:GLUX), Amundi IS S&P Global Luxury ETF-C USD (LUXU), and the HANARO Global Luxury S&P (SK: 354350). A close proxy to a luxury stock ETF would be a thematic ETF like the Global X Millennials Consumer ETF (MILN) which holds many of the luxury-light stocks mentioned above that are popular with younger generations. The ALPS Global Travel Beneficiaries ETF (JRNY) holds luxury stocks like LVMH and Estee Lauder in its top holdings in addition to hotels, resorts, and other travel stocks. YTD, these ETFs are performing closely in line with the broader consumer discretionary ETFs, despite having different holdings. MILN is so far up 13.9% YTD, while JRNY is up 12.5%. For reference, the S&P 500 Index is up 6.8% during the same time period. Disclosure: © VettaFi LLC 2023. All rights reserved. This material has been prepared and/or issued by VettaFi LLC ("VettaFi") and/or one of its consultants or affiliates. It is provided as general information only and should not be taken as investment advice. Employees of VettaFi are prohibited from owning individual MLPs. For more information on VettaFi, visit VettaFi. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. This article was written by Comments (1) - 7% since.

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U.S. economy adds more jobs, slightly fewer than expected. Is this your last chance to jump ship?

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

MarketWatch

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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This woman went from living without electricity and running water to owning real estate worth $2 million. Here`s how she did it.

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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5 Best Value Stocks to Invest in Now, According to Analysts ��� April 2023

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

TipRanks

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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5 Predictable Stocks Warren Buffett and Baillie Gifford Agree On

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

GuruFocus

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. 5 Predictable Stocks Warren Buffett and Baillie Gifford Agree On Read full article here »

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18 Stocks: Some For Dividend Growth And Some For Pure Growth

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

TalkMarkets

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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Tech Stocks Have Been on Fire. Earnings Could Spell Trouble.

The first quarter was a profitable one for tech stocks, but now Big Tech has to report earnings—and investors might not love what they see.

MarketWatch

Ah, April. The crack of the bat. The smell of fresh-cut grass. The frantic search for year-old receipts. And the sound of conference calls ringing in the air. It’s baseball season. It’s tax season. And even better, it’s first-quarter earnings season. The first quarter of 2023 was a remarkably profitable one for tech investors, helping to turn the corner on a nightmarish 2022. Stocks that were pummeled last year have rebounded with strong gains. The seven tech companies with market values above $500 billion— Apple (ticker: AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META)—have each rallied at least 20% in 2023, outstripping a 7% gain for the S&P 500 index. Investors think the Federal Reserve is nearly finished tightening monetary policy—and they anticipate steady and then declining rates. As a result, miserable first-quarter results—and they almost certainly are going to be pretty bad—might not matter. You could see that dynamic in the recent earnings report from memory-chip producer Micron Technology (MU). With PC and smartphone demand flagging—and many customers oversupplied with inventory—Micron’s financial results cratered. For its quarter ended March 2, Micron’s revenue plunged 53% from a year earlier. But Micron said customers are cleaning up their inventory issues and predicted that results will show sequential growth from here. By 2025, Micron said, its total addressable market would be at a record level, aided by growth in automotive and industrial applications. “It was a tough quarter, but we are seeing good, positive signs for the future,” Sumit Sadana, Micron’s chief business officer, tells me. Read More I suspect that’s going to be the theme running through first-quarter earnings season: Conditions aren’t great, but they should get better soon. The question is how much improvement has already been discounted in stocks—after buying the rumor, it might be time to sell the news. Here are some key questions and themes to look for in the weeks ahead. The New Netflix. The streaming-video service kicks off tech earnings season on April 18 with a quarter that will mark a fundamental shift in its reporting practices. Starting with the 2022 fourth quarter, Netflix (NFLX) stopped providing specific guidance on subscriber growth—although it will still report its total subscribers at the end of the quarter. That could lead to surprises around subscriber numbers and more volatility for the stock. Meanwhile, investors will be looking for signs of progress on the company’s two big initiatives—advertising and a crackdown on password sharing. Netflix has projected “modest” positive net subscriber growth in the quarter, with revenue of $8.2 billion—growing just 4%—and profits of $2.82 a share. Another change: This will be the first call without Reed Hastings, who last quarter gave up the CEO role to become executive chairman. The Year of Efficiency, Part III. Shares of Meta Platforms have surged nearly 80% this year, thanks to CEO Mark Zuckerberg’s decision to placate investors and rein in spending. Meta, which operates Facebook, Instagram, and WhatsApp, cut 11,000 jobs shortly after a poorly received third-quarter earnings report, and recently chopped 10,000 more. On the last Meta earnings call, Zuckerberg declared 2023 to be “the year of efficiency,” talked up artificial intelligence, and largely ignored the metaverse, the initiative that he once considered so important that he changed the company’s name. Meta investors will be looking for updates on efficiency moves—and any evidence that they will spur the company’s sagging growth. Wall Street sees a 1% year-over-year first-quarter revenue dip, reflecting a still weak advertising market. Shareholders await updates on monetizing Reels, the company’s TikTok competitor, particularly given recent pressure in Washington to ban TikTok. Zuckerberg will surely continue to talk about AI, and probably not so much about the metaverse. Thin Cloud Cover. Amazon shares have rallied 24% this year, and Microsoft is up 20%—no thanks to their cloud businesses. Amazon Web Services and Microsoft Azure continue to dominate cloud computing, but both have suffered a multiquarter deceleration, as customers tighten budgets. This past week, research firm IDC trimmed its 2023 enterprise spending forecast for the fifth month in a row. According to FactSet, analysts see March-quarter AWS growth of 17%, down from 20% in December and 27% in September; for Azure, consensus estimates call for 28% growth, down from 31%, 35%, 40%, and 46% growth, respectively, over the four prior quarters. But as with Micron, the thinking on the Street is that things get better from here—that recession or no, the transition to cloud computing will continue. There are some near-term worries: for Microsoft, soft PC demand; for Amazon, sluggish online-shopping growth. Cashing Out. Apple is almost certainly going to raise its dividend and expand its stock-buyback program when the company reports next month. But there are tough questions for Apple about reviving growth. Wall Street sees revenue declining 4% in the March quarter and 1% for the full year. This past week, Apple contract manufacturer Foxconn said it expected business to decline in the second quarter. For Apple investors, the focus is on this fall’s release of the iPhone 15 and, before that, an expected launch of virtual- and mixed-reality products. The outstanding question is how Apple is planning to take advantage of AI. I’ll have to ask ChatGPT. Write to Eric J. Savitz at eric.savitz@barrons.com

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With the unemployment rate now at 3.5%, is this your last chance to jump ship?

Looking for stock market analysis and research with proves results? Zacks.com offers in-depth financial research with over 30years of proven results.

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This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc. Copyright 2023 Zacks Investment Research | 10 S Riverside Plaza Suite #1600 | Chicago, IL 60606 At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Visit Performance Disclosure for information about the performance numbers displayed above. Visit www.zacksdata.com to get our data and content for your mobile app or website. Real time prices by BATS. Delayed quotes by FIS. NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

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Fintech Jack Henry Is Safe From Banking Turmoil. Buy the Stock While It’s Cheap.

Financial-software provider Jack Henry & Associates, at its cheapest valuation in years, can keep prospering even if banks continue to stumble.

MarketWatch

In any short-term market turbulence or panic, babies are inevitably thrown out with the bathwater—companies whose stocks are dragged down by association with more-troubled businesses. March’s banking turmoil is one such episode of investors throwing out the bathwater: The S&P 500 financials sector has lost 13% of its value since mid-February, led by a 28% decline for bank stocks in the index. Financial-software provider Jack Henry & Associates (ticker: JKHY) is the baby. Investors can be forgiven for their “shoot first, ask questions later” trading. Jack Henry’s customer base includes some 8,000 small banks and other financial institutions—the group at the very center of the recent turbulence. Jack Henry’s shares have declined 15% this year—to their cheapest valuation in years—after returning 18% annually over the prior decade. Analysts’ consensus price target is now about $175, or some 20% above the stock’s recent $148. Jack Henry has a market value of about $11 billion and minimal debt, and the stock carries an annual dividend yield of 1.4%. The long-term trends in Jack Henry’s business remain intact—banking crisis or not. Its core business is providing the software that runs a bank’s everyday operations. That means the information-technology systems that banks rely on to open and keep track of customer accounts, process checks, and manage loans and deposits—all of the nondiscretionary services for banks that are akin to keeping the lights on. “Almost everything you need to run a bank or credit union in the U.S., you can get from Jack Henry,” says David Foss, the company’s CEO and chairman. The Monett, Mo.–based firm competes with the likes of Fidelity National Information Services (FIS) and Fiserv (FISV). Jack Henry’s sweet spot is with banks and credit unions ranging from about $500 million to $50 billion in assets. Foss pegs its market share at about 19% of U.S. banks and 14% of credit unions, including nearly half of those with at least $1 billion in assets. Short of widespread bank and credit-union failures among Jack Henry’s massive and diverse customer base, the company’s revenue won’t be affected much as a result of the past six weeks’ action. More than 80% is recurring on a subscription basis, with contracts that average seven years in length. Those sales may be tied to a bank’s total assets or quantity of accounts, or to the number of members at a credit union. Some revenue is more transaction-based, including debit-card or check payments—and management warned earlier this year about the potential for that business to slow this year. Importantly, none of Jack Henry’s contracts tie its sales to the total value of deposits. “I believe there’s a misconception in the market right now that if deposits potentially move over to the largest banks, then Jack Henry will be negatively affected,” says UBS analyst Rayna Kumar. “But no—as long as the bank exists, Jack Henry will still get paid because its model isn’t based on deposits.” Kumar has a Buy rating and a $184 price target on Jack Henry stock—25% above its recent price. Even during the 2008-09 global financial crisis, the company still managed to report positive revenue growth of 11.5% in its fiscal 2008—which ended in June—and 0.4% in fiscal 2009. In fact, the company stands to marginally gain from the recent banking fallout, should depositors spread their cash across more distinct banks to keep accounts under the $250,000 Federal Deposit Insurance Corp. insurance limit. That could mean an increase in the portion of Jack Henry’s revenue that depends on the number of accounts at its banking and credit-union customers. Newsletter Sign-up That same dependability of sales and visibility into the future—paired with steady growth—has earned Jack Henry stock a relatively rich valuation multiple in recent years. The early-2023 declines present an attractive entry point. “Given the stickiness of its products and services, we think investors have really overreacted,” says Lori Keith, a portfolio manager of the $5.8 billion Parnassus Mid Cap fund (PARMX), which holds Jack Henry shares. The stock now trades for about 28 times its forecast earnings over the coming year—its lowest valuation in six years, and compared with an average of 36.5 times over the past five years. Jack Henry trades at a 60% premium to the S&P 500 index’s valuation, versus an average of a 100% premium and a low of 50% over the past half-decade. Jack Henry’s prospects for growth remain solid. Analyst consensus calls for high-single digit percent annual revenue increases and about 10% earnings-per-share growth in the coming years. That’s after a relatively weak forecast for fiscal 2023: Wall Street sees EPS of $4.82, down 2% from fiscal 2022, on a roughly 6% increase in revenue, to $2.1 billion. Management said earlier this year that early contract-termination fees would be down in fiscal 2023 due to slower bank mergers-and-acquisitions activity than in the previous year. That is lumpier, one-time revenue that is less important than Jack Henry’s subscription-based services. Even if financial tremors continue and profits are crimped, banks will continue to invest in their IT systems to remain competitive, become more efficient, and replace paper-based processes with digital alternatives. A UBS survey of technology executives at 100 banks and credit unions last year found that 78% planned to increase their spending on the core IT services offered by Jack Henry, while none expected to decrease spending. In addition to growing its business with existing clients, Jack Henry had been adding more than 50 customers a year. On the core services side, where Jack Henry offers more than 100 different products, the long-term story is a transition from on-premises computing to a private-cloud environment, and then an eventual shift to public-cloud providers like Amazon.com’s (AMZN) AWS and Microsoft’s (MSFT) Azure. That modernization process means more revenue for Jack Henry and greater capabilities for banks, says Foss. Jack Henry is also pushing complementary services that should generate revenue incremental to its core business. Those include Banno, a white-label digital-banking platform for small banks to keep up with larger, better-resourced banks in the digital era. Revenue there is tied to active users, and the software offerings have economies of scale—as more banks and users get on board, profit margins will expand. For those weary of banking drama and concerned about more to come, Jack Henry is a way to invest in a supplier to the industry—while staying out of the fray. Write to Nicholas Jasinski at nicholas.jasinski@barrons.com

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Nicholas Ward's Dividend Growth Portfolio: Special Fixed Income Edition

My passive income stream grew by 22.63% in February and by 46.87% in March. Read more as I review my February and March results in this piece.

SeekingAlpha

Nicholas Ward's Dividend Growth Portfolio: Special Fixed Income Edition Summary - I'm reviewing my February and March results in this piece. - My passive income stream grew by 22.63% in February and by 46.87% in March. - Due to rising rates, during 2023 I've added exposure to fixed income in my portfolio for the first time. - Looking for a portfolio of ideas like this one? Members of The Dividend Kings get exclusive access to our subscriber-only portfolios. Learn More » Hello everyone… we’ll start this special edition portfolio review off with the normal introduction: Another [two] month[s] another step[s] towards financial freedom. Why was the February recap skipped, you may be wondering? Primarily because I was on vacation last month and that cut into my time to work on Seeking Alpha articles. My family had a wonderful vacation in Florida. My wife and I took the kids to Disney World for the week, spent the weekend at Grandma’s in Tampa, and then I had business meetings down in the Delray/West Palm areas for a few days. All in all, it was a wonderful time. It was nice to have a short break from work. Despite all of the clamoring about the “magic being lost” from Disney, the entire family still loved it. Being in the “Disney bubble” really allows you to forget about the troubles of the outside world and focus on silly things like which princesses you’re going to meet with your toddler. There were a few days where I didn’t even check up on my watch lists. It was all very refreshing. And with regard to south Florida, all I have to say is this: I’m jealous of the people who live here. I am grateful that hurricanes aren’t a threat where I live, but it was beautiful and 30 degrees warmer than Virginia, which was a nice change of pace. And I guess I’m always going to be a sucker for the silhouette of palm trees in front of a setting sun. But, the delay wasn’t just about vacation. I could have crammed it in sometime last month, but I was also happy to wait on the portfolio updates because I made significant changes to my asset allocation during February and March and I wanted to allocate the proper time/energy to discussing them. For the first time ever in my portfolio management career, I invested into fixed income assets. The rapidly rising rates finally pushed the risk/reward into my favor and now that it's possible to generate 4%+ using relatively risk-free assets, I transitioned the vast majority of my cash savings into those income generating vehicles. With that in mind, you’ll see a very significant bump to my passive income during the past two months and moving forward, I expect these decisions to result in 2023 being one of, if not my very best year ever, in terms of year-over-year passive income growth. I couldn’t be happier to use these fixed income/money market funds as an accelerant to the compounding process that serves as the bedrock of my investment strategy. I don’t know how long rates are going to stay high. But, in the meantime, I’m pleased to take advantage of the opportunities that the hawkish Fed is presenting. As I’ve said many times before, my success in the markets revolves around my ability to be fearful when others are greedy, to be thankful for opportunities, and to take what the market gives me. This is what I’ve done throughout 2023 thus far and I couldn’t be happier with the results. February/March Passive Income After a relatively tepid y/y dividend growth in January of 9.56% (9.5% isn’t terrible, but I’d much rather see dividend compound at a double digit clip), my February and March results were much stronger. In February my y/y dividend growth rate was 22.63%. This pushed my year-to-date growth rate up to 16.34% on a y/y basis. In March my dividend growth rate accelerated to 46.87%, which is the best results in years (narrowly beating out my December 2022 result of 46.50%). After March’s big gains my year-to-date y/y growth rate grew to 28.55%. And, like I said in the introduction, due to the additions of several fixed income/money market funds which are likely to carry significant weightings in my portfolio for the foreseeable future, I think 2023’s year end dividend growth results could end up being in the 25-30% range. With regard to the compounding process, I had fun over the weekend comparing my Q1 2023 dividend results to years in the past. During the first three months of 2023 my portfolio generated more passive income than I did in the entire year of 2016. March of 2023 was my biggest month ever in terms of passive income. I began tracking my dividend growth results closely in 2014. March of 2023’s total was 72% of my entire 2014 dividend haul. At my expected rate of compounding, it’s possible that one of my biggest months next year (likely my December haul) will be larger than the dividends that I generated during my first year as a DGI investor. I understand that these statistics are all meaningless to you, the reader, but the point is this: compounding works. It snowballs over time. And, anyone who is diligent about living below their means, regularly allocating savings towards the market, selecting blue chip dividend growth stocks, and consistently re-investing their dividends can create a situation where their passive income stream evolves from a trickle to a roaring river as well. Generating Higher Yields on my Cash Position As regular readers know, I tend to maintain a cash position in the 5-7% range. I want to know that I can take advantage of irrational weakness in the market if it occurs and even though inflation is eating away at those funds, that’s a level that allows me to sleep well at night. On top of that cash, I have my bear market buckets as well. Throughout the sell-off that we’ve seen over the last 18 months or so, I used my -10%, -15%, -20%, and -25% buckets (when the S&P 500 hit those levels from its all-time intraday high). That means that I still have my -30%, -35%, -40%, and -45% buckets ready to go. Once again, I understand that there is an opportunity cost of holding that cash; however, during past sell-offs I’ve noticed that far too many investors blow through all of their dry powder in the early days of sell-offs and therefore, I put that plan in place to ensure that I would have the capability to capitalize on deep market sell-offs (because I know that crashes like that are when investors can make moves that truly change the long-term trajectory of their financial journeys). Finally, on top of those cash positions I have my family emergency funds. Depending on what financial experts you listen to, it’s deemed prudent to maintain 3-6 months of living expenses in cash as an emergency savings fund to help to weather an unpredictable financial storm (being laid off, an unexpected medical emergency, a leaky roof that has to be fixed, what have you) and due to my relatively conservative mindset, I’ve maintained a 6 month cushion for years. That’s been a pretty significant pile of cash sitting on the sidelines in a relatively unproductive manner for a while now. I’ve banked with Bank of America since college and in general, I’ve been happy with their services. However, even with their reward programs and incentives, I was only generating 0.04% APY on my cash in their savings accounts. For the longest time we were living in a zero interest rate policy (ZIRP) environment and therefore, that measly yield didn’t bother me. The unproductive cash was just a cost of doing business when it came to the conservative management of my household’s balance sheet. At the end of the day, sleeping well at night with my finances was worth it…even if savers were being hosed. Thankfully all that has changed in recent months. We’ve seen rates on short-term treasury notes rise at an unprecedented pace and this has created opportunities for savers. So, a couple of months ago I decided to begin transitioning the vast majority of my cash holdings into higher yielding investment vehicles which, in my opinion, could be deemed “cash equivalents” due to their relatively low risks. On February 21, 2023 I initiated stakes in the WisdomTree Floating Rate Treasury Fund ETF (USFR) at $50.40. USFR currently sports a SEC 30-day yield of 4.78%. The fund’s expense ratio is just 0.15%. So to me, going with a short-term treasury ETF like this was a lot easier than building bond ladders myself and as always, it’s nice to have the liquidity of a low cost ETF in place. Also on 2/21/2023 I initiated a stake in the SPDR Bloomberg 1-3 Months T-Bill ETF (BIL) at $91.63. BIL currently offers a SEC 30-day yield of 4.50% and a gross expense ratio of just 0.1354%. Once again, I was pleased to go the ETF route here instead of buying short-term bonds directly from the government or my brokerage. These expense ratios are more than a fair price to pay for the ease of exposure to short-term treasuries, in my opinion. These two purchases replaced my bear market cash buckets; now, in the event of a market sell-off which triggers through -30%, -35%, -40%, or -45% purchases, I will liquidate these funds to raise cash to make them. I think the risk of capital losses here is minimal and in the meantime, I’m generating 4.5%+ yields on cash that was previously generating 0.04%. More recently, on 3/9/2023, I transitioned my emergency cash holdings from my savings account into a Fidelity account with a “core holding” of FZFXX, which is the Fidelity Treasury Money Market Fund. As of 3/31/2023, FZFXX had a 7-day yield of 4.46%. I feel comfortable using this fund as a cash equivalent and once again, I’m extremely happy to be generating nearly 4.5% on cash that was previously yielding nearly 0.04%. As you’ll see in a moment, these are now relatively significant positions within my portfolio; especially FZFXX, which is now my second largest holding. In short, I turned roughly 7% of my portfolio from an essentially zero-yielding asset into various high yielding assets while taking on minimal risk. This is the benefit of rising rates and moving forward, these moves are going to result in significant y/y dividend growth figures over the next year or so. February/March Stock Purchases Since I just spilled so much ink discussing my fixed income/money market moves, rather than highlighting my prior trade reports for each equity trade that I made during the last couple of months, I’m going to quickly list them. Please don’t hesitate to ask about any specific trades that you see in the comment section below; I’m happy to discuss them and/or copy & paste my original trade reports that Dividend Kings subscribers received in real-time when I made these moves. I just didn’t want to copy/paste all of those words here because it would have turned this article into a novella of sorts. So, with that being said, here’s the list in chronological order… February: 2/01/2023: bought Broadridge Financial Solutions (BR) at $151.04 2/01/2023: bought Essex Property Trust (ESS) at $226.23 2/01/2023: bought Diageo (DEO) at $177.96 2/01/2023: bought Palantir (PLTR) at $7.96 2/01/2023: bought Republic Services (RSG) at $123.29 2/01/2023: bought EcoLab (ECL) at $153.93 2/06/2023: sold Scotts Miracle-Gro (SMG) at $81.40 2/13/2023: bought UnitedHealth Group (UNH) at $492.74 2/14/2023: sold Roper (ROP) at $431.89 2/14/2023: bought Brookfield Infrastructure Corp. (BIPC) at $43.41 2/16/2023: trimmed Cisco (CSCO) at $51.18 2/16/2023: bought Toronto-Dominion Bank (TD) at $68.99 2/16/2023: bought Royal Bank of Canada (RY) at $103.27 2/23/2023: trimmed British American Tobacco (BTI) at 38.27 2/23/2023: bought Owl Rock Capital Corp. (ORCC) at $13.72 2/23/2023: bought Linde (LIN) at $331.09 2/23/2023: bought CME Group (CME) at $187.37 2/28/2023: trimmed Altria (MO) at $46.60 2/28/2023: bought Owl Rock Capital Corp. at $13.72 2/28/2023: bought Broadridge Financial Solutions at $141.03 March: 3/01/2023: bought Broadridge Financial Solutions at $140.57 3/01/2023: bought Republic Services at $128.43 3/01/2023: bought UnitedHealth Group at $477.27 3/01/2023: bought CME Group at $184.84 3/01/2023: bought S&P Global (SPGI) at $341.92 3/01/2023: bought Palantir at $7.85 3/02/2023: trimmed Salesforce (CRM) at $189.05 3/02/2023: bought Danaher (DHR) at $244.71 3/07/2023: trimmed Meta Platforms (META) at $186.44 3/07/2023: sold Meta Platforms at $186.61 3/08/2023: bought UnitedHealth Group at $469.86 3/10/2023: bought CME Group at $174.85 3/10/2023: bought Broadridge Financial Solutions at $136.88 3/13/2023: bought Toronto-Dominion Bank at $59.32 3/13/2023: bought Royal Bank of Canada at $95.08 3/27/2023: bought Toronto -Dominion Bank at $57.81 3/27/2023: bought Royal Bank of Canada at $93.55 3/31/2023: bought Thermo Fisher (TMO) at $569.17 3/31/2023: bought UnitedHealth Group at $472.32 3/31/2023: bought Camden Property Trust (CPT) at $103.88 Nicholas Ward’s Dividend Growth Portfolio | | Core Dividend Growth |56.55%| |Company name||Ticker||Cost basis||Portfolio Weighting| |Apple||AAPL||$24.26||13.07%| |Microsoft||MSFT||$72.84||4.06%| |Broadcom||AVGO||$234.30||3.11%| |Starbucks||SBUX||$48.10||1.92%| |Qualcomm||QCOM||$76.44||1.91%| |BlackRock||BLK||$413.84||1.73%| |Johnson and Johnson||JNJ||$114.02||1.59%| |Comcast||CMCSA||$38.54||1.43%| |Cummins||CMI||$217.77||1.38%| |Merck||MRK||$73.71||1.37%| |Lockheed Martin||LMT||$354.14||1.37%| |Raytheon Technologies||RTX||$80.22||1.36%| |PepsiCo||PEP||$97.58||1.27%| |Bristol Myers Squibb||BMY||$49.47||1.17%| |Brookfield Infrastructure||BIPC||$31.06||1.06%| |Deere & Co.||DE||$347.85||1.04%| |Texas Instruments||TXN||$106.72||1.03%| |Cisco||CSCO||$23.80||0.99%| |Coca-Cola||KO||$40.25||0.94%| |Honeywell||HON||$126.18||0.91%| |Brookfield Renewables||BEPC||$33.49||0.91%| |Parker-Hannifin||PH||$255.96||0.88%| |Amgen||AMGN||$136.07||0.88%| |Essex Property Trust||ESS||$223.54||0.76%| |Illinois Tool Works||ITW||$130.90||0.78%| |L3Harris Technologies||LHX||$192.50||0.75%| |Ecolab Inc.||ECL||$143.58||0.66%| |Brookfield Corporation||BN||$29.89||0.64%| |Diageo||DEO||$130.66||0.61%| |AvalonBay Communities||AVB||$163.23||0.57%| |Medtronic||MDT||$74.84||0.54%| |Broadridge Financial Services||BR||$145.57||0.52%| |Air Products and Chemicals||APD||$234.91||0.52%| |Camden Property Trust||CPT||$114.59||0.48%| |Northrop Grumman||NOC||$376.97||0.48%| |Prologis||PLD||$118.30||0.45%| |Hershey||HSY||$213.40||0.41%| |Sherwin Williams||SHW||$219.30||0.36%| |Rexford Industrial Realty||REXR||$51.90||0.35%| |Stanley Black & Decker||SWK||$139.75||0.35%| |Alexandria Real Estate||ARE||$130.96||0.33%| |Republic Services||RSG||$123.71||0.30%| |Hormel||HRL||$42.99||0.29%| |Digital Realty||DLR||$49.87||0.26%| |Linde||LIN||$331.10||0.24%| |McCormick||MKC||$35.71||0.23%| |Mid-America Apartments||MAA||$163.02||0.17%| |Carlisle Companies||CSL||$237.18||0.12%| |Automatic Data Processing||ADP||$227.52||<0.10%| |McDonalds||MCD||$232.10||<0.10%| |Waste Management||WM||$161.37||<0.10%| |High Yield||11.40%| |Realty Income||O||$62.34||2.05%| |British American Tobacco||BTI||$37.50||1.24%| |W. P. Carey||WPC||$65.23||1.24%| |AbbVie||ABBV||$79.08||1.22%| |Agree Realty||ADC||$65.85||1.09%| |Enbridge||ENB||$39.33||1.07%| |Toronto Dominion Bank||TD||$65.06||0.64%| |Crown Castle||CCI||$140.53||0.63%| |Altria||MO||$44.30||0.62%| |Federal Realty Investment Trust||FRT||$114.86||0.54%| |National Retail Properties||NNN||$36.57||0.50%| |Royal Bank of Canada||RY||$100.18||0.32%| |Verizon||VZ||$45.20||0.24%| | | High Dividend Growth |10.71%| |Visa||V||$86.42||2.34%| |Nike||NKE||$62.68||1.52%| |Lowe's||LOW||$148.99||1.48%| |MasterCard||MA||$90.44||0.95%| |Home Depot||HD||$250.58||0.87%| |Intercontinental Exchange||ICE||$97.23||0.60%| |S&P 500 Global||SPGI||$334.29||0.47%| |UnitedHealth Group||UNH||$481.67||0.45%| |Domino's Pizza||DPZ||$355.20||0.41%| |Booz Allen Hamilton||BAH||$75.49||0.36%| |Accenture||ACN||$271.18||0.36%| |ASML Holding||ASML||$643.47||0.25%| |Danaher||DHR||$245.62||0.23%| |Carrier||CARR||$32.67||0.22%| |Thermo Fisher||TMO||$568.76||0.20%| |Non-Dividend||6.82%| |Alphabet||GOOGL||$44.34||3.95%| |Amazon||AMZN||$88.17||1.68%| |Adobe||ADBE||$439.36||0.66%| |Chipotle||CMG||$1,298.41||0.20%| |Salesforce||CRM||$233.58||0.18%| |PayPal||PYPL||$201.72||0.15%| |Palantir||PLTR||$11.90||<0.10%| | | Special Circumstance |6.89%| |NVIDIA||NVDA||$37.19||2.00%| |Walt Disney||DIS||$91.92||1.59%| |Blackstone||BX||$95.86||0.93%| |Owl Rock Capital||ORCC||$13.64||0.82%| |Main Street Capital||MAIN||$39.25||0.41%| |CME Group||CME||$183.92||0.35%| |Constellation Brands||STZ||$172.19||0.27%| |Ares Capital Corp.||ARCC||$17.04||0.26%| |Brookfield Asset Management||BAM||$23.67||0.15%| |Otis||OTIS||$58.65||0.11%| | | Cash Equivalents |7.06%| |Fidelity Treasury Money Market Fund||FZFXX||$1.00||4.68%| |WisdomTree Floating Rate Treasury Fund ETF||USFR||$50.40||1.59%| |SPDR Bloomberg 1-3 Months T-Bill ETF||BIL||$91.63||0.79%| |Crypto||Diversified Basket||n/a||0.40%| |Cash||0.02%| |Most||Recent||Update:||4/5| Conclusion Despite recent negative volatility, I continue to look forward to what 2023 has in store. Due to my long-term time horizon I am always happy when I see blue chip dividend growth stocks go on sale because buying low accelerates the compounding process. In recent days there has been major weakness in the Industrials sector, in general, and there are many companies in that area of the market that I’d love to accumulate. There’s always a bargain to be found somewhere… and now that interest rates are so high, even if my stock watch list runs dry I can happily park cash in short-term bonds or money market funds and generate 4-5% while I wait for wonderful opportunities to arise. That’s a win-win for an income oriented investor like me. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks. Dividend Kings helps you determine the best safe dividend stocks to buy via our Master List. Membership also includes - Access to our model portfolios - real-time chatroom support - Our "Learn How To Invest Better" Library Click here for a two-week free trial so we can help you achieve better long-term total returns and your financial dreams. This article was written by University of Virginia, class of 2011 B.A English Senior Investment Analyst at Wide Moat Research. Contributor for Safe High Yield, The Dividend Kings, iREIT, and The Forbes Real Estate Investor. I am also the former editor-in-chief and portfolio manager at The Intelligent Dividend Investor. Check out my youtube channel for other investing ideas: https://www.youtube.com/channel/UCP7AhF_TqJSE7fN7CFwxKlg?view_as=subscriber Ranked #18 overall blogger by TipRanks for 2014. Former contributor at TheStreet.com (where I cover stocks held in Jim Cramer's Action Alert PLUS Charitable Trust Portfolio), Investing Daily, and Sure Dividend. Former Editor-in-Chief of The Dividend Growth Club and The Income Minded Millennial. I am a young investor focused primarily on dividend growth stocks. Seeking Alpha, and more specifically, the dividend and income community that exists here, has played a significant role in my development as a portfolio manager. I am not a professional, though I do manage my family's finances. I enjoy the process; the research, the decision making, the strategic planning...and not paying a financial adviser to do the work for me. I've built what I believe to be a conservative, diverse, and balanced dividend growth portfolio currently consisting of ~60 positions. At the end of every month I break down the portfolio in my Nicholas Ward's Dividend Growth Portfolio Updates. Thus far, I've been able to meet by goals from income, income growth, and capital appreciation standpoints. I use a wide variety of metrics, both fundamental and technical, when establishing fair value when doing my due diligence on an individual company. All of my methods are discussed in my work here. I hope this work inspires debate, conversation, and education - this is why I write for Seeking Alpha, to give back to the community that has helped me so much and to hopefully contribute, in some way...even if its by posing a question, to the growth of others. *I should note that all articles that I write here are done so for my personal informational/educational purposes only. Any purchases that I make or opinions that I express are not meant as recommendations for anyone else. Please perform your own due diligence before following my lead into or out of a position. I am not a professional. I am not a financial adviser of any sort. I enjoy investing and the open discussion that articles on this site inspire - this is why I write, not to influence anyone else's decisions, but to enhance my own ability to make sound financial choices. That being said, I wish the best of luck to everyone. May we all meet our own financial goals. Analyst’s Disclosure: I/we have a beneficial long position in the shares of AAPL, ABBV, ACN, ADBE,ADC, ADP, AMGN, AMZN, APD, ARCC, ARE, ASML, AVB, AVGO, BAH, BAM, BEPC, BIPC, BIL, BLK, BMY, BN, BR, BTI, BX, CARR, CCI, CMCSA, CME, CMG, CMI, CPT, CRM, CSCO, CSL, DE, DEO, DHR, DIS, DLR, DPZ, ECL, ENB, ESS, FB, FRT, FZFXX, GOOGL, HD, HON, HRL, HSY, ICE, ITW, JNJ, KO, LHX, LMT, LOW, MA, MAA, MCD, MDT, MKC, MO, MRK, MSFT, NKE, NNN, NOC, NVDA, O, ORCC, OTIS, PEP, PH, PLD, PLTR, PYPL, QCOM, REXR, RSG, RTX, RY, SBUX, SHW, SPGI, STZ, SWK, TMO, TD, TXN, USFR, UNH, V, VZ, WM, WPC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (123) Wishing successful investing to all. It’s nice yield will not last forever, when the rates stabilize I’ll turn to lock in some CD rates.When you wrote “I just didn’t want to copy/paste all of those words here because it would have turned this article into a novella of sorts.” It reminded me of what a professor told me many years ago about an essay I wrote. He told me. “ an essay should be like a woman’s skirt, short enough to be interesting, but long enough to cover the subject “Take care. BR - anything special about it? I've never heard about it. Trimmed Salesforce (CRM) - for a loss? reason?

