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Investor's Business Daily
Inovio Surges On Reddit Call To Action As Investment Firm Boosts Stake
Inovio Pharmaceuticals surged Monday on a Reddit call to action and after investment firm BlackRock upped its stake in the biotech company. INO stock soared to a five-month high.
12h ago
Investor's Business Daily
Nine Investors Instantly Make $16 Billion On GameStop Stock 'Squeeze'
Here's a game many would like to play how to make a billion bucks in a month? And nine investors just pulled it off with GameStop stock.
18h ago
Yahoo Finance
GameStop shares close down 30% — a big move for anyone who just got in
GameStop shares were down double digit percentages by mid-session on Monday, following a massive short squeeze last month fueled by retail investors on Reddit’s WalStreetBets forum.
11h ago
TipRanks
3 ‘Strong Buy’ Stocks With 8% Dividend Yield
Let’s talk portfolio defense. After last week’s social flash mob market manipulation, that’s a topic that should not be ignored. Now, this is not to say that the markets are collapsing. After 2% losses to close out last week’s Friday session, this week’s trading kicked off with a positive tone, as the S&P 500 rose 1.5% and the Nasdaq climbed 2.5%. The underlying bullish factors – a more stable political scene, steadily progressing COVID vaccination programs – are still in play, even if they are not quite as strong as investors had hoped. While increased volatility could stay with us for a while, it’s time to consider defensive stocks. And that will bring us to dividends. By providing a steady income stream, no matter what the market conditions, a reliable dividend stock provides a pad for your investment portfolio when the share stop appreciating. With this in mind, we’ve used the TipRanks database to pull up three dividend stocks yielding 8%. That’s not all they offer, however. Each of these stocks has scored enough praise from the Street to earn a “Strong Buy” consensus rating. New Residential Investment (NRZ) We’ll start by looking into the REIT sector, real estate investment trusts. These companies have long been known for dividends that are both high-yield and reliable – as a result of company compliance with tax rules, that require REITs to return a certain percentage of profits directly to shareholders. NRZ, a mid-size company with a market cap of $3.9 billion, holds a diverse portfolio of residential mortgages, original loans, and mortgage loan servicing rights. The company is based in New York City. NRZ holds a $20 billion investment portfolio, which has yielded $3.4 billion in dividends since the company’s inception. The portfolio has proven resilient in the face of the corona crisis, and after a difficult first quarter last year, NRZ saw rising gains in Q2 and Q3. The third quarter, the last reported, showed GAAP income of $77 million, or 19 cents per share. While down year-over-year, this EPS was a strong turnaround from the 21-cent loss reported in the prior quarter. The rising income has put NRZ in a position to increase the dividend. The Q3 payment was 15 cents per common share; the Q4 dividend was bumped up to 20 cents per common share. At this rate, the dividend annualizes to 80 cents and yields an impressive 8.5%. In another move to return profits to investors, the company announced in November that it had approved $100 million in stock repurchases. BTIG analyst Eric Hagen is impressed with New Residential – especially by the company’s sound balance sheet and liquidity. “[We] like the opportunity to potentially build some capital through retained earnings while maintaining a competitive payout. We think the dividend increase highlights the strengthening liquidity position the company sees itself having right now… we expect NRZ has been able to release capital as it's sourced roughly $1 billion of securitized debt for its MSR portfolio through two separate deals since September,” Hagen opined. In line with his comments, Hagen rates NRZ a Buy, and his $11 price target implies an upside of 17% for the year ahead. (To watch Hagen’s track record, click here) It’s not often that the analysts all agree on a stock, so when it does happen, take note. NRZ’s Strong Buy consensus rating is based on a unanimous 7 Buys. The stock’s $11.25 average price target suggests ~20% upside from the current share price of $9.44. (See NRZ stock analysis on TipRanks) Saratoga Investment Corporation (SAR) With the next stock, we move to the investment management sector. Saratoga specializes in mid-market debt, appreciation, and equity investments, and holds over $546 million in assets under management. Saratoga’s portfolio is wide ranging, and includes industrials, software, waste disposal, and home security, among others. Saratoga saw a slow – but steady – rebound from the corona crisis. The company’s revenues fell in 1Q20, and have been slowly increasing