Stock market news live updates: Stocks jump to recover some losses, silver prices surge

Bloomberg
Robinhood Narrows Trading Restrictions to Eight Companies
(Bloomberg) -- Robinhood Markets Inc. reduced the number of companies with trading restrictions to eight from 50, ahead of Monday’s trading session, according to an update on its website.The current list includes GameStop Corp., AMC Entertainment Holdings Inc., BlackBerry Ltd., Express Inc., Genius Brands International Inc., Koss Corp., Naked Brand Group Ltd. and Nokia Oyj.Opening new positions in these securities is limited, according to Robinhood’s website, which listed the maximum number of shares and options contracts each user can hold. For those whose current holdings already exceed the limits, their positions won’t be sold or closed.Robinhood put buying restrictions in place after its clearinghouse deposit requirements for equities increased last week, the company said in a blog post on Friday. “It was not because we wanted to stop people from buying these stocks,” Robinhood said.Rumors that the company was pressured by Citadel or other market makers to restrict trading on GameStop and other “meme stocks” are false, Robinhood CEO Vlad Tenev said on social audio app Clubhouse in an appearance with Tesla Inc. Chief Executive Officer Elon Musk. Rather, it was because the National Securities Clearing Corp. sought $3 billion in deposits, which the firm negotiated down to $700 million, he said.“We knew this was a bad outcome for customers,” Tenev said. “But we had no choice as we had to conform to our requirements.”The trading app, popular among retail investors who fostered the rise of GameStop stock, has been under fire across the political spectrum for its decision to restrict trading of high-flying stocks that surged after being touted on social media.Senator Elizabeth Warren on Sunday called for a broader review by the U.S. Securities and Exchange Commission on recent trading swings and said a broker-dealer like Robinhood that invites a lot of individual investors needs to operate “under some basic rules.”Robinhood’s Trading Restrictions Not Illegal: Fmr. SEC Counsel (Video)“You can’t do that in the middle of a trading cycle,” Warren said of Robinhood’s trading limits on CNN’s “State of the Union.” “It’s not about protecting people from making bad trades. It’s about keeping the playing field level.”A representative for Robinhood declined to comment beyond the website’s update.Multiple lawsuits have been filed against Robinhood, mostly alleging restrictions by the trading platform that amounted to a breach of contract. Still, investors who sued online brokerages over claims they were unfairly blocked from trading shares may have a long wait before their cases are resolved.(Updates with CEO comments in 5th, 6th paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
6h ago
InvestorPlace
Reddit’s r/WallStreetBets Just Took Down a Hedge Fund. You’ll Love What Comes Next.
As a member of r/WallStreetBets, a popular Reddit forum, let me tell you this: It wasn’t supposed to ever happen. Our happy band of rag-tag investors was supposed to use our little corner of the internet to exchange risky stock investment ideas, not take down one of America’s most prominent hedge funds. Source: Mehaniq / Shutterstock.com Yet here we are. In the past week, traders reading WSB and other forums have pushed GameStop (NYSE:GME) and a host of other highly shorted stocks to impossibly high levels, bankrupting at least one hedge fund and causing several platforms to halt trading. So ham-handed was Wall Street’s response that Congress members Ted Cruz and Alexandria Ocasio-Cortez, long-sworn enemies, even managed a coordinated tongue-wagging (Twitter-wagging?) at the U.S. financial system. But as Citadel picks up the pieces of Melvin Capital and Reddit users find their next short-squeeze target, people are starting to ask, “what’s next?”InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reddit’s r/WallStreetBets Gives Citron a Taste Let me be clear: You won’t find my posts on r/WallStreetBets. As much as I read and enjoy the platform, my work and ethics prevent me from talking about any stock I own. (Sorry, Elon Musk. I wish I were you.) Wall Street Bets has always been about having fun. Many of the posts are intentionally moronic — think out-of-the-money calls on failing retailers — and there are plenty of contributors who show screenshots of life savings going to zero. Profitable or not, it was about finding the joys and absurdities of market speculation. Back in November, GameStop was among these fun little ventures. And it all seemed quite a standard fare for the subreddit billed as “4chan finding a Bloomberg Terminal.” GameStop fans cheered on buyers while cursing out Melvin Capital for shorting the stock. All in hopes of realizing America’s favorite pastime: making a lot of money with as little effort as possible. But