AMZN

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Petroecuador says people attempted to enter facilities in Amazon

Ecuadorean state oil company Petroecuador said on Thursday it has activated security protocols and evacuated personnel from a block in the Amazon after people from the area attempted to enter its facilities.

Reuters

Petroecuador says people attempted to enter facilities in Amazon QUITO, April 6 (Reuters) - Ecuadorean state oil company Petroecuador said on Thursday it has activated security protocols and evacuated personnel from a block in the Amazon after people from the area attempted to enter its facilities. Block 16 is among four blocks in Orellana province that were subject to a force majeure declaration by the company last month amid community protests. "Security protocols were activated as part of the force majeure declaration that is in force for these operations," Petroecuador said in a statement, adding that there is evidence some cabling and other items were stolen. The people attempting to enter the facility were stopped by members of the armed forces, the military said in its own statement, and said that some soldiers were injured. Force majeure measures for two of the four blocks that were subject to the declaration - Blocks 61 and 43-ITT - were lifted at the end of March, while the measure is expected to be lifted at Block 12 after a deal to finance housing project studies. The March declaration means the country will need to reduce its production target to a maximum of 490,000 barrels per day, Energy Minister Fernando Santos has said, from a previous 520,000. Output was just over 464,000 barrels per day on Wednesday, according to official figures. Our Standards: The Thomson Reuters Trust Principles.

AMZN

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Claim of TikTok Breach Spotlights Viral App’s Lure as Target

(Bloomberg) -- TikTok, the short-video sensation that’s among the world’s most downloaded apps, is coming under increased scrutiny about its data security as it guards the personal information of over a billion users.Most Read from BloombergAmazon Closes, Abandons Plans for Dozens of US WarehousesBed Bath & Beyond CFO Died in Fall From NYC BuildingNASA’s Artemis Rocket Is a Gigantic Waste of MoneyGermany to Make ‘Billions’ Off Energy Firm Levy, Scholz SaysCyrus Mistry, Heir to One of India’s Old

Yahoo

Claim of TikTok Breach Spotlights Viral App’s Lure as Target (Bloomberg) -- TikTok, the short-video sensation that’s among the world’s most downloaded apps, is coming under increased scrutiny about its data security as it guards the personal information of over a billion users. On Monday, several cybersecurity analysts tweeted about the discovery of what was purportedly a breach of an insecure server that allowed access to TikTok’s storage, which they believe contained personal user data. Only days earlier, Microsoft Corp. said it had found a “high-severity vulnerability” in TikTok’s Android application, “which would have allowed attackers to compromise users’ accounts with a single click.” ByteDance Ltd.’s TikTok surpassed a billion monthly users a year ago and now ranks as many young people’s favorite app. That makes it an enticing target for hackers who may seek to hijack popular accounts or resell sensitive information. It was identified as a privacy threat by the Trump administration in 2020 and nearly banned because of concern about potential links between its Beijing-based parent company and the Chinese government. TikTok said the claims of a breach discovered over the weekend were incorrect. “Our security team investigated this statement and determined that the code in question is completely unrelated to TikTok’s backend source code,” a spokesperson said. Troy Hunt, an Australian web security consultant, went through some of the data samples listed in the leaked files and found matches between user profiles and videos posted under those IDs. But some details included in the leak were “publicly accessible data that could have been constructed without breach.” “This is so far pretty inconclusive; some data matches production info, albeit publicly accessible info. Some data is junk, but it could be non-production or test data,” he posted on Twitter. “It’s a bit of a mixed bag so far.” The vulnerability identified by Microsoft is a narrower issue that could have affected mobile phones running Android. It may have allowed attackers to access and modify “TikTok profiles and sensitive information, such as by publicizing private videos, sending messages and uploading videos on behalf of users,” wrote Dimitrios Valsamaras from the Microsoft 365 Defender Research Team. A TikTok spokesperson said the company had responded quickly to Microsoft’s findings and fixed the security flaw, which was found “in some older versions of the Android app.” However inconclusive or small the issues may be, there will be intense focus on TikTok and its parent firm at a time when the US may step up its measures against businesses with links to China. In June, nine US senators wrote a public letter to TikTok’s chief executive officer asking him to explain alleged security breaches. President Joe Biden is expected to sign an executive order that would restrict US investment in Chinese tech companies and separate action targeting TikTok is a possibility, with the administration paying close attention to whether the Chinese government has access to American customer data. The company has told US lawmakers that it has taken steps to protect that data through a contract with Oracle Corp. “There’s a lot of attention on the way TikTok operates and there’s a big gap between how it operates and how it says it operates,” said Robert Potter, co-CEO of Australian-US cybersecurity firm Internet 2.0 Inc. In July, Potter’s team said in a report that it had found “excessive data harvesting” carried out by TikTok on user devices, that the app checks device location at least once an hour and it has code that collects serial numbers for both the device and the SIM card. TikTok rejected the findings and said the report “misstates the amount of data we collect.” The report received wide attention in Australia, and Clare O’Neil, the new Minister for Home Affairs, announced on Monday that she has ordered her department to investigate what data TikTok acquires and who can access it. “We’ve got this basic problem here where we’ve got technology companies that are based in countries with a more authoritarian approach to the private sector,” O’Neil said in emailed remarks. “TikTok is not the beginning and the end of this. It’s one of the very large number of issues that’s given rise to by these very dominant technology companies and the role they are playing in our lives.” (Updates with TikTok response to Internet 2.0 report) More stories like this are available on bloomberg.com ©2022 Bloomberg L.P.

MSFT

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Dow retreats Tuesday as robust service sector points to still higher interest rates

In the holiday-shortened week, investors are looking ahead to speeches from Federal Reserve presidents and an ECB rate hike due out later this week.

CNBC

Dow closes more than 100 points lower in post-Labor Day session as interest rates pop U.S. stocks slumped on Tuesday in a volatile trading session as investors weighed what strong economic data and rising rates mean for the Federal Reserve's aggressive tightening campaign. The Dow Jones Industrial Average fell 173.14 points, or 0.55%, to close at 31,145.30, but was off the lows of the day, boosted by defensive stocks such as Johnson & Johnson and Coca-Cola. The S&P 500 slipped 0.41% to 3,908.19. The Nasdaq Composite slid 0.74% to 11,544.91, notching its seventh day of losses, its longest since 2016. At the same time, bond yields surged, adding to the rout in stocks. The yield on the U.S. 10-year Treasury jumped as much as 0.162 percentage point to 3.353% at one point in the day. Yields move inversely to prices. The moves came after August ISM data Tuesday morning was stronger than expected, coming in at 56.9 versus expectations of 55.5. The report follows Friday's jobs release, which also beat Wall Street's expectations, showing a more solid U.S. economy than anticipated. Both reports come ahead of the Federal Reserve's September meeting, where they're expected to raise interest rates again. Better-than-expected economic data may mean that the central bank continues to act aggressively in hiking interest rates. On Friday, the major averages closed out their third negative week in a row. The Nasdaq Composite posted its first six-day losing streak since 2019, ending the session 1.3% lower, while the Dow erased a 370-point gain on Friday to close about 1.1% lower. The S&P shed 1.1% to its lowest close since July. "Bulls hoping for a rebound will be doing so during a shortened Labor Day week that historically has paralleled September and its track record of underperformance: Losses have been slightly less frequent over the past three decades, but volatility has been higher," said Chris Larkin, managing director of trading for E*Trade from Morgan Stanley. In the holiday-shortened week, investors are looking ahead to speeches from Federal Reserve presidents and a fresh rate hike decision from the European Central Bank due out later this week. Stocks fall to start short week of trading post Labor Day All three major averages ended Tuesday in the red, starting off the holiday-shortened week of trading with a volatile session that whiplashed between gains and losses all day. The Dow Jones Industrial Average fell 173.14 points, or 0.55%, to close at 31,145.30, but was off lows of the day boosted by defensive stocks such as Johnson & Johnson and Coca-Cola. The S&P 500 slipped 0.41% to 3,908.19. The Nasdaq Composite fell 0.74% to 11,544.91, notching its seventh day of losses. It is the longest losing streak for the index since 2016. —Carmen Reinicke All three major averages negative heading into last hour of trading The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all in the red going into the final hour of trading Tuesday in a holiday-shortened week. The Dow shed 202 points or 0.65%. The S&P 500 lost 0.53% and the Nasdaq fell 0.81%. - Carmen Reinicke Market negativity could mean opportunities to buy ahead, Craig Johnson of Piper Sandler says There's a tremendous amount of negativity in the market at the moment, according to Craig Johnson of Piper Sandler. "I haven't seen investors this negative on the market in quite some time," he said on CNBC's Power Lunch, adding that it makes sense that investors feel this way. This year, the market has had to deal with challenges in Europe, rising interest rates, the inverted yield curve and today's rout. "But here's the thing that I find interesting, the market is reflecting this," he said, adding that many indicators he's looked at are oversold. "When I see levels this low I lean into the negativity and look at where I want to buy," he said. - Carmen Reinicke 2-year U.S. Treasury yield nearing highest level since 2007 As the bond selloff continues, yields have surged. Tuesday afternoon the yield on the 2-year U.S. Treasury jumped to a fresh daily high of 3.515%, nearly touching the highest yield since 2007. Yields move inversely to price. At the same time, long-dated treasury yields have continued to gain as well, with five, seven and ten year U.S. Treasury bond yields picking up 0.14 percentage point. The 20 and 30 year bonds gained as well. - Carmen Reinicke Lots of big swings for the S&P 500 this year The S&P 500 has already posted 81 daily moves of at least 1% in 2022, making it one of the most volatile years since 2000. Of those 81 moves, 39 have been to the upside and 42 to the downside. Bottom line: With roughly 80 trading days left in the year, and the Fed showing no signs of diverting from its monetary policy path, more wild daily swings are not out of the question. — Fred Imbert Long-term optimism still in stocks says, Jeff Krumpelman, Mariner Wealth Advisors There's still reason to be long-term optimistic on stocks, according to Jeff Krumpelman, chief investment strategist and head of equities at Mariner Wealth Advisors. "On the fundamental front after the Powell presser, we actually got some good news on the employment front, the inflation front, the manufacturing activities front," he said. That means fundamentals are solid, valuations are coming in and that he hopes the bottom in stocks will hold. In addition, the market is starting to look oversold, he said on CNBC's "The Exchange." "You mix that all together and you have a pretty good cocktail longer-term, knowing that folks are still going to fret with all the transitions going on," he said. Still, he added it's a good time for stock pickers and active management with some stocks down 40%, 50%. - Carmen Reinicke Stocks making the biggest moves midday Take a look at some of Tuesday's biggest movers: - Illumina — Shares of the biotech company rose 3.5% after Illumina said it plans to appeal a decision by the European Commission prohibiting the company's acquisition of Grail. - Bed Bath & Beyond — The beaten-down stock continued its losing streak, falling another 16.7%. On Tuesday, the home-goods retailer appointed its chief account officer as interim CFO after his predecessor, Gustavo Arnal, died by suicide Friday. - FedEx — The transportation giant slipped 2.5% after Citi downgraded FedEx to neutral from buy. The bank anticipates slower volume ahead for FedEx and cited macro headwinds and challenges in the freight industry among the reasons for the downgrade. Click here to read the full story. — Michelle Fox Treasuries, financials among most popular ETF plays in August Fear and volatility returned to Wall Street in August, and that showed up starkly in fund flows for ETFs. According a report from Strategas Research, Treasuries were the most popular fund category in August, attracting more than $8 billion of inflows. However, investors pulled more than $4 billion out of high-yield funds. "Defense (treasuries) vs. offense (high yield) helping sum up August jitters… flows remain reluctant to embrace more economically sensitive corners (e.g. Europe, Commodities)," Strategas strategist Todd Sohn wrote in a note to clients. At an individual fund level, the Financial Select Sector SPDR Fund (XLF) earned $3.7 billion of inflows, while the JPMorgan Beta Builders Europe ETF (BBEU) shed about $2.7 billion of capital. — Jesse Pound US Treasury yields hit highest levels since mid-June A bond selloff has boosted U.S. Treasury yields to their highest levels since mid-June as investors weigh what strong economic data means for the Federal Reserve's future rate hikes. The U.S. 10-year Treasury yield rose as much as 3.353%, the highest level since June 16, when the yield hit 3.495%. Yields are inverse to prices. The yield on the U.S. 30-year Treasury hit a high of 3.484% and the U.S. 5-year Treasury yield hit 3.334%, also both the top levels seen since mid-June. The 2-year yield also rose to a daily high of 3.535%, but it is only the highest yield for the note since Friday. - Carmen Reinicke Falling gas prices show inflation is coming down, Fundstrat's Tom Lee says Fundstrat's Tom Lee believes that falling gas prices show that inflation is coming down. "I think the bar is pretty high for investors and markets and the Fed to be convinced inflation is breaking. I mean part of it is because inflation is so uncertain that the market wants to have comfort that it's truly vanquished before they think the Fed can even consider being a little easier," Lee said Tuesday on CNBC's "TechCheck." Still, Lee said investors should be encouraged by gasoline prices that are falling "like a rock" in a way they hadn't in prior inflationary periods. The investor also pointed to softening housing data, and believes that there is more weakness in the job market than is immediately apparent. "I think investors should be encouraged that [rising prices] hit some sort of wall. We think it's actually going to fall pretty quick," he added. — Sarah Min Canaccord Genuity's Dwyer says don't "feed the whoosh" Last week's S&P 500 losses continued an oversold reading on Canaccord Genuity's two most sensitive tactical indicators, analyst Tony Dwyer wrote in a Tuesday note. It also caused two intermediate-term indicators to lose their positive momentum. "The percentage of stocks above the 10- day moving average dropped into single digits for six consecutive days, and the CBOE Volatility Index (VIX) rose to the mid-20s, which is a level we watch closely to indicate an oversold condition," he said, adding "our two longer-term indicators have lost their upward momentum and fallen back into neutral territory in the context of a downtrend." This has informed Canaccord's game plan for the year, which is to not chase the dips and runups in choppy markets - or whooshes, as they call them. "The weakness has been extreme enough to cause our most sensitive tactical indicators to suggest a pause in the selling, but our trusty weekly stochastic for the SPX continues to point to a market that lost upside momentum while in a clear intermediate-term downtrend of lower highs and lower lows," he said. "Despite the possibility of an oversold bounce, we continue to suggest not taking any major market or sector bets until we see a real pivot from the Fed — and that is likely to take more time," Dwyer added. —Carmen Reinicke Nasdaq on track for seven days of losses – its longest since 2016 The Nasdaq Composite ticked lower on Tuesday, heading for its seventh consecutive day of declines. It's a grim milestone for the tech-heavy index, marking its longest losing streak since a 9-day downturn in November 2016. This is also a particularly painful slump for the Nasdaq, which is off by nearly 9% in this latest string of consecutive losses. Here are a list of notable losing streaks for the Nasdaq, going back to 2000: September 2022 -8.86% January 2016 -9.09% November 2011 -9.11% October 2008 -21.36% June 2001 -12.16% December 2000 -22.63% The Federal Reserve's move to hike interest rates haven't helped the companies underlying the Nasdaq Composite. Rising interest rates reduce the value of future earnings for tech stocks. -Darla Mercado, Robert Hum Dow, S&P 500 turn green The Dow Jones Industrial average and the S&P 500 reversed earlier losses to trade in positive territory heading into midday Tuesday. Defensive stocks such as Johnson & Johnson and Coca-Cola lifted the Dow, while the S&P 500 was boosted by Rollins, Illumina and Eli Lilly. The Nasdaq was still down on the day as tech shares dragged the index lower. Pinduoduo, Okta and Moderna were the biggest losers on the index. Shares of Netflix, Datadog and Palo Alto Networks also slumped. - Carmen Reinicke Defensive stocks help Dow Defensive names gained on Tuesday, helping to lift the Dow Jones Industrial Average off lows of the morning. Health services and health technology sectors led the index. Johnson & Johnson notched the top performance on the Dow, up more than 2%. UnitedHealth Group gained 1.81% and Merck rose nearly 1%. Consumer staples also helped lift the market. Coca-Cola gained 1.21% to come in third on the top performers of the Dow list. It was followed by McDonald's, which was up 0.60%. — Carmen Reinicke Tech stocks drop Tech stocks dropped, despite earlier gains, as rising rates threatened to dampen their growth and expose their high valuations. Information technology was among the biggest laggards in the S&P 500, with the sector down 1.3% in Tuesday morning trading. Shares of Apple and Microsoft dropped 1.3% and 1.2%, respectively. Tesla fell 1%. Nvidia slipped 1.5%. Loading chart... — Sarah Min U.S. Treasury yields push higher U.S Treasury yields surged on Tuesday as investors weighed concerns that the Federal Reserve will remain aggressive in its fight to tame surging prices despite its potential repercussions on economic growth. The yield on the 2-year note last rose 11 basis points to 3.511% and traded at its highest level since November 2007, while the yield on the 10-year note was last up nearly 15 basis points at 3.336%. The moves came as investors digested a fresh batch of economic news, including August ISM data which came in stronger than anticipated. — Samantha Subin ISM services PMI tops expectations for August The Institute for Supply Management said its services purchasing managers index (PMI) came in at 56.9 for August, beating a Dow Jones estimate of 55.5. In other words, the U.S. services sector expanded last month at a faster rate than expected. The report propelled Treasury yields higher and sent stocks lower, as it raised concern over even higher rates from the Federal Reserve. To be sure, &P Global's U.S. services PMI showed the biggest contraction for the services sector since May 2020. — Fred Imbert Verizon hikes dividend Telecom giant Verizon raised its quarterly dividend to 65.25 cents per share from 64 cents per share — a 2% increase. The new dividend will be payable Nov. 1. The move comes as Verizon shares struggle this year, losing 20% in 2022. The stock is also off by 7% over the past month and 25% below its 52-week high. — Fred Imbert Stocks rise at market open Tuesday U.S. stocks rose at Tuesday's open as Wall Street looks to snap a three-week losing streak. The Dow Jones Industrial average ticked up 117 points or 0.38%, while the S&P 500 and the Nasdaq Composite gained 0.28% and 0.08%, respectively. "Bulls hoping for a rebound will be doing so during a shortened Labor Day week that historically has paralleled September and its track record of underperformance: Losses have been slightly less frequent over the past three decades, but volatility has been higher," said Chris Larkin, managing director of trading for E*Trade from Morgan Stanley. — Carmen Reinicke Stoltzfus on what September trading signals for the year September is known for being a volatile trading month for markets. Looking back at past Septembers can offer some clues about what the month may have in store, John Stoltzfus, Chief Investment Strategist, Managing Director Oppenheimer Asset Management, wrote in a Tuesday note. "With Q2 earnings season pretty much in the rearview mirror (with 99% of the S&P 500's companies having reported through last Friday) and Q3 earnings season not scheduled to get underway until mid-October when the big banks report, the "what have you done for me lately" market crowd are likely to carry more weight on the day-to-day near term and with their usual propensity for worry and negative projection," he wrote. Counting back from 1994 to calendar year 2021, Stoltzfus counted 13 Septembers that saw a negative return for the S&P 500 and 15 Septembers when the S&P 500 delivered a positive return. He also noted that of the past 13 Septembers that delivered negative returns, only 6 of those years saw the S&P 500 negative for the full year. "In consideration of the aforementioned we think that while it's not unreasonable to consider potential volatility in entering any September it's not necessarily a determinant for how the S&P 500 will perform in that month or for that matter how the benchmark will perform for the calendar year," he said. - Carmen Reinicke Billionaire investor Bill Ackman says there are signs inflation is calming Billionaire investor Bill Ackman has said the Federal Reserve needed to be more aggressive in its rate hiking plan to tame inflation. Now, he says it's on well on that track and there are some indications that inflation is calming. "Our biggest fear was inflation, and that's why I wanted the Fed to raise rates quickly and soon. They're now doing this, I think they have to [continue]," the Pershing Square Capital CEO told CNBC's "Squawk Box" Tuesday morning. "What they've said they're going to do they have to do, which is raise rates to something in order of 4% or maybe a little bit more, keep the there for… a year or so." The markets are still down big for the year but Ackman said that for the most part, Pershing owns the same companies it has owned since the start of 2022. "Ultimately if you own great businesses, you can ride through a challenging time like this," he said. — Tanaya Macheel Credit Suisse's Golub on market returns year to date The S&P 500's roughly -16.1% year-to-date "hides sharp underlying moves," Credit Suisse's Jonathan Golub wrote in a Monday note. Returns have been -22.5% year-to-date through mid-June, up 17.7% to mid-August and -8.1% to month-end. "Market leadership has been consistent throughout, with Value, Large Cap and Energy outperforming on moves lower, while Growth, Small Cap and TECH+ outperformed during the markets recent rebound," said Golub. In addition, even though EPS grew 10.2% during the second-quarter earnings season, outperforming estimates of 4.6%, revisions have slumped due to recession concerns and poor guidance. Now, estimates are -5.5% for the third quarter and -3.7% for 2023. "Energy revisions have been an outlier to the upside, TECH+ to the downside," said Golub. "Historically, in inflationary periods, EPS rolls over at a recession's onset, 15 months in advance when inflation is low." Still, employment data is not consistent with a recession, he said. And, breakevens and economist forecasts are signaling that inflation could drop to roughly 2.5% at the end of 2023. - Carmen Reinicke Bed Bath & Beyond under pressure once again Shares of Bed Bath & Beyond dropped more than 16% in the premarket, putting the meme stock on track for its fifth straight day of losses. Those moves come as traders pore over a slew of corporate moves by the company, including store closures and layoffs. The decline comes after CFO Gustavo Arnal died by suicide on Friday. Police said he fell to his death. The company said in a statement Sunday that Arnal "was instrumental in guiding the organization throughout the coronavirus pandemic." —Fred Imbert U.S. Treasury yields rise as investors monitor economic data U.S. Treasury yields were higher as market participants awaited a fresh batch of economic data and Treasury auctions following Monday's Labor Day recess. The yield on the benchmark 10-year Treasury note rose over 7 basis points to 3.265% at around 3:40 a.m. ET, while the yield on the 30-year Treasury bond gained 6 basis points to 3.408%. The yield on the 2-year Treasury note jumped nearly 7 basis points to trade at 3.466%. — Sam Meredith Sterling jumps on reports of new UK PM's energy bill plans Sterling climbed 0.6% against the dollar in early trade on Tuesday after Bloomberg reported that incoming British Prime Minister Liz Truss has drafted plans to freeze energy bills for U.K. households, in a bid to mitigate the country's spiraling cost of living crisis. The pound was changing hands for around $1.158 shortly after 8 a.m. in London, having slid below $1.15 on Monday. The report overnight suggested that Truss plans to fix typical household gas and electricity prices at their current level £1,971 ($2,300) per year. British energy regulator Ofgem recently announced an 80% increase to the country's energy price cap from Oct. 1, which would take the cap to £3,548 per year. — Elliot Smith European markets rise as investors assess economic challenges European markets climbed on Tuesday, recovering the previous session's losses as investors continued to assess recession risks in the region. The pan-European Stoxx 600 added 0.8% in early trade, with retail stocks jumping 3.7% to lead gains as most sectors nudged into positive territory. Oil and gas stocks were the outliers, slipping 0.7%. - Elliot Smith Australia's central bank hikes rates by half a point The Reserve Bank of Australia hiked rates by 50 basis points, in line with analyst forecasts in a Reuters poll. That's the fifth increase in a row since the central bank started raising rates in May. Inflation in Australia stood at 6.1% in the June quarter, above the target range of between 2% and 3%. — Abigail Ng Russian energy minister says price cap will lead to shipping more Russian oil to Asia Russian energy minister Nikolai Shulginov said the country will ship more oil to Asia in response to price caps on its oil exports, Reuters reported. "Any actions to impose a price cap will lead to deficit on (initiating countries') own markets and will increase price volatility," he told reporters at the Eastern Economic Forum in Vladivostok, according to Reuters. Last week, the G-7 economic powers agreed to cap the price of Russian crude to punish Moscow for its unprovoked invasion of Ukraine. Before the invasion, Russia exported approximately half of its crude and petroleum product exports to Europe, according to the International Energy Agency. — Natalie Tham CNBC Pro: Forget the volatility. Buy this ETF for a long term growth story, analyst says Investors should navigate the ongoing market volatility by getting into ETFs with a long-term growth story, according to one portfolio manager. "The idea of owning ETF instead of one specific player — you have the whole basket and ride the wave of more capital investment into the cyberspace," John Petrides, portfolio manager at Tocqueville Asset Management, told CNBC. He names his favorite cyber security ETF, along with two others. CNBC Pro subscribers can read more here. — Weizhen Tan CNBC Pro: Hold cash as it's beating the market, say the pros Strategists are urging investors to allocate more of their portfolios to cash during these volatile times, as interest rate hikes mean it's now offering higher yields. "Cash was king" last month, Bank of America said in a Sept. 1 note, as most asset classes — such as stocks, bonds and even commodities — posted losses. Here's how to add it to your portfolios, according to the pros. CNBC Pro subscribers can read more here. — Weizhen Tan Where the major averages stand to start the week Last week's sell-off saw the major averages post their third straight week of losses. All 11 S&P 500 sectors ending the week negative, led to the downside by materials, which fell nearly 5%. Here's how the major averages fared: - The Dow Industrial Average fell 1.1% on Friday. The 30-stock index closed roughly 3% lower for the week and finished more than 15% off its 52-week high. - The S&P 500 fell 1.1% on Friday and 3.29% for the week. The benchmark index hit its lowest close since July and closed more than 18% off its 52-week highs. - The Nasdaq Composite fell 1.3% on Friday and finished its sixth negative session in a row for the first time since 2019. The tech-heavy index fell 4.21% for the week and closed more than 28% off its 52-week high. — Samantha Subin, Christopher Hayes Truist's Lerner on searching for signs of 'stabilization' in an oversold market How markets react to the news over the weekend could play an integral role in where the markets move going forward, said Truist's Keith Lerner "The best side for the bulls would be that the market is actually able to stabilize with all the bad news," he said. "That will at least tell you that the market has taken enough short-term pain. I'm just looking to see — in an oversold market — can we find any kind of stabilization coming back online after a long weekend." According to Lerner, technical indicators show the most extreme oversold conditions since June's trough, but the market moving higher or slightly only lower on the back of the weekend could be a good sign. Over the long weekend, Europe grappled with energy supply concerns amid news that Russia would halt gas flows to Europe, while OPEC+ announced a production cut. Lerner is also closely watching the ECB and its impending decision on rate hikes. "What you want to see is can the market find some stability tomorrow as opposed to a big broad sell-off," Lerner said. — Samantha Subin CVS to purchase Signify Health for roughly $8 billion CVS Health said Monday it's reached a deal to buy in-home health company Signify Health for $30.50 a share, or roughly $8 billion. The acquisition, which both companies expect to close in the first half of 2023, will enable CVS to continue expanding its growing health-care services offerings and comes amid a push by competitors Amazon and Walgreens to expand in the space. "This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the health care experience," CVS Health President and CEO Karen Lynch said in a news release. — Samantha Subin, Leslie Josephs Stock futures open higher Stock futures rose on Monday as Wall Street kicked off a holiday-shortened week of trading. Futures tied to the Dow Jones Industrial Average rose 121 points, or 0.39%, while S&P 500 futures gained 0.26%. Nasdaq 100 futures were last up 0.12%. — Samantha Subin

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Tech stocks: MATANA is the new FAANG, analyst says

It's time to rethink who's at the top of the Big Tech food-chain, Constellation Research Principal Analyst & Founder Ray Wang told Yahoo Finance Live.

