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InvestorPlace
3 High-Quality Dividend Stocks to Purchase for Income Investors
Interest rates remain very low and given the ongoing economic impact from COVID-19, they will likely stay very low. This low-rate environment places income investors in a difficult position. Add in the S&P 500 rising nearly 100% over the last five years, and finding high-yielding securities has become much more difficult. With low interest rates, investors looking for income are somewhat limited in their investment choices. Higher security prices haven’t helped either as the average yield on the S&P 500 is well below 2%. 8 Cheap Stocks Under $20 That Could Double Fortunately, there are plenty of high-dividend stocks offering yields of at least 5% that these investors can turn to for high levels of investment income. Three that look particularly appealing right now are:InvestorPlace - Stock Market News, Stock Advice & Trading Tips PPL Corporation (NYSE:PPL) Prudential Financial (NYSE:PRU) P. Carey (NYSE:WPC) My picks all provide a dividend yield north of 5% today and all have increased dividends for at least 13 years. Each has a solid business model with competitive advantages that should provide for future growth. Investors seeking safe, reliable income should consider purchasing these three high-dividend stocks. PPL Corporation (PPL) Source: zhao jiankang / Shutterstock.com PPL Corporation is a utility company that provides power to more than 10 million customers between its U.S. and U.K. operations. The company has stated its intentions to sell its U.K. based business, but for now it retains the international segment. Operations include distributing electricity to customers in Kentucky, Pennsylvania, Tennessee and Virginia and natural gas to customers in Kentucky. Utility companies are often viewed as slow and steady growers. That fits PPL Corporation, as the company has increased its earnings-per-share at a rate of ~1% per year over the last decade. The growth rate becomes slightly more impressive when noting that the company has diluted its share count at a rate of 4.6% per year over this same period of time. Net profit has improved at 4.4% clip since 2011. An increase in share count hasn’t stopped PPL Corporation from growing its dividend either, as shareholders have received a raise in yield for the past 20 years. Utility companies are often favored by income seeking investors, as this sector tends to be recession-resistant. Customers still need to pay their bills, even in an economic downturn. This factor should allow PPL Corporation to continue to pay and raise its dividend through the next recessionary period. Currently, the company has an annualized dividend of $1.66. With expected earnings-per-share of $2.45 for the year, PPL Corporation’s payout ratio is 68% and nearly in-line with the 10-year average payout ratio of 62%. The one downside to PPL Corporation is that its average dividend increase is less than 2% since 2011, which is partly due to a higher share count, but reflects the slow growth reality that utility companies often face. Utility companies often have high payout ratios, but PPL Corporation’s is fairly reasonable and just slightly higher than its long-term average. Shares yield almost 6% today, significantly higher than the average yield of 4.7% that PPL Corporation traded with from 2011 through 2019, suggesting that the stock may also be undervalued. Prudential Financial (PRU) Source: JHVEPhoto / Shutterstock.com Prudential Financial provides various financial products such as investment management, insurance, annuities and more. Prudential is one of the largest firms in its industry, boasting assets under management of $1.7 trillion as of its most recent quarter. Low interest rates often present a headwind to financial companies, but Prudential’s business has performed quite well over the past decade while rates have been extremely low, growing earnings-per-share at a rate of almost 5% annually over the last 10 years. Even accounting for share repurchases, net profits have risen by 3.1% per year during the last decade. Prudential did cut its dividend during the last recession, showing that it may not be immune to significant downturns in the economy. To its credit, the company has raised its dividend every year since 2010. The stock offers an annualized dividend of $4.60, which represents an expected payout ratio of 40% based on earnings-per-share estimates of $11.50. This is higher than the decade-long average payout ratio of 23%, but nowhere near danger levels. Even a significant decrease in Prudential’s business likely won’t lead to a dividend reduction as the company is considerably stronger today than it was during the last recession. 