since. The fiscal Q3 report, released early in January, showed $14.3 million at the top line. In pre-tax adjusted terms, Saratoga’s net investment income of 50 cents per share beat the 47-cent forecast by 6%. They say that slow and steady wins the race, and Saratoga has shown investors a generally steady hand over the past year. The stock has rebounded 163% from its post-corona crash low last March. And the dividend, which the company cut back in CYQ2, has been raised twice since then. The current dividend, at 42 cents per common share, was declared last month for payment on February 10. The annualized payment of $1.68 gives a yield of 8.1%. Analyst Mickey Schleien, of Ladenburg Thalmann, takes a bullish view of Saratoga, writing, “We believe SAR's portfolio is relatively defensive with a focus on software, IT services, education services, and the CLO... SAR's CLO continues to be current and performing, and the company is seeking to refinance/upsize it which we believe could provide upside to our forecast." The analyst continued, "Our model anticipates SAR employing cash and SBA debentures to fund net portfolio growth. We believe the Board will continue to increase the dividend considering the portfolio's performance, the existence of undistributed taxable income, and the economic benefit of the Covid-19 vaccination program.” To this end, Schleien rates SAR a Buy along with a $25 price target. This figure implies a 20% upside from current levels. (To watch Schleien’s track record, click here) Wall Street’s analysts agree with Schleien on this stock – the 3 other reviews on record are Buys, and the analyst consensus rating is a Strong Buy. Saratoga’s shares are trading for $20.87, and carry an average price target of $25.50, suggesting an upside of 22% for the next 12 months. (See SAR stock analysis on TipRanks) Hercules Capital (HTGC) Last but not least is Hercules Capital, a venture capital company. Hercules offers financing support to small, early-stage client companies with scientific bent; Hercules’ clients are in life sciences, technology, and financial SaaS. Since getting started in 2003, Hercules has invested over $11 billion in more than 500 companies. The quality of Hercules’ portfolio is clear from the company’s recent performance. The stock has bounced back fully from the corona crisis of last winter, rebounding 140% from its low point reached last April. Earnings have also recovered; for the first nine months of 2020, HTGC posted net investment income of $115 million, or 11% higher than the same period of 2019. For dividend investors, the key point here is that the net investment income covered the distribution – in fact, it totaled 106% of the base distribution payout. The company was confident enough to boost the distribution with a 2-cent supplemental payment. The combined payout gives a $1.28 annualized payment per common share, and a yield of 8.7%. In another sign of confidence, Hercules completed a $100 million investment grade bond offering in November, raising capital for debt pay-downs, new investments, and corporate purposes. The bonds were offered in two tranches, each of $50 million, and the notes are due in March of 2026. Covering the stock for Piper Sandler, analyst Crispin Love sees plenty to love in HTGC. “We continue to believe that HTGC's focus on fast growing technology and life sciences companies sets the company up well in the current environment. In addition, Hercules is not dependent on a COVID recovery as it does not have investments in "at-risk" sectors. Hercules also has a strong liquidity position, which should allow the company to act quickly when it finds attractive investment opportunities,” Love commented. All of the above convinced Love to rate HTGC an Outperform (i.e. Buy). In addition to the call, he set a $16 price target, suggesting 9% upside potential. (To watch Love’s track record, click here) Recent share appreciation has pushed Hercules’ stock right up to the average price target of $15.21, leaving just ~4% upside from the trading price of $14.67. Wall Street doesn’t seem to mind, however, as the analyst consensus rating is a unanimous Strong Buy, based on 6 recent Buy-side reviews. (See HTGC stock analysis on TipRanks) To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
17h ago
Yahoo Finance
BABA earnings preview: Here's what to expect
Alibaba (BABA) will be reporting earnings on Tuesday before the opening bell. The e-commerce giant is expected to show a boost from its recent 11/11 shopping event. However investors will be watching for any commentary on recent regulatory concerns in China.
9h ago
Investor's Business Daily
DraftKings Stock Surges After Cathie Wood's ARK Invest Buys DKNG Shares, Is It A Buy Right Now?
DraftKings is one of the top IPO stocks to watch, as gambling legalization gains steam. Here is what the fundamentals and technical analysis say about buying DKNG stock now.