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MATANA is the new FAANG, analyst says It's time to rethink who's at the top of the Big Tech food-chain, Constellation Research Principal Analyst & Founder Ray Wang told Yahoo Finance Live (video above). Wang argued that MATANA — Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), Alphabet (GOOG, GOOGL), Nvidia (NVDA), and Amazon (AMZN) – is an upgrade to FAANG by dropping Meta (META) and Netflix (NFLX) while adding Microsoft, Tesla, and Nvidia. In 2013, when Jim Cramer of CNBC's "Mad Money" coined the term FAANG, many of those companies were thought of as upstarts who'd taken their respective markets by storm. This was especially true of Meta — then Facebook — and Netflix. But now, Wang said, both should be re-assessed. Meta, in particular, needs a new plan. "Facebook has got to do something besides ads," he told Yahoo Finance. "Once again, they're taking a beating for it. So, is it going to be the glasses? Is it going to be the metaverse? We're not there yet and that's really kind of what the challenge is." For Netflix, it's a question of growth, and what is and isn't on the table. And because the company's operating on a subscription model, Wang has questions about how much further they could go. "The reason they're out is because, how many more subscribers? How many more subscriptions are you going to handle?" he said. "Product placement should be where they are, plus the ability to do IP licensing. Look at how Disney makes its money." Wang stressed that Microsoft, which is often viewed as one of tech's leading legacy names, should be included in the group of tech's most elite leaders (and sometimes has been with the bulky FAAMNG acronym). "Microsoft has more than just business-to-business and consumer – they've been able to manage both," he said. "They're positioned well for the metaverse. They're positioned well for the cloud and, of course, they've got their gaming business." Rounding out the new grouping would be Tesla — a well-known success story at this point — and Nvidia. "Nvidia is a lot more than just the chips that we look at and more than the data center or gaming," Wang said. "They're sitting at the edge between AI, the metaverse, the future of computing, and the way they do their partnerships, they're set up in a way that's going to be dominant for quite some time." Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks. Download the Yahoo Finance app for Apple or Android. Follow Yahoo Finance on Twitter, Facebook, Instagram, LinkedIn, and YouTube.

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Is Trending Stock Microsoft Corporation (MSFT) a Buy Now?

Zacks.com users have recently been watching Microsoft (MSFT) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.

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Is Trending Stock Microsoft Corporation (MSFT) a Buy Now? Microsoft (MSFT) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future. Over the past month, shares of this software maker have returned -9.5%, compared to the Zacks S&P 500 composite's -3.9% change. During this period, the Zacks Computer - Software industry, which Microsoft falls in, has lost 7.3%. The key question now is: What could be the stock's future direction? While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. Revisions to Earnings Estimates Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For the current quarter, Microsoft is expected to post earnings of $2.31 per share, indicating a change of +1.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. The consensus earnings estimate of $10.09 for the current fiscal year indicates a year-over-year change of +9.6%. This estimate has remained unchanged over the last 30 days. For the next fiscal year, the consensus earnings estimate of $11.67 indicates a change of +15.6% from what Microsoft is expected to report a year ago. Over the past month, the estimate has remained unchanged. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Microsoft is rated Zacks Rank #3 (Hold). The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Revenue Growth Forecast Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial. For Microsoft, the consensus sales estimate for the current quarter of $49.72 billion indicates a year-over-year change of +9.7%. For the current and next fiscal years, $219.94 billion and $250.08 billion estimates indicate +10.9% and +13.7% changes, respectively. Last Reported Results and Surprise History Microsoft reported revenues of $51.87 billion in the last reported quarter, representing a year-over-year change of +12.4%. EPS of $2.23 for the same period compares with $2.17 a year ago. Compared to the Zacks Consensus Estimate of $52.31 billion, the reported revenues represent a surprise of -0.86%. The EPS surprise was -2.19%. Over the last four quarters, Microsoft surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period. Valuation No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is. The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued. Microsoft is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade. Bottom Line The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Microsoft. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

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Can the Videogame Industry Overcome Its Recent Challenges?

All major videogame makers like Microsoft Corporation (MSFT), Sony Corporation (SONY), Nintendo (NTDOY) and Activision Blizzard (ATVI) have been suffering owing to poor videogame sales.

Yahoo

Can the Videogame Industry Overcome Its Recent Challenges? Videogame sales have been slumping at an alarming rate lately after two solid years when the industry saw sales reaching dizzying heights, thanks to the pandemic. However, videogame makers are now struggling as people once again have more entertainment options, with the economy having fully reopened. Videogame sales decreased both in the first half and second quarter of 2022, according to market research company NPD, as players significantly reduced their purchases of consoles and gaming peripherals. Soaring prices have been a major threat to the industry as people are aggressively cutting down their spending on discretionary items and cautiously buying necessities. Besides, there are several other challenges that are plaguing the industry. Videogame Sales Declining Videogame sales in the United States have been on the decline since the beginning of the year. The scene, however, changed drastically, with the picture remaining completely opposite over the past couple of years. According to a report from the NPD, videogame sales declined by 1.78 billion in the second quarter of 2022. Total spending on video games in the second quarter was a meager $12.35 billion, marking a decline of 13% year over year. There are several factors that have been posing challenges for the videogame industry, the biggest right now being soaring commodity prices. Inflation is clearly a factor in this revenue decline, and cautious spending has resulted in people spending less on luxuries. People spent more time indoors during the COVID-19 pandemic, which led to a massive jump in sales of video games. As a result, between 2019 and 2021, the gaming business gained 26%, reaching record-high revenues of $191 billion. Sales were already up from 2015, and the pandemic provided a further boost. Since the start of this year, things have changed. Experts had predicted that the industry would see a sharp decline in sales once consumers find more options for outdoor recreation following the economic reopening. However, that didn’t happen immediately, as sales surged and were even higher in 2021 as several popular titles and consoles were launched during this period. Videogame Makers Struggling Of the several reasons that have resulted in videogame sales plummeting in 2022, the major is a dearth of new titles and consoles. In fact, videogame makers also have been complaining of a decline in revenues as a result of this halt in sales rally. Last month, both Microsoft Corporation MSFT and Sony Corporation SONY reported a decline in their gaming revenues during their earnings call. Nearly all major videogame developers are delaying the introduction of new consoles or titles, and reported a sharp decrease in sales in the second quarter. Last month, MSFT said that its gaming unit's revenues fell 7% on a year-over-year basis in second-quarter 2022. Xbox console sales dropped a whopping 11% year over year during this period. Microsoft also said that its content and service revenues declined 6% in the second quarter. Microsoft carries a Zacks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. SONY’s performance at its videogame unit, too, has been dismal. SONY said last month that its gaming revenues declined 2% year over year in the second quarter, while Sony Corporation’s operating profit dropped 37%. Sony also downwardly revised its profit forecast by 16%. Nintendo NTDOY, one of the top performers in console sales during the peak of the pandemic, saw its operating profit decline by 15% in the second quarter of 2022. Only 3.43 million Switch portable consoles were sold by NTDOY during this period, a 23% decline from the previous year. Additionally, Nintendo's software sales declined 8.6% on a year-over-year basis in the second quarter to 41.4 million. The scene at Activision Blizzard ATVI was even worse. ATVI, which is being acquired by Microsoft Corporation, reported a decline of 70% in net profit. Activision Blizzard’s sales plunged 29% in the second quarter. ATVI attributed the decline to a drop in sales of the most recent installment of its popular title Call of Duty. Other factors are also hampering sales. A shortage in semiconductor supply has been plaguing the production of videogames, which is directly impacting revenues. Gamers have also been facing difficulty finding new consoles in physical stores and online due to logistical problems as well as a shortage of gaming components and semiconductors. Moreover, gamers' interest is dwindling because there haven't been any major launches in a while, and the dry period will continue for some time. The most-played games in the second quarter were primarily classics. This is one of the reasons why businesses like Sony, Microsoft, and Nintendo witnessed a decline in second-quarter sales. Performance in the gaming sector is also being hampered by the ongoing rivalry for crucial platform hardware. In the second quarter, sales of Nintendo's portable Switch device fell 23% year over year. Sales of the Sony PlayStation 5 console totaled 2.4 million between April and June, marking a slight increase over 2.3 million units sold during the same time in 2021. A report from Ampere Analysis predicts the global gaming business to shrink 1.2% this year to $188 billion. This will be the gaming industry's first annual decline since 2012. However, the industry still has a lot of potential. As more games and platforms are expected to be released in the second half of the year, sales will certainly rise. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report Nintendo Co. (NTDOY) : Free Stock Analysis Report Sony Corporation (SONY) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

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Aurora Innovation: Buyout Hope Isn't Ideal

Aurora Innovation soared on a CEO memo suggesting tech giants could buy the firm. See why I think investors should sell AUR stock on any buyout hype.

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Aurora Innovation: Buyout Hope Isn't Ideal Summary - Aurora Innovation soared on a CEO memo suggesting tech giants could buy the firm. - The internal memo actually highlights how the self-driving tech firm lacks the funds to commercialize the technology. - Investors should sell the stock on any buyout hype. - Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio. Learn More » At one point, Aurora Innovation (NASDAQ:AUR) was one of the most promising companies in the autonomous driving technology sector. Now, the stock was trading below $2 and the CEO is promoting a buyout from a tech giant. My investment thesis remains Bearish on the stock due to extreme high costs levels while a buyout isn't a great investment thesis. Buyout Hype Per Bloomberg, a company memo from CEO Chris Urmson laid out potential scenarios for Aurora Innovation of possible buyouts by Apple (AAPL) and Microsoft (MSFT). While Apple is focused on developing EVs with self-driving technology, the company may or may not be interested in buying Aurora for a premium valuation. Apple has a net cash balance of $60 billion and generates a ton of free cash flow annually, so the company could easily afford a cash payout to buy Aurora. The stock has market cap of only $3 billion and a 30% premium would only require one of the tech giants to pay ~$4 billion for the firm. Apple has made several deals in this range such as buying Beats for $3 billion in order to enter the headphone and audio software market and paying $1 billion to buy the modem technology unit from Intel (INTC). Ultimately, the tech giant is still trying to build 5G modems to replace Qualcomm (QCOM) chips several years later, but Apple parlayed the headphone technology into a successful business with AirPods. The problem with Aurora Innovation is that the company is focused on autonomous highway travel with trucks, not exactly the AVs where Apple is focused with an Apple Car. Baidu (BIDU) has already launched robotaxis in China and Tesla (TSLA) is promoting launching self-driving technology by the end of the year. Aurora Innovation was once promoted as having the technology to compete with Waymo (GOOG, GOOGL) and Tesla in the sector. Now, the CEO appears to sound desperate looking for a way to cash out in a tough market. As part of the memo, the CEO outlined tons of options to finance the business including a reduction in force or a merger with another AV business. Neither option seems appealing. The Aurora Driver technology built by the company is more focused on commercial trucking operations. The company has an AV test with FedEx (FDX), amongst others, on multiple routes in Texas with a safety driver. Again, this isn't an area where Apple would necessarily have an interest in the business. The tech giant is much more focused on consumer applications and the speculation of an Apple Car development is on either the software side for the infotainment system or an actual EV with AV technology. Microsoft is more focused on enterprise customers, so possibly AV technology focused on corporate trucking customers would intrigue this tech giant. Wild Cash Burn For Q2'22, Aurora reported $171 million in cash operating expenses while obtaining about $21 million in collaboration revenue from Toyota (TM). Total expenses were $217 million due to an additional $46 million in stock-based compensation expenses. The company has an annualized spending rate of close to $900 million. Aurora burned $225 million in cash from operations in the 1H of the year and another $9 million from property and equipment while originally forecasting a cumulative cash burn of $3.7 billion through 2027 where the company forecast turning profitable. One really has to question if Apple, or even Microsoft, wants to acquire a business burning that much cash. The company suggests commercial applications won't start until 2024 with the launch of the Aurora Driver truck platform. Aurora hadn't forecast much in the ways of revenues until a few years after launch. Cleary, the internal memo is trying to address the main question of how Aurora gets to 2027 with a cash balance of $1.4 billion. What appeared like a strong balance sheet, quickly gets depleted in the next couple of years before the platform even launches. The stock ended up 15% on Friday following the memo leak, but Aurora only trades at $2.43 now. The company is in a weaker position after this memo leak questions the viability of the firm. Takeaway The key investor takeaway is that the internal memo from CEO Chris Urmson has to really question the business prospects of Aurora Innovation. The AV technology company valued at $11 billion with the SPAC deal and rumored at higher values in the private markets now appears a shell of its former self with an odd claim that a tech giant might buy the company when the stock valuation is trading at a fraction of the previous amount. Investors should continue to avoid this stock, especially on any buyout hope. If you'd like to learn more about how to best position yourself in undervalued stocks mispriced by the market during the 2022 sell off, consider joining Out Fox The Street. The service offers model portfolios, daily updates, trade alerts and real-time chat. Sign up now for a risk-free, 2-week trial to start finding the next stock with the potential to generate excessive returns in the next few years without taking on the outsized risk of high flying stocks. This article was written by Stone Fox Capital launched the Out Fox The Street MarketPlace service in August 2020. Invest with Stone Fox Capital's model Net Payout Yields portfolio on Interactive Advisors as he makes real time trades. The site allows followers to duplicate the model portfolio in their own brokerage accounts. You can find the portfolio and more details here: Net Payout Yields model Follow Mark on twitter: @stonefoxcapital Analyst’s Disclosure: I/we have a beneficial long position in the shares of QCOM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (10) Why not just read the disclosure? It clearly states no position whether long or short in $AUR. Got a position in some Lidar stocks, but we aren't going to justify your allegations. Any CEO of a public company better understand an internal memo is as good as public information.

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Stock Market Analysis: AMZN, AAPL, NVDA, META, NFLX, TSLA, GOOGL

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Top Stocks To Invest In Now? 3 Tech Stocks To Watch This Week

Is now the time to invest in these top tech stocks?

StockMarket

Are These The Best Tech Stocks To Invest In September 2022? Many investors are keeping a close eye on technology stocks as we kick off September 2022. For the uninitiated, tech stocks have been on a roller coaster ride over the past year. Meanwhile, many analysts are predicting that they will continue to be volatile in the months ahead. While there is no sure way to predict the future of the stock market, there are a few factors that could impact tech stocks in the coming months. First, interest rates are expected to rise in the second half of the year, which could put pressure on stock prices. Additionally, the ongoing trade war between the United States and China could also lead to volatility in tech stocks, as tensions between the two countries continue to escalate. This is evident with tech firms like NVIDIA Corporation (NASDAQ: NVDA) and Micron Technology Inc. (NASDAQ: MU). Shares of both companies have fallen recently in light of new export rules from the U.S. in regards to exporting chips to China. Finally, earnings reports from major tech companies will also being digested by investors. With so much uncertainty on the horizon, it’s important to stay disciplined with your investment strategy and keep a diversified portfolio. Technology stocks may be volatile, but they can still offer opportunities for long-term growth. With that, here are three top tech stocks to watch in the stock market today. Tech Stocks To Invest In [Or Avoid] Right Now - Shopify Inc. (NYSE: SHOP) - Microsoft Corporation (NASDAQ: MSFT) - Roblox Corporation (NYSE: RBLX) Shopify (SHOP Stock) Next, Shopify Inc. (SHOP) is a Canadian e-commerce company headquartered in Ottawa, Ontario. In brief, the company offers online retailers a platform to buy and sell products. As well as a suite of tools to manage inventory, orders, and customers. Shopify is an e-commerce platform that enables businesses of all sizes to sell online. In July, the company reported a miss for its second quarter 2022 financial results. In detail, Shopify reported a 2nd quarter 2022 loss of $0.01 per share, with revenue of $1.3 billion. Versus, Wall Street’s consensus earnings estimate of $0.03 per share, with revenue of $1.8 billion. Additionally, the company notched in a revenue increase of 16% during the same period, in 2021. Moreover, the company reported that its subscription solutions revenue was up 10% year-over-year at $366.4 million for the quarter. “While commerce through offline channels grew faster in Q2, where our exposure is lower but growing, we continued to see increased adoption of our solutions, enabling our merchants to remain agile against a challenging macro environment and highlighting the breadth and resilience of our business model,” stated Amy Shapero, Shopify’s CFO. With that, shares of SHOP have been beaten down by over 77%. This comes after closing Friday’s trading session at $30.11 per share. Considering all of this, do you think SHOP is a good buy at these price levels? [Read More] 5 Top Dividend Stocks To Watch In A Bear Market Microsoft (MSFT Stock) Next, Microsoft Corporation (MSFT) is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses supports, and sells computer software, consumer electronics, personal computers, and related services. Most notably, some of its best-known software products are; Microsoft Windows, Microsoft Office suite, Internet Explorer and Edge web browsers. For a sense of scale, Microsoft is one of the largest information technology companies in the world. In July, Microsoft reported its most recent Q4 2022 financial results. In detail, the company posted earnings of $2.23 per share. As well as revenue of $51.9 billion. This is in comparison to, analysts’ consensus estimates of earnings of $2.28 per share, on revenue of $52.9 billion. “In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform. Commercial bookings grew 25% and Microsoft Cloud revenue was $25 billion, up 28% year over year,” commented Amy Hood, executive vice president, and CFO of Microsoft. “As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth.” With that, shares of MSFT stock are still down over 23% since the start of 2022. As of Friday’s closing bell, shares of MSFT stock are trading at $256.06 per share. [Read More] Cheap Stocks To Buy Now? 3 Marijuana Stocks To Watch Roblox (RBLX Stock) Lastly, Roblox Corporation (RBLX) is an American technology company that develops and operates the Roblox platform, which is a social networking service for people to play games, create experiences and interact with other people. Just last month, the company announced its second quarter 2022 financial results. Diving in, Roblox reported a loss of $0.30 per share on revenue of $591.2 million for the second quarter. This is in comparison with the consensus estimates of a loss of $0.23 per share and revenue of $658.5 million. Though, Roblox was able to notch in a revenue increase of 30.2% during the same period, last year. Meanwhile, the company announced its Average Daily Active Users grew 21% year-over-year to 52.2 million. David Baszucki, CEO of Roblox commented in his letter to shareholders, “We are driving record levels of users and engagement globally as we execute on our innovation roadmap and broaden the appeal of Roblox across geographies and age groups. We continue to make progress on key operational and product initiatives to enhance the long-term value of the Roblox platform.” Moving along, shares of RBLX stock are down over 60%. Meanwhile, RBLX stock is looking to start off this shortened trading week at $37.94 per share. With this in mind, will you be watching RBLX stock in the stock market this week? If you enjoyed this article and you’re interested in learning how to trade so you can have the best chance to profit consistently then you need to checkout this YouTube channel. CLICK HERE RIGHT NOW!!

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Selling High-Growth Profitless Stocks Now Is Dumb, Here's Why

The notion that profitless stocks should be avoided no longer makes sense. The market has discounted them mightily, and 4% inflation - its effect on 50% to 60% revenue is minimal.

SeekingAlpha

Selling High-Growth Profitless Stocks Now Is Dumb, Here's Why Summary - The notion that profitless stocks should be avoided, no longer makes sense. The market has discounted them mightily, and 4% inflation - its effect on 50% to 60% revenue is minimal. - We are likely at the bottom of this ersatz recession with minimal layoffs. - We just have to tough it through this month, and October should get the bull started. - My concern turns to mid-2023, where I think Dan Niles prediction of an S&P that breaks 3600 (he says 3000) might come to pass. - This idea was discussed in more depth with members of my private investing community, Dual Mind Research. Learn More » You’ve heard dozens of times now, “sell all profitless hyper-growth names”. It’s time to re-assess. Why has it worn out its usefulness? Does this notion bother you? That is your first clue. There is a reason for taking a contrary approach and applying a skeptical analysis to “accepted wisdom”. A key point to making this switch is when every market participant repeats the same mantra. Odds are, it is rapidly becoming obsolete. In this case, whether you feel that inflation is still going higher, and disbelieve the new emerging facts or not, at some point the value of rapidly growing companies which by necessity must be highly successful will reassert itself as a wise investment. Of course, companies that are buying market share with equity raises are as doomed as ever. I am not talking about those or other types of zombie companies. Let’s also say that the notion of “profitless” is really over-broad. There are plenty of companies that are taking free cash flow and reinvesting it back in their business. In the tech world, gaining share now is more important than showing a profit. That aside only the most obstinate will insist that inflation is not subsiding, the fact is, supply chain kinks are coming out of the economy. There are few areas such as rents are still stubbornly high, yet overall it is pretty clear that the rapid rise in interest rates and the artful (or perhaps purposefully blunt) jawing of the Fed put fear into corporate America. Hiring has slowed, and the “Tech Titans” and their contenders are reversing their ravenous consumption of technology personnel. This has led to a great reshuffling of that talent as it spread to small and midsize enterprises, where it can play a more productive role in bringing them into the digital age. Alas, good news is now the bad news On Friday, we had a very good employment number at about 350,000 new jobs, and the unemployment rate rose by 3.7%. Last month was 3.5%, so wasn’t that bad news? No, because the unemployment number counts the number of people looking for work, so in this case, more people are coming into the workforce, with the 60 to +64-year-old cohort coming back into the workforce. Contrary to public opinion, the older aged workforce can be extremely productive. Also rising were the first-time jobseekers - this was very good news indeed. Average hourly wages came down a bit and as workforce participation accelerates, wages will continue to moderate. What does this mean for high-growth unprofitable stocks? The notion that wages, one of the largest motors of inflation coming under control, and the other data points indicate that we will level off on inflation. 4% happens to be the consensus of where inflation should move to, shortly. Let’s dwell on that for the moment. Let’s take MongoDB (MDB) for an example; Revenue soared 53% year over year in the second quarter, driven by the sizable 73% growth for Atlas, MongoDB's fully managed cloud-based database platform. Atlas now accounts for 64% of total revenue, with the rest coming from enterprise-focused products and services. Atlas subscription model as it grows will contribute mightily to profit visibility. So let’s play the “Long Duration and Inflation” game. Inflation will be at 4% by year-end, let’s say it takes another eighteen months to get back to two percent. In 18 months, MDB growing at 53% will easily cover the 6% to 8% ding to profits. Will we see profits in 18 months? I hope not, but I definitely am confident there will be free cash flow. You see, MDB is at the center of digitization. The move of legacy applications stuck on the Mainframe. This is easily a trillion-dollar (yes, with a "T") market opportunity. It would be the height of foolishness for the executive management of MDB to throttle back on that growth. Will MDB capture it all, obviously not, there are other platforms out there. Will MDB be the next Microsoft (MSFT), that’s not conceivable right now. That’s not to say that it is inconceivable, meaning there is another MSFT, or GOOGL out there. Why would a Snowflake (SNOW) or an MDB ease up on that mission to satisfy the purveyors of value stocks or some talking head that is looking backward instead of forward? The recession will end before we even really notice it if it ever really was a recession. What do I mean by that? Everyone knows it is 2 quarters of negative growth. Though, there has never been a recession that didn’t have massive layoffs. It is likely, as I have been saying, that the big enterprises were hoarding tech talent. That is where the biggest growth in salaries is to be found. So now the big boys have stopped hoarding talent, a lot of that talent doesn’t want to sit in the office anyway. Which is where a lot of the big companies want their people to be. Smaller mid-sized companies will be only too happy to get their hands on that remote talent. That will fire up the lagging productivity numbers we’ve been having, and voila! More productivity means even less inflation. Last November was the peak in the market, and we experienced a long slide down as the stock market got busy discounting inflation and what we now know was a recession of some sort. The graph below is a great illustration of what is likely to happen next. If you start the above with the market peak aligned with November there’s nearly a perfect alignment with the rest of the cycle, are we at the absolute bottom? Good question, Dan Niles, a hedge fund god whom I admire greatly, expects a crash down to 3000 on the S&P. I don’t see that now. It could happen next year, when all of these rising rates might really take the economy by the throat. However, right now and until the end of the year, I believe we are nearing very strong support from market participants. Where will they gravitate to in a slower-paced economy? Not the cyclical value names, though, this could very well be an “everything” rally. I believe they will start picking up the SNOW and MDBs of the world. I also think that all these foundries being built will need the machinery to turn out those chips that run everything. Select chip stocks which are the equivalent to the transports of the last century will also be in demand. Let’s not forget the energy stocks, which will still benefit from $90 to $100 WTI. I sense good times ahead once again. That does not mean that you eschew hedging, husbanding your cash, and making select shorts (either via puts, or simply shorting). I did a lot of that this week. My Trades Long EA Put 131 strike Sept 02 @ $1.4 closed $2.35 Long Put BBY 75 strike Oct 21 @ $6 Closed at $8.45 Long Put CHWY 30 strike Oct 21 @ $1.95 closed at $2.30 Long Put BBY 72.5 strike Oct 21 @ $4.90 closed $5.50 Long Put NCNO 35 Strike Oct 21@ 3.60 closed $5.10 Long Put SQQQ 42 Strike Sept 23 @ 4.2 per contract closed $2.73 (loss) I felt confident that we were in a bearish phase, so looking for short opportunities was relatively easy. In many of these names, the stock actually popped on bullish news. Serop ElMayan, our options guru at Dual Mind Research inspired this tactic, and I am making full use of his insight. I also had several hedges going on with SQQQ, SPSX, and SARK which I held intermittently this week, but closed out before the weekend with minimal gains. I am sure it won't surprise anyone that I have been picking up shares of MongoDB. I have not gotten to SNOW as yet, however, if the market opens down tomorrow, I will be sure to get back in and this time I think I will hold onto it. Expanding on my interest in biotech, I started a position in Veeva Systems (VEEV), also added to Seagen (SGEN), and blue bird (BLUE). I sold down a lot of my energy names in my trading account, not because I am less confident in the sector. I did so because I would rather hold the cash. There is nothing wrong with taking some profits as well. The Oil companies have held up very well compared to the actual product, though if some of these quality names do fall hard I will gladly add some back, I haven’t touched my long-term investment in Devon Energy (DVN), Apache (APA), Coterra (CTRA). I will continue to hold them. I have been adding back my Amazon (AMZN), and Alphabet (GOOGL), as they have been falling. Contrary to some negative comments about not timing stocks, I guess I have been lucky selling AMZN and GOOGL at higher prices and slowly adding back to them now. In fact, I believe that timing the market is something that has been quite successful for me and my friends in the DMR community. So yes, if you put in the research work to measure the market’s temperature it is possible to skate where the puck is going, not where it was. If you enjoy my weekly stock analysis articles, You will be happy to learn that I offer a subscription service Dual Mind Research. Serop Elmayan, a brilliant young man who brings a quantitative approach to surface high probability fast-money trades, and I are partners in this service so you get the benefit of two unique investing approaches. My narrative style and his engineering approach will give you a unique value indeed. The first 2 weeks are free so check it out today for our latest ideas. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of MDB either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Please note: You should not take the above text as investment advice. I am not a broker, Registered Investment Advisor, or certified money manager, I cannot give financial advice. What I am doing is chronicling my thought process. If I use the word you in a sentence, I am really talking to myself, or it was a simple typo, in no way did I mean to advise you. Always do your own research and understand what you are buying, and what your risk is, and be sure before you make a purchase. Also, only trade what you can afford to lose. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (68) Jan. 10, 2022 12:33 AM ET Hmmmmmmm. This is your article correct?? (Continuing) Real average weekly earnings DECREASED 3.6% between July 2021 and July 2022. From: www.bls.gov/... Actually, LOW real wage growth occurs during periods of high inflation. 1) From the St. Louis Fed site: www.stlouisfed.org/... "... confirming the finding in the first figure that periods of high inflation are, in general, periods of low real wage growth."2) For July 2021 T: "3.6-percent DECREASE in real average weekly earnings over this period. "Real average hourly earnings decreased 3.0 percent, seasonally adjusted, from July 2021 to July 2022. The change in real average hourly earnings combined with a decrease of 0.6 percent in the average workweek resulted in a 3.6-percent decrease in real average weekly earnings over this period." seekingalpha.com/... This is exactly how a healthy capitalist system is supposed to operate. So-called "activist investors" who throw baby fits because companies aren't dissipating their profits on stock holders instead of R&D and expanding their product and market base have a parasitical effect on companies and the overall market place. The damage isn't obvious at first because, like termites, it takes awhile to notice you have a problem. By the time the problem is noticeable it's severe and difficult to correct. The real problem is spineless, or indulgent, board members. They're supposed to be the grown ups in the room. If they don't have their company's long-term health in mind, they're useless. seekingalpha.com/... You would be most welcome in our community. We offer a 2-week free trial. seekingalpha.com/... I still like MRNA’s long term prospects. Too many great biotechs to list them. SAVA for a wild ride?! Adding slowly to HCP & CFLT. Thanks again! Don’t work on Labor Day

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Trading The Top 10 Stocks From 40 Large Hedge Funds: Trading Update 9/4/2022

A strategy selecting 10 of the 50 stocks, equally weighted, would have increased total return to 178.0%, an active return of 61.6% vs. SPY.