then Citron Research changed it all. Citron Research? Meet r/WallStreetBets On Jan. 19, respected short-seller Andrew Left managed to finally pick the wrong target. As long-time Wall Street outsider, Mr. Left made a name for himself exposing companies like Valeant Pharmaceuticals, whose executives were channel stuffing and spiking the prices of the lifesaving drugs. He would have made a great WSB contributor, if he were willing to put up with hate speech from 15 year olds. But then something happened. The day before the presidential inauguration, Mr. Left announced he would make a case why GameStop shares were worth only $20. Perhaps Mr. Left was right to target GameStop, a shrinking company that still awarded its executives $20 million. Or he could have been wrong — at $20, GameStop would still be worth less than half of Best Buy (NYSE:BBY) when adjusted for sales. But that didn’t matter one bit. Suddenly, GameStop became more than a money-making venture to Redditors. It became a way to fight back against Wall Street greed; now it was war. How Did WSB Do It? In a financial system that values a stock based on its last trade price, even tiny trades at weird prices will revalue a hedge fund’s entire holding. In other words, a few well-timed buys can cause mayhem, especially in stocks with few sellers. That’s exactly what happened with GME. Until then, short interest had remained relatively stable. Market makers, the underpinnings of the U.S. financial system, were doing their job in matching orders and sales. That all changed on Wednesday when prices jumped from $150 to $350. As market makers began to seize up, markets started going wild. That spelled problems for Robinhood. On Wednesday, Robinhood halted trading for GameStop and almost a dozen other companies. “In order to protect our firm and protect our customers,” CEO Vlad Tenev would later tell CNBC’s Andrew Ross Sorkin, “we had to limit buying in these stocks.” Can Robinhood Go Under? In the world of trading, most conservatively-run platforms don’t have trouble managing liquidity. As long as you hold enough capital and maintain disciplined margin requirements, it’s rare for your clearinghouse to force you to raise fresh capital. But when it comes to Wall Street, financial companies all seem to run into the same issue — when your customers are making so much money, it’s hard to resist the temptation to join them. Financial regulators have long known these Wall Street shenanigans. Banks from Bear Stearns to Barings all went under when they tried trading customer money as their own, leaving taxpayers and shareholders footing the bill. Many more have experimented with bare-minimum capitalization — only later to realize their disastrous mistakes. So, over the years, smart governments have occasionally found the willpower to ban such practices and enforce strict margin and capital requirements. (Often, these rules would come undone by even smarter financial lobbyists.) Today, many platforms use a loophole to lease customer securities for profit. And when GME stock can get leased out at 25% interest rates to short-sellers, there’s a great temptation for these financial firms to double-dip. Did Robinhood do that? Possibly. Despite Robinhood’s claims that its trading shutdown was proactive, the company still drew down capital lines and banned users from buying more GameStop shares — a signal that Robinhood itself might have been short on capital and shares. (Since Robinhood is a private company, we may never know the truth.) But will Robinhood get in regulatory trouble? Almost certainly. The company banned trading in a dozen stocks on Wednesday during peak investment demand — reportedly because the company needed time to raise fresh capital. So, as retail investors watched from the sidelines, hedge funds cashed out at otherwise lower prices. In a very real sense, Robinhood arguably saved institutions billions of dollars at investors’ expense. Should We Be Scared? As Wall Street picks up the remnants of Melvin Capital and the GME fallout, two things have become clear. 1) “Dumb money” isn’t so dumb after all, and 2) “smart money” is getting taken to the woodshed. First, let’s consider what Wall Street has long called “dumb money,” the retail investor. Most of these people are like you and me — investing the majority of savings in long-term stocks for retirement, while playing around with a small portion for fun. And the gleeful absurdity of r/WallStreetBets aside, most retail investors tend to know what they’re buying (even if they get the valuations wrong sometimes.) The top-100 Robinhood stocks represent a wide swatch of consumer-related companies that have grown in real-world popularity as well as stock-related fame. Second, the GME fiasco has revealed “smart money” for the absurd bets they sometimes take. While a long-short hedge fund can help investors smooth out gains, they’re often as bad as what