8h ago
Bloomberg
Reddit Traders Declare ‘BioWar’ as Shorted Biotechs Soar
(Bloomberg) -- BioCryst Pharmaceuticals Inc. blew past a five-year high as Reddit investors rallied around a call to start a “#BioWar” on the bears behind a heavily-shorted biotech that develops rare disease drugs.The stock, which recently ended development of an experimental therapy for Covid-19, rallied to close 39% higher on Monday after a poster on Reddit’s WallStreetBets forum called it “the most undervalued stock in the market” while another said a brewing #BioWar was “about sticking it to the shorts in a massive way.”Biotechs with little to no revenue have long been the focus of short bets on Wall Street and could emerge as a new focal point for small-time investors railing against elite hedge funds. But the battleground is an already crowded arena with hedge funds positioned on both sides.Indeed, BioCryst is a short target with about 17% of float, or $259 million, sold short, according to financial analytics firm S3 Partners. But it’s also a hedge fund pick held by the likes of Citadel, the well-known biotech outfit Baker Bros. Advisors LP, and activist investor Alex Denner’s Sarissa Capital Management.Before Monday’s rally, shares of BioCryst had already shrugged off the scuttling of a Covid-19 trial supported by the National Institutes of Health. The company is expected to generate less than $31 million in revenue for all of 2020.Novavax Inc., another heavily-shorted biotech, has also garnered interest across chat forums, which could benefit funds like RA Capital Management and Perceptive Advisors, which hold stakes in the company. The stock has more than doubled in the past few trading days, albeit on late-stage positive results for its Covid-19 vaccine candidate. The short position on Novavax stands at $1.5 billion, according to S3.Throughout the pandemic, biotechs racing to find the next Covid-19 treatment or vaccine have captured the imagination of retail investors. Dynavax Technologies Corp. added another $436 million in market value on Monday on news it had both initiated a mid-stage Covid vaccine study with one partner and that the U.K. had exercised an option to order more inoculations from another Dynavax partner using the company’s adjuvant.Inovio Pharmaceuticals Inc. also soared Monday after Twitter users jumped on a filing over BlackRock Inc.’s stake in the company. One tweet said BlackRock had doubled its position, although Bloomberg data show the stake is virtually unchanged.Meanwhile, the motivations behind Monday’s 131% rally in Healthier Choices Management Corp. powered by Reddit was unclear as Twitter users said it was an opportunity to send hedge funds “on the run.” Short interest in the sub-penny stock, which makes vaping products and operates health food stores in Florida, appears non-existent however. The micro-cap’s largest holders were its management team.(Updates to add Covid-19 stock plays as well as Healthier Choices trading details)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.
11h ago
Yahoo Finance
Tesla challenger Faraday Future wants to go from 0 to $20B in sales by selling lots of $180K electric cars
Electric vehicle maker Faraday Future has big goals for the next five years, CEO Carsten Breitfeld explains to Yahoo Finance.
15h ago
Bloomberg
BP Shows Big Oil Is Still Suffering With Earnings Miss
(Bloomberg) -- BP Plc showed that Big Oil has barely begun to heal the wounds from last year’s historic slump, posting earnings that fell short of expectations on weak fuel sales, refining margins and gas trading.The Western world’s largest oil and gas producers were supposed to be sailing into fourth-quarter earnings season with a tailwind from stronger commodity prices, but their results so far show the enduring impact of the Covid-19 pandemic.BP eked out a modest profit, but it was still just a fraction of typical pre-pandemic levels and cash flow was down. Chevron Corp., the only other major so far to post its results for the period, reported a surprise loss due to weak fuel demand.Shares of the company fell 3% to 259 pence at 8 a.m. in London.“Tough quarter, clearly, at the end of a really tough year,” BP Chief Executive Officer Bernard Looney said in a Bloomberg TV interview on Tuesday. “The full-year results were hit hard by Covid.”BP’s fourth-quarter adjusted net income was $115 million, down from $2.57 billion a year earlier and only a slight improvement from the preceding three months. The company fell short of the average analyst estimate of $440 million.Operating cash flow excluding Gulf of Mexico spill payments, a key figure for investors as it determines the sustainability of dividend payments and capital expenditure, was much weaker. It fell to $2.4 billion in the period, down from $5.4 billion in the third quarter.With crude prices and refining margins buoyed by the roll-out of Covid-19 vaccines and the prospect of an economic rebound, investors had been expecting a grim year to end on a more positive note. Some optimism had already been priced in, with shares of BP and its peers posting double-digit percentage gains since the end of the third quarter of 2020.Yet refining weighed down the company’s performance. BP said the business was affected “significantly” by lower volumes as a result of the pandemic, with continuing pressure on margins. Gas marketing and trading was also weak.“Weather was warmer in the United States than we thought and colder in Asia than we thought, and that made for some difficult trading conditions,” Looney said.One bright spot was net debt, which was down $1.4 billion from the preceding quarter to $39 billion at year-end. Still, BP said it expects the figure to increase in the first half of 2021, driven by payments related to employee severance, the annual Gulf of Mexico oil spill compensation, and the completion of the offshore wind joint venture with Equinor ASA. The ratio of net debt to equity was 31%.BP remains on track to meet its net-debt target of $35 billion between the fourth quarter of 2021 and first quarter of 2022, “which will trigger the start of share buybacks, subject to maintaining a strong investment grade credit rating,” Chief Financial Officer Murray Auchincloss said in a statement.Exxon Mobil Corp. will publish its fourth-quarter earnings at 7:30 a.m. New York time.(Updates with share price in fourth 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.