SeekingAlpha

Trading The Top 10 Stocks From 40 Large Hedge Funds: Trading Update 9/4/2022 Summary - This portfolio strategy uses the quarterly 13F filings to extract 50 consensus stocks from 40 large hedge funds that have more than $3.5 billion in Assets Under Management. - From 1/2/2016 to date investing in all 50 stocks, equally weighted, would have produced a total return of 78.5%, an active return of -37.8% when compared to SPY’s 116.3%. - A strategy selecting 10 of the 50 stocks, equally weighted, would have increased the total return to 178.0%, an active return of 61.6% when compared to SPY. - Here we report the most recent holdings and the trading signals for 9/6/2022. Research from Barclays and Novus published in October 2019 found that a copycat stock selection strategy that combines conviction and consensus of fund managers that have longer-term views outperformed the S&P 500 by 3.80% on average annually from Q1 2004 to Q2 2019. Based on that rational, we previously presented two trading models (in Article-1 and Article-2) that use the top 50 consensus stocks of 40 Large Hedge Funds (listed in Appendix A below), that historically outperformed the S&P 500. The iM-Top50(from 40 Hedge Funds) model holds all 50 stocks equally weighted and has a low turnover. The iM-Top10(from 40 Hedge Funds) model holds a subset of 10 stocks, also equally weighted, but with higher turnover which is rewarded by improved returns. The performance simulation, and generation of trading signals, for these strategies is done using the platform Portfolio123 and reported below. For more comprehensive description of the 50 stock universe please refer to here. Note: This update is published on Seeking Alpha, editor permitting, only if the model has generated trading signals. Model Performance: Note: The iM-Top10VariableWeight model (green line) is an experimental model. It holds the same stocks as the iM-Top10 model put position weights are adjusted to an inverse function of market capitalization, that is the higher the market cap of the stock the lower the position weight. As a consequence it is difficult to trade as market capitalization changes with the stock price. Trade Signals for 9/6/2022 |iM-Top10(of 40 Large Hedge Funds)| |Action||Ticker||Shares||Name| |SELL||ADBE||67||Adobe, Inc.| |BUY||QCOM||192||QUALCOMM, Inc.| |iM-Top50(of 40 Large Hedge Funds)| |No Trades| The models trade on the first trading day of the week. Trading signals are published on a weekly basis here on Seeking Alpha (subject to model trading and editor’s acceptance) and on iMarketSignals. Next update on Sunday 9/13/2022 Holdings for iM-Top10(of 40 Large Hedge Funds) as of 9/2/2022 |Current Portfolio 9/2/2022||Cash Flow| |Ticker||Number of Shares||Weight||Value now||Open Date||Open Costs||Rebal Costs | Return||Dividends Received||Gain to date| |(AAPL)||179||10.03%||$27,890||08/22/22||($30,109)||—||—||($2,219)| |(ADBE)||67||8.87%||$24,665||08/08/22||($29,199)||—||—||($4,533)| |(CHTR)||67||9.81%||$27,278||08/22/22||($29,707)||—||—||($2,429)| |(DHR)||103||9.98%||$27,750||06/13/22||($25,190)||—||$26||$2,586| |(INCY)||411||10.38%||$28,856||08/22/22||($30,326)||—||—||($1,470)| |(MA)||87||10.10%||$28,063||05/02/22||($27,266)||($3,816)||$37||($2,982)| |(SCHW)||416||10.53%||$29,261||08/08/22||($28,585)||—||$92||$768| |(TDG)||50||10.81%||$30,060||05/23/22||($28,158)||—||$925||$2,827| |(TSM)||321||9.34%||$25,969||08/08/22||($28,268)||—||—||($2,299)| |(V)||140||9.96%||$27,686||12/07/20||($30,865)||$1,269||$360||($1,549)| Holdings for iM-Top50(of 40 Large Hedge Funds) as of 8/19/2022 |Current Portfolio 9/2/2022||Cash Flow| |Ticker||Number of Shares||Weight||Value now||Open Date||Open Costs||Rebal Costs | Return||Dividends Received||Gain to date| |(AAPL)||24||2.09%||$3,739||01/04/16||($2,109)||$4,982||$269||$6,881| |(ADBE)||9||1.86%||$3,313||01/04/16||($2,118)||$3,218||—||$4,414| |(ALTR)||69||1.88%||$3,358||08/22/22||($3,714)||—||—||($357)| |(AMT)||14||1.97%||$3,512||01/04/16||($2,033)||$1,727||$480||$3,686| |(AMZN)||30||2.14%||$3,825||01/04/16||($1,913)||$3,912||—||$5,825| |(APP)||140||1.89%||$3,373||05/30/22||($3,147)||($2,402)||—||($2,176)| |(BRK.B)||13||2.02%||$3,610||05/23/22||($4,343)||$144||—||($589)| |(BSX)||96||2.18%||$3,887||02/24/20||($3,949)||$152||—||$90| |(CHTR)||8||1.82%||$3,257||08/22/22||($3,547)||—||—||($290)| |(CNI)||32||2.10%||$3,744||05/23/22||($4,410)||$819||$23||$175| |(COUP)||55||1.76%||$3,134||08/19/19||($3,549)||($3,491)||—||($3,906)| |(CRM)||20||1.72%||$3,074||05/22/17||($2,315)||$840||—||$1,599| |(CRWD)||20||1.93%||$3,449||05/26/20||($4,210)||$5,621||—||$4,860| |(DHR)||13||1.96%||$3,502||08/19/19||($3,547)||$3,433||$54||$3,442| |(DOCU)||57||1.74%||$3,104||08/24/20||($5,118)||($4,258)||—||($6,272)| |(ELV)||8||2.16%||$3,856||02/28/22||($4,503)||$854||$29||$237| |(FATE)||133||1.99%||$3,554||02/16/21||($6,499)||($3,851)||—||($6,796)| |(FIS)||38||1.92%||$3,419||08/22/22||($3,724)||—||—||($305)| |(FISV)||44||2.50%||$4,463||11/18/19||($3,209)||($1,830)||—||($576)| |(FOLD)||396||2.54%||$4,538||05/23/22||($4,407)||$1,277||—||$1,408| |(GFS)||62||2.01%||$3,589||08/22/22||($3,680)||—||—||($92)| |(GOOGL)||34||2.05%||$3,667||01/04/16||($2,281)||$2,932||—||$4,318| |(INCY)||45||1.77%||$3,159||02/28/22||($4,566)||$1,507||—||$100| |(INTU)||8||1.88%||$3,360||02/19/19||($3,523)||$3,219||$112||$3,168| |(KMX)||39||1.91%||$3,415||05/24/21||($5,377)||$721||—||($1,241)| |(MA)||11||1.99%||$3,548||01/04/16||($2,088)||$2,636||$144||$4,241| |(MCO)||12||1.91%||$3,413||01/04/16||($2,044)||$2,791||$259||$4,419| |(META)||22||1.98%||$3,527||01/04/16||($2,047)||($928)||—||$553| |(MSFT)||16||2.29%||$4,097||01/04/16||($2,085)||$3,882||$366||$6,260| |(MU)||62||1.96%||$3,492||08/22/22||($3,634)||—||—||($142)| |(NFLX)||17||2.15%||$3,844||01/04/16||($2,092)||$687||—||$2,439| |(NOW)||8||1.95%||$3,476||11/19/18||($2,825)||$3,001||—||$3,652| |(NVDA)||21||1.61%||$2,866||02/24/20||($3,830)||$6,951||$16||$6,003| |(QCOM)||24||1.73%||$3,084||08/24/20||($5,106)||$3,168||$238||$1,384| |(SCHW)||58||2.29%||$4,080||02/28/22||($4,555)||($526)||$24||($978)| |(SGEN)||24||2.05%||$3,656||01/04/16||($2,099)||$2,907||—||$4,465| |(SNOW)||26||2.50%||$4,459||02/16/21||($6,487)||($89)||—||($2,117)| |(SPGI)||10||1.95%||$3,476||05/23/22||($4,544)||$976||$20||($72)| |(TDG)||6||2.02%||$3,607||01/04/16||($2,071)||$2,572||$1,023||$5,131| |(TMO)||8||2.44%||$4,348||05/23/22||($4,446)||—||$2||($95)| |(TMUS)||28||2.23%||$3,975||05/23/22||($4,395)||$704||—||$285| |(TSLA)||18||2.72%||$4,864||05/26/20||($4,098)||$10,984||—||$11,749| |(TSM)||43||1.95%||$3,479||11/22/21||($6,768)||$1,599||$61||($1,629)| |(UBER)||137||2.23%||$3,980||05/23/22||($4,358)||$1,350||—||$972| |(UNH)||7||2.02%||$3,614||05/22/17||($2,274)||$3,836||$314||$5,492| |(UNP)||17||2.13%||$3,807||05/23/22||($4,331)||$670||$48||$194| |(V)||17||1.88%||$3,362||01/04/16||($2,046)||$1,693||$170||$3,179| |(W)||71||1.98%||$3,527||11/23/20||($5,390)||($5,138)||—||($7,001)| |(WDAY)||25||2.22%||$3,964||05/26/20||($4,213)||$159||—||($91)| Appendix A Hedge Fund Filers: - Akre Capital Management LLC - Alkeon Capital Management LLC - Altimeter Capital Management, LP - Aristotle Capital Management, LLC - Baker Bros. Advisors LP - Barings LLC - Calamos Advisors LLC - Capital International Ltd - Citadel Advisors LLC - Coatue Management LLC - D. E. Shaw & Company, Inc. - Disciplined Growth Investors Inc - DSM Capital Partners LLC - Echo Street Capital Management LLC - FMR LLC - Fort Washington Investment Advisors Inc - GW&K Investment Management, LLC - Hitchwood Capital Management LP - Jennison Associates LLC - King Luther Capital Management Corp - Kohlberg Kravis Roberts & Company LP - Lone Pine Capital LLC - Loomis Sayles & Company LP - Matrix Capital Management Company, LP - Meritage Group LP - Panagora Asset Management Inc - Perceptive Advisors LLC - Pinebridge Investments, LP - Redmile Group, LLC - Renaissance Technologies LLC - Riverbridge Partners LLC - Ruane, Cunniff & Goldfarb LP - Steadfast Capital Management LP - TCI Fund Management Ltd - Tiger Global Management LLC - Verition Fund Management LLC - Viking Global Investors LP - Westfield Capital Management Company LP - Whale Rock Capital Management LLC - Winslow Capital Management, LLC This article was written by Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (4)

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2 Trillion-Dollar Growth Stocks to Buy Hand Over Fist Right Now

These might be two of the largest companies in the world, but there's still upside left in the tank.

Yahoo

2 Trillion-Dollar Growth Stocks to Buy Hand Over Fist Right Now These might be two of the largest companies in the world, but there's still upside left in the tank. These might be two of the largest companies in the world, but there's still upside left in the tank.

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Dividend Growth Stock Watchlist - September 2022

20 stocks on my dividend growth watchlist for September 2022. Click here to know them.

SeekingAlpha

Dividend Growth Stock Watchlist - September 2022 Summary - There are 20 stocks on my dividend growth watchlist for September 2022. - The majority of the stocks on my watchlist are currently undervalued based on dividend yield theory. - An equally-weighted portfolio of these stocks would have underperformed the Vanguard Dividend Appreciation ETF by more than 6% through August of this year. Dividend Growth Watchlist Criteria The companies listed on this watchlist are stable with a track record of raising their dividends consistently. The company must also have a "Wide" economic moat, according to Morningstar. This ensures a company I consider for investment has a sustainable competitive advantage for the foreseeable future. An S&P Capital IQ Earnings and Dividend Ranking of A or A+ helps to establish the company has achieved and should continue to achieve lower price volatility when compared to the broader market. Next, since this is a dividend growth watchlist, it would logically make sense to measure a company's dividend growth. In this case, a company needs to have a 10-year dividend growth rate of 10% or greater to ensure growth in the dividend itself, in addition to being a quality company. The company should have room to grow their dividend too, so a payout ratio of 50% or less is used as the final filter. I use the dividend yield theory to determine if a stock is potentially overvalued or undervalued. This idea suggests a company's yield will revert to the norm over time. An example below is Texas Instruments Inc (TXN) - the current yield is 2.78% while its five-year average is just 2.36%. The difference being 42 basis points or about 18%, which suggests it could be undervalued. |Company||10 Year DGR||Dividend Yield (8/31/22)||Div. Yield(5 Yr Avg.)||Overvalued / Undervalued| |Accenture PLC (ACN)||14.61%||1.35%||1.46%||8%| |Applied Materials Inc (AMAT)||11.49%||1.11%||1.22%||9%| |Amphenol Corp (APH)||45.43%||1.09%||0.86%||-27%| |Bank of New York Mellon Corp (BK)||10.48%||3.56%||2.26%||-58%| |BlackRock Inc (BLK)||11.63%||2.93%||2.29%||-28%| |Comcast Corp (CMCSA)||16.09%||2.98%||1.88%||-59%| |Costco Wholesale Corp (COST)||12.50%||0.69%||0.85%||19%| |Graco Inc (GGG)||10.10%||1.32%||1.09%||-21%| |Home Depot Inc (HD)||20.30%||2.64%||2.07%||-28%| |Lowe's Companies Inc (LOW)||18.11%||2.16%||1.53%||-41%| |Mastercard Inc (MA)||40.16%||0.60%||0.50%||-20%| |Microsoft Corp (MSFT)||11.70%||0.95%||1.15%||17%| |Northrop Grumman Corp (NOC)||12.08%||1.45%||1.63%||11%| |Roper Technologies Inc (ROP)||17.01%||0.62%||0.52%||-19%| |Sherwin-Williams Co (SHW)||16.28%||1.03%||0.77%||-34%| |Thermo Fisher Scientific Inc (TMO)||22.63%||0.22%||0.23%||4%| |T Rowe Price Group Inc (TROW)||13.29%||4.00%||2.46%||-63%| |Texas Instruments Inc (TXN)||22.35%||2.78%||2.36%||-18%| |US Bancorp (USB)||13.15%||4.03%||2.83%||-42%| |Visa Inc (V)||23.91%||0.75%||0.59%||-27%| Goal The goal of my dividend growth watchlist is to discover companies to add to my dividend growth portfolio in an attempt to consistently exceed the market return of the Vanguard Dividend Appreciation ETF (VIG). Through August of this year, an equally weighted portfolio of these 20 stocks mentioned above would have underperformed VIG by more than 6%. VIG has lost 13.07% through the first eight months of 2022, while the stocks above lost 19.75%. |Symbol||AugustReturns||YTD Return through August| |ACN||-5.81%||-29.78%| |AMAT||-11.01%||-39.81%| |APH||-4.67%||-15.44%| |BK||-4.44%||-26.87%| |BLK||-0.42%||-26.17%| |CMCSA||-3.54%||-26.84%| |COST||-3.55%||-7.59%| |GGG||-4.94%||-20.05%| |HD||-3.53%||-29.18%| |LOW||1.36%||-23.92%| |MA||-8.32%||-9.34%| |MSFT||-6.67%||-21.74%| |NOC||17.00%||24.86%| |ROP||-7.81%||-17.81%| |SHW||-3.84%||-33.63%| |TMO||-8.87%||-18.18%| |TROW||-2.81%||-37.75%| |TXN||-7.65%||-10.60%| |USB||-3.37%||-17.31%| |V||-6.15%||-7.81%| |VIG||-3.45%||-13.07%| New Option Amphenol Corporation appeared on the watchlist for the first time ever and is significantly undervalued based on dividend yield theory. APH is down about 15% year to date and lost 4.67% during the month of August. It has an exceptional 10 year dividend growth rate of more than 45% with another dividend increase expected in October. Amphenol Corporation also has one of the lowest payout ratios on the watchlist at just 25% leaving ample room for the company to continue raising its dividend at a healthy rate. Final Thoughts This dividend growth watchlist is used to identify companies worthy of further research. Stock prices fluctuate continuously, and although there are legitimate reasons for a price increase or decrease, occasionally there are times the market is just overreacting to a short-term issue. I believe if you can identify the reason(s) and determine for yourself if a decline in stock price is justified, you can minimize risk in your portfolio by purchasing a company's stock when their yield is higher than average. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of HD, LOW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments

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Microsoft, McDonald's Among 12 Companies Scheduled To Announce Annual Dividend Boosts In September

Double-digit boosts from multiple companies in August. Click here to see the list of 12 stocks that will announce dividend increases in September.

SeekingAlpha

Microsoft, McDonald's Among 12 Companies Scheduled To Announce Annual Dividend Boosts In September Summary - It was a good month for dividend growth investors, with double-digit boosts from multiple companies. - Dover extended its dividend growth streak to 67 years - one of the longest among publicly traded companies - with a 1% increase. - Another 12 companies will announce increases in September, including McDonald’s, Microsoft, and Lockheed Martin. This is the latest in my series of articles where I provide predictions of annual dividend increases for a variety of long-term dividend growth companies. At the end of July, I provided predictions for 15 dividend growth companies that have historically announced annual payout increases during August. In this article I'll look at another 12 dividend growth companies that I expect will announce their annual dividend increases in September. Here are the results from my predictions from August (as always, the original predictions are available here), followed by my predictions for the dividend increases that I'm expecting to be announced in September: (All yields are based on stock prices at the market close on Friday, September 2nd.) Results for Dividend Increase Announcements from August American Financial Group, Inc. (AFG) - 17 years of dividend growth Prediction: 11.6 - 13.4% increase to $2.50 - $2.54 Actual: 12.5% increase to $2.52 Forward yield: 1.98% The insurer continued its pattern of 12% annual increases. BancFirst Corporation (BANF) - 28 years Prediction: 2.8 - 5.6% increase to $1.48 - $1.52 Actual: Deferred to September Regional bank BancFirst should announce its next annual dividend increase in the first week of September. Badger Meter, Inc. (BMI) - 30 years Prediction: 5.0 - 10.0% increase to $0.84 - $0.88 Actual: 12.5% increase to $0.90 Forward yield: 0.96% With zero debt, Badger Meter was able to announce an increase above its 10-year average of 10%. Broadridge Financial Solutions, Inc. (BR) - 16 years Prediction: 9.4 - 12.5% increase to $2.80 - $2.88 Actual: 13.3% increase to $2.90 Forward yield: 1.74% Financial technology company Broadridge announced an increase closer to its average growth rate of 14% than I expected. CBOE Global Markets, Inc. (CBOE) - 13 years Prediction: 10.4 - 14.6% increase to $2.12 - $2.20 Actual: 4.2% increase to $2.00 Forward yield: 1.67% Financial markets company CBOE broke its streak of double-digit increases this year. Carlisle Companies Incorporated (CSL) - 46 years Prediction: 4.6 - 7.4% increase to $2.26 - $2.32 Actual: 38.9% increase to $3.00 Forward yield: 1.01% The diversified niche manufacturer more than made up for last year's 3% dividend boost with this year's increase. Dover Corporation (DOV) - 67 years Prediction: 3.0 - 6.0% increase to $2.06 - $2.12 Actual: 1.0% increase to $2.02 Forward yield: 1.58% This is now the 5th year of 2-4 cent annual dividend growth for Dover, but it keeps the dividend growth streak - one of the longest ones for a publicly traded company - alive. Federal Realty Investment Trust (FRT) - 55 years Prediction: 2.8 - 4.7% increase to $4.40 - $4.48 Actual: 0.9% increase to $4.32 Forward yield: 4.29% The REIT keeps its dividend growth streak going with its 3rd straight year of 4-cent annual growth. International Flavors & Fragrances Inc. (IFF) - 20 years Prediction: 3.8 - 6.3% increase to $3.28 - $3.36 Actual: 2.5% increase to $3.24 Forward yield: 3.00% Dividend growth is slowing at the specialty chemical company, as IFF is expecting earnings to be pressured by continued inflationary and supply chain issues. Intuit Inc. (INTU) - 11 years Prediction: 14.7 - 17.6% increase to $3.12 - $3.20 Actual: 14.7% increase to $3.12 Forward yield: 0.74% The financial software company's latest dividend increase is nearly identical to its 5-year dividend growth rate. Illinois Tool Works Inc. (ITW) - 48 years Prediction: 12.3 - 13.9% increase to $5.48 - $5.56 Actual: 7.4% increase to $5.24 Forward yield: 2.68% This is the 2nd straight year of 7% dividend growth for this diversified industrial manufacturer. MGE Energy, Inc. (MGEE) - 47 years Prediction: 3.9 - 5.2% increase to $1.61 - $1.63 Actual: 5.2% increase to $1.63 Forward yield: 2.11% MGE Energy continued its pattern of 4-5% dividend growth. Altria Group, Inc. (MO) - 13 years Prediction: 3.3 - 4.4% increase to $3.72 - $3.76 Actual: 4.4% increase to $3.76 Forward yield: 8.36% The tobacco company's latest dividend boost was in line with the expected EPS growth rate. Nordson Corporation (NDSN) - 59 years Prediction: 13.7 - 19.6% increase to $2.32 - $2.44 Actual: 27.5% increase to $2.60 Forward yield: 1.16% This year's 27% boost follows up last year's 30% increase; Nordson has grown its dividend by 66% over the last two years. Ritchie Bros. Auctioneers Incorporated (RBA) - 22 years Prediction: 5.0 - 8.0% increase to $1.05 - $1.08 Actual: 8.0% increase to $1.08 Forward yield: 1.54% The auctioneer's dividend growth rate fell from last year's 14% increase, but this year's boost should help investors keep up with inflation. The Scotts Miracle-Gro Company (SMG) - 13 years Prediction: 1.5 - 3.0% increase to $2.68 - $2.72 Actual: 0% increase to $2.64 Forward yield: 4.32% Battered by a heavy debt load and falling earnings, Scotts Miracle Gro is deferring its dividend boost this year. The company has until the end of 2023 to keep its dividend growth streak going. Skyworks Solutions, Inc. (SWKS) - 8 years Prediction: 11.6 - 15.2% increase to $2.50 - $2.58 Actual: 10.7% increase to $2.48 Forward yield: 2.52% The chip manufacturer just missed my expectations in its 8th year of dividend growth. Verizon Communications Inc. (VZ) - 17 years Prediction: 1.6 - 3.1% increase to $2.60 - $2.64 Actual: Deferred to September Verizon should announce its dividend boost after Labor Day. Westlake Corporation (WLK) - 19 years Prediction: 14.3 - 21.0% increase to $1.36 - $1.44 Actual: 20.0% increase to $1.428 Forward yield: 1.49% The specialty chemical company rewarded investors with a big boost after blowout earnings growth. Essential Utilities, Inc. (WTRG) - 31 years Prediction: 6.0 - 7.0% increase to $1.1372 - $1.1479 Actual: 7.0% increase to $1.148 Forward yield: 2.34% It was another year of 7% dividend growth for the parent company of water utility Aqua and natural gas utility Peoples. Predictions for Dividend Increases for September There are 12 companies I expect to announce their annual dividend increases in September. First, here are my predictions for three featured companies: Lockheed Martin Corporation (LMT) - 18 years of dividend growth The defense and aeronautics mega-contractor has seen sales and earnings grow rapidly under prior Presidential administrations, but over the last two years has seen EPS contract from a high of $24.30 in 2020 to a projected $21.55 this year. Initially projected to resume its earnings growth, Lockheed got a hit to EPS due to the need to recharacterize some pension contributions that were not directly chargeable to Government contracts. One piece of good news is that although the company has borrowed a decent amount, it just refinanced all its near-term debt to fixed 10-year debt, fixing the need for cash in the near-term. Lockheed has historically boosted its payout by double-digits, but with the lower earnings dividend growth fell to below 8% last year. With nearly two decades of dividend growth under its belt, Lockheed has too much invested to stop growing its dividend, but the continuing drop in earnings will put pressure on the growth rate. Even with the reduced EPS, Lockheed's payout ratio is around 50% leaving room for another boost in the high single digits. Prediction: 7.1 - 8.9% increase to $12.00 - $12.20 Predicted Forward Yield: 2.87 - 2.91% McDonald's Corporation (MCD) - 45 years Like most companies, international restaurant chain McDonald's took a hit during the pandemic. However, the company recovered quickly in 2021, with worldwide revenues up 18% and adjusted EPS rebounding by 59% year-over-year. The rebound is continuing into 2022, with adjusted EPS up another 13% year-over-year (18% when currency effects are removed). The company continues to generate plenty of free cash flow - McDonald's has compounded its dividend by 8% over the last 5 years and has bought back 7.5% of its outstanding shares over that same time. And with continued earnings growth, investors can expect McDonald's to keep up the dividend growth at the same rate. Prediction: 6.9 - 8.7% increase to $5.90 - $6.00 Predicted Forward Yield: 2.32 - 2.36% Microsoft (MSFT) - 18 years Microsoft continues to fire on all cylinders. With only a couple of exceptions, all of Microsoft's products and services saw increased revenues in fiscal 2022 (ending June 30th), and across all business sectors. Cloud services, in particular, saw continued rapid growth, with Intelligent Cloud business segment revenues up 20%. The Productivity & Business Processes segment revenues, incorporating the Office suite of products among others, was up 13%. The revenue growth drove 16% adjusted EPS growth to $9.21, giving Microsoft a payout ratio around 25%. Like McDonald's above, Microsoft dedicates some of its free cash flow to stock buybacks. Unlike McDonald's, Microsoft has bought back less than 3% of its outstanding stock over the last 5 years. But with continued revenue and earnings growth - impressive for such a large company (nearly $2T in market cap) - will come continued dividend growth; investors can look to the company to continue to compound the payout at north of 10%. Prediction: 11.3 - 16.1% increase to $2.76 - $2.88 Predicted Forward Yield: 1.08 - 1.12% Here are my predictions for 9 other companies which should announce annual increases in September: |Company||Ticker||Industry||Prediction||New Annual Rate| |(# yrs)| |Accenture plc||ACN (11)||IT Services||9.3% - 11.3%||$4.24 - $4.32| |With expected EPS growth of 21 - 22%, the consulting services company should be able to announce another dividend increase in line with its historical dividend growth rate of 10%.| |Brady Corporation||BRC (37)||Security & Protection||4.4% - 6.7%||$0.94 - $0.96| |Although the maker of ID products historically increases its dividend by about 2% annually, with little debt and expected EPS growth of 12-15%, investors can expect a slightly larger boost this year.| |The First of Long Island Corp.||FLIC (26)||Banks - Regional||10.0% - 12.5%||$0.88 - $0.90| |Between lower interest expenses and higher loan volumes, FLIC's EPS was up 11% in the first 6 months of 2022. This should lead to a boost larger than last year's 5% increase.| |Honeywell International||HON (12)||Specialty Industrial Machinery||4.6% - 6.1%||$4.10 - $4.16| |Although the industrial company is guiding adjusted EPS growth to between 6 - 9%, Honeywell's heavy debt load will likely keep its latest increase to the lower end of that range.| |Ingredion Inc.||INGR (10)||Packaged Foods||1.5% - 3.1%||$2.64 - $2.68| |Ingredion provides inputs to food products around the world. The company is guiding adjusted EPS growth of between 3 and 12% for 2022. Given the uncertainty with the wide range, and the fact the company has boosted its dividend by 4 cents or less over each of the last 3 years, investors can expect another year of small growth.| |New Jersey Resources Corp.||NJR (25)||Utilities - Gas||6.2% - 9.0%||$1.54 - $1.58| |The central New Jersey-based utility has built a consistent dividend growth history in the 6 - 7% range. The company recently raised its adjusted EPS guidance for 2022 and is expecting around 13% growth, which should allow New Jersey Resources to maintain its dividend growth rate.| |OGE Energy Corp.||OGE (14)||Utilities - Electric||6.1% - 8.5%||$1.74 - $1.78| |After suffering losses in 2020 due to having to write down equity investments in a natural gas midstream investment, OGE posted earnings of $3.68 in 2021. With the return to profitability, the company should return to its usual high single digit dividend growth after last year's 2% boost.| |Philip Morris International|| | PM (13) |Tobacco||4.0% - 4.8%||$5.20 - $5.24| |The tobacco company has a decade long dividend growth rate of 5%, which generally keeps the payout ratio around 80 - 85%. The company is guiding to EPS growth of 8 - 10% in 2022. While this would usually mean a payout bump in that range, I expect Philip Morris will keep the dividend growth in the historical range.| |Williams-Sonoma||WSM (16)||Specialty Retail||17.9% - 21.8%||$3.68 - $3.80| |Williams-Sonoma, owner of the Pottery Barn, West Elm and the eponymous Williams Sonoma Home brands, produces and markets products for the home. The company does semi-annual dividend boosts. Earnings are skyrocketing right now and investors can expect a good increase from this debt-free company.| Summary It was a good month for dividend growth investors. 15 companies announced their annual dividend increases, and some very good ones, at that. Investors were rewarded with double-digit boosts from 8 companies, including a nearly 40% increase from Carlisle, a 27% increase from Nordson, and a 20% increase from Westlake. While there were a few very small increases - Federal Realty came in with a 1% boost - most of the increases were of decent size. The only exception was Scotts Miracle-Gro, which skipped its regular increase due to pressure on earnings. Another notable increase was the 1% boost from Dover, which extends the industrial company's dividend growth streak to 67 years - one of the longest among publicly traded companies. September will bring dividend increases from another 12 companies. Double-digit boosts are expected from regional bank The First of Long Island, tech company Microsoft, and home furnisher Williams-Sonoma. This article was written by Analyst’s Disclosure: I/we have a beneficial long position in the shares of OGE, MO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I may take a position in any of the stocks mentioned in this article in the near future. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (15) Well, with 12% AFFO growth in 2021 and another 10% expected in 2022, I think it'll be a good year for investors in $STOR. The company's long-term dividend growth rate is around 6%; last year's boost of 6.9% was slightly higher. The AFFO growth can support continued accelerating dividend growth - I expect a new annualized rate of between $1.64 - $1.68, representing an increase of 6.5% - 9.1%. This would give $STOR a forward yield of between 6.12% - 6.28%.Thanks for the comment!Cheers, HD I didn't miss anything - $TXN announces their annual increases in October.Cheers, HD OK, I see the problem - according to the dividend history part of their website, they've declared the annual dividend increase in mid-October but there is usually a press release in mid-September announcing the increase.So here's my prediction: $TXN grew EPS by 38% in 2021, and by another 17% in the first half of 2022. They're aggressively buying back stock, retiring ~7% of the outstanding shares in the last 5 years. I think they increase their dividend growth rate this year above the 13% increases over each of the last two years. I expect a 14.8% - 17.4% boost to an annualized $5.28 - $5.40.Cheers, HD I pull my data from dripinvesting.org, which is where I came up with 13 years. But I understand your point - $MO spun off $PM; the combined dividends for investors remained the same and any investors that kept their shares in both companies would have seen continuous dividend growth.I appreciate the comment!Cheers, HD

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Dividend Champion, Contender, And Challenger Highlights: Week Of September 4

A weekly summary of dividend activity for Dividend Champions, Contenders, and Challengers. Read more for div increases, ex-div dates, and upcoming payouts.