they call “dumb money” in closing out losses. Melvin Capital, for instance, lost 30% of its net worth in the first three weeks of January. But it took another six days (after the stock had gained another 250%) for the hedge fund to finally relinquish its mammoth position. Since then, other hedge funds have stepped up to replace Melvin in this high-stakes game of “pass the hot potato,” as if trying to prove r/WallStreetBets’ point that hedge funds will always try to make more money off regular investors if they believe the odds are right. GameStop also exposed the revolving door behind hedge funds and market makers. When Ken Griffin’s Citadel LLC, a $35 billion fund, bailed out Melvin Capital, Twitter users quickly pointed out that Citadel also owns a market-making operation that services none other than Robinhood. Where to Go from Here? Investors looking to soak the financial system would do well to buy index funds and sit on them forever. You might not get the gleeful joy of seeing a hedge fund blow up, but companies like Citadel that rely on retail money will see revenues dry up. But for those looking to invest wisely, consider this. With retail investors’ newfound power, you can expect short-sellers to think twice about selling a company. Citron Research’s Andrew Left has already vowed never again to publish short-seller reports. Other hedge funds are nervously watching. That means hot stocks will move faster than ever. As Reddit users have learned this week, it doesn’t take much to influence stock prices when only the marginal trade counts. And with no one willing to short-sell stocks in the face of an angry mob, price spikes will become increasingly common. You can expect many winners and losers. The stock market, after all, is mostly a fixed-sum game. But for long-term investors, the same truth still holds: The road to consistent wealth has always been in buying a group of high-quality investments bought at a reasonable price. Practice that discipline with your core portfolio, and you’ll make plenty of merriment with joining me in reading about the trials and tribulations of others on r/WallStreetBets. On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tom Yeung, CFA, is a registered investment advisor on a mission to bring simplicity to the world of investing. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post Reddit’s r/WallStreetBets Just Took Down a Hedge Fund. You’ll Love What Comes Next. appeared first on InvestorPlace.
2d ago
Benzinga
Elon Musk Turns Tough Interviewer For Robinhood CEO, Demands Answers On GameStop Events
Robinhood Co-founder and CEO Vladimir Tenev made a surprise appearance on Clubhouse early Monday with Tesla Inc (NASDAQ: TSLA) counterpart Elon Musk, who grilled him extensively on recent events. What Happened: Tenev said it had been a “surreal” week for him, in a reference to the Reddit investor-led short squeeze rally in the shares of Gamestop Corp (NYSE: GME), Nokia Oyj (NYSE: NOK), AMC Entertainment Holdings Inc (NYSE: AMC), Blackberry Ltd (NYSE: BB) and others. The brokerage head referred to these stocks as “meme stocks” throughout the broadcast where he appeared to clarify the events of the tumultuous week — when purchase of such stocks was restricted on the popular trading app. Tenev said the app experienced “unprecedented volume” and “load on the system.” He pointed out that the net buys increased exponentially. Robinhood was among the top apps on Apple Inc (NASDAQ: AAPL) and Alphabet Inc’s (NASDAQ: GOOGL) (NASDAQ: GOOG) respective app stores as of last week, Tenev noted. Detailing the sequence of events that led to the suspension of buying in the Reddit-fueled stocks, he said Robinhood received a demand for $3 billion from the National Securities Clearing Corporation in the wee hours of Thursday. NSCC provides clearing, settlement, risk management, and central counterparty services. The executive explained that Robinhood had to put up money for the NSCC based volatility and the concentration of securities but the formula behind the demand was not fully known to him. Why It Matters: The NSCC is not a government agency but is rather controlled by a consortium, as per Tenev. The executive said that on Monday’s opening, some of the “stringent limits” placed on the hot stocks will be removed. Tenev said that some limits would always be in place. “If someone decided to deposit $100 billion and trade in one stock that’s not gonna be possible.” “Citadel and other market makers were not involved in it,” said Tenet in reference to the trading restrictions. NSCC had lowered its deposit requirements to $1.4 billion after Robinhood reached out. After explanations were given on the restrictions, the clearinghouse dropped the deposit to $ 700 million. Tenev admitted that restricting trade was a “bad outcome for customers” but other brokers had also placed similar restrictions. In a lighter moment in the interview, Musk asked Tenev if he was being held hostage while handing out this explanation, to which the Robinhood CEO replied in negation, saying “thanks for asking.” Related Links: Robinhood Gets B Funding, Taps Credit Line As It Prepares To Resume Trading Of GameStop, Other Hot Stocks See more from BenzingaClick here for options trades from BenzingaElon Musk Talks Self-Driving, Batteries, Space, Neuralink, COVID-19 Vaccines, Bitcoin In Clubhouse AppearanceTesla, Charles Schwab — Stocks NYSRTS, One Of US' 10 Largest Pension Funds, Purchased In Q4© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