1h ago
Benzinga
10 Most Heavily-Shorted Stocks On The Russell 3000
Last week, members of the Reddit forum WallStreetBets were able to pull off a short squeeze for the history books by banding together to take on hedge funds betting against GameStop Corp. (NYSE: GME). Targeting GameStop worked well for the Reddit community because GameStop had very high short interest — over 130% at the time — and has a relatively small float of 51 million. However, the short squeeze was big trouble for Melvin Capital, which was forced to close out its entire GameStop short position for a loss. Afterward Melvin Capital required Citadel and Point72 to inject $3 billion into its fund to bolster its finances. The retail trading community is targeting stocks with the highest percentage of short interest to force institutions to cover their positions, which helps drive the share price dramatically higher. Small retail investors, large hedge funds and financial institutions may be wondering what stock they’ll successfully target next. Related Link: A Short Seller Joins Benzinga's 'Power Hour' To Talk GameStop. The Rest Is History Below are the next 10 most heavily shorted stocks on the Russell 3000 as of Jan. 29, 2021: Accelerate Diagnostics Inc. (NASDAQ: AXDX): Market cap of $600 million with 31.03 total share float and 45% short. Academy Sports and Outdoors Inc (NASDAQ: ASO): Market cap of $1.9 billion with 21.07 million total share float and 45% short. AMC Entertainment Holdings (NYSE: AMC): Market cap of $2 billion with 56.56 million total float and 58% short. Bed Bath & Beyond (NYSE: BBBY): Market cap of $4.3 billion with 230.80 million total float and 63% short. Ligand Pharmaceuticals Inc. (NASDAQ: LGND): Market cap of $3 billion with 15.34 million total float and 65% short. Macerich Co (NASDAQ: MAC): Market cap of $2.3 billion with 137.99 total share float and 57% short. National Beverage Corp (NASDAQ: FIZZ): Market cap of $7.1 billion with 11.64 million total float and 63% short. SunPower Corporation (NASDAQ: SPWR): Market cap of $9.2 billion with 80.91 million total float and 57% short. Tanger Factory Outlet Centers Inc. (NYSE: SKT): Market cap of $1.4 billion with 90.15 total share float and 57% short. Tootsie Roll Industries, Inc. (NYSE: TR): Market cap of $2.6 billion with 16.11 million share float and 46% short. (Photo by Giorgio Trovato on Unsplash) See more from BenzingaClick here for options trades from BenzingaVirgin Galactic Announces Date For New Test Flight Of SpaceShipTwo UnityFord, Google Partner On Android-Connected Vehicles© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
11h ago
Benzinga
Analyst Raises General Electric Target Following FCF Deep Dive
General Electric Company (NYSE: GE) shares traded slightly higher on Monday after one Wall Street analyst performed a deep dive into the company’s free cash flow outlook. The GE Analyst: Bank of America analyst Andrew Obin reiterated his Buy rating for GE and raised his price target from $13 to $14. See also: Buy Bank of America Stock The GE Thesis: Last week, GE shares jumped after the company reported a better-than-expected $4.37 billion in fourth-quarter industrial free cash flow and guided for between $2.5 billion and $4.5 billion in industrial FCF in 2021. On Monday, Obin said GE’s 3% year-over-year drop in orders in the fourth quarter was also a pleasant surprise given orders dropped 28% in the previous quarter. The $3.5 billion midpoint of GE’s 2021 industrial FCF guidance was also slightly above Bank of America’s target of $3.3 billion. Obin said investors don’t seem to fully appreciate GE’s multi-year effort to reduce factoring, which was a $3.2 billion outflow in 2020. That process is now coming to an end and Obin said investors can expect working capital levels to begin to normalize. Related Link: ,000, 5 Years Later: How Much Would General Electric Stock Be Worth? Obin understands the caution toward GE given the uncertain economic outlook and the company’s rough recent track record, but he believes the company is being overly cautious with its 2021 Aviation revenue guidance. In the meantime, Obin says GE has plenty of financial flexibility