SeekingAlpha

Dividend Champion, Contender, And Challenger Highlights: Week Of September 4 Summary - A weekly summary of dividend activity for Dividend Champions, Contenders, and Challengers. - Companies which changed their dividends. - Companies with upcoming ex-dividend dates. - Companies with upcoming pay dates. - I do much more than just articles at The Dividend Kings: Members get access to model portfolios, regular updates, a chat room, and more. Learn More » Introduction The Dividend Champions list is a monthly compilation of companies which have consistently increased their annual dividend payouts. However, since this list is only produced once per month, the data in it can quickly get out of date. Furthermore, with over 700 companies on the list, the sheer amount of data can quickly become overwhelming. In this weekly series, I highlight recent and upcoming dividend related activity for companies on the Dividend Champions list. In the data presented below, Yield is forward annualized and Years reflects the up-to-date streak, including dividends declared since the last edition of the Dividend Champions list. Dividend Changes In the past week, the following companies declared dividends which changed from their previous payouts. Increases: | | Company | | Symbol | | Ex-Div | | Pay | | Old Rate | | New Rate | | Increase | | Yield | | Years | | Avnet, Inc. | | (AVT) | | 9/13 | | 9/28 | | 0.26 | | 0.29 | | 11.54% | | 2.72% | | 10 | | Brady Corporation | | (BRC) | | 10/6 | | 10/28 | | 0.225 | | 0.23 | | 2.22% | | 2.02% | | 37 | | Citizens Financial Services, Inc. | | (CZFS) | | 9/15 | | 9/30 | | 0.475 | | 0.48 | | 1.05% | | 2.34% | | 24 | | TriCo Bancshares | | (TCBK) | | 9/8 | | 9/23 | | 0.25 | | 0.3 | | 20.00% | | 2.57% | | 10 Decreases: None Last Chance to Buy These companies have ex-dividend dates approaching. The following tables indicate the last day you can buy these stocks in order to be eligible for the upcoming dividend. Tables are sorted alphabetically by symbol. Monday Sep 5 Markets closed in observance of Labor Day. Tuesday Sep 6 (Ex-Div 9/7) | | Company | | Symbol | | Pay Date | | Payout | | Price | | Yield | | Years | | Canadian National Railway Company | | (CNI) | | 9/29 | | 0.7325 CAD | | 117 | | 1.90% | | 27 | | First American Financial Corporation | | (FAF) | | 9/15 | | 0.52 | | 53.19 | | 3.91% | | 13 | | H&R Block, Inc. | | (HRB) | | 10/3 | | 0.29 | | 44.47 | | 2.61% | | 7 | | MDU Resources Group, Inc. | | (MDU) | | 10/1 | | 0.2175 | | 29.95 | | 2.90% | | 30 | | Northrim BanCorp, Inc. | | (NRIM) | | 9/16 | | 0.5 | | 40.64 | | 4.92% | | 13 | | Principal Financial Group, Inc. | | (PFG) | | 9/30 | | 0.64 | | 74.44 | | 3.44% | | 13 | | Texas Pacific Land Corporation | | (TPL) | | 9/15 | | 3 | | 1888.01 | | 0.64% | | 17 | | Triton International Limited | | (TRTN) | | 9/22 | | 0.65 | | 59.37 | | 4.38% | | 6 Wednesday Sep 7 (Ex-Div 9/8) | | Company | | Symbol | | Pay Date | | Payout | | Price | | Yield | | Years | | Automatic Data Processing, Inc. | | (ADP) | | 10/1 | | 1.04 | | 238.48 | | 1.74% | | 46 | | AMERISAFE, Inc. | | (AMSF) | | 9/23 | | 0.31 | | 48.01 | | 2.58% | | 10 | | Auburn National Bancorporation, Inc. | | (AUBN) | | 9/26 | | 0.265 | | 27.7 | | 3.83% | | 21 | | Becton, Dickinson and Company | | (BDX) | | 9/30 | | 0.87 | | 252.84 | | 1.38% | | 50 | | CME Group Inc. | | (CME) | | 9/27 | | 1 | | 194.69 | | 2.05% | | 12 | | CNO Financial Group, Inc. | | (CNO) | | 9/23 | | 0.14 | | 18.04 | | 3.10% | | 11 | | DICK'S Sporting Goods, Inc. | | (DKS) | | 9/30 | | 0.4875 | | 108.23 | | 1.80% | | 8 | | Elevance Health Inc. | | (ELV) | | 9/23 | | 1.28 | | 481.99 | | 1.06% | | 12 | | Exponent, Inc. | | (EXPO) | | 9/23 | | 0.24 | | 92.27 | | 1.04% | | 10 | | First Horizon Corporation | | (FHN) | | 10/3 | | 0.15 | | 22.6 | | 2.65% | | 10 | | Farmers National Banc Corp. | | (FMNB) | | 9/30 | | 0.16 | | 14.21 | | 4.50% | | 7 | | Genpact Limited | | (G) | | 9/23 | | 0.125 | | 46.22 | | 1.08% | | 6 | | Jack Henry & Associates, Inc. | | (JKHY) | | 9/29 | | 0.49 | | 191.19 | | 1.03% | | 32 | | Kimberly-Clark Corporation | | (KMB) | | 10/4 | | 1.16 | | 126.48 | | 3.67% | | 50 | | Lancaster Colony Corporation | | (LANC) | | 9/30 | | 0.8 | | 168.25 | | 1.90% | | 59 | | Insperity, Inc. | | (NSP) | | 9/23 | | 0.52 | | 108 | | 1.93% | | 12 | | Public Service Enterprise Group Incorporated | | (PEG) | | 9/30 | | 0.54 | | 64.01 | | 3.37% | | 11 | | South Jersey Industries, Inc. | | (SJI) | | 10/4 | | 0.31 | | 33.89 | | 3.66% | | 23 | | Schneider National, Inc. | | (SNDR) | | 10/10 | | 0.08 | | 22.52 | | 1.42% | | 6 | | TriCo Bancshares | | (TCBK) | | 9/23 | | 0.3 | | 46.61 | | 2.57% | | 10 | | The Travelers Companies, Inc. | | (TRV) | | 9/30 | | 0.93 | | 162.7 | | 2.29% | | 18 | | United Bancorp, Inc. | | (UBCP) | | 9/20 | | 0.1575 | | 15.55 | | 4.05% | | 9 | | United Bankshares Inc. | | (UBSI) | | 10/3 | | 0.36 | | 36.42 | | 3.95% | | 47 | | Unity Bancorp, Inc. | | (UNTY) | | 9/23 | | 0.11 | | 27.49 | | 1.60% | | 10 | | Vishay Intertechnology, Inc. | | (VSH) | | 9/28 | | 0.1 | | 19.19 | | 2.08% | | 6 | | Waste Management, Inc. | | (WM) | | 9/23 | | 0.65 | | 168.45 | | 1.54% | | 19 | | The Williams Companies, Inc. | | (WMB) | | 9/26 | | 0.425 | | 33.72 | | 5.04% | | 5 | | WesBanco, Inc. | | (WSBC) | | 10/1 | | 0.34 | | 34.41 | | 3.95% | | 12 Thursday Sep 8 (Ex-Div 9/9) | | Company | | Symbol | | Pay Date | | Payout | | Price | | Yield | | Years | | Air Lease Corporation | | (AL) | | 10/7 | | 0.185 | | 36.17 | | 2.05% | | 10 | | Capital City Bank Group, Inc. | | (CCBG) | | 9/26 | | 0.17 | | 31.95 | | 2.13% | | 9 | | CTO Realty Growth, Inc. | | (CTO) | | 9/30 | | 0.38 | | 20.86 | | 7.29% | | 10 | | Spire Inc. | | (SR) | | 10/4 | | 0.685 | | 69.01 | | 3.97% | | 19 | | UMB Financial Corporation | | (UMBF) | | 10/3 | | 0.37 | | 88.88 | | 1.67% | | 29 | | UnitedHealth Group Incorporated | | (UNH) | | 9/20 | | 1.65 | | 516.35 | | 1.28% | | 13 | | V.F. Corporation | | (VFC) | | 9/20 | | 0.5 | | 40.75 | | 4.91% | | 49 Friday Sep 9 (Ex-Div 9/12) | | Company | | Symbol | | Pay Date | | Payout | | Price | | Yield | | Years | | Evans Bancorp, Inc. | | (EVBN) | | 10/4 | | 0.64 | | 38.09 | | 3.36% | | 11 Money on the Way The following companies have dividend pay dates in the upcoming week (Tuesday through the following Monday). Check if you want your DRIPs to reinvest at these yields…or take the cash and go have a steak dinner! | | Company | | Symbol | | Pay Date | | Payout | | Yield | | Analog Devices, Inc. | | (ADI) | | 9/8 | | 0.76 | | 2.0% | | Archer-Daniels-Midland Company | | (ADM) | | 9/7 | | 0.4 | | 1.8% | | American Electric Power Company, Inc. | | (AEP) | | 9/9 | | 0.78 | | 3.1% | | Amgen Inc. | | (AMGN) | | 9/8 | | 1.94 | | 3.2% | | Badger Meter, Inc. | | (BMI) | | 9/9 | | 0.225 | | 1.0% | | BWX Technologies, Inc. | | (BWXT) | | 9/8 | | 0.22 | | 1.7% | | Cabot Corporation | | (CBT) | | 9/9 | | 0.37 | | 2.1% | | CDW Corporation | | (CDW) | | 9/9 | | 0.5 | | 1.2% | | CRA International, Inc. | | (CRAI) | | 9/9 | | 0.31 | | 1.4% | | Chevron Corporation | | (CVX) | | 9/12 | | 1.42 | | 3.6% | | Discover Financial Services | | (DFS) | | 9/8 | | 0.6 | | 2.4% | | Emerson Electric Co. | | (EMR) | | 9/9 | | 0.515 | | 2.5% | | Evercore Inc. | | (EVR) | | 9/9 | | 0.72 | | 3.1% | | First BanCorp. | | (FBP) | | 9/9 | | 0.12 | | 3.4% | | Fidelity D & D Bancorp, Inc. | | (FDBC) | | 9/9 | | 0.33 | | 3.2% | | Forward Air Corporation | | (FWRD) | | 9/8 | | 0.24 | | 1.0% | | First National Corporation | | (FXNC) | | 9/9 | | 0.14 | | 3.2% | | The Gorman-Rupp Company | | (GRC) | | 9/9 | | 0.17 | | 2.6% | | Huntington Ingalls Industries, Inc. | | (HII) | | 9/9 | | 1.18 | | 2.1% | | HNI Corporation | | (HNI) | | 9/8 | | 0.32 | | 4.1% | | Home Bancshares, Inc. (Conway, AR) | | (HOMB) | | 9/7 | | 0.165 | | 2.9% | | Littelfuse, Inc. | | (LFUS) | | 9/8 | | 0.6 | | 1.1% | | Eli Lilly and Company | | (LLY) | | 9/9 | | 0.98 | | 1.3% | | LeMaitre Vascular, Inc. | | (LMAT) | | 9/8 | | 0.125 | | 1.0% | | Moody's Corporation | | (MCO) | | 9/9 | | 0.7 | | 1.0% | | 3M Company | | (MMM) | | 9/12 | | 1.49 | | 4.9% | | Microsoft Corporation | | (MSFT) | | 9/8 | | 0.62 | | 1.0% | | Materion Corporation | | (MTRN) | | 9/8 | | 0.125 | | 0.6% | | Nu Skin Enterprises, Inc. | | (NUS) | | 9/7 | | 0.385 | | 3.8% | | Otter Tail Corporation | | (OTTR) | | 9/9 | | 0.4125 | | 2.2% | | Parker-Hannifin Corporation | | (PH) | | 9/9 | | 1.33 | | 2.0% | | Park National Corporation | | (PRK) | | 9/9 | | 1.04 | | 3.2% | | Rockwell Automation, Inc. | | (ROK) | | 9/12 | | 1.12 | | 1.9% | | Rush Enterprises, Inc. | | (RUSHA) | | 9/12 | | 0.21 | | 1.8% | | The Sherwin-Williams Company | | (SHW) | | 9/9 | | 0.6 | | 1.0% | | The Scotts Miracle-Gro Company | | (SMG) | | 9/9 | | 0.66 | | 4.3% | | Snap-on Incorporated | | (SNA) | | 9/9 | | 1.42 | | 2.7% | | Sonoco Products Company | | (SON) | | 9/9 | | 0.49 | | 3.1% | | S&P Global Inc. | | (SPGI) | | 9/12 | | 0.85 | | 1.0% | | Tractor Supply Company | | (TSCO) | | 9/7 | | 0.92 | | 2.0% | | Walgreens Boots Alliance, Inc. | | (WBA) | | 9/9 | | 0.48 | | 5.4% | | Exxon Mobil Corporation | | (XOM) | | 9/9 | | 0.88 | | 3.7% | | Yum! Brands, Inc. | | (YUM) | | 9/9 | | 0.57 | | 2.0% Conclusion I hope you found this article useful. Please let me know if you have any ideas for improving the format or data included in this series. Looking for more in depth analysis of high quality dividend stocks? Check out the Dividend Kings marketplace service! This article was written by I am the curator of the Dividend Champions list, a monthly publication of companies with a history of consistently increasing their dividends. My primary investing focus is in deep value and dividend paying stocks, but I am constantly exploring alternative strategies. I have a Ph.D in Chemistry from Rice University and have earned the CFA Institute Investment Foundations certificate. I am a contributor to The Dividend Kings marketplace service. Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMGN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (6)

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I’m rebuilding my retro game collection, and it’s a pricier hobby than you’d think

Want to get into retro gaming? It can be more expensive than you might expect?

Yahoo

I’m rebuilding my retro game collection, and it’s a pricier hobby than you’d think I’ve been playing video games since my parents bought my brother and me a Nintendo (NTDOY) Entertainment System one Christmas in the late 80s. The two of us spent hours trouncing goombas and fighting Bowser, my brother as Mario since he was older, and me as Luigi. In the 90s we got a Sega Genesis and played “Road Rash,” then a Sega Saturn, a PlayStation (SONY), and so on. Eventually, we started buying our consoles and games, and, since we were still kids, decided to trade in our older systems for store credit at places like Babbages and Electronics Boutique, now GameStop (GME). At the time, it was a great idea. We got new games and consoles and got rid of the ones we weren’t playing. As you can imagine based on the headline of this article, though, I regret the move. We gave away a slew of the game that we loved and consoles we spent hours playing. So my wife and I are trying to build a collection of old games and consoles one at a time. But doing can be a pricey hit-or-miss proposition. The pandemic forced people inside for months on end, and during that time a lot of former gamers went back to the games they loved, buying up old consoles and cartridges. It doesn’t help that none of these systems or games, heck, even the original TVs they were meant to be played on, are being made anymore. And that means they’re also degrading over time. From hard-to-find titles and busted systems to dead game batteries and frayed wires, collecting retro games is far from as straightforward as pulling up to a Best Buy (BBY) and grabbing a PlayStation 5 game off of the shelf. But when you find that one game you’ve been looking for, or score a long-lost cartridge you’ve always wanted to show to a friend or significant other, it’s all worth it. Buying consoles is trickier than you’d think My wife and I started buying older games after we took a trip to Digital Press, a retro gaming store in New Jersey, as part of a story my former-colleague Nick Monte and I did for Yahoo Finance. My wife purchased an original PlayStation and “Namco Museum Volume 1,” a collection of old Namco games she played with her parents when she was a kid. But older consoles and games are a different story. A Nintendo Entertainment System (NES) is nearly 40 years old at this point, and consoles aren’t exactly indestructible. Connectors inside and outside can splinter or break, preventing games from displaying properly and internal parts can corrode, killing systems entirely. Check eBay (EBAY) and Super Nintendos are for about $100. That’s not incredibly pricey, but many of them are chipped or damaged. Others are only available for spare parts. The ones that are in great shape, meanwhile, will cost you $150 or so after shipping. Want one with the original box, you’re looking at anywhere between $300 and $1,200 depending on the condition. And there's no guarantee they'll always work. Last week, I bought a Super Nintendo for $180 with three games, but the console was a dud. Thankfully, I was able to return the console and get my money back. But that’s simply the risk of buying consoles that are old enough to legally drink. Games are aging and dying Just like old-school consoles, retro games are aging and becoming more expensive as time passes. I’m not saying that a copy of “Super Mario Bros.” is going to cost you $50, but titles like “Chrono Trigger,” a beloved Japanese role-playing game, can set you back as much as $225 for the cartridge alone. And if you’re the type of person who wants a pristine game complete with the box and manual, you’re looking at spending prices ranging from the hundreds of thousands to millions of dollars. Needless to say, I’m not a part of that group. But there's a bigger problem. Super Nintendo games in particular sport internal batteries that allowed gamers to save their progress. However, those batteries were never meant to last more than 20 years. There are some online explainers that can walk you through the process of swapping batteries, but you also run the risk of destroying the game itself. Oh, and remember when you thought blowing into your old Nintendo and Sega cartridges were the surefire way to get them working when they were buggy? Turns out all that did was ruin them by getting them wet from the moisture in your breath. Sure, there are still plenty of games out there that aren’t too inexpensive, but as time goes on, they’ll be fewer and further between. You’ll need the right TV I have a 65-inch OLED TV, and despite how great modern games look on the big screen, old-school games just don’t hold up on it. That’s because older titles were built with CRT TVs in mind. You know the ones I’m talking about. The TVs with rounded screens took up tons of space. They helped smooth out the jagged edges around the pixels that made up old games, giving them a better overall appearance. And those TVs, while nowhere near as expensive as a brand new set, will still cost you around $130 to $150. I recently purchased a 20-inch Magnavox set thinking that I could put it in my living room next to my 65-inch TV, but I dramatically underestimated how large the set would be. At 30 inches deep, the Magnavox is too big for my shelf. And tipping the scales at 50 pounds, it’s way too heavy for anything short of a proper TV stand. So now I’ve got a 20-inch TV that’s sitting in a box in my basement until I can space for it. My wife and I have easily spent several hundred dollars on our gaming collection over the past few years. And that’s just for the consoles. We've still got games that we want to pick up too. While we could hold on to these retro systems and titles for years and try to sell them for a profit, that’s not what we have in mind. Our collection is meant to be played. And when we eventually have kids, we want them to be able to see the kind of games we played growing up. And that alone, makes the search, and price, worth it. Sign up for Yahoo Finance's Tech newsletter More from Dan Samsung’s Z Fold4 and Z Flip4 are foldable phones for the tech curious Samsung’s $279 Galaxy Watch 5 is the go-to for Android smartwatches, for now Got a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley. Click here for the latest trending stock tickers of the Yahoo Finance platform Click here for the latest stock market news and in-depth analysis, including events that move stocks Read the latest financial and business news from Yahoo Finance Download the Yahoo Finance app for Apple or Android Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube

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5 Relatively Safe And Cheap Dividend Stocks To Invest In - September 2022

This article is part of our monthly series where we highlight five companies that are large-cap, relatively safe, dividend-paying, and are offering large discounts to their historical norms.