6h ago
Bloomberg
Citadel Silver Holding Exposes Rifts in WallStreetBets Army
(Bloomberg) -- Ken Griffin’s Citadel has once again found itself at the center of a WallStreetBets drama, this time over the firm’s holdings of silver.The precious metal has become a popular buying target for retail investors keen to inflict losses on hedge funds, after posts on WallStreetBets claimed the market was ripe for a short squeeze. Yet some members of the Reddit forum have responded with pleas to avoid the trade, saying Citadel stands to benefit as a major holder of the largest silver exchange-traded fund.“CITADEL IS THE 5TH LARGEST OWNER OF SLV,” one WallStreetBets user wrote on Sunday, referring to the iShares trust’s ticker symbol. “IT’S IMPERATIVE WE DO NOT ‘SQUEEZE’ IT.”Read more: Silver Spikes Past $30 as Retail Investors Swarm Biggest TargetCitadel Advisors LLC owned about 6 million shares of the iShares Silver Trust as of Sept. 30, equivalent to a 0.93% stake, data compiled by Bloomberg show.While these holdings may well be related to its role as one of the world’s largest market makers -- the firm also held shares in at least 17 other silver companies and ETFs -- the debate they have caused highlights that traders in the WallStreetBets forum are far from a homogeneous group.They stunned the world by banding together to fuel epic gains in heavily shorted stocks including GameStop Corp. In the past few days investors have been watching the metal’s rally for clues on the staying power of this David-vs-Goliath buying spree.Silver futures on the Comex jumped as much as 13% on Monday. That pushed prices above $30 an ounce to the highest level since 2013, but the gains are so far tiny relative to GameStop’s 16-fold surge since mid-January.A phone call to Citadel’s Chicago office outside regular business hours went unanswered. It’s unclear whether the firm’s holdings of iShares Silver Trust or other silver-related securities have changed since September -- given its market-making role, it is likely they would. Inflows into the iShares trust surged by a record $944 million on Friday as trading in the ETF soared.As well as being one of the biggest market makers, Citadel runs one of the largest hedge funds in the world. The firm drew the ire of the WallStreetBets crowd last month after it injected cash into hedge fund Melvin Capital, which lost about 53% in January after being hit by a short squeeze on shares including GameStop.Anger toward Citadel among WallStreetBets users only increased after Robinhood Markets imposed curbs on trading GameStop last week. Some alleged that Griffin, whose firm helps execute orders from Robinhood customers, might be behind an attempt to stamp out the rebellion of individual investors. Citadel and Robinhood both denied any involvement by the billionaire in the decision.(Updates with more market-making context.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
2h ago
Yahoo Finance
GameStop traders may inflict even more pain on Wall Street: Goldman
Wall Street is far from being out of the woods as retail investors have their moment.
4h ago
MarketWatch
EV battery maker Microvast to go public via merger with SPAC Tuscan Holdings in deal valued at about $3 billion
Microvast Inc., a maker of electric vehicle battery technology, said Monday it is going public via a merger with special purpose acquisition corporation Tuscan Holdings Corp. in a deal with an implied equity valuation of $3 billion. Upon closing, the combined company will be renamed Microvast Holdings Inc. and will list on Nasdaq under the new ticker symbol "MVST." The company was founded in 2006 in Houston, Texas, and develops batteries for commercial and specialty vehicles. It's R&D and production capabilities span battery materials, multiple battery cell chemistries, modules and packs. Its batteries are being used in almost 30,000 vehicles in 160 cities and 19 countries, for a total of more than 3.8 billion miles traveled, the companies said in a statement. The new company will have up to $822 million in cash. The deal is expected to close in the second quarter. Tuscan Holdings shares were halted premarket for the news. SPACs, or blank-check companies, go public without having a business, and then have two years to acquire one or more. They have proved to be highly popular during the pandemic.