in the near-term, and could actually benefit from rising interest rates. Rising rates would help reduce GE’s $25.5 billion in pension liabilities and GE Capital’s $21.3 billion in long-term care liabilities. “Higher discount rates would lower the value of these long-lived liabilities,” Obin said. Benzinga’s Take: GE appears to have stopped the bleeding by aggressively addressing its liquidity and balance sheet issues, and it has implemented a long-term turnaround plan. However, Obin is forecasting just 62 cents in 2023 earnings per share, suggesting GE is already trading at 17.2 times 2023 earnings even if the company hits Obins growth targets over the next two years. Photo credit: Momoneymoproblemz, via Wikimedia Commons Latest Ratings for GE DateFirmActionFromTo Jan 2021Morgan StanleyMaintainsOverweight Dec 2020DZ BankUpgradesSellHold Dec 2020Morgan StanleyMaintainsOverweight View More Analyst Ratings for GE View the Latest Analyst Ratings See more from BenzingaClick here for options trades from Benzinga,000, 5 Years Later: How Much Would General Electric Stock Be Worth?© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
16h 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.
18h ago
Investor's Business Daily
Nio, Xpeng Sales Soar To Start 2021 After 2020 Boom; Li Auto Due
Nio and Xpeng posted strong January sales that suggest no pause in China's electric-vehicle market after 2020's boom.
11h ago
Bloomberg
Kashkari Says Let Market Be: If Investors Lose, ‘That’s on Them’
(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari on Monday became the latest central bank official to push back against the idea that the trading frenzy in GameStop Corp. and other hot stocks calls for a monetary policy response.“GameStop has gotten a lot of attention. If one group of speculators wants to have a battle of wills with another group of speculators over an individual stock, God bless them,” Kashkari said while answering questions during a virtual town hall event.“That’s for them to do, and if they make money, fine. And if they lose money, that’s on them,” he said. “I’m not at all thinking about modifying my views on monetary policy because of speculators in these individual stocks.”GameStop shares were lower on Monday after rallying 1,600% in January. Hordes of day traders piled into the shares after noticing elevated short interest in the company in hopes that buying would force shorts to cover, driving the price ever higher.Kashkari’s perspective on the potential for froth in financial markets echoed that of some other Fed officials. At a Jan. 27 press conference, Chair Jerome Powell declined to comment on the recent meteoric rise in of GameStop shares and those of similarly beaten-down companies. But he told reporters that the main forces propelling the stock market higher in recent months were vaccine developments and fiscal stimulus.San Francisco Fed President Mary Daly chimed in on Jan. 29, arguing during a virtual event that she didn’t favor tightening up monetary policy, which would potentially slow the economic recovery, “simply to ensure that some people who already have stock market wealth don’t get more.”The U.S. central bank has signaled it will hold interest rates near zero at least through 2023 and keep buying bonds at a $120 billion monthly pace until “substantial further progress” has been made on employment and inflation.“The key now is for the Federal Reserve to keep our foot on the monetary policy gas until we really have achieved maximum employment,” Kashkari said.Speaking at a separate event Monday, Dallas Fed President Robert Kaplan said that while supervisors had good visibility on the capital levels of big banks through stress-testing as they gauge the potential for systemic risks, he was monitoring the situation closely.“Non-bank financials I’m watching very carefully -- potential instability funding risks that might occur,” Kaplan said. “And I’m conscious of the fact that we’ve had to make these extraordinary moves that we’ve had at the Fed with interest rates and bond buying.”(Updates with Kaplan comments beginning in final 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.