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5 Relatively Safe And Cheap Dividend Stocks To Invest In - September 2022 Summary - This article is part of our monthly series where we highlight five companies that are large-cap, relatively safe, dividend-paying, and are offering large discounts to their historical norms. - It's always a good idea to keep your wish list ready by separating the wheat from the chaff. - We go over our filtering process to select just five conservative DGI stocks from more than 7,500 companies that are traded on U.S. exchanges, including OTC networks. In addition, we present two other groups of five DGI stocks, each for investors who need higher yields. - Looking for a portfolio of ideas like this one? Members of High Income DIY Portfolios get exclusive access to our model portfolio. Learn More » The market had bounced back quite a bit until last week. However, it was spooked by Fed Chairman Jay Powell's speech in Jackson Hole. It may be an overreaction to what we already knew that Fed is likely to continue the interest rate hikes at least a few more times until there is a clear indication that either there is a significant downward trend in inflation or there is a recession at the door. On the contrary, the 10-year Treasury yield (US10Y) changed very little on a comparative basis. As of this writing, the US10Y is at 3.09%, which is much below its previous peak of 3.48%, achieved in mid-June. So, all other things being equal, the bond yields should hold the key to the market's next move. We feel there are slightly better chances of upward movement right now than downwards, but high volatility is here to stay for the time being. Irrespective of the market's short-term movements, as long-term DGI investors, we need to pay attention to the quality of companies that we invest in and the price we pay. Naturally, it helps to buy such companies when they're being offered relatively cheap. The goal of this series of articles is to find companies that are fundamentally strong, carry low debt, support reasonable, sustainable, and growing dividend yields, and also trade at relatively low or reasonable prices. These DGI stocks are not going to make anyone rich overnight, but if your goal is to attain financial freedom by owning stocks that should grow dividends over time, meaningfully and sustainably, then you are at the right place. We believe in keeping a buy list handy and dry powder ready so that we can use the opportunity when the time is right. Besides, we think, every month, this analysis is able to highlight some companies that otherwise would not be on our radar. This article is part of our monthly series, where we scan the entire universe of roughly 7,500 stocks that are listed and traded on U.S. exchanges, including over-the-counter (OTC) networks. However, our focus is limited to dividend-paying stocks. We usually highlight five stocks that may have temporary difficulties or lost favor with the market and offer deep discounts on a relative basis. However, that's not the only criteria that we apply. While seeking cheaper valuations, we also demand that the companies have an established business model, solid dividend history, manageable debt, and investment-grade credit rating. Please note that these are not recommendations to buy but should be considered as a starting point for further research. This month, we highlight three groups with five stocks each that have an average dividend yield (as a group) of 4.01%, 6.20%, and 7.37%, respectively. The first list is for conservative and risk-averse investors, while the second one is for investors who seek higher yields but still want relatively safe dividends. The third group is for yield-hungry investors but comes with an elevated risk, and we urge investors to exercise caution. Notes: 1) Please note that when we use the term "safe" regarding stocks, it should be interpreted as "relatively safe" because nothing is absolutely safe in investing. Also, in our opinion, for a well-diversified portfolio, one should have 15-20 stocks at a minimum. 2) All tables in this article are created by the author unless explicitly specified. The stock data have been sourced from various sources such as Seeking Alpha, Yahoo Finance, GuruFocus, and CCC-List (dripinvesting). The Selection Process Note: Regular readers of this series could skip this section to avoid repetitiveness. However, we include this section for new readers to provide the necessary background and perspective. Goals: We start with a fairly simple goal. We want to shortlist five companies that are large-cap, relatively safe, dividend-paying, and trading at relatively cheaper valuations in comparison to the broader market. The objective is to highlight some of the dividend-paying and dividend-growing companies that may be offering juicy dividends due to a temporary decline in their share prices. The excess decline may be due to an industry-wide decline or some kind of one-time setbacks like some negative news coverage or missing quarterly earnings expectations. We adopt a methodical approach to filter down the 7,500-plus companies into a small subset. Our primary goal is income that should increase over time at a rate that at least beats inflation. Our secondary goal is to grow the capital and provide a cumulative growth rate of 9%-10% at a minimum. These goals are, by and large, in alignment with most retirees and income investors as well as DGI investors. A balanced DGI portfolio should keep a mix of high-yield, low-growth stocks along with some high-growth but low-yield stocks. That said, how you mix the two will depend upon your personal situation, including income needs, time horizon, and risk tolerance. A well-diversified portfolio would normally consist of more than just five stocks and preferably a few stocks from each sector of the economy. However, in this periodic series, we try to shortlist and highlight just five stocks that may fit the goals of most income and DGI investors. But at the same time, we try to ensure that such companies are trading at attractive or reasonable valuations. However, as always, we recommend you do your due diligence before making any decision on them. Selection Criteria: The S&P 500 currently yields roughly 1.50%. Since our goal is to find companies for a dividend income portfolio, we should logically look for companies that pay yields that are at least similar to or better than the S&P 500. Of course, the higher, the better, but at the same time, we should not try to chase very high yields. If we try to filter for dividend stocks paying at least 1.50% or above, nearly 2,000 such companies are trading on U.S. exchanges, including OTC networks. We will limit our choices to companies that have a market cap of at least $10 billion and a daily trading volume of more than 100,000 shares. We also will check that dividend growth over the last five years is positive, but there can be some exceptions. We also want stocks that are trading at relatively cheaper valuations. But at this stage, we want to keep our criteria broad enough to keep all the good candidates on the list. So, we will measure the distance from the 52-week high but save it to use at a later stage. Also, at this initial stage, we include all companies that yield 1% or higher. In addition, we also include other lower-yielding but high-quality companies at this stage. Criteria to Shortlist: - Market cap > $10 billion ($9.5 billion in a down market) - Dividend yield > 1.0% (some exceptions are made to include high quality but lower yielding companies) - Daily average volume > 100,000 - Dividend growth past five years >= 0. By applying the above criteria, we got over 550 companies. Narrowing Down The List As a first step, we would like to eliminate stocks that have less than five years of dividend growth history. We cross-check our current list of over 500 stocks against the list of so-called Dividend Champions, Contenders, and Challengers originally defined and created by David Fish. Generally, the stocks with more than 25 years of dividend increases are called dividend Champions, while stocks with more than ten but less than 25 years of dividend increases are termed, Contenders. Further, stocks with more than five but less than ten years of dividend increases are called Challengers. Also, since we want a lot of flexibility and wider choice at this initial stage, we include some companies that pay dividends lower than 1.50% but otherwise have a stellar dividend record and growing dividends at a fast pace. After we apply all the above criteria, we're left with roughly 295 companies on our list. However, so far in this list, we have demanded five or more years of consistent dividend growth. But what if a company had a very stable record of dividend payments but did not increase the dividends from one year to another? At times, some of these companies are foreign-based companies, and due to currency fluctuations, their dividends may appear to have been cut in US dollars, but in reality, that may not be true at all when looked at in the actual currency of reporting. At times, we may provide some exceptions when a company may have cut the dividend in the past but otherwise looks compelling. So, by relaxing some of the conditions, a total of 69 additional companies were considered to be on our list. We call them category 'B' companies. After including them, we had a total of 368 (299 + 69) companies that made our first list. We then imported the various data elements from many sources, including CCC-list, GuruFocus, Fidelity, Morningstar, and Seeking Alpha, among others, and assigned weights based on different criteria as listed below: - Current yield: Indicates the yield based on the current price. - Dividend growth history (number of years of dividend growth): This provides information on how many years a company has paid and increased dividends on a consistent basis. For stocks under the category 'B' (defined above), we consider the total number of consecutive years of dividend paid rather than the number of years of dividend growth. - Payout ratio: This indicates how comfortably the company can pay the dividend from its earnings. We prefer this ratio to be as low as possible, which would indicate the company's ability to grow the dividend in the future. This ratio is calculated by dividing the dividend amount per share by the EPS (earnings per share). The cash-flow payout ratio is calculated by dividing the dividend amount paid per share by the cash flow generated per share. - Past five-year and 10-year dividend growth: Even though it's the dividend growth rate from the past, this does indicate how fast the company has been able to grow its earnings and dividends in the recent past. The recent past is the best indicator that we have to know what to expect in the next few years. - EPS growth (average of previous five years of growth and expected next five years growth): As the earnings of a company grow, more than likely, dividends will grow accordingly. We will take into account the previous five years' actual EPS growth and the estimated EPS growth for the next five years. We will add the two numbers and assign weights. - Chowder number: So, what's the Chowder number? This number has been named after well-known SA author Chowder, who first coined and popularized this factor. This number is derived by adding the current yield and the past five years' dividend growth rate. A Chowder number of "12" or more ("8" for utilities) is considered good. - Debt/equity ratio: This ratio will tell us about the debt load of the company in relation to its equity. We all know that too much debt can lead to major problems, even for well-known companies. The lower this ratio, the better it is. Sometimes, we find this ratio to be negative or unavailable, even for well-known companies. This can happen for a myriad of reasons and is not always a reason for concern. This is why we use this ratio in combination with the debt/asset ratio (covered next). - Debt/asset ratio: This ratio will tell us about the debt load in relation to the total assets of the company. In almost all cases, this ratio would be lower than the debt/equity ratio. Also, this ratio is important because, for some companies, the debt/equity ratio is not a reliable indicator. - S&P's credit rating: This is the credit rating assigned by the rating agency S&P Global and is indicative of the company's ability to service its debt. This rating can be obtained from the S&P website. - PEG ratio: This also is called the price/earnings-to-growth ratio. The PEG ratio is considered to be an indicator if the stock is overvalued, undervalued, or fairly priced. A lower PEG may indicate that a stock is undervalued. However, PEG for a company may differ significantly from one reported source to another, depending on which growth estimate is used in the calculation. Some use past growth, while others may use future expected growth. We're taking the PEG from the CCC list wherever available. The CCC list defines it as the price/earnings ratio divided by the five-year estimated growth rate. - Distance from 52-week high: We want to select companies that are good, solid companies but also are trading at cheaper valuations currently. They may be cheaper due to some temporary down cycle or some combination of bad news or simply having a bad quarter. This criterion will help bring such companies (with a cheaper valuation) near the top, as long as they excel in other criteria as well. This factor is calculated as (current price - 52-week high) / 52-week high. - Sales or Revenue growth: This is the average growth rate in annual sales or revenue of the company over the last five years. A company can only grow its earnings power as long as it can grow its revenue. Sure, it can grow the earnings by cutting costs, but that can't go on forever. Below we provide a table (as a downloadable Excel spreadsheet) with weights assigned to each of the ten criteria. The table shows the raw data for each criterion for each stock and the weights for each criterion, and the total weight. Please note that the table is sorted on the "Total Weight" or the "Quality Score." The list contains 343 names and is attached as a file for readers to download: File-for-export_-_5_Safe_and_Cheap_DGI_-_Sep_2022.xlsx Selection Of The Top 50 We will first bring down the list to roughly 50 to 60 names by automated criteria, as listed below. In the second step, which is mostly manual, we will bring the list down to about 30. - Step 1: We will first take the top 20 names in the above table (based on total weight or quality score). This time around, we selected the top 21. - Step 2: Now, we will sort the list based on dividend yield (highest at the top). We take the top 10 after the sort to the final list. We only take the top two or three from any single industry segment because, otherwise, some of the segments, like energy, tend to overcrowd (selected 13 names). - Step 3: We will sort the list based on five-year dividend growth (highest at the top). We will take the top 10 after the sort to the final list (selected 11 names). - Step 4: We will then sort the list based on the credit rating (numerical weight) and select the top 10 stocks with the best credit rating. However, we only take the top two or three from any single industry segment because, otherwise, some of the segments tend to overcrowd (selected 11 names). - Step 5: We will also select ten names that have the largest discount from their 52-week highs, as long as they meet other criteria. From the above steps, we had a total of 66 names in our final consideration. The following stocks appeared more than once: Appeared two times: AMAT, BBY, MSFT, NEM, SWK, TROW, VALE (7 duplicates) After removing ten duplicates, we are left with 59 names. Since there are multiple names in each industry segment, we will just keep a maximum of three or four names from the top of any one segment. We keep the following: Financial Services, Banking, and Insurance: Banking: (JPM) Financial Services - Others: (MS), (TROW), (BEN) Insurance: (MFC) Business Services/ Consulting: Conglomerates: (IEP) Industrials: Logistics: Chemicals: (APD) Materials/Mining/Gold: Materials: Mining (other than Gold): (VALE), (RIO), (SCCO) Gold: (NEM) Defense: None Consumer/Retail/Others: Cons-discretionary: Cons-Retail: (TGT), (LOW), (HD), (BBY) Communications/Media: Healthcare: Healthcare Ins: (UNH) Technology: (MSFT), (AMAT), (LRCX), (TXN), (QCOM), (INTC), (AVGO) Energy: Pipelines/ Midstream: (MPLX), (ENB) Oil & Gas (prod. & exploration): (CVX), (PXD), (CTRA), (DVN) Utilities: (NRG) Housing/ Construction: REIT: Final Step: Narrowing Down To Just Five Companies This step is mostly a subjective one and is based solely on our perception. The readers could certainly differ from our selections, and they may come up with their own set of five companies with a target yield, but they should pay attention to keeping the group diversified among different sectors or industry segments. Below, we make three lists for different sets of goals, dividend income, and risk levels. We try to make each of the groups highly diversified and try to ensure that the safety of dividends matches the overall risk profile of the group. Nonetheless, here are our three final lists for this month: Final A-List (Conservative Safe Income): Average yield: 4.01% Table-1A: A-LIST (Conservative Income) We think this set of five companies (in the A-List) would form a solid diversified group of dividend companies that would be appealing to income-seeking and conservative investors, including retirees and near-retirees. The average yield is very nice at 4.01% compared to less than 1.6% of the S&P 500. The average dividend history is roughly 20 years, and four out of five companies have a credit rating of "A-" or better. The average discount from a 52-week high is very attractive for these stocks at 26.6%. DVN (Devon Energy): This is the riskiest stock on the A-List. It also has the highest dividend yield of nearly 7%. Also, this is the only stock in the group that is not rated A- or higher, though it is still investment grade. DVN is rated as a "strong-buy" by SA's Quant Rating. Due to high energy prices and resulting strong cash flow, DVN has been acquiring a number of small players, most recently a $1.8 billion deal to acquire privately held Validus Energy that will strengthen its position in the Eagle Ford. The risk comes from the highly volatile nature of Oil prices. If the oil prices were to crash in the future (though unlikely any time soon), DVN's ability to provide the current level of dividends might become strained. This month's A-List is for moderately conservative investors. It has a slightly higher risk profile compared to such lists in the past months. The yield is very respectable at 4.01%. However, if you must need even higher dividends, consider B-List or C-List, as presented below. Final B-List (High Yield, Moderately Safe): Average yield: 6.20% Note 1: Very often, we include a few low-risk stocks in B-List and C-list. Also, oftentimes, a stock can appear in multiple lists. This is done on purpose. We try to make each of our lists fairly diversified among different sectors/industry segments of the economy. We try to include a few of the highly conservative names in the high-yield list to make the overall group much safer. Note 2: Please pay attention that MPLX is an MLP (Master Limited Partnership) and issues Form K-1 at tax time instead of regular 1099-Div. Please use your due diligence. Table-1B: B-LIST (High Yield) In the B-List, the overall risk profile of the group becomes slightly elevated compared to A-List. That said, the group will likely provide safe dividends for many years. This list offers an average yield for the group of 6.25%, an average of 12 years of dividend history, and high dividend growth. In this list, four of the five positions offer very good discounts compared to their 52-week highs, and the average discount is -23%. Rio Tinto: RIO has been recommended in this series for the last few months. The price has come down quite a bit on weakness, and so has the dividend. RIO's dividend is variable, and we saw that the recent semi-annual dividend was reduced. But even with a reduced dividend going forward, the yield is currently at 8.90%. That said, RIO has paid dividends continuously for the last 12 years, and the current dividend is likely to be at least maintained (if not increased) in the future. It appears to be one of the best commodity exposure stocks. Even though China's economy and growth may be cooling off but the demand for basic commodities like steel, aluminum, and copper is likely to continue growing due to the adoption of green technologies. Final C-LIST (Yield-Hungry, Less Safe): Average yield: 7.37% Notes: Note 1: Please pay attention that MPLX is an MLP (Master Limited Partnership) and issues Form K-1 at tax time instead of regular 1099-Div. Please use your due diligence. Note 2: Oftentimes, a stock can appear in multiple lists. We try to include one or two conservative names in the high-yield list to make the overall group much safer. Table-1C: C-LIST (Yield-Hungry, Elevated Risk) As you can notice, the credit ratings of this group are not as stellar as the A-list, but all of them have investment-grade ratings. MPW is a medical REIT, and its yield is very attractive at 7.75%, while MPLX is a midstream energy partnership with an 8.5% yield. The overall group is very diversified, and that makes it reasonably safe. Apparently, this list (C-List) is for yield-hungry DGI investors, so we urge due diligence to determine if it would suit your personal situation. Nothing comes free, so there will be more risk involved with this group. That said, it's a highly diversified group spread among five different sectors. We may like to caution that each company comes with certain risks and concerns. Sometimes these risks are real, but other times, they may be a bit overblown and temporary. So, it's always recommended to do further research and due diligence. What If We Were To Combine The Three Lists? If we were to combine the three lists, after removing the duplicates (because of combining), we would be left with 11 unique names. The combined list is highly diversified in eight industry segments. However, there are multiple (TWO) names from some of the sectors (for example, DVN and MPLX in the Energy sector). One could remove some of them based on further research. The stats for the group of 11 are as follows: Average yield: 5.57% Average discount (from 52WK High): -26.01% Average 5-Yr dividend growth: 10.65% Average Quality Score: 58.22 Table 2: Conclusion In the first week of every month, we start with a fairly large list of dividend-paying stocks and filter our way down to just a handful of stocks that meet our selection criteria and income goals. In this article, we have presented three groups of stocks (five each) with different goals in mind to suit the varying needs of a wider audience. Even though the risk profile of each group is different, each group in itself is fairly balanced and diversified. The first group of five stocks is for conservative investors who prioritize the safety of the dividend and preservation of their capital. The second group reaches for a higher yield but with only a slightly higher risk. However, the C-group comes with an elevated risk and is certainly not suited for everyone. This month, the first group yields 4.01%, while the second group elevates the yield to 6.20%. We also presented a C-List for yield-hungry investors with a 7.37% yield. We believe the first two groups of five stocks each make an excellent watchlist for further research and buying at an opportune time. High Income DIY Portfolios: The primary goal of our "High Income DIY Portfolios" Marketplace service is high income with low risk and preservation of capital. It provides DIY investors with vital information and portfolio/asset allocation strategies to help create stable, long-term passive income with sustainable yields. We believe it's appropriate for income-seeking investors including retirees or near-retirees. We provide ten portfolios: 3 buy-and-hold and 7 Rotational portfolios. This includes two High-Income portfolios, a DGI portfolio, a conservative strategy for 401K accounts, and a few High-Growth portfolios. For more details or a two-week free trial, please click here. This article was written by I am an individual investor, an SA Author/Contributor, and manage the “High Income DIY (HIDIY)” SA-Marketplace service. However, I am not a Financial Advisor. I have been investing for the last 25 years and consider myself an experienced investor. I share my experiences on SA by way of writing three or four articles a month as well as my portfolio strategies. You could also visit my website “FinanciallyFreeInvestor.com” for additional information. I focus on investing in dividend-growing stocks with a long-term horizon. In addition to a DGI portfolio, I manage and invest in a few high-income portfolios as well as some Risk-adjusted Rotation Strategies. I believe "Passive Income" is what makes you 'Financially Free.' My personal goal is to generate at least 60-65% of my retirement income from dividends and the rest from other sources like real estate etc. My current "long-term" long positions (DGI-dividend-paying) include ABT, ABBV, CI, JNJ, PFE, NVS, NVO, AZN, UNH, CL, CLX, UL, NSRGY, PG, KHC, TSN, ADM, MO, PM, BUD, KO, PEP, EXC, D, DEA, DEO, ENB, MCD, BAC, PRU, UPS, WMT, WBA, CVS, LOW, AAPL, IBM, CSCO, MSFT, INTC, T, VZ, VOD, CVX, XOM, VLO, ABB, ITW, MMM, LMT, LYB, RIO, O, NNN, WPC, TLT. My High-Income CEF/BDC/REIT positions include: ARCC, ARDC, GBDC, NRZ, AWF, CHI, DNP, EVT, FFC, GOF, HQH, HTA, IIF, IFN, HYB, JPC, JPS, JRI, LGI, KYN, MAIN, NBB, NLY, OHI, PDI, PCM, PTY, RFI, RNP, RQI, STAG, STK, USA, UTF, UTG, BST, CET, VTR. In addition to my long-term positions, I use several "Rotational" risk-adjusted portfolios, where positions are traded/rotated on a monthly basis. Besides, at times, I use "Options" to generate income. I am also invested in a small growth-oriented Fin/Tech portfolio (NFLX, PYPL, GOOGL, AAPL, JPM, AMGN, BMY, MSFT, TSLA, MA, V, FB, AMZN, BABA, SQ, ARKK). From time to time, I may also own other stocks for trading purposes, which I do not consider long-term (currently own AVB, MAA, BX, BXMT, CPT, MPW, DAL, DWX, FAGIX, SBUX, RWX, ALC). I may use some experimental portfolios or mimic some portfolios (10-Bagger and Deep Value) from my HIDIY Marketplace service, which are not part of my long-term holdings. Thank you for reading. Analyst’s Disclosure: I/we have a beneficial long position in the shares of ABT, ABBV, JNJ, PFE, NVS, NVO, UNH, CI, CL, CLX, GIS, UL, NSRGY, PG, KHC, ADM, MO, PM, BUD, KO, PEP, D, DEA, DEO, ENB, MCD, BAC, PRU, UPS, WMT, WBA, CVS, LOW, AAPL, IBM, CSCO, MSFT, INTC, T, VZ, VOD, CVX, XOM, VLO, ABB, ITW, MMM, LMT, LYB, RIO, ARCC, AWF, BST, CET, CHI, DNP, EVT, FFC, GOF, HCP, HQH, HTA, IIF, JPC, JPS, JRI, KYN, MAIN, MCI, TLT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock. The author is not a financial advisor. Please always do further research and do your own due diligence before making any investments. Every effort has been made to present the data/information accurately; however, the author does not claim 100% accuracy. The stock portfolios presented here are model portfolios for demonstration purposes. For the complete list of our LONG positions, please see our profile on Seeking Alpha. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Comments (48) Ed Can you provide the link for the bankruptcy I can't find anything about it $MPW, $T, $VZ, $WBD, $WBA, $DOW. Intresting, I've considered it but never pulled the trigger Agreed , there something holding me back Did you catch yesterday's article on Amazon "Amazon is reportedly scrapping plans to build dozens of warehouse facilities across the United States amid slowed sales growth.The consulting firm MWPVL says that the online retail giant is either closing or abandoning plans to open 42 facilities across the country totaling almost 25 million square feet of usable space, Bloomberg reported.The firm says that Amazon has also delayed opening 21 other locations and canceled several European projects, mostly in Spain."Could STAG be headed to $24 before dust settles I sold both OHI and MPW ... sitting on cash now waiting for next big drop

MSFT

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Nasdaq Bear Market: 5 Incomparable Growth Stocks You'll Regret Not Buying On the Dip

These fast-paced companies are in a league of their own and begging to be bought following a 34% peak decline in the Nasdaq Composite.

Yahoo

Nasdaq Bear Market: 5 Incomparable Growth Stocks You'll Regret Not Buying On the Dip These fast-paced companies are in a league of their own and begging to be bought following a 34% peak decline in the Nasdaq Composite. These fast-paced companies are in a league of their own and begging to be bought following a 34% peak decline in the Nasdaq Composite.

MSFT

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S&P 500 Earnings Update: Slight Improvement But Market Action Trumps All

There was a slight sequential improvement in the forward 4-quarter estimate (FFQE) this week, but the 2023 and 2024 calendar year EPS for the S&P 500 continue to be revised lower.

SeekingAlpha

S&P 500 Earnings Update: Slight Improvement But Market Action Trumps All Summary - There was a slight sequential improvement in the forward 4-quarter estimate (FFQE) this week, but the 2023 and 2024 calendar year EPS for the S&P 500 continue to be revised lower. - The data really doesn’t give investors confidence that S&P 500 earnings will cure the stock market’s ills, but it’s not yet a disaster. - The fact is the S&P 500 earnings data is more “coincident” than leading or lagging, at least looking through the aggregate earnings data. There was a slight sequential improvement in the forward 4-quarter estimate (FFQE) this week, but the 2023 and 2024 calendar year EPS for the S&P 500 continue to be revised lower. The data really doesn’t give investors confidence that S&P 500 earnings will cure the stock market’s ills, but it’s not yet a disaster. The fact is the S&P 500 earnings data is more “coincident” than leading or lagging, at least looking through the aggregate earnings data. S&P 500 data: - The forward 4-quarter estimate rose two cents this past week to $232.57 from last week’s $232.55 and if there is anything notable about this data point, it’s that it is the first sequential increase in the FFQE since the week of July 1. - The S&P 500 PE ratio ended the week at 16.9x. - The S&P 500 earnings yield jumped to 5.93% this week from last week’s 5.73%. Anything above 6% since gets interesting, and 7% was the S&P 500 earnings yield during Christmas week 2018. These calendar year and quarterly bottom-up S&P 500 EPS estimates indicate that 2022-2024 full-year EPS estimates peaked this Spring ’22. - 2024 peaked the first week of April at $276 and change and has declined to $263 today. - 2023 peaked numerous times from late April ’22 to May ’22 at $251 and change and has been revised lower from there to $243.61 today. - 2022 peaked between $229 and $230 in mid-June ’22 and has declined to its current print of $225.37. - The Q3 ’22 bottom-up quarterly estimate has been revised lower by 5% to $56.23 today, from its peak near $59 as of late July ’22. - The Q4 ’22 bottom-up quarterly estimate has been revised lower also by 5% from its peak near $61 per share to today’s $58.40. The data is right above for you to look at, and at least so far anyway this isn’t that extreme. However, one high profile earnings warning from an Apple (AAPL) or a Microsoft (MSFT) or any of the mega-cap 5 and it could get grim in a hurry. Technology is worrisome: The above table shows the “expected” full-year 2022 S&P EPS growth rates (YoY) by sector. Highlighted in dark border is the Tech sector’s expected growth rate for 2022 since April 1 ’22. Technology’s expected growth rate has been cut by 2/3rds since April 1 ’22, probably pretty consistent with the action in semiconductors, and Intel (INTC) in particular. Intel still has a pretty sizable market cap weighting in the S&P 500 (63rd if I counted right) but Nvidia (NVDA) is 11th even after their miss, with a 1.13% weight. Bespoke has long written that watch semis for a tell for technology and often for the market in general, and the news of late isn’t good. The nice thing is – in terms of the Tech sector – was that their troubles started in Q4 ’21 with the ad spending slowdown. Q2 ’22 was a very tough quarter for comps for technology as a whole, but tech comps get easier as we get into year-end. Summary/conclusion: Given the stock market action today, Friday, September 2nd, 2022, there is little reason to do anything in the stock market until we get some kind of technical improvement in the action. The August ’22 jobs report was almost picture-perfect today with unemployment rising to 3.7%, the average hourly earnings coming in better-than-expected, the actual “new new jobs added” to the US economy was almost exactly inline with what was expected – around 300,000 – and we even saw a big negative revision to June’s numbers, which made the aggregate number look even lighter. The stock market is clearly saying “we will wait to hear from Jay Powell” before we get too excited about expecting higher future stock market returns. The CPI and PPI don’t come out until a week from next Monday, September 5th, 2002, and Tuesday, so there will be another 5 days to wait before the data confirms the numbers are actually “disinflating”. The market signals are indicating inflation is declining rapidly. Here’s what’s worrisome: The stock and bond market action from January to May ’22 was all about higher inflation and waiting for it to break, since May-June and the mid-June ’22 lows, as market-based inflation data has fallen sharply, the Fed seems to have ever-so-slightly shifted its focus to labor and wages, and now today – albeit the average hourly earnings is just one data point – but if the labor and wage data softens and stocks still do not get a footing, the only conclusion is that the US economy is headed for a weaker recession than the pundits expect. That’s my own calculus, so take it all with a hefty wheelbarrow of salt. Jay Powell changed his mind quickly in the last two weeks of 2018, and the stock market sniffed it out and rallied sharply after Christmas and all through 2019. But again, there wasn’t the inflation issue there is today. There isn’t really one company that will report earnings next week that is of interest, but the next week, September 12th to 16th, investors will hear from both Oracle (ORCL) and Adobe (ADBE), two software companies and software hasn’t fared too well since 2021 ended. Long weekends like memorial and Labor Day usually make for good writing. More to come (hopefully) over the weekend. Remember all of this is one opinion, it can change quickly, it can be very wrong, so take it as such. Past performance is no guarantee of future results. Thanks for reading. Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors. This article was written by Comments (15) "Russia stopped delivering gas through the Nord Stream 1 pipeline (NS1) that supplies much of western Europe on Wednesday, claiming a two-day shutoff was necessary for maintenance work. On Friday, just hours before it was due to reopen, Russia's state-owned company Gazprom said repairs now require it to "suspend further operation." This would seem not to bode well for Europe and their energy needs over the months ahead, unless the Russians are just using this as leverage to get something else. But either way, this kind of action has got to ripple across the Atlantic to hit us, right?Suggest this topic for you for a future article.

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Self-driving tech firm Aurora mulls sale to Apple or Microsoft - Bloomberg News

Reuters reported in 2020 that Apple was moving forward with its self-driving car technology and was targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology. Microsoft, on the other hand, has invested in San Francisco-based self-driving car maker Cruise, which is valued at $30 billion and counts General Motors Co as a majority stakeholder.

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Self-driving tech firm Aurora mulls sale to Apple or Microsoft - Bloomberg News (Reuters) -Aurora Innovation Inc Chief Executive Chris Urmson recently outlined several options for the self-driving tech firm to combat challenging market conditions, including a possible sale to Apple Inc or Microsoft Corp, Bloomberg News reported on Friday. Many electric-vehicle and self-driving startups that had raised cash easily through IPOs and mergers with blank-check firms during the market boom are now scrambling to launch vehicles and burning cash rapidly amid a bleak economy and supply-chain snarls. Reuters reported in 2020 that Apple was moving forward with its self-driving car technology and was targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology. Microsoft, on the other hand, has invested in San Francisco-based self-driving car maker Cruise, which is valued at $30 billion and counts General Motors Co as a majority stakeholder. Urmson, who co-founded Aurora after running Google owner Alphabet Inc's self-driving car project, also floated measures including cost cuts, taking the company private and spinning off or selling assets, the report said, citing an internal memo. (https://bloom.bg/3ReFDgP) Aurora declined to comment. Shares of the company closed 15% higher on Friday, but have lost nearly 80% this year, in a sign of its struggles since going public late last year with a blank-check firm. It has a market cap of about $2.4 billion. Last month, Aurora said it would delay the delivery of its scalable autonomous freight trucks by a year to the first half of 2024, citing supply constraints. Other options Urmson suggested in the memo were to buy companies in the sector with $150 million to $300 million of cash, and to freeze hiring and lay off employees, the Bloomberg report said. (Reporting by Eva Mathews in Bengaluru; Editing by Devika Syamnath)

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Lucid Stock Takes a Tumble. Why? Look at the Shareholder Mix.

The electric-vehicle maker will eventually need a lot of financing. But its individual investor-heavy shareholder base dumped its shares when the company...

MarketWatch

A sudden drop in Lucid Group’s stock price highlights a key investing insight: Shareholder mix matters. The electric-vehicle maker’s shares (ticker: LCID) fell 6.3% Tuesday, while the S&P 500 was off 0.6%. News that Lucid is about to raise capital—a development that had long been in the cards—seemed to be behind the fall. Lucid filed a universal shelf registration statement that allows it to raise up to $8 billion via any combination of stock, preferred shares, warrants, and debt. That’s a lot, but the registration statement doesn’t mean a huge stock sale is imminent. Companies have limits on what securities they can sell without telling their owners—shareholders—first. Shelf registrations give them the ability to raise money when management believes the time is right. The best explanation for the reaction to Lucid’s relatively routine filing might be that the stock is a favorite of individual, rather than institutional, investors. Individuals tend to be less familiar with capital-market technicalities than big players. They hold about 70% of Lucid’s available shares, based on Bloomberg data, while institutions have the rest. That’s high. Comparable numbers for Tesla and Microsoft are 45% and 25%, respectively. It’s no surprise that Lucid will need more capital. Wall Street projects that the company will burn through roughly $7 billion over the next two years, while it ended the second quarter with some $4.3 billion on the books. Tesla used roughly $9 billion before it began generating free cash flow. Lucid stock is off about 60% this year, while the S&P 500 and Dow Jones Industrial Average are down about 15% and 12%, respectively. Last Week Payroll Shock Stocks fell after Jerome Powell’s hawkish Jackson Hole talk, with indexes off 4% or more as August closed. The dollar rose, and job openings ticked up. Bed Bath & Beyond and Snap laid off 20% of workers, and Nvidia warned on sales after new U.S. restrictions on chips to Russia and China. Covid flared again in China. The big news: August jobs came in at 315,000, off from July but strong enough to stir rate-hike fears. On the week, the Dow industrials fell 2.99%, to 31,318.44; the S&P 500 shed 3.29%, to 3924.26; and the Nasdaq Composite sank 4.21%, to 11,630.86. Ukraine Offensive Begins Ukraine began its long-awaited offensive around Kherson, attempting to cut off Russian troops on the western side of the Dnipro River. United Nations inspectors visited the beleaguered Ukraine nuclear plant amid the fighting. Exxon Mobil sued Russia, claiming the Kremlin had blocked its exit from its 30% stake in the Sakhalin-1 oil project. Russia again shut off the Nord Stream 1 gas pipeline. In a compromise, the European Union agreed to suspend Europe’s visa pact with Moscow but allow some Russian tourism. Pakistan Under Water Pakistan sought U.N. emergency aid after monsoon rains inundated the country, flooding as much of a third of it. Over 1,200 have been killed and a million homes destroyed. The IMF offered a $1 billion loan. Artemis Delayed NASA delayed launching its new, 38-story Space Launch System, Artemis I, until Saturday after a problem with engine cooling lines. Boeing is the biggest contractor on the SLS, the largest rocket NASA has ever built and meant to take men back to the moon. “You don’t want to light the candle until it’s ready to go,” said NASA chief Bill Nelson. Inside Those Boxes The Department of Justice, responding to former President Trump’s demand for a special master to examine documents taken from Mar-a-Lago in an FBI raid, accused Trump’s team of obstruction of justice. The DOJ filing detailed the timeline of attempts to retrieve the material as well as the haul from the raid: 33 boxes containing more than 100 classified documents. Annals of Deal Making Illumina won its case against the Federal Trade Commission trying to block its $7.1 billion acquisition of cancer screener Grail…Honda and LG Energy Solution said they would spend $4.4 billion to build a lithium-ion battery plant in the U.S., probably near Honda’s Ohio manufacturing operation…Delaware Chancery Judge Kathaleen St. J. McCormick ordered Twitter to hand over to Elon Musk an analysis of some 9,000 accounts it surveyed last year...Meta Platforms reached a settlement over Cambridge Analytica’s harvesting of Facebook data for political ads. Terms weren’t disclosed. Meta has already paid a $5 billion FTC fine in the case. Write to Al Root at allen.root@dowjones.com

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Dow Jones Dives Toward Bear Market Lows As AMD, Tesla, On Semi Plunge; What To Do Now

A market rally attempt is reeling as the indexes plunged on Friday's jobs report. Tesla, AMD and On Semi sold off.

Yahoo

Dow Jones Futures: Stocks Near Bear Market Lows On Columbus Day The market rally attempt is reeling, back near bear lows. What will investors discover on Columbus Day? The market rally attempt is reeling, back near bear lows. What will investors discover on Columbus Day?

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Weekly Roundup

Despite the late-week selloff, the portfolio had a rather good week, as about a dozen of our holdings outperformed the S&P 500.

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Weekly Roundup Despite the late-week selloff, the portfolio had a rather good week, as about a dozen of our holdings outperformed the S&P 500. Despite the late-week selloff, the portfolio had a rather good week, as about a dozen of our holdings outperformed the S&P 500.

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Forget Negativity; 3 Inspiring Acquisitions in 2022

It's easy to get caught up in all the negative news headlines we've received in 2022. However, when taking a step back, several notable announcements seem to have been forgotten amidst all the gloom and doom.

Yahoo

Forget Negativity; 3 Inspiring Acquisitions in 2022 It’s easy to get caught up in all the negative news headlines we’ve received in 2022. Investors seemingly can't catch a break, whether that be a hawkish Fed, geopolitical issues, or lingering COVID-19 effects spoiling the fun. However, when taking a step back, several notable announcements seem to have been forgotten amidst all the negativity. And they’re not small announcements by any means, either. We’re talking about significant acquisition news from large-cap tech companies. Alphabet GOOGL, Microsoft MSFT, and Broadcom AVGO have all announced major acquisitions in 2022, indicating that they are still laser-focused on growth opportunities. Let’s take a deeper dive into each acquisition a little further. Broadcom To Acquire VMware Broadcom announced its plans to acquire VMware VMW in a cash-and-stock transaction valued at approximately $61 billion in May, expected to close in Broadcom’s FY23. VMware is a leading provider of multi-cloud services for all apps, having pioneered virtualization technology, an innovation that has positively transformed x86 server-based computing. The combined company will offer enterprise customers a broader platform of critical infrastructure solutions to help them accelerate innovation and address the most complex information technology infrastructure requirements. It’s been a challenging road for AVGO shares in 2022, down nearly 30%. However, the company’s dividend metrics are too hard to ignore; AVGO’s annual dividend yield sits at a steep 3.4%, visibly higher than the Zacks Computer and Technology sector average of 0.9%. Further, the company carries a massive 26.3% five-year annualized dividend growth rate. Image Source: Zacks Investment Research For the cherry on top, Broadcom shares are cheap for a technology company – the company sports a 13.9X forward earnings multiple, well below its 16.6X five-year median and reflecting a sizable 34% discount relative to its Zacks sector. Image Source: Zacks Investment Research Microsoft To Acquire Activision Microsoft made a big splash earlier this year, putting forward its plans to acquire Activision Blizzard ATVI for a whopping $68.7 billion - the largest acquisition in the video game industry’s history. Activision Blizzard is a video game development and interactive entertainment content publisher best known for its Call of Duty franchise. The reasons behind the deal are clear – Microsoft wants to bolster its stance in the video game industry. MSFT shares have been no exception to the market’s woes in 2022, down 30%. However, the company is still forecasted to grow at a solid pace; earnings are forecasted to climb 9.2% in FY23 and a further double-digit 16% in FY24. Pivoting to the top line, estimates suggest revenue growth of 11% and 13.4% in FY23 and FY24, respectively. Image Source: Zacks Investment Research Alphabet Acquires Mandiant In March of this year, Alphabet told its plans to acquire Mandiant for a price tag of $5.4 billion. The deal was completed in September. Mandiant is a dynamic provider of cyber defense and response solutions, utilizing its cloud-based Mandiant Advantage software as a service (SaaS) platform. It’s a clear attempt from Alphabet to capitalize on the rapidly growing cloud computing market, with Mandiant joining forces with Google Cloud. The adverse price action in 2022 has caused GOOGL’s forward earnings multiple to slide down to 19.5X, nowhere near its five-year median of an expensive 26.8X. Further, the value reflects a respectable 8% discount relative to its Zacks sector. Image Source: Zacks Investment Research Alphabet generates serious cash – in its latest print, the company reported quarterly free cash flow of $12.6 billion, the fourth highest of any S&P 500 company in Q2 2022. Image Source: Zacks Investment Research Bottom Line While negative sentiment has been widespread all year, there are still many positive announcements we’ve received from companies, including acquisitions from the three titans above. Acquisitions allow for a vast range of growth opportunities and for companies to get their hands on impressive talent. Further, acquisitions speak volumes about a company’s future roadmap, telling us that it's willing to pursue long-term growth opportunities. All three companies above – Alphabet GOOGL, Microsoft MSFT, and Broadcom AVGO – have all taken on notable acquisitions in 2022. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report VMware, Inc. (VMW) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

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15 Most Valuable Companies In History

In this article, we will take a look at 15 of the most valuable companies in history. If you want to see some more of the most valuable companies in history, go directly to 5 Most Valuable Companies In History. Many of the most valuable companies in history dominate their industries. Some of the most […]