3h ago
Yahoo Finance
Robinhood in a tough position as it faces a wave of lawsuits over GameStop saga
Since the Robinhood mobile trading app temporarily blocked its customers from buying stock in GameStop, AMC, Entertainment, and 11 other companies last Thursday, it has been hit with at least 33 federal lawsuits across the country.
1h ago
Yahoo Finance
'Spill the beans man:' Tesla's Elon Musk grills Robinhood CEO on GameStop/Reddit trading saga
Elon Musk spontaneously interviewed Robinhood CEO Vlad Tenev late Sunday evening, injecting himself into the fray of the retail investing frenzy that’s sent markets into a tailspin.
10m ago
MarketWatch
Nokia upped to buy after Ericsson results
Nokia was upgraded to buy from sell at DNB Markets, which also lifted its price target to €4.80 ($5.80) from €4. Analyst Frank Maao said the share price has come down after the retail frenzy last week, the read-across from Ericsson's fourth quarter suggests there is 5G cycle strength in Northeast Asia excluding China, the capital markets day in March could be another catalyst and there could be increasing order momentum from those looking to diversify away from Chinese gear. Nokia shares rose nearly 8% in premarket trade.
2h ago
Bloomberg
Apple Selling Bonds After Cautious Outlook Masks Blowout Quarter
(Bloomberg) -- Apple Inc. is selling bonds just days after a blowout period for sales, still eager to take advantage of cheap borrowing costs amid a cautious earnings outlook.The company is issuing debt in six parts, according to a person with knowledge of the matter. The longest portion of the offering, a 40-year security, may yield between 115 and 120 basis points above Treasuries, said the person, who asked not to be identified as the details are private.Apple is coming off a quarter in which revenue topped $100 billion for the first time. Executives didn’t provide an official forecast in reporting earnings Wednesday, but warned that sales growth from AirPods and other wearables will decelerate in the current period.The tech giant said it will use the proceeds for general corporate purposes, including buying back stock and paying dividends. It may also be used in funding for working capital, capital expenditures, acquisition and repayment of debt, the person said.Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are managing the bond sale, the person said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1h ago
Investopedia
10 Ways to Reduce Your 401(k) Taxes
How you take a 401(k) distribution can greatly impact your taxes. Read about 10 ways to help reduce the taxes you pay on 401(k) withdrawals.
1d ago
Barrons.com
After 10 Years of Underperformance, Commodities Are Set to Boom. Here’s How to Play the Rally.
Commodities are starting to revive after a 10-year bear market. The recovery in commodity prices, Goldman Sachs analysts say, “will actually be the beginning of a much longer structural bull market” that could rival that of the 1970s, when gold rose 25-fold, and the mid to late 2000s, when oil peaked at over $140 a barrel. Global economies look poised to revive in the second half of 2021 as pandemic restrictions ease.
2h ago
Reuters
Exclusive-Mexican tax authorities to seek over $500 million from Canada's First Majestic
Mexico's government plans to seek more than $500 million from Canadian miner First Majestic Silver Corp in what it says are owed taxes for artificially keeping its silver prices low over the past decade, two sources told Reuters. Audits dating back to 2010 show that the company owes about 11 billion pesos ($534.36 million), the sources said. So far, Mexico's Tax Administration Service, or SAT, has sought 5.5 billion pesos ($267.18 million) in tax debt, with the remaining half of the total yet to enter into formal disputes, according to the sources.