14h ago
Benzinga
If You Like Tesla, Check Out These 3 Companies
If you invested in Tesla Inc (NASDAQ: TSLA) one year ago, you would be up by roughly 600%. The growth in electric vehicles isn’t limited to this one stock: with the Global X Autonomous & Electric Vehicles ETF (NYSE: DRIV) being up roughly 75%. Here are three more companies to look into if you’re enjoying your position in Tesla: Nio Inc (NYSE: NIO) is often touted as the “Tesla of China.” The company operates in China’s premium electric vehicle market. It designs and jointly manufactures, and sells smart and connected premium electric vehicles, driving innovations in next-generation technologies in connectivity, autonomous driving and artificial intelligence. Albemarle Corporation (NYSE: ALB) is the world's largest lithium producer. The outlook for lithium demand is predicated upon increased demand for electric vehicle batteries. Lithium is used in electric vehicle batteries and many other electric-based solutions. As the demand for clean energy solutions increases, Albemarle’s lithium demand could increase as well. General Motors Company (NYSE: GM) makes electric vehicles, but isn’t considered an electric vehicle company just yet. Although the automotive giant’s electric vehicle lineup may not be seen as being on par with Tesla's right now, the company has many resources and talent at its disposal to gain a strong footing in the EV industry. In fact, the company has committed to offering only electric vehicles by 2035. As more and more companies continue to shift to electric vehicles, it might be harder for Tesla to maintain its current status once EV options are more plentiful. See more from BenzingaClick here for options trades from BenzingaPete Najarian Sees Unusual Options Activity In Walgreens16 Stocks Moving In Thursday's After-Hours Session© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
18h ago
Investor's Business Daily
Is Nio Stock A Buy As Electric Vehicle Sales Surge In New Year?
Nio is growing its lineup of electric vehicles as sales boom for the emerging Tesla of China. But is Nio stock a buy right now?
11h ago
Bloomberg
Carson Block Suspects Hedge Fund Coordination in Short Squeezes
(Bloomberg) -- Carson Block, the activist short-seller famous for targeting Chinese frauds, recognizes familiar behavior in the rally of shares such as GameStop Corp. To him, the parabolic moves look less like the product of Reddit-driven retail orders than a short squeeze by hedge funds targeting other hedge funds.“I’ve wondered, is there coordination with these hedge funds?” Block said in an interview on Bloomberg Television. “What constitutes coordination? Did they cross the line? That could be interesting.”For the moment, it’s an unproven theory. But if Block is right, what seemed like a history-making retail uprising last week was just as much a convenient smokescreen for internecine hedge-fund warfare.The list of casualties in that fight is growing from the severely wounded, such as Melvin Capital Management and Maplelane Capital, to include funds run by firms ranging from David Einhorn’s Greenlight Capital to Renaissance Technologies. What’s not clear yet is who profited on the other side.Block said his firm, Muddy Waters Capital, was the victim of what he thinks was a short squeeze by hedge funds in shares of GSX Techedu Inc. in the weeks leading up to the GameStop frenzy. As a result of that and similar situations, he had to hire a full-time trader to monitor the stock-options markets and adjust positions to more actively manage risk.“It’s a trading game, it’s flows-driven, it’s technical,” he said. “We’re going to do what we need to do to survive.”Unlike many short-sellers, Block is decidedly public with the names of companies he believes are scams and which he’s betting against. He typically publishes the research underpinning his short thesis and makes it available on Twitter. More recently, he started releasing videos on zer0es.tv.As he sees it, that effort to expose wrongdoing has a “social utility” and should set him apart from the short-sellers under attack on Reddit. He scoffs at the suggestion that he’s part of a Wall Street establishment. If he were such an insider, he asked, why would Goldman Sachs Group Inc. and Credit Suisse Group AG have turned down his business?“When we get tagged as establishment, you can’t be more inaccurate than that,” he said. “It’s almost funny if it weren’t for the fact that I now have all these people trying to troll me.”What Block agrees with is the growing sense that financial markets are overvalued and predominantly small investors will be hurt when the bubble finally bursts. He faults the Federal Reserve for pumping in too much liquidity, allowing for too much credit extension and too much leverage.“We need a combination of monetary and fiscal policy that makes sense or else we’re just stuck in this building a bigger powder keg to explode again,” he said. “It always transfers wealth from the many to the few.”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.