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15 Most Valuable Companies In History In this article, we will take a look at 15 of the most valuable companies in history. If you want to see some more of the most valuable companies in history, go directly to 5 Most Valuable Companies In History. Many of the most valuable companies in history dominate their industries. Some of the most valuable companies in history dominated oil and gas. Some are leaders in information technology and computing. All of the companies created a lot of value for their shareholders. In terms of what creates the most valuable companies in history, the size of the country's economy that a company is from is a key component. If a company's parent country is a small country, it is harder for that company to reach the scale needed to be considered among the most valuable in history. If the company's parent country is a nation with a huge economy, on the other hand, there are likely more markets that have the scale to allow companies to grow to reach very valuable status. In the 16th century, the Dutch were the leading economic power. As things changed, the British became the leading economic power in the 18th and 19th century. As a result, some Dutch and British companies have made it to the list of 15 Most Valuable Companies In History. In the 20th century, the United States became the leading economic power. Immediately after World War II, the United States had around half the world's GDP and much of the world's wealth. With much of the world's wealth, many American companies had the capital necessary to expand overseas and gain substantial market share. With much of the world as potential markets, American companies can gain more revenue and potentially more profits. As a result of the dominance of the United States economically, many American companies make this list. Another factor that helps companies make it to the list of 15 Most Valuable Companies In History is the era that they operate. In terms of eras, modern day companies are more likely to be more valuable given the growth in the global economy. Because economies have advanced so much over the past 100 years, the markets today are much larger than the markets 100 years ago. With globalization, modern day companies also have opportunities at a larger market. The emergence of technology has also created many valuable companies, some of which also make the list of the 15 Most Valuable Companies In History. With technology, companies can grow very quickly and potentially capture a monopoly on very valuable markets that many people use. Microsoft is one example with Windows. Given that technology may not cost all that much to produce after it's first created, some tech sectors can also have higher margins than other industries. With higher margins and larger markets, it can be easier for some tech companies to be considered very valuable. In terms of the composition of the 15 Most Valuable Companies In History, the majority are tech companies and many exist today. Pixabay/Public Domain Methodology For our list of 15 Most Valuable Companies In History, we used peak market cap to rank the companies since some of the most valuable companies no longer exist today. Some have also fallen in market cap from their peaks. For companies that existed hundreds of years ago, we used subjective measures to rank them. For the peak market cap, we used data from Ycharts. 15 Most Valuable Companies In History 15. NVIDIA Corporation (NASDAQ:NVDA) Peak Market Capitalization: $834.40 billion NVIDIA Corporation (NASDAQ:NVDA) is a leader in GPUs which is in some ways better suited for some AI applications than traditional CPUs. Given the huge anticipated growth in AI, investors sent NVIDIA Corporation (NASDAQ:NVDA) to a peak market capitalization of over $830 billion before the stock eventually fell to its current valuation of around $300 billion. If the company maintains its lead in the AI chip market, however, NVIDIA Corporation (NASDAQ:NVDA) could have upside. In terms of hedge funds, Fisher Asset Management was one of the top hedge fund holders with a holding of almost 7.6 million shares at the end of Q2. 14. Alibaba Group Holding Limited (NYSE:BABA) Peak Market Capitalization: $858.50 billion Given its market share in e-commerce and the cloud in China, Alibaba Group Holding Limited (NYSE:BABA) achieved a peak market capitalization of over $850 billion before its stock fell due to the Chinese government beginning to reign in the tech giants in the nation. With China's economy weaker and the broader weakness in the market, Alibaba Group Holding Limited (NYSE:BABA) has a market capitalization of around $220 billion. There is a chance that Alibaba Group Holding Limited (NYSE:BABA) stock could be delisted if China and the United States can't agree on accounting terms. 13. PetroChina Peak Market Capitalization:$1 trillion PetroChina achieved the $1 trillion mark briefly when it debuted in 2007. As a result, PetroChina became the first company to break through the $1 trillion mark. Since its IPO, however, PetroChina stock hasn't done very well and the company actually withdrew its listing on the NYSE. 12. International Business Machines Corporation (NYSE:IBM) Peak Market Capitalization: $1 trillion International Business Machines Corporation (NYSE:IBM) was worth $258.6 billion in 1967, which assuming the growth in the stock market, could easily be considered worth $1 trillion or even more today. As a result, International Business Machines Corporation (NYSE:IBM) is ranked #12 on our list of 15 Most Valuable Companies In History. Back then International Business Machines Corporation (NYSE:IBM) was one of the most dominant mainframe computing companies with substantial market share. Today, International Business Machines Corporation (NYSE:IBM) is overshadowed by bigger companies in computing but still has potential upside if the economy doesn't slow as much as expected. 11. Meta Platforms, Inc. (NASDAQ:META) Peak Market Capitalization: $1.078 trillion At its peak, Meta Platforms, Inc. (NASDAQ:META) was worth $1.078 trillion as the market anticipated substantial future earnings growth from the company given its billions of daily users and many different ways of monetizing those users. Given competition from TikTok as well as the worsening economy, however, Meta Platforms, Inc. (NASDAQ:META) is worth around $375 billion as of October 7. There is potential upside in Meta Platforms, Inc. (NASDAQ:META) if it can maintain its user base and grow earnings. Although the market isn't very optimistic about the metaverse, Meta Platforms, Inc. (NASDAQ:META) could also benefit if the metaverse does become a huge market as CEO Mark Zuckerberg expects. Renaissance Technologies owned almost 5.5 million shares at the end of Q2. 10. Tesla, Inc. (NASDAQ:TSLA) Peak Market Capitalization: $1.239 trillion Although it isn't the largest auto maker in the world, Tesla, Inc. (NASDAQ:TSLA) achieved the highest peak market capitalization of all auto makers with a peak value of $1.239 trillion. With a market capitalization of over $750 billion as of October 7, Tesla, Inc. (NASDAQ:TSLA) is still by the most valuable car company in the world. As the electric vehicle leader, investors expect substantial earnings growth in Tesla, Inc. (NASDAQ:TSLA)'s future. Given its CEO in Elon Musk, many expect Tesla, Inc. (NASDAQ:TSLA) to be among the leaders in autonomous driving. ARK Investment Management was one of the top holders of Tesla, Inc. (NASDAQ:TSLA) at the end of the second quarter. 9. Amazon.com, Inc. (NASDAQ:AMZN) Peak Market Capitalization: $1.888 trillion Amazon.com, Inc. (NASDAQ:AMZN) has been one of the best growth stocks over the last twenty years. As a result of its growth, Amazon.com, Inc. (NASDAQ:AMZN) has achieved the number one position in both e-commerce and the cloud, both of which are huge markets. With its positions, Amazon.com, Inc. (NASDAQ:AMZN) achieved a peak market capitalization of $1.888 trillion. That ranks the company as #9 on our list of 15 Most Valuable Companies In History. Although its market cap is around $1.25 trillion as of October 7, the stock could still have upside if it continues its earnings growth. 8. Alphabet Inc. (NASDAQ:GOOG) Peak Market Capitalization: $2.001 trillion Alphabet Inc. (NASDAQ:GOOG) has also been one of the best growth stocks since its IPO in 2004. Thanks to its leading market share in search and also its smart acquisition of YouTube, Alphabet Inc. (NASDAQ:GOOG) has become one of the most profitable companies in the world. As one of the world's leading tech giants, Alphabet Inc. (NASDAQ:GOOG) also achieved a peak market cap of $2 trillion. TCI Fund Management owned almost 2.5 million shares at the end of Q2. 7. Saudi Aramco Peak Market Capitalization: $2.43 trillion. Saudi Aramco is the world's biggest oil company and also the leading company in Saudi Arabia. Given its huge oil reserves and substantial profits, Saudi Aramco is also one of the most valuable companies in history with a peak market capitalization of over $2.4 trillion. Given the higher oil prices, Saudi Aramco reported that is net income rose 90% to $48.4 billion in Q2 2022. 6. Microsoft Corporation (NASDAQ:MSFT) Peak Market Capitalization: $2.576 trillion Microsoft Corporation (NASDAQ:MSFT) has also been one of the best growth stocks in history since its founding in 1975. As a result, Microsoft Corporation (NASDAQ:MSFT) achieved a peak market capitalization of $2.576 trillion, which ranks it #6 on our list of 15 Most Valuable Companies In History. Although it's valued under $2 trillion now due to the broader market decline, Microsoft Corporation (NASDAQ:MSFT) could have upside if it continues to grow its earnings. Click to continue reading and see 5 Most Valuable Companies In History. Suggested articles: Disclosure: None. 15 Most Valuable Companies In History is originally published on Insider Monkey.

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Fact Check-Video does not show Bill Gates changing his mind about clean energy

Social media users are sharing a clip from an interview with Microsoft co-founder and philanthropist Bill Gates and claiming that it shows him opposing climate change efforts.

Reuters

Social media users are sharing a clip from an interview with Microsoft co-founder and philanthropist Bill Gates and claiming that it shows him opposing climate change efforts. Examples can be seen ( here ) and (here ) The text in the post reads: “Back in 2018 when Bill Gates would still admit the truth about “clean energy” madness: “Whenever we came up with this term ‘clean energy,’ I think it screwed up people’s minds!”. The clip shows an interview (clip begins at 8:37 youtu.be/d1EB1zsxW0k?t=517 ) with Gates by Arun Majumdar, the dean of Stanford Doerr School of Sustainability, at Stanford University’s Global Energy Forum on Nov. 2, 2018 (here , here ). The description of the original video reads: “Declining prices for devices to generate and store renewable energy are great, but not nearly enough to save the world from climate change, according to Bill Gates. Gates talked about overly optimistic thinking, natural gas, a carbon tax and the responsibilities of developing economies vs. developed economies. He was hopeful, however, that the power of research and innovation could meet rising energy demand globally while addressing climate change and other environmental challenges.” In the video, Majumdar asks Gates if the decrease in wind and solar renewables and battery costs are enough, to which Gates responds that it is “so disappointing” because more needs to be done to address greenhouse gas emissions. Gates says that electricity accounts for 25% of greenhouse gas emissions and that other sources of emissions should also be considered such as the production of steel, fertilizer, cement, plastic, and airplanes. While he is critical of this, it is clear from the rest of the video that he is supportive of these efforts. Since this interview, Gates has continued to work on climate change as reported (here , here , here ). VERDICT Missing context. The clip has been taken out of context to falsely suggest that Microsoft co-founder and philanthropist Bill Gates is against efforts to address climate change. This article was produced by the Reuters Fact Check team. Read more about our fact-checking work here . Our Standards: The Thomson Reuters Trust Principles.

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Why Microsoft Fell Today

Shares of tech giant Microsoft (NASDAQ: MSFT) fell hard today, down some 4.5% as of 12:30 p.m. ET. Microsoft is considered somewhat defensive by tech standards, so it was rare to see the stock down so much in a day. Last night, AMD pre-announced revenue for its September quarter, which came in far below expectations.

Yahoo

Why Microsoft Fell Today Shares of tech giant Microsoft (NASDAQ: MSFT) fell hard today, down some 4.5% as of 12:30 p.m. ET. Microsoft is considered somewhat defensive by tech standards, so it was rare to see the stock down so much in a day. Last night, AMD pre-announced revenue for its September quarter, which came in far below expectations.

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Microsoft (MSFT) Mulls Funding in India-Based Platform Zupee

Microsoft (MSFT) is reportedly in talks to lead a funding round of more than $100 million in play-to-earn gaming platform Zupee.

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Microsoft (MSFT) Mulls Funding in India-Based Platform Zupee Microsoft MSFT is reportedly planning an investment in India-based play-to-earn gaming platform, Zupee, per a TechCrunch report. The technology giant is said to be in talks to potentially lead a funding round of more than $100 million in New Delhi-based Zupee, the latest in a series of bets by the Windows maker to expand its cloud business in key overseas markets. Zupee is a cloud-based, casual gaming platform with over 70 million downloads. The company has completed a $102 million Series B funding round, which took the online skill-based gaming startup’s total fund raised to $121 million at a $600 million valuation. Zupee’s gaming platform features casual board games, such as ludo, carrom, snakes and ladders, etc. If the deal should go through, it could mean the integration of Microsoft's Azure cloud service with Zupee. The two firms have not reached an agreement and there is a reasonable chance that the deal will not materialize, the sources cautioned. The point of contention for Microsoft seems to be Zupee's pay-to-win service, which can also be seen as gambling. Microsoft Corporation Price and Consensus Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote Microsoft’s India Expansion Holds Promise This Zacks Rank #3 (Hold) company's business model, which relies on partners building additional services on top of its cloud platform, Azure, recorded total revenues of about $10 billion in India in the last five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Per the latest IDC report, the public cloud service market of India is likely to hit $13.5 billion by 2026, seeing a CAGR of 24% between 2021 and 2026. Microsoft, which has lost 26.7% on a year-to-date basis, remains well-poised to gain investors’ confidence in the near term on the back of its expanding footprint in this promising market. Microsoft competes with the likes of Amazon’s AMZN Amazon Web Services (AWS) and Alphabet GOOGL owned Google Cloud in India. The news arrives months after Microsoft announced that it is setting up its largest India data center region in Hyderabad for an investment of more than INR 15,000 crore over a period of 15 years. The proposed Hyderabad data center region will be Microsoft’s fourth in the country after Mumbai, Pune and Chennai. This makes Microsoft’s data center investment the second largest foreign direct investment in Telangana after AWS’ $2.77 billion FDI in its second Asia Pacific data center region in India. AWS was chosen by Prasar Bharati News Services in India to host and scale its digital news website — NewsOnAir — and daily magazine in India and across the world. AWS has two data center regions in Mumbai and Hyderabad. Likewise, last year, Google Cloud launched its second cloud region in Delhi-NCR to serve its customers in India and the Asia-Pacific. The first Google cloud region in India was established in Mumbai in 2017. Microsoft’s Activision Deal Sees No Respite Microsoft plans to acquire Activision Blizzard ATVI for $68.7 billion but is currently facing antitrust investigations in many countries around the world including the United Kingdom and the United States. Activision recently launched Overwatch 2, the sequel to Blizzard Entertainment's popular team-based shooter game. Activision's expanding gaming portfolio is expected to aid the company's top-line growth in the holiday season. Last month, the UK’s Competition and Market Authority said that the acquisition could significantly harm competition and entered the second phase of its investigation, which will be finalized before Mar 1, 2023. The US Federal Trade Commission also launched an investigation into Microsoft’s largest acquisition but hasn’t announced its decision yet. Meanwhile, Saudi Arabia became the first country to approve the deal in late August, followed by Brazil, which has just announced its decision. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

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Microsoft Corp. stock underperforms Friday when compared to competitors

Shares of Microsoft Corp. slid 5.09% to $234.24 Friday, on what proved to be an all-around dismal trading session for the stock market, with the S&P 500...

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Shares of Microsoft Corp. MSFT, +0.19% slid 5.09% to $234.24 Friday, on what proved to be an all-around dismal trading session for the stock market, with the S&P 500 Index SPX, +0.67% falling 2.80% to 3,639.66 and Dow Jones Industrial Average DJIA, +0.93% falling 2.11% to 29,296.79. This was the stock's second consecutive day of losses. Microsoft Corp. closed $115.43 short of its 52-week high ($349.67), which the company reached on November 22nd. The stock underperformed when compared to some of its competitors Friday, as Apple Inc. AAPL, -0.28% fell 3.67% to $140.09, Alphabet Inc. Cl A GOOGL, +0.59% fell 2.70% to $98.68, and SAP SE ADR SAP, +1.07% fell 2.12% to $84.53. Trading volume (37.0 M) eclipsed its 50-day average volume of 24.5 M. Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.

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Stock Market Today: Dow Stumbles as Strong Jobs Data Strike Down 'Fed Pivot' Hopes

By Yasin Ebrahim

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Stock Market Today: Dow Stumbles as Strong Jobs Data Strike Down 'Fed Pivot' Hopes By Yasin Ebrahim Investing.com -- The Dow slumped Friday, as a stronger-than-expected monthly jobs report quelled hopes of a Fed pivot, and shifted investor focus to the prospect of another jumbo-sized rate hike next month. The Dow Jones Industrial Average fell 2.1%, or 630 points, the Nasdaq slipped 3.8%, and the S&P 500 fell 2.8%. The U.S. economy created 263,000 jobs last month, above the 250,000 economists had expected, while the unemployment rate unexpectedly dropped to 3.5% as fewer than expected people entered the labor market. Wage growth of 0.3% was in line with forecasts, but slowed to 5% from 5.2% in 12 months through September. While this is a “welcome development for the Fed,” according to Jefferies, it won’t provide a ”justification for slowing from the recent pace of 75 bp rate hikes, so we expect another one at the November meeting.” The revival of hawkish Fed bets pushed Treasury yields higher, pushing growth areas of the market including tech and consumer discretionary stocks into the red. Microsoft (NASDAQ:MSFT) fell more than 5% followed by Meta (NASDAQ:META), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) as a rising rate environment tends to sour sentiment on higher-valued stocks with a longer payoff horizon. Tech was also pushed deeper in the red by a slump in chip stocks following a profit warning from chipmaker AMD. Advanced Micro Devices (NASDAQ:AMD) plunged nearly 14% after announcing preliminary results for the third quarter that missed Wall Street estimates. The miss on revenue guidance was driven by a “weaker-than-expected PC market&the resulting inventory correction in the PC supply chain,” Deutsche Bank said in a note after cutting its price target on the stock to $90 from $95. NVIDIA (NASDAQ:NVDA) slipped 8%, Taiwan Semiconductor Manufacturing (NYSE:TSM) fell 6% and Qualcomm (NASDAQ:QCOM) was down more than 3%. On the earnings front, Levi Strauss&Co (NYSE:LEVI) fell more than 9% after trimming its full-year guidance as ongoing supply chain troubles and a stronger dollar bite. The broader market drop comes ahead of fresh inflation data next week that will influence the Fed's thinking on rate hikes. But without a "precipitous drop" in economic growth, or a deep recession, the slowdown in the pace of inflation is going to be "slower than what everybody hopes," Robert Conzo, CEO of The Wealth Alliance told Investing.com's Yasin Ebrahim in an interview on Friday. “You're going to have a period of sideways markets as the economy is unlikely to go into a deep recession because people are working and spending,” Conzo said. “That trend isn’t going to change very much, meaning that inflation will be sticky,” he added. Related Articles Stock Market Today: Dow Stumbles as Strong Jobs Data Strike Down 'Fed Pivot' Hopes Chip industry grapples with new U.S. curbs on China sales U.S. aims to hobble China's chip industry with sweeping new export rules

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Datadog (DDOG) to Launch Datadog Certification Program

Datadog (DDOG) launches Datadog Certification Program to strengthen and validate cloud professionals' knowledge of the Datadog Platform.

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Datadog (DDOG) to Launch Datadog Certification Program Datadog DDOG recently announced the launch of the Datadog Certification Program that will help developers to enhance their observability skills. The program offers these professionals a path to build and demonstrate their knowledge of both Datadog’s platform and the industry’s best practices, and also allows partners to showcase their Datadog competency to potential customers. The launch includes three certifications, the Datadog Fundamentals for beginners, Log Management Fundamentals and APM & Distributed Tracing Fundamentals, which require six months of experience with the Datadog platform. These certifications will validate the practiced competency of cloud professionals in monitoring with Datadog and signal peers and employers that they have proficiency in the industry’s leading observability platform and have demonstrated the ability to apply that knowledge. Datadog’s Strong Product Line to Aid Top-Line Growth The company’s third-quarter 2022 revenues are anticipated to be in the range of $410-$414 million, which implies 52% year-over-year growth at the midpoint. These programs are expected to be beneficial for professionals as Datadog sees continued momentum of cloud migration and digital transformation projects. It had about 21,200 customers in second-quarter 2022, almost 30% up on a year-over-year basis. Datadog, Inc. Price and Consensus Datadog, Inc. price-consensus-chart | Datadog, Inc. Quote The three pillars of observability, which are infrastructure, APM and Log Management, have shown positive growth in the recent quarter. The APM suite and Log Management now exceed $0.750 billion of annual recurring revenues. Additionally, it has also launched Datadog Observability Pipelines, through which, customers can control their cost and volume of data, pick up all data sources from their destination, standardize and improve on data quality, and redact sensitive data to help maintain compliance. Datadog signed a seven-figure upsell with a multi-national media company that has aggressive expansion plans for a streaming service, including in international markets, and a global service and audit company that is going through a large-scale digital transformation, including migration from on-premises data centers to multiple clouds, and Azure. Datadog is also organizing Dash 2022, a user conference in October at the Javits Center in New York City. This is an occasion for them to showcase the latest product innovations and organize an investor meeting. Datadog Faces Stiff Competition in the Cloud Computing Industry Shares of Datadog, which currently has a Zacks Rank #3 (Hold), have declined 47.4% year to date compared with the Zacks Computer & Technology Sector’s decline of 32.8%. It faces stiff competition from Microsoft Corporation’s MSFT Azure, Amazon’s AMZN AWS and Alphabet’s GOOGL Google Cloud. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Microsoft shares have declined 26.7% year to date. Microsoft has doubled down on the cloud computing opportunity as Azure increased availability in more than 60 regions globally. In the fourth quarter of 2022 cloud services’ revenues surged 40% year over year that was driven by robust growth in consumption-based business. Amazon’s shares have declined 27.9% year to date. Amazon is the leading provider of cloud infrastructure as a service to enterprise customers and is gaining momentum with customers including Boeing, Geisinger, British Telecom, Jefferies, Meta, Roche, adidas and many more. Alphabet’s shares have declined 30% in the same time frame. The company’s cloud services have been growing investments in infrastructure, security, data management, analytics and AI and are expanding its footprint worldwide as it recently opened four new cloud regions which are located in Warsaw (Poland), Delhi (India), Melbourne (Australia) and Toronto (Canada). Datadog is suffering from cost escalations in the form of research and development (R&D), sales and marketing expenses and general and administrative expenses that are expected to hurt its bottom line. However, the company is positive about its investments in R&D, sales and marketing and is expecting a future pay-off. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Datadog, Inc. (DDOG) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

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2 Technology Stocks For Your October 2022 Watchlist

Check out these technology stocks for a potential buy and hold opportunity.

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Technology is playing an increasingly important role in our lives today. As we become more reliant on technology, it is becoming more important for businesses to invest in technology. With that, technology stocks are a type of stock that represents ownership in a company that produces or uses technology. Technology stocks are popular with investors because they offer the potential for high growth. Notably, some of the more popular technology stocks among stock market investors today are companies such as Amazon (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOGL), and Meta Platforms Inc. (NASDAQ: META) just to name a few. Technology companies often have high-profit margins and strong market demand for their products. However, investing in technology stocks can also be risky. Technology companies are often volatile and susceptible to sudden changes in the marketplace. When investing in technology stocks, it is important to carefully research the company before making a purchase. You should also be aware of the risks involved. Furthermore, technology stocks can provide investors with the opportunity to earn high returns, but they can also be risky. Before investing, it is important to understand both the potential rewards and risks involved. If this has you keen on investing in the tech sector, here are two technology stocks to watch in the stock market today. Technology Stocks To Watch Right Now - Microsoft Corporation (NASDAQ: MSFT) - Apple, Inc. (NASDAQ: AAPL) 1. Microsoft (MSFT Stock) Starting off the list today is Microsoft Corporation (MSFT). In short, Microsoft is an American multinational technology company. Additionally, the company develops, manufactures, licenses supports, and sells computer software, consumer electronics, personal computers, and related services. Its best-known software products are the Microsoft Windows line of operating systems, Microsoft Office office suite, and Internet Explorer and Edge web browsers. MSFT Recent Stock News In September, Microsoft reported that its Board Of Directors have declared a quarterly dividend of $0.68 per share. This represents a $0.06 or 10% increase in dividend payment from the previous quarter’s dividend. Moreover, the dividend is payable on December 8th, 2022 to shareholders on record on November 17, 2022. Separate from that, Microsoft also reported that it will be hosting its 2022 annual shareholders meeting. Specifically, the company’s annual shareholder meeting for 2022 will take place on December 13, 2022. MSFT Stock Chart Meanwhile, so far in 2022, MSFT stock has fallen over 29% as of Friday’s mid-morning trading session at $235.68 per share. What’s more, shares of Microsoft stock is currently trading 32.58% off of their 52-week high of $349.67 a share. [Read More] Top Stocks To Buy Now? 3 Industrial Stocks To Check Out 2. Apple (AAPL Stock) Next, Apple Inc. (AAPL) is an American multinational technology company. Simply put, the company designs, develops and sells consumer electronics, computer software, and online services. The company’s hardware products include the iPhone smartphone, the iPad tablet computer, the Mac personal computer, the iPod portable media player, the Apple Watch smartwatch, the Apple TV digital media player, and the HomePod smart speaker. AAPL Recent Stock News Recently, just last month, the company released its new product lineup to investors. In detail, Apple reported it has launched a new iPhone® 14 Pro and iPhone 14 Pro Max. For context, this new iPhone will include extra features that include an Always-On display, the first-ever 48MP camera on an iPhone, and others. Moreover, the company also reported that they will be introducing the new Apple Watch® Series 8 and the new Apple Watch SE®. AAPL Stock Chart Year-to-date, Apple stock is still down 22.50%. Meanwhile, on Friday morning, shares of AAPL stock are trading at $141.14 per share. If you enjoyed this article and you’re interested in learning how to trade so you can have the best chance to profit consistently then you need to checkout this YouTube channel. CLICK HERE RIGHT NOW!!

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Dow's 731-point fall led by losses in shares of Walgreens Boots, Microsoft

Shares of Walgreens Boots and Microsoft are trading lower Friday afternoon, leading the Dow Jones Industrial Average slump. The Dow was most recently trading...

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Shares of Walgreens Boots and Microsoft are trading lower Friday afternoon, leading the Dow Jones Industrial Average slump. The Dow DJIA, +0.93% was most recently trading 731 points, or 2.4%, lower, as shares of Walgreens Boots WBA, +2.62% and Microsoft MSFT, +0.19% are contributing to the index's intraday decline. Walgreens Boots's shares have fallen $1.82, or 5.6%, while those of Microsoft are off $13.21, or 5.4%, combining for a roughly 99-point drag on the Dow. Also contributing significantly to the decline are Intel INTC, +1.71%, Apple Inc. AAPL, -0.28%, and Salesforce Inc. CRM, +3.93%. A $1 move in any one of the 30 components of the index results in a 6.59-point swing.

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S&P 500 Slips as Strong Jobs Report Puts Hawkish Fed Bets Back in Focus

By Yasin Ebrahim

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S&P 500 Slips as Strong Jobs Report Puts Hawkish Fed Bets Back in Focus By Yasin Ebrahim Investing.com -- The S&P 500 slumped Friday, as a stronger-than-expected monthly jobs report muted recent hopes of a Fed pivot, and shifted investor focus to the prospect of another jumbo-sized rate hike next month. The S&P 500 fell 2.9%, the Dow Jones Industrial Average fell 2.2%, or 669 points, and the Nasdaq slipped 3.7%. The U.S. economy created 263,000 jobs last month, above the 250,000 economists’ had expected, while the unemployment rate unexpectedly dropped to 3.5% as fewer than expected people entered the labor market. Wage growth of 0.3% was in line with forecasts, but slowed to 5% from 5.2% in 12 months through September. While this is a “welcome development for the Fed,” according to Jefferies, it won’t provide a ”justification for slowing from the recent pace of 75 bp rate hikes, so we expect another one at the November meeting.” The revival of hawkish Fed bets pushed Treasury yields higher, pushing growth areas of the market including tech and consumer discretionary stocks into the red. Microsoft (NASDAQ:MSFT) fell more than 5% followed by Meta (NASDAQ:META), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) as a rising rate environment tends to sour sentiment on higher-valued stocks with a longer payoff horizon. Tech was also pushed deeper in the red by a slump in chip stocks following a profit warning from chipmaker AMD. Advanced Micro Devices (NASDAQ:AMD) fell more than 13% after announcing preliminary results for the third quarter that missed Wall Street estimates. The miss on revenue guidance was driven by a “weaker-than-expected PC market&the resulting inventory correction in the PC supply chain,” Deutsche Bank said in a note after cutting its price target on the stock to $90 from $95. NVIDIA (NASDAQ:NVDA) fell more than 7%, Taiwan Semiconductor Manufacturing (NYSE:TSM) fell 5% and Qualcomm (NASDAQ:QCOM) was down more than 3%. On the earnings front, Levi Strauss&Co (NYSE:LEVI) fell more than 9% after trimming its full-year guidance as ongoing supply chain troubles and a stronger dollar bite. The broader market drop comes ahead of fresh inflation data next week that will influence the Fed's thinking on rate hikes. But without a "precipitous drop" in economic growth, or a deep recession, the slowdown in the pace of inflation is going to be "slower than what everybody hopes," Robert Conzo, CEO of The Wealth Alliance told Investing.com's Yasin Ebrahim in an interview on Friday. “You're going to have a period of sideways markets as the economy is unlikely to go into a deep recession because people are working and spending,” Conzo said. “That trend isn’t going to change very much, meaning that inflation will be sticky,” he added. Related Articles Toyota says about 296,000 pieces of customer info possibly leaked U.S. fund managers bet on poker while market wagers loom large

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Dow drops 650 points on losses in shares of Intel, Microsoft

The Dow Jones Industrial Average is slumping Friday afternoon with shares of Intel and Microsoft facing the biggest declines for the price-weighted average....

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The Dow Jones Industrial Average is slumping Friday afternoon with shares of Intel and Microsoft facing the biggest declines for the price-weighted average. The Dow DJIA, Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.

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Dow Jones Plunges 500 Points On Jobs Report; AMD Stock Tumbles On Revenue Warning

The Dow Jones Industrial Average plunged 500 points Friday on the September jobs report. AMD lost 8% after a third-quarter revenue warning.

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Dow Jones Plunges 500 Points On Jobs Report; AMD Stock Tumbles On Revenue Warning The Dow Jones Industrial Average plunged 500 points Friday on the September jobs report. AMD lost 8% after a third-quarter revenue warning. The Dow Jones Industrial Average plunged 500 points Friday on the September jobs report. AMD lost 8% after a third-quarter revenue warning.