1h ago
Bloomberg
Silver Spikes Past $30 as Retail Investors Swarm Biggest Target
(Bloomberg) -- Silver broke above $30 an ounce as the precious metal took center stage in the retail investor frenzy sweeping through markets.Most-active futures jumped as much as 13% to $30.35 an ounce on the Comex, the highest in eight years. That followed a weekend buying binge that overwhelmed online sellers of silver coins and bars from the U.S. to Australia. BlackRock Inc.’s iShares Silver Trust, the largest exchange-traded product tracking the metal, recorded an unprecedented $944 million net inflow on Friday.Like the buying stampede in GameStop Corp. and other small-cap stocks that has captivated the financial world in recent weeks, silver’s advance can be traced to Reddit’s WallStreetBets forum. One post last week declared the metal “THE BIGGEST SHORT IN THE WORLD” and encouraged traders to pile into the iShares trust as a way to stick it to big banks.Yet silver differs in important ways from stocks like GameStop. For one, the scope for a short squeeze in silver is far less obvious: money managers have had a net-long position on the metal since mid-2019, futures and options data from the Commodity Futures Trading Commission show.The market for silver is also by some measures much deeper than those for smaller stocks like GameStop. The bricks-and-mortar video game retailer had a market capitalization of about $1.4 billion in mid-January, before the Reddit frenzy sent the company’s value soaring more than 16-fold. By contrast, London vaults held 1.08 billion ounces of silver at the end of November, according to LBMA data. That’s worth almost $32 billion at current prices.Why Reddit traders will learn commodities aren’t stocks: Macro ViewWhat’s more, it’s unclear how long retail investors will stick to the silver trade. Already some prominent members of the WallStreetBets forum have advised against it, with some noting that Ken Griffin’s Citadel Advisors LLC, a favorite bogeyman of the Reddit crowd, is listed as one of the biggest shareholders of the iShares silver trust.Whether or not the rally fizzles, it could have ramifications beyond what has typically been a relatively niche corner of the commodities world. As the first high-profile target of the retail frenzy to start trading on Monday, silver may help set the tone this week for managers trying to gauge how Reddit-fueled volatility will impact their risk models and potentially cascade from one asset to the next.Momentum Trade“Last week’s events have shown it to be unwise to doubt the purchasing power of retail investors, and this has been sufficiently demonstrated again on the silver market,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. “They may find it a bit harder to squeeze the silver market than they did with GameStop -- the former is much bigger and more liquid -- but the momentum looks like it rests with them at the moment.”Early trading pointed to more gains for SLV on Monday. The ETF was up over 10% in the pre-market session, on huge volumes. As of 9:16 a.m. in New York 27.1 million shares had changed hands.Futures were trading 11% higher on the Comex, after rising more than 5% last week. Spot silver climbed to as high as $30.1003 an ounce. Other precious metals also advanced. Spot gold rose 0.9%, while platinum jumped 3.9%.The buying frenzy also fed into mining shares. Mexican silver miner Fresnillo Plc surged as much as 21% in London trading. China Silver Group Ltd. rose as much as 63% in Hong Kong, while Australia’s Silver Mines Ltd. gained as much as 49%.The calls to buy silver began appearing on WallStreetBets as early as Wednesday, when the mania surrounding GameStop reached a fever pitch. Some of the posts touched on a similar David-vs-Goliath theme that has inspired individual investors to take on short-selling hedge funds: “Any short squeeze in silver paper shorts would be EPIC. We know billion (sic) banks are manipulating gold and silver to cover real inflation.”But that narrative isn’t as straightforward as the one surrounding GameStop, one of the most-shorted stocks in the U.S. before it began surging this month.Silver has performed well over the past year, rallying more than 60% on a weaker dollar and hopes for an end to the pandemic. It has also attracted bullish commentary from some of the biggest Wall Street banks. Goldman Sachs Group Inc. described silver as the “preferred precious metal” in a Jan. 27 research note that had a price target of $30 an ounce. Net-bullish bets by money managers rose to a three-week high in the week to Jan. 26, according to CFTC data compiled by Bloomberg.Short-term forward rates on the London silver market flattened on Monday, indicating strong demand for the metal in coming weeks.“I can envisage a scenario where maybe a hedge fund has purchased maybe a short-term tactical long position, so the upside could be a combination of several factors now,” said Philip Newman, managing director at consultancy Metals Focus.Locking UpStill, that hasn’t stopped some retail investors from piling in. By Sunday, sellers of physical silver including Apmex -- often called the Walmart of precious metals products in North America -- said they were unable to process orders until Asian markets opened because of record demand. “It’s been nuts,” said John Feeney, business development manager at Guardian Vaults in Sydney.Ken Lewis, Apmex’s chief executive officer, said the decision to temporarily suspend silver sales was unprecedented in the company’s history and that it may take longer then usual to fill orders going forward.“As we evaluate the markets, it is difficult to know where silver’s price and demand will go in the coming day and weeks,” Lewis said, adding that his firm is “locking up any metal we can find in the marketplace.”(An earlier version of this story corrected value of London vault holdings in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