12h ago
Bloomberg
Koreans Buy Tesla, GameStop as Foreign Stock Buying Hits Record
(Bloomberg) -- South Korean traders piled into U.S. stocks like GameStop Corp. and Tesla Inc. in January, driving their buying of overseas equities to a record high in January.Korean individual and institutional investors bought a net $5 billion of foreign stocks in January, their most-ever monthly tally since 2011, when the Korea Securities Depository began collecting data.Their positions now include $9.8 billion in Tesla Inc. shares -- the largest for any stock -- as well as about $557 million in GameStop Corp., KSD’s data show. GameStop, an unprofitable videogame retailer, has drawn day traders globally, including from India and China.With U.S. stocks representing some 80% of their holdings, Korean retail investors are “highly exposed” to U.S. market risks, Goldman Sachs senior Asia economist Goohoon Kwon said in a note on Sunday.“With their heavy buying during a global equity rally in late 2020, a 10% market correction for example could put one-third of their holdings in the red,” Kwon wrote.GameStop’s Wild Ride Has Indian Retail Traders Joining InKorea’s retail investors, having buoyed their domestic markets, turned to the U.S. and especially tech stocks like Tesla and Apple Inc. for returns last year.The benchmark Kospi surged 31% in 2020, making the Korean bourse the world’s best performer after that of Nigeria’s.Regulators in Seoul have been warning retail investors, and especially those indulging in “reckless borrowing” to be cautious about investing overseas.(Updates the value of Koreans’ holding of Tesla and GameStop shares in third 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.
2h ago
USA TODAY
'This is life-changing': Meet the Redditors behind the GameStop saga
Members of the r/WallStreetBets Reddit community that’s taken Wall Street by storm discuss the GameStop frenzy and what drove them to scoop up shares.
4h ago
TipRanks
These 3 Stocks Are Top Picks for 2021, Says BMO
Usually, when markets climb to record levels and stay there, investors start thinking about bubbles. However, Brian Belski, chief investment strategist at BMO Capital, believes that we’re just in the midst of a counter-intuitive time. In a recent note, Belski ruminates at length on the current conditions, and investors’ guesstimates that 1H21 will see a stock bubble. “Widespread speculation of an imminent stock market bubble, not to mention calls for a potential sharp correction in the first half of 2021, only to be followed up by strength during the second half, represents excessively consensus thought by most clients we speak with,” Belski wrote. But here the plot thickens – Belski isn’t sure that the common wisdom has called conditions right: “We believe the first part of 2021 will be much stronger than most investors are imagining.” Belski explains that with the Joe Biden ensconced in the White House, and supported by Democrat majorities in both Houses of Congress, a new corona response stimulus package will likely be larger than expected. Combined with vaccine programs and a solid Q4 earnings season, Belski believes that a cyclical uplift will hit the markets and extend through the year. Against this backdrop, the stock analysts at BMO are taking their cue from Belski, and choosing their top picks for 2021. Using TipRanks’ Stock Comparison tool, we lined up the three alongside each other to get the lowdown on what the near-term holds for these top picks. Tronox, Ltd. (TROX) We will start with Tronox, a mining and specialty metal manufacturing company. Tronox mines titanium ores and zircon, which are used to produce titanium chemicals: titanium dioxide and chemical sands, primarily, which are used in dyes. Tronox products are found in paints, papers, plastics, and other common products. Useful byproducts of the manufacturing process include caustic soda, gypsum, iron sulfate, and various acid compounds. A solid industrial niche, with essential products in a variety of sectors, gives Tronox a firm foundation for growth, and the share value reflects that. The stock rose an impressive 106% over the past 12 months. In Q3, the last reported, Tronox showed $675 million at the top line, up 17% sequentially. Improved market demand, and consequent improved TiO2 (titanium dioxide) sales through the quarter powered the higher revenues. Looking ahead, Tronox has recently issued new Q4 guidance – and these preliminary numbers were far better than expected. For the last quarter of CY20, Tronox is guiding toward revenue of $783 million – which will be a 13.6% year-over-year gain. Based on all that Tronox has going for it, BMO analyst John McNulty tells investors that his bullish thesis remains very much intact. “We listed TROX as one of our top picks for 2021 [based on] our belief that the strength of the cycle would surprise investors in the near term on the volume side and in the intermediate term on the pricing side. The 4Q "blowout" supports our near-term thesis while… recent