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11 Best Long-Term Stocks To Buy Now

In this article, we will look at the 11 best long-term stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Long-Term Stocks To Buy Now. The current market situation is not ideal for short-term investors and day traders. As of October 5, the S&P […]

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11 Best Long-Term Stocks To Buy Now In this article, we will look at the 11 best long-term stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Long-Term Stocks To Buy Now. The current market situation is not ideal for short-term investors and day traders. As of October 5, the S&P 500 has tanked over 21% year to date, the tech-heavy Nasdaq is down 30% for the year, and the Dow has lost 17.35% since the beginning of 2022. The stock market is in shambles, but for long-term investors, it has started to look like an attractive entry point. Wharton’s Jeremy Siegel: “If You’re a Long-Term Investor, I Would Absolutely Buy Now” Jeremy Siegel is a professor of finance at the Wharton School of the University of Pennsylvania and is a notable commentator on the economy and capital markets. Mr. Siegel recently appeared on CNBC’s ‘Squawk Box’ where he discussed his view on why now is an attractive buying opportunity for long-term investors. Here are some comments from the professor of finance at one of the top business schools in the world: “If you’re a long-term investor, I would absolutely buy now. I think these are absolutely great long-term values. Could it go down more? Of course in the short-run and in bear markets (historical), it has gone down more. But when you’re talking about 16 times earnings and even if they are clipped by a recession, you shouldn’t just base it on recession earnings you should base it on longer-term earnings, which I think are very favorable looking beyond the dip. I think these are just absolutely excellent values. Short-term, anything can happen in the short term.” While short-term investors are unwinding their positions and triggering major sell-offs, they are in fact creating a buying opportunity for long-term investors. Some of the best long-term stocks to buy now include Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT). Photo by Roberto Júnior on Unsplash Our Methodology To determine the 11 best long-term stocks to buy now, we picked out blue chip companies with track records of profitability and strong balance sheets. We picked stocks from a variety of sectors including consumer staples, healthcare, and technology. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and salient features that make it a good candidate for long-term investors. The hedge fund sentiment was derived from Insider Monkey's database, which tracks roughly 900 elite hedge funds. Best Long-Term Stocks To Buy Now 11. Colgate-Palmolive Company (NYSE:CL) Number of Hedge Fund Holders: 55 Colgate-Palmolive Company (NYSE:CL) is one of the best long-term stocks to buy now because of its rich dividend history, defensive business model, and strong pricing power due to a solid brand image in global markets. On September 9, Colgate-Palmolive Company (NYSE:CL) declared a quarterly cash dividend of $0.47 per share. The dividend is payable on November 15, to shareholders of record on October 21. As of October 5, the stock is offering a forward dividend yield of 2.64%. On August 1, Wells Fargo analyst Chris Carey raised his price target on Colgate-Palmolive Company (NYSE:CL) to $80 from $71 and upgraded the stock to Equal Weight from Underweight. This August, Barclays analyst Lauren Lieberman raised his price target on Colgate-Palmolive Company (NYSE:CL) to $74 from $71 and maintained an Equal Weight rating on the shares. At the end of Q2 2022, 55 hedge funds held stakes in Colgate-Palmolive Company (NYSE:CL). The total value of these stakes amounted to $2.93 billion, up from $2.59 billion a quarter ago, with 50 positions. The hedge fund sentiment for the stock is positive. As of June 30, First Eagle Investment Management is the largest investor in Colgate-Palmolive Company (NYSE:CL) and has stakes worth $899 million in the company. Here is what First Eagle Investments had to say about Colgate-Palmolive Company (NYSE:CL) in its second-quarter 2022 investor letter: “Shares of consumer staples giant Colgate-Palmolive have performed well as investors rotated into more recessionary-resilient defensive stocks amid the broader selloff during the second quarter. The company raised revenue guidance for 2022 but lowered its margin outlook because of higher costs for raw materials, packaging and logistics; we believe that the company’s size and market share provide it with options to mitigate the inflation challenges it faces. We continue to like Colgate- Palmolive’s dividend and previously announced $5 billion stock buyback program.” 10. The Coca-Cola Company (NYSE:KO) Number of Hedge Fund Holders: 60 The Coca-Cola Company (NYSE:KO) has the ability to drive long-term shareholder value and is one of the best long-term stocks to buy now. The company has been awarding shareholders with dividends for roughly 6 decades. At the close of the second quarter of 2022, 60 hedge funds were long The Coca-Cola Company (NYSE:KO) and held stakes worth $28.3 billion in the company. This is compared to 64 hedge funds in the previous quarter that had stakes worth $29 billion in the company. Wall Street is bullish on The Coca-Cola Company (NYSE:KO) and sees upside to the stock. This July, Deutsche Bank analyst Steve Powers raised his price target on The Coca-Cola Company (NYSE:KO) to $65 from $64 and maintained a Hold rating on the shares. On September 6, HSBC analyst Carlos Laboy raised his price target on The Coca-Cola Company (NYSE:KO) to $76 from $72 and reiterated a Buy rating on the shares. As of June 30, Berkshire Hathaway is the largest shareholder in The Coca-Cola Company (NYSE:KO) and owns 400 million shares. Warren Buffett has owned the stock for over a decade and the investment covers 8.38% of his hedge fund's second-quarter 2022 investment portfolio. Some of the top blue-chip companies that should be on long-term investors' radars include The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT). 9. Costco Wholesale Corporation (NASDAQ:COST) Number of Hedge Fund Holders: 64 On September 22, Costco Wholesale Corporation (NASDAQ:COST) released earnings for the fourth quarter of fiscal 2022. The company reported earnings per share of $4.20 and generated a revenue of $72 billion, up 15% year over year, and ahead of Wall Street estimates by $90 million. As of October 5, the stock has gained 6.8% over the past twelve months. Costco Wholesale Corporation (NASDAQ:COST) is one of the best long-term stocks to buy now because the company has a track record for profitability and financial growth. Over the past ten years, Costco Wholesale Corporation (NASDAQ:COST) has returned 20% to investors, outperforming the S&P 500's return of 12% for the same time period. Shortly after the company's earnings release, Jefferies analyst Corey Tarlowe reiterated his $610 price target and Buy rating on Costco Wholesale Corporation (NASDAQ:COST) and also said that the stock remains his "top pick". At the end of Q2 2022, 64 hedge funds were bullish on Costco Wholesale Corporation (NASDAQ:COST) and held stakes worth $4.76 billion in the company. This is compared to 61 hedge funds in the preceding quarter with stakes worth $5.41 billion. As of June 30, Fisher Asset Management is the leading shareholder in Costco Wholesale Corporation (NASDAQ:COST) and has stakes of more than $2 billion in the company. The investment covers 1.47% of Ken Fisher's 13F portfolio. 8. Walmart Inc. (NYSE:WMT) Number of Hedge Fund Holders: 67 Walmart Inc. (NYSE:WMT) is one of the largest retailers in the world by revenue and is one of the best long-term stocks to buy now. Walmart Inc. (NYSE:WMT) is a cash-rich and profitable business that can meet its long-term financial goals and drive long-term shareholder value. As of July 31, Walmart Inc. (NYSE:WMT) has a debt-to-equity ratio of 0.58. The company has a trailing twelve-month operating margin of 4% and has free cash flows of $5.4 billion. Analysts see upside to Walmart Inc. (NYSE:WMT). This August, Morgan Stanley analyst Simeon Gutman raised his price target on Walmart Inc. (NYSE:WMT) to $150 from $145 and maintained a buy-side Overweight rating on the shares. On September 14, KeyBanc analyst Bradley Thomas started coverage of Walmart Inc. (NYSE:WMT) with an Overweight rating and a $155 price target. Walmart Inc. (NYSE:WMT) is a prominent backer of the metaverse. On September 26, the company launched two new experiences, Walmart Land and Walmart's Universe of Play, in Roblox Corporation's (NASDAQ:RBLX) metaverse platform. The Walmart Land and Walmart's Universe of Play feature Walmart's aisles in a virtual world. At the end of Q2 2022, 67 hedge funds disclosed ownership of stakes in Walmart Inc. (NYSE:WMT). These funds held collective stakes of $3.78 billion in the company. As of June 30, GQG Partners owns more than 9.8 million shares of Walmart Inc. (NYSE:WMT) and is the most prominent investor in the company. 7. The Procter & Gamble Company (NYSE:PG) Number of Hedge Fund Holders: 71 The Procter & Gamble Company (NYSE:PG) is one of the best dividend-paying long-term stocks to buy now. The company's defensive business model makes it less vulnerable to changes in economic cycles and allows it to maintain its profitability. The Procter & Gamble Company (NYSE:PG) has a trailing twelve-month operating margin of 23.3% and has free cash flows of $13.5 billion. Over the past ten years, The Procter & Gamble Company (NYSE:PG) has returned 9.68% to investors. The Procter & Gamble Company (NYSE:PG) has a consensus Buy rating among Wall Street analysts. On August 2, Barclays analyst Lauren Lieberman revised her price target on The Procter & Gamble Company (NYSE:PG) to $154 from $157 and maintained a buy-side Overweight rating on the shares. At the end of the second quarter of 2022, 71 hedge funds were eager on The Procter & Gamble Company (NYSE:PG) and held stakes worth $5.53 billion in the company. As of June 30, Bridgewater Associates is the largest shareholder in the company and has stakes worth $970 million. The investment covers 4.1% of Ray Dalio's 13F portfolio. Like The Procter & Gamble Company (NYSE:PG), other profitable cash-rich companies include Johnson & Johnson (NYSE:JNJ), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT). 6. Merck & Co., Inc. (NYSE:MRK) Number of Hedge Fund Holders: 79 Merck & Co., Inc. (NYSE:MRK) is presenting an attractive entry point for long-term investors and is trading at bargain levels. As of October 5, the stock has a trailing twelve-month PE ratio of 13.47 and is offering a forward dividend yield of 3.15%. Merck & Co., Inc. (NYSE:MRK) has consistently grown its dividends for the past decade and the stock is one of the best undervalued long-term stocks to buy now. Analysts are bullish on Merck & Co., Inc. (NYSE:MRK). On August 25, Erste Group analyst Hans Engel upgraded Merck & Co, Inc. (NYSE:MRK) to Buy from Hold. The analyst noted that the company is leading its sector and has above-average profitability. On September 14, Berenberg analyst Luisa Hector raised her price target on Merck & Co., Inc. (NYSE:MRK) to $100 from $95 and upgraded the stock to Buy from Hold. As of October 5, Merck & Co., Inc. (NYSE:MRK) has gained 14.75% year to date and has a trailing twelve-month operating margin of 34.9%. At the close of Q2 2022, 79 hedge funds were bullish on Merck & Co., Inc. (NYSE:MRK) and held stakes worth $6.11 billion in the company. This is compared to 84 hedge funds in Q1 2022 with stakes worth $5.86 billion. As of June 30, Fisher Asset Management owns more than 12 million shares of Merck & Co., Inc. (NYSE:MRK) and is the largest investor in the company. The investment covers 0.78% of Ken Fisher's 13F portfolio. Here is what Chartwell Investment Partners had to say about Merck & Co., Inc. (NYSE:MRK) in its second-quarter 2022 investor letter: “In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).” Click to continue reading and see 5 Best Long-Term Stocks To Buy Now. Suggested articles: Disclosure: None. 11 Best Long-Term Stocks To Buy Now is originally published on Insider Monkey.

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11 Best FAANG Stocks To Buy Now

In this article, we will be taking a look at the 11 best FAANG stocks to buy now. To skip our detailed analysis of these stocks and the technology sector, you can go directly to see the 5 Best FAANG Stocks to Buy Now. In spite of the Fed jacking up interest rates, the technology sector […]

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11 Best FAANG Stocks To Buy Now In this article, we will be taking a look at the 11 best FAANG stocks to buy now. To skip our detailed analysis of these stocks and the technology sector, you can go directly to see the 5 Best FAANG Stocks to Buy Now. In spite of the Fed jacking up interest rates, the technology sector is continuing to attract investor attention in 2022. With rampant inflation still plaguing the market, the sector was expected to suffer from a loss in popularity. However, its cheaper valuation in a time of economic recession is managing to work in its favor. According to a Bloomberg article published this September, The Nasdaq 100 Index was 35% cheaper than its peak in 2020. Some of the best FAANG stocks like Apple Inc. (NASDAQ:AAPL) still continued to rake in cash and maintain their earnings outlooks, inspiring confidence as far as investors were concerned. What are FAANG stocks? The acronym FAANG refers to the top five American technology companies in the market today: Facebook (now known as Meta Platforms, Inc. (NASDAQ:META)), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), and Alphabet Inc. (NASDAQ:GOOG). With Netflix, Inc. (NASDAQ:NFLX) losing the favor of many investors with its performance this year, Microsoft Corporation (NASDAQ:MSFT) is steadily becoming a new member of this group of stocks. Investors' approach to the markets this year has demonstrated that staying away from the best FAANG stocks like Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) is not an option. The sheer size of the tech industry alone makes it the largest of its kind in the S&P 500, making up almost 27% of the index. As a result, many investors are now being pulled towards durable businesses like the FAANG stocks. According to a Reuters article published this July, Microsoft Corporation's (NASDAQ:MSFT) earnings results added to investor confidence in the tech sector, as they showed that the FAANG stocks were well-equipped to deal with a recession. Microsoft Corporation (NASDAQ:MSFT) rose by about 3.1% in July after the company mentioned it was targeting double-digit growth in fiscal revenue. Let's now take a look at the 11 best FAANG stocks to buy now. Our Methodology We have selected renowned tech stocks that are comparable to the Big Tech companies. These stocks were popular among the 895 hedge funds tracked by Insider Monkey in the second quarter of 2022. They have also reported positive latest earnings and demonstrate growth potential based on projected EPS growth, revenue growth, and free cash flow growth, among other factors. We have ranked these stocks based on the number of hedge funds holding stakes in them, from the lowest to the highest. We have also mentioned analyst ratings and price targets for these stocks. Best FAANG Stocks To Buy Now 11۔ International Business Machines Corporation (NYSE:IBM) Number of Hedge Fund Holders: 40 International Business Machines Corporation (NYSE:IBM) is an information technology company providing integrated solutions and services across the globe. The company offers hybrid cloud platform and software solutions, software for business automation, data and artificial intelligence solutions, and more. It is based in Armonk, New York. An Overweight rating was reiterated on shares of International Business Machines Corporation (NYSE:IBM) on October 6, by analyst Erik Woodring at Morgan Stanley. The analyst also placed a $152 price target on the stock. The company's revenue has grown by 27.28% year-over-year, and its EPS is expected to grow by 8.97% over the next three to five years. International Business Machines Corporation (NYSE:IBM) has a one-year dividend growth rate of 0.77% as well. Its EPS in the second quarter of 2022 was $2.31, beating estimates by $0.02. International Business Machines Corporation (NYSE:IBM) also brought in $15.54 billion in revenue, beating estimates by $359.15 million. Citadel Investment Group was the largest stakeholder in International Business Machines Corporation (NYSE:IBM) in the second quarter, holding 2.9 million shares worth about $420.9 million. In total, 40 funds were long the stock, with a total stake value of $948 million. International Business Machines Corporation (NYSE:IBM), like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), is one of the top tech stocks hedge funds are pouring into today. 10. Intel Corporation (NASDAQ:INTC) Number of Hedge Fund Holders: 65 Intel Corporation (NASDAQ:INTC) is a semiconductor company working to design, manufacture, and sell computer products and technologies across the globe. It offers platform products like central processing units and chipsets. It is based in Santa Clara, California. Ross Seymore at Deutsche Bank has a Hold rating on Intel Corporation (NASDAQ:INTC) shares as of September 8. The analyst also placed a $35 price target on the stock. Intel Corporation (NASDAQ:INTC) has a forward dividend per share growth rate of 4.21%, and a one-year dividend growth rate of 5.17%. The company has been investing large sums in research and development, manufacturing, and packaging technologies, a move that will benefit it in the long run. This March, Intel Corporation (NASDAQ:INTC) announced plans to invest $85 billion in the above areas. In total, there were 65 hedge funds long Intel Corporation (NASDAQ:INTC) in the second quarter. Their total stake value was $2.5 billion. 9. QUALCOMM, Incorporated (NASDAQ:QCOM) Number of Hedge Fund Holders: 71 QUALCOMM, Incorporated (NASDAQ:QCOM) is a semiconductor company working to develop and commercialize foundational technologies for the wireless industry worldwide. The company operates through its Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI) segments. It is based in San Diego, California. On September 26, Samik Chatterjee at JPMorgan reiterated an Overweight rating on shares of QUALCOMM, Incorporated (NASDAQ:QCOM). The analyst also placed a $185 price target on the stock. QUALCOMM, Incorporated's (NASDAQ:QCOM) EPS is expected to grow by 23.02% over the next three to five years. The company's revenue has grown by 29.36% year-over-year, and its forward free cash flow per share growth rate is 50.65%. QUALCOMM, Incorporated (NASDAQ:QCOM) also has a one-year dividend growth rate of 6.08%. Analyst Chatterjee sees a substantial upside in the stock in light of the stock's current valuation. QUALCOMM, Incorporated (NASDAQ:QCOM) was found among the 13F holdings of 71 hedge funds in the second quarter, and 73 funds in the previous quarter. Their total stake values were $2.8 billion and $3.6 billion, respectively. 8. NVIDIA Corporation (NASDAQ:NVDA) Number of Hedge Fund Holders: 84 NVIDIA Corporation (NASDAQ:NVDA) is another semiconductor company providing graphics, compute, and networking solutions in the US, Taiwan, China, and internationally. It offers game streaming services and related infrastructure, solutions for gaming platforms, and automotive platforms for infotainment systems. It is based in Santa Clara, California. Joseph Moore at Morgan Stanley holds an Equal Weight rating on shares of NVIDIA Corporation (NASDAQ:NVDA) as of September 21. The analyst also maintains a $182 price target on the stock. Moore believes NVIDIA Corporation (NASDAQ:NVDA) will benefit in the near future, since gaming revenues are set to recover in 2023, seeing how prices in the sector are 28% higher than the baseline price from two year ago. NVIDIA Corporation (NASDAQ:NVDA) had revenue of $6.7 billion in the fiscal second quarter of 2023, beating estimates by $3.47 million. There were 84 hedge funds long NVIDIA Corporation (NASDAQ:NVDA) in the second quarter, with a total stake value of $3.3 billion. Of these funds, Citadel Investment Group was the largest stakeholder in the company, holding 17.7 million shares worth $2.7 billion. 7. Advanced Micro Devices, Inc. (NASDAQ:AMD) Number of Hedge Fund Holders: 87 Advanced Micro Devices, Inc. (NASDAQ:AMD) is another information technology company operating in the semiconductor industry. The company offers chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services, among more. It is based in Santa Clara, California. An Overweight rating was maintained on shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) on October 5, placed by analyst Aaron Rakers at Wells Fargo. The analyst also placed a $90 price target on the stock. Advanced Micro Devices, Inc.'s (NASDAQ:AMD) working capital growth year-over-year stands at a rate of 61.17%. The company's EPS is expected to grow by 30.95% over the next three to five years, and its revenue has grown by 61.74% year-over-year. This October, Advanced Micro Devices, Inc. (NASDAQ:AMD) also led chip stocks higher for the third straight day of gains this month. Out of 895 funds, 87 funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD) in the second quarter, with a total stake value of $4.8 billion. In comparison, 83 funds were long the stock in the previous quarter, with a total stake value of $6.9 billion. 6. Alibaba Group Holding Limited (NYSE:BABA) Number of Hedge Fund Holders: 106 Alibaba Group Holding Limited (NYSE:BABA) is an internet and direct marketing retail company operating in the consumer discretionary sector. The company provides technology infrastructure and marketing reach to help merchants, retailers, and businesses to engage with their consumer bases in China and internationally. It is based in Hangzhou, China. On October 3, Jiong Shao at Barclays kept an Overweight rating on Alibaba Group Holding Limited (NYSE:BABA) shares, while placing a $135 price target on the stock. This October, Alibaba Group Holding Limited (NYSE:BABA) led Chinese tech stocks in the broader market, rising 4.6% on October 4. The company's revenue has grown by 10.87% year-over-year, and its EPS is expected to grow by 1.74% over the next three to five years. In the fiscal first quarter of 2023, Alibaba Group Holding Limited (NYSE:BABA) had an EPS of $1.74, beating estimates by $0.18, while its $30.46 billion revenue also beat estimates by $296.3 million. Alibaba Group Holding Limited (NYSE:BABA) had 106 hedge funds long its stock in the second quarter, with a total stake value of $7.4 billion. Fisher Asset Management was the largest stakeholder in the company, holding 14.5 million shares worth $1.6 billion. Distillate Capital Partners LLC, an investment management firm, mentioned Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2022 investor letter. Here's what the company said: “Changes & Regional Weights: The largest new position is Alibaba Group Holding Limited (NYSE:BABA), which underperformed considerably and has seen its enterprise value fall by almost two thirds from its peak despite a net cash position on its balance sheet.” Alibaba Group Holding Limited (NYSE:BABA), like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT), has been on the rise in the tech sector for many year, attracting positive investor attention. Click to continue reading and see the 5 Best FAANG Stocks to Buy Now. Suggested articles: Disclosure: None. 11 Best FAANG Stocks to Buy Now is originally published on Insider Monkey.

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10 Best Fast Money Stocks To Buy According To Hedge Funds

In this article, we discuss 10 best fast money stocks to buy according to hedge funds. If you want to read about some more fast money stocks, go directly to 5 Best Fast Money Stocks To Buy According To Hedge Funds. Raging inflation and high interest rates continue to weigh on consumer spending in the […]

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10 Best Fast Money Stocks To Buy According To Hedge Funds In this article, we discuss 10 best fast money stocks to buy according to hedge funds. If you want to read about some more fast money stocks, go directly to 5 Best Fast Money Stocks To Buy According To Hedge Funds. Raging inflation and high interest rates continue to weigh on consumer spending in the past few months, raising investor concerns around an economic recession in the United States that could slow down global growth. Final estimates from the US Bureau of Economic Analysis reveal that the US economy shrank for the second consecutive quarter in the three months ended June, meeting the technical criteria for a recession. The GDP shrank by 0.6% on an annualized basis in the second quarter, below the initially reported 0.9% decline. The numbers indicate that storm clouds are likely to hover over the marketplace in the coming months. However, not all is doom and gloom. Newly released job data shows that payrolls increased 275,000 in September, while the unemployment rate held at 3.7%. Per a recent survey, top US economists expect average hourly earnings to increase 0.3% month-over-month in September, compared to 5.1% from a year ago. The latter number is below the figures estimated for the month of August. In this macro environment, investors are eagerly looking for stocks that offer a healthier risk/reward ratio in the near-term, primarily because investments in traditional growth offerings are a no-go. Some of the best stocks to monitor in this regard include Microsoft Corporation (NASDAQ:MSFT), The Walt Disney Company (NYSE:DIS), and Humana Inc. (NYSE:HUM), among others discussed in detail below. As policymakers try to beat inflation, these options could offer investors access to fast money. Our Methodology The companies that have upcoming growth catalysts were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm. Photo by buian_photos on Unsplash Best Fast Money Stocks To Buy According To Hedge Funds 10. LyondellBasell Industries N.V. (NYSE:LYB) Number of Hedge Fund Holders: 37 LyondellBasell Industries N.V. (NYSE:LYB) operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. It is one of the best fast money stocks to invest in. The company has grappled with declining prices from commodity chemicals and lower volumes in the past few months. However, the attractive yield and dividend history offers investors some much-needed solidity as the market environment becomes more volatile. On September 16, Deutsche Bank analyst David Begleiter maintained a Hold rating on LyondellBasell Industries N.V. (NYSE:LYB) stock and lowered the price target to $85 from $92, noting that the company was seeing weaknesses across core segments driven by higher costs. At the end of the second quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $953.5 million in LyondellBasell Industries N.V. (NYSE:LYB), compared to 32 in the previous quarter worth $744 million. Just like Microsoft Corporation (NASDAQ:MSFT), The Walt Disney Company (NYSE:DIS), and Humana Inc. (NYSE:HUM), LyondellBasell Industries N.V. (NYSE:LYB) is one of the best fast money stocks to buy now according to hedge funds. In its Q3 2021 investor letter, Miller Howard Investments, an asset management firm, highlighted a few stocks and LyondellBasell Industries N.V. (NYSE:LYB) was one of them. Here is what the fund said: “We initiated a position in LyondellBasell (LYB). Chemical markets are currently robust given the combination of 2020 plant shutdowns and strongly recovering demand. Despite the tailwinds, Lyondell trades at a low valuation and yields just under 5%.” 9. Las Vegas Sands Corp. (NYSE:LVS) Number of Hedge Fund Holders: 42 Las Vegas Sands Corp. (NYSE:LVS), together with its subsidiaries, develops, owns, and operates integrated resorts in Asia and the United States. It is one of the top fast money stocks to invest in. The stock has climbed in the past few weeks on the back of reports that the firm is the frontrunner to operate in the home of the Mets. Steve Cohen, the owner of the Mets, is engaging city officials and casino owners to discuss the options to open a casino in Citi Field. The shares have also benefited from easing of virus restrictions across the globe. On September 26, Citi analyst George Choi maintained a Buy rating on Las Vegas Sands Corp. (NYSE:LVS) stock and raised the price target to $60 from $58, highlighting the resumption of Macau-bound e-visas as a positive surprise. Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Las Vegas Sands Corp. (NYSE:LVS), with 4.1 million shares worth more than $138.6 million. In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Las Vegas Sands Corp. (NYSE:LVS) was one of them. Here is what the fund said: “Certain travel-related businesses remain cyclically depressed not secularly challenged and should rebound as economic strength re-emerges. For example, the business operations of Macau-centric casino and gaming companies such as Las Vegas Sands Corporation (NYSE:LVS) have yet to recover due to the ongoing COVID-19 challenges in China. We expect business to rebound sharply when economic growth recovers just as it did in Las Vegas. Las Vegas Sands Corporationis a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. It is currently valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.” 8. Archer-Daniels-Midland Company (NYSE:ADM) Number of Hedge Fund Holders: 42 Archer-Daniels-Midland Company (NYSE:ADM) procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients. It is one of the elite fast money stocks to invest in. On August 17, the company announced that it had partnered with animal free dairy company, New Culture, to increase the development and commercialization of alternative dairy products. Under the deal, New Culture will also gain access to a range of plant-based ingredients and flavors offered by the former. On August 12, Wolfe Research analyst Sam Margolin initiated coverage of Archer Daniels-Midland Company (NYSE:ADM) with an Outperform rating and a $117 price target, noting that the nutrition section for the firm alone provides very competitive dividend growth. Among the hedge funds being tracked by Insider Monkey, Washington-based firm Markel Gayner Asset Management is a leading shareholder in Archer-Daniels-Midland Company (NYSE:ADM), with 1.5 million shares worth more than $113.6 million. In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Archer-Daniels-Midland Company (NYSE:ADM) was one of them. Here is what the fund said: “ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.” 7. Constellation Brands, Inc. (NYSE:STZ) Number of Hedge Fund Holders: 44 Constellation Brands, Inc. (NYSE:STZ) produces, imports, markets, and sells beer, wine, and spirits. It is one of the premier fast money stocks to invest in. The shares have slid after President Obrador of Mexico announced that the Mexican government will no longer be granting new permits to beer production companies in the region. However, the firm remains well-positioned from a rise in demand for beverages as international travel resumes and the holiday season approaches. On September 30, investment advisory Barclays maintained an Overweight rating on Constellation Brands, Inc. (NYSE:STZ) stock and lowered the price target to $272 from $284. Analyst Lauren Lieberman issued the ratings update. At the end of the second quarter of 2022, 44 hedge funds in the database of Insider Monkey held stakes worth $1.29 billion in Constellation Brands, Inc. (NYSE:STZ), compared to 41 in the preceding quarter worth $982 million 6. IQVIA Holdings Inc. (NYSE:IQV) Number of Hedge Fund Holders: 53 IQVIA Holdings Inc. (NYSE:IQV) provides advanced analytics, technology solutions, and clinical research services to the life sciences industry. It is one of the most prominent fast money stocks to invest in. On July 21, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $2.44, beating estimates by $0.06. The revenue over the period was $3.44 billion, beating estimates by $50 million. On August 24, Credit Suisse analyst Dan Leonard initiated coverage of IQVIA Holdings Inc. (NYSE:IQV) stock with an Outperform rating and a $300 price target, noting that the firm's combined data and research assets will continue to drive industry-leading sales growth. At the end of the second quarter of 2022, 53 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in IQVIA Holdings Inc. (NYSE:IQV), compared to 62 in the previous quarter worth $3.3 billion. Alongside Microsoft Corporation (NASDAQ:MSFT), The Walt Disney Company (NYSE:DIS), and Humana Inc. (NYSE:HUM), IQVIA Holdings Inc. (NYSE:IQV) is one of the best fast money stocks to buy now according to hedge funds. In its Q2 2022 investor letter, L1 Capital International, an asset management firm, highlighted a few stocks and IQVIA Holdings Inc. (NYSE:IQV) was one of them. Here is what the fund said: “IQVIA Holdings Inc. (NYSE:IQV) is the leading global provider of advanced analytics, technology solutions and clinical research services to the life sciences industry. Behind many of the breakthroughs in the treatment of COVID-19 you will find IQVIA. It is the largest contract research organisation (CRO) globally, planning and managing clinical trials as well as reporting on safety and efficacy in the real world following regulatory approval. IQVIA is not the life science industry gold miner, but rather provides the ‘picks and shovels’ to support others discover life sciences industry gold. Few companies can compete with IQVIA – a proprietary database of over 1.2 billion non-identified patient records, a global healthcare IT network that receives and processes 100 billion healthcare records annually while ensuring privacy and security, combined with unique technology, data analytics and logistical capabilities managed by 80,000 employees in over 100 countries. IQVIA delivers information and insights on over 85% of the world’s pharmaceuticals, as measured by global sales. Disruption risk to this highly specialised but comprehensive network is limited (…read more) Click to continue reading and see 5 Best Fast Money Stocks To Buy According To Hedge Funds. Suggested Articles: Disclosure. None. 10 Best Fast Money Stocks To Buy According To Hedge Funds is originally published on Insider Monkey.

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Dow Jones Futures Drops On Jobs Report; AMD Stock Tumbles On Revenue Warning

Dow Jones futures dropped Friday morning on the September jobs report. AMD dived more than 5% after a third-quarter revenue warning.

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Dow Jones Plunges 500 Points On Jobs Report; AMD Stock Tumbles On Revenue Warning The Dow Jones Industrial Average plunged 500 points Friday on the September jobs report. AMD lost 8% after a third-quarter revenue warning. The Dow Jones Industrial Average plunged 500 points Friday on the September jobs report. AMD lost 8% after a third-quarter revenue warning.

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Microsoft, Intel share losses contribute to Dow's 562-point fall

The Dow Jones Industrial Average is in a selloff Friday afternoon with shares of Microsoft and Intel delivering the stiffest headwinds for the blue-chip...

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The Dow Jones Industrial Average is in a selloff Friday afternoon with shares of Microsoft and Intel delivering the stiffest headwinds for the blue-chip average. The Dow DJIA, Editor's Note: This story was auto-generated by Automated Insights, an automation technology provider, using data from Dow Jones and FactSet. See our market data terms of use.

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