58m ago
InvestorPlace
7 Stocks Selling at a Discount As January Comes To An End
Nowadays it’s not really popular to focus stocks selling at a discount — that is, the so-called value investing approach. Instead, the interest is mostly on momentum. For the most part, this approach has gotten… well… crazy! The phenomenon of Reddit investors has taken Wall Street by storm — and has even threatened the stability of billion-dollar hedge funds. These investors have targeted heavily shorted stocks to gin up epic squeezes. The result is that there have been huge surges with companies like GameStop (NYSE:GME), AMC Entertainment Holdings (NYSE:AMC), Koss (NASDAQ:KOSS) and BlackBerry (NYSE:BB).InvestorPlace - Stock Market News, Stock Advice & Trading Tips But whenever there is this level of speculation, the markets are likely close to reaching a peak. And if this is the case this time, investors may want to look at value plays. The Top 7 Hot Stocks to Buy for 2021’s Biggest Trends So then which ones looking interesting right now? Well, let’s take a look at seven otherwise familiar names: IBM (NYSE:IBM) Morgan Stanley (NYSE:MS) Oracle (NYSE:ORCL) Ameriprise Financial (NYSE:AMP) Cisco Systems (NASDAQ:CSCO) Verizon Communications (NYSE:VZ) Lockheed Martin (NYSE:LMT) Stocks Selling at a Discount: IBM (IBM) Source: JHVEPhoto / Shutterstock.com The past few years have seen strong gains from old-tech companies like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Adobe (NASDAQ:ADBE). But some have been left behind. One is IBM. IBM stock touched a $180 high in February 2017 and hasn’t been anywhere close in the intervening four years. Shares are trading for under $120 a piece, bringing the current market capitalization to about $106 billion. The main reason for this? It’s really simple: Revenues have been declining. In fact, the latest earnings report was yet another case of this, with revenues off about 6% to $20.4 billion. OK, in light of this, why might it be a good idea for investors to consider IBM stock? There are several reasons. First of all, IBM plans to spin-off its managed-infrastructure services business, which should help streamline operations. Next, the company has been making bold acquisitions — such as for Red Hat — to reinvigorate its technology product line. Then there is the R&D capability. The company has been investing heavily in key areas like artificial intelligence (AI), the hybrid cloud and quantum computing. As for IBM stock, it is selling at a reasonable valuation. The forward price-to-earnings ratio is at 10.8x. The dividend yield is also 5.43%, which is one of the highest in the tech industry. Morgan Stanley (NYSE:MS) Source: Ken Wolter / Shutterstock.com Since late October, Morgan Stanley has been in the rally mode. The shares have gone from $48 to $68. Yet MS stock is still trading at a discounted valuation. Consider that the forward price-earnings ratio is only about 12.08x. This is reasonable in light of the potential growth opportunities. With interest rates at rock-bottom levels and the booming market for IPOs and SPACs (special purpose acquisition companies), the environment is quite favorable. During the latest quarter, earnings jumped by 51% to $3.39 billion, or $1.81 per share and revenues were up by 26% to $13.64 billion. There was strength across all the company’s businesses. 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times However, the biggest bright spot was the investment banking division. The revenues soared by 46% to $2.30 billion. About $1 billon came from equity offerings. True, IPOs can be choppy. But for the most part, the momentum is particularly strong — and this should be a nice source of growth in the new year. Morgan Stanley has also been aggressive with M&A. To this end, the company acquired E*TRADE and Eaton Vance. There will not only be cost synergies, but also boosts of the top line. The company is also ramping up its buybacks for MS stock. The most recent authorization is for up to $10 billion. Oracle (ORCL) Source: Jonathan Weiss / Shutterstock.com Oracle has been a laggard in its move to the cloud, which has certainly been a drag on ORCL stock. But during the past few years, the company has been transitioning its various platforms. And yes, this should be key to get Oracle back on the growth path. The components for the cloud story include NetSuite, which is a fast-growing ERP (enterprise resource planning) system, Fusion (middleware technologies) and Gen2 (for infrastructure). These platforms have been seeing nice growth