price hikes give us greater confidence in our intermediate-term thesis as well as our belief that our 2021 and 2022 estimates are solidly too low. We continue to believe TROX offers the most upside of any name in our space looking out through 2021,” McNulty commented. Unsurprisingly, McNulty gives Tronox an Outperform (i.e. Buy) rating, and a $23 price target. This conveys his confidence in TROX's ability to rise 36% over the next twelve months. (To watch McNulty’s track record, click here) What does the rest of the Street think? As it turns out, 3 out of 4 analysts that have published a recent review see the stock as a Buy, making the consensus rating a Strong Buy. Meanwhile, the $19 average price target indicates ~13% upside potential. (See TROX stock analysis on TipRanks) Netflix, Inc. (NFLX) Netflix hardly needs any introduction. It's one of the famous FAANG stocks, a group of tech companies whose sheer size and rate of growth have helped to power the markets over past few years. The FAANGs include Facebook, Amazon, Apple, and Google – so Netflix is in good company, even if its $239 billion market cap puts it in a distant fifth place for size behind its peers. Revenue has grown steadily in every quarter for the past two years, reaching $6.64 billion in 4Q20. That wasn’t the only good news from Q4. The company reported that it had exceeded 200 million paid subscribers in the quarter, and is now looking forward to turning cash flow positive for the first time. On the balance sheet after Q4, Netflix has $15 billion in debt and $8.2 billion in cash on hand. As long as the company turns out hits like ‘The Queen’s Gambit’ and ‘The Midnight Sky,’ which had 68 million and 72 million viewers respectively in their first four weeks, the debt is considered sustainable. Analyst Daniel Salmon, rated 5-stars by TipRanks, rates Netflix as Outperform (i.e. Buy) in his recent note for BMO. Salmon gives the stock a $700 price target, implying an upside of 30% for 2021. (To watch Salmon’s track record, click here) Describing Netflix as a ‘Top Pick’ in his headline, the analyst goes on to say: “We raise our ARPU estimates driven by recent price increases, leading to higher revenue estimates [...] While the pricing increases may slow the subscriber growth somewhat, we do not anticipate similar level of churns as in 2019 and think total subs can surprise to the upside in 2021. We think there is another leg as the FCF generation becomes reality, and we continue to like the lack of antitrust/regulatory overhang versus rest of FANG.” There are plenty of Buy ratings for Netflix amongst Salmon's colleagues – 23, in fact. With the addition of 6 Holds and 3 Sell, the stock has a Moderate Buy consensus rating. The average price target stands at 632.90 and implies ~17% upside for the foreseeable future. (See NFLX stock analysis on TipRanks) Corteva (CTVA) The third stock on BMO's top picks list, Corteva, was once the agricultural unit of the chemical giant Dupont, before being spun off as an independent company in mid-2019. The company currently boasts a market cap of $30.3 billion – making it the world’s largest aggrotech company. Corteva fuels its growth through a diverse product line, including seeds, crop protection, and digital land management, all designed to improve crop yields and acre value. Corteva’s seed lines include such staples as corn, wheat, soy, and sorghum – all of which are either eaten directly, shifted into processed foods, or used as livestock feed. Land management is essential to all aspects of farming, at all scales, from wheat farmers to dairy and meat producers. The third calendar quarter is Corteva’s slowest, and Corteva showed year-over-year declines in earnings and revenue. At the same, the 52-cent EPS and the $1.86 billion reported revenue both beat the analyst forecasts. Watching Corteva for BMO, Joel Jackson writes, “Our favorite idea for 2021 is CTVA… There's a strong pathway if 13-14x multiples keep rolling forward to future years as CTVA continues to penetrate deeper into seed traits… we believe 2021 could be a much stronger year for CTVA, which could deliver 20%+ EBITDA growth (we don’t believe this is fully appreciated by the Street although it’s starting to get there). CTVA’s earnings bridge for 2021E could be leaning closer to bull case scenarios as … higher crop prices provide better seed price opportunities (lower rebates), and crop protection sales fare better than expected.” These comments support an Outperform (i.e. Buy) rating, and Salazar’s $48 price target suggests that CTVA has room for a 18% upside in the coming year. (To watch Jackson’s track record, click here) All in all, Corteva’s Moderate Buy analyst consensus rating is based on 8 reviews, breaking down to 5 Buys and 3 Holds. The $43.90 average price target suggests room for ~8% upside growth from the current trading price of $40.71. (See CTVA stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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