ramps — and have good long-term prospects. Then what about the core database business? Yes, this has come under pressure from upstarts like MongoDB (NASDAQ:MDB). But Oracle has been making considerable progress. At the heart of this is the Autonomous Database. Oracle CTO and cofounder, Larry Ellison, told the latest earnings call: “it is certainly cloud first. It is the only database that really does both transaction processing and query processing. So query processing were much faster than Snowflake, the market’s current darling. And in transaction processing, we’re much faster than anybody.” Meanwhile, ORCL stock is trading at a cheap valuation — at least compared to other tech operators — with the forward price-to-earnings multiple at 14x. The dividend yield is also an acceptable 1.657%. Ameriprise Financial (AMP) Source: Shutterstock Revenues for financial advisory operators are projected to go from $57 billion to $200 billion in the next decade. One driver for this is the digitization of the industry. But then there is the impact of the Baby Boom generation, which has a population of 75 million. This group will demand more services to help with retirement needs (such as finding ways to live off their current assets). Such trends are definitely good news for Ameriprise Financial. The company is one of the largest financial advisory firms. It has over $900 billion in assets under management and has more than two million clients. The Top 7 Hot Stocks to Buy for 2021’s Biggest Trends Ameriprise Financial is also a highly disciplined organization. During the past eight years, earnings per share have nearly tripled and the company has returned a hefty $15 billion back to shareholders. AMP stock is also selling at a discount, with the forward PE at 11x. As for the dividend, it is at 2.1%. Cisco Systems (CSCO) Source: Valeriya Zankovych / Shutterstock.com Last year, investors saw Cisco Systems shares decline about 6% while the S&P 500 index gained more than 18%. Then again, the growth sputtered as competition heated up and there were delays because of the Covid-19 pandemic. But as for the new year, things are likely to be better for CSCO stock. Analysts expect continued improvement in the operations after the company beat the consensus estimates in the fiscal first quarter. The company has been making a shift towards software and recurring subscription business models. Q2 results are due on Feb. 9. Although, the WebEx videoconference business could be the biggest driver. Cisco has been making considerable updates to the platform, which should help boost growth. Some of the new features include real-time language translation, speech enhancement, and transcriptions. Regarding the valuation of Cisco, it is at relatively low levels at least for big tech operators. The forward price-to-earnings multiple is 14.3x and the dividend yield is 3.2%. Verizon Communications (VZ) Source: Michael Vi / Shutterstock.com The consumer mobile phone business in the U.S. is fairly saturated. But it is still a great source of cash flows. Just look at Verizon. During the first nine months of last year, cash flows came to $32.5 billion, up from $26.7 billion in the same period in 2019. There are currently about 94.1 million subscribers. But in the coming years, Verizon is poised to get a boost from its 5G network. And this will be more than just about consumer offerings. If anything, the opportunity for business customers may be even bigger. A key will be the development of edge network systems to allow for Internet of Thing (IoT) applications, such as on the factory floor. 7 Safe Stocks to Buy for Solid Returns in Tumultuous Times The valuation on VZ stock is also at discounted levels. The forward price-to-earnings ratio is 10.88x and the dividend yield is 4.6%. Moreover, the company has increased the payout for 13 consecutive years. Lockheed Martin (LMT) Source: Ken Wolter / Shutterstock.com With the new Biden Administration, there will likely be more pressure on the defense budget. Another factor is the escalating budget deficits. However, for the large defense contractors, there will likely be continued growth — especially since there remain considerable national security risks to address. So one company that looks attractive is Lockheed Martin, which has the advantage of massive scale. Consider that it is the largest defense contractor in the U.S. During the latest quarter, revenues increased by 7.3% to $17.03 billion and earnings were up by 20.6% to $6.38 per share. The big source of business is the massive F-35 program. But there are other important drivers as well. In fact, the company recently acquired Aerojet Rocketdyne for $4.4 billion. The company is a developer of hypersonic technology, which is essential for missile and space systems. Regarding LMT stock, the valuation is at a reasonable 12.2x times forward earnings. The dividend yield is also at 3.3%. On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the author of courses on topics like the Python language and COBOL. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post 7 Stocks Selling at a Discount As January Comes To An End appeared first on InvestorPlace.
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