8 Cheap Stocks Under $20 That Could Double The company has rewarded shareholders with an average dividend increase in the low double-digits over the last 10 years. Prudential has a yield of 5.6% today, which compares very favorably to the 3.4% yield that shares have averaged since 2011. W.P. Carey (WPC) Source: Shutterstock W.P. Carey is a real estate investment trust (REIT) with two segments: real estate ownership and investment management. The trust owns and operates more than 1,200 single tenant properties, with a footprint in the U.S. as well as Northern and Western Europe. Unlike many REITs, W.P. Carey benefits from its international diversification. The trust has also invested heavily in new properties over the years, putting more than $10 billion into new assets through the purchase of other REITs and single-tenant properties. Low interest rates have allowed the trust to tap into debt markets at extremely reasonable rates. The Covid-19 pandemic has weighed on results and rent collections were considerably lower than normal at various points throughout 2020. That said, the trust saw its rent collection improve to 99% as recently as October, proving how resilient W.P. Carey’s business can be even in the face of an extremely challenging environment. Because REITs are required to pass nearly all of their income along to shareholders in the form of dividends, W.P. Carey often issues new shares to help fund acquisitions. The trust’s share count has increased by a factor of four from 2010 through 2019. Despite this, W.P. Carey has seen its funds-from-operation grow by more than 4% during the last decade. That shows how W.P. Carey’s use of issuing shares to fund acquisitions has allowed the company to grow its bottom-line, which has led to more than two decades of dividend growth for the trust. One item that separates W.P. Carey from traditional REITs or corporations is that the trust often raises its dividend every quarter instead of once per year. The average annual increase since 2011 is just shy of 7%. The annualized dividend of $4.18 represents a payout ratio of 89% based on expected funds-from-operation of $4.70 for 2020. Keep in mind that last year’s funds-from-operation result will most likely be lower than prior years due to the impact of the pandemic. Long-term, we expect the payout ratio to be much closer to the 72% that the trust averaged over the last decade, which is a reasonable ratio for REITs. The current yield of 6.1% is even better than its 10-year average yield of 5.8%. On the date of publication, Bob Ciura did not have (either directly or indirectly) any positions in the securities mentioned in this article. Bob Ciura has worked at Sure Dividend since 2016. He oversees all content for Sure Dividend and its partner sites. Prior to joining Sure Dividend, Bob was an independent equity analyst. His articles have been published on major financial websites such as The Motley Fool, Seeking Alpha, Business Insider and more. Bob received a bachelor’s degree in Finance from DePaul University and an MBA with a concentration in investments from the University of Notre Dame. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post 3 High-Quality Dividend Stocks to Purchase for Income Investors appeared first on InvestorPlace.
2d ago
Investor's Business Daily
Dow Jones Futures: Be Ready For A Stock Market Rally Pullback Or Melt Up; Analyzing Apple, Amazon, Palantir
The stock market could pull back or melt up, are you ready? Apple and Amazon are setting up, while Palantir earnings are on tap.
3h ago
InvestorPlace
An $80 Price Would Drive Nio To Become the Third-Largest Automaker
As I’m preparing my latest article about Nio (NYSE:NIO), the hard-charging Chinese manufacturer of electric vehicles (EVs), Nio stock trades for $60. That values the company at $93.6 billion, good for the fifth spot amongst the world’s largest automakers by market capitalization. Source: Sundry Photography / Shutterstock.com On Feb. 1o, Deutsche Bank analyst Edison Yu reiterated his “buy” rating and $70 price target. By hitting Yu’s target, Nio could become the third-largest automaker in the world. Here’s why Volkswagen (OTCMKTS:VWAGY) and BYD (OTCMKTS:BYDDF) ought to be looking in their rearview mirrors. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Much Has Changed for Nio Stock in the Past Year Approximately 15 months ago, I didn’t have much good to say about the upstart EV manufacturer: “As Taulli [InvestorPlace contributor Tom Taulli] points out, the company’s burning through cash at such a rate, any future equity or debt financing arrangements will be highly one-sided for the entity providing the lifeline and terrible for current shareholders. “Nio’s Altman Z-Score, a predictor of future bankruptcy, is -4.45 at the current moment. That’s nowhere near where it needs to be to give investors a warm, fuzzy feeling. “I wish I had better news for shareholders of Nio stock. But you can’t put lipstick on a pig.” Of course, in hindsight, we know that Nio snagged $1 billion in critical financing less than five months later, and the rest is history. Forever, that will be known as the turning point for the company. So, by June 2020, I fully converted from skeptic to enthusiast, suggesting a double-digit stock price by the end of the year was totally realistic. It finished 2020, just shy of $50. It’s amazing what a billion dollars will do for your confidence. A 17% Gain Puts Nio At or Near Third Spot Based on the analyst’s 12-month target price of $70, the price of Nio stock only has to appreciate by 17% over the next year to hit the target. At the rate it’s growing, that seems like a slam dunk. Nio recently announced further collaboration with the Hefei municipal government, the same people who rescued the company from crashing in April 2020. As part of this collaboration, the Hefei government plans to reinvest the returns from their equity investment in Nio to further support EV production in the city. Hefei is focusing on making the city a hotspot for all things EV. As part of this expansion, the city will build the Hefei Xinqiao Smart Electric Vehicle Industrial Park. Importantly, Nio plans to use this park as the foundation for building its global growth. Yu said: “This lays the groundwork for capacity expansion to help NIO reach its +300k longer term volume target or nearly 3x current capacity. Details were not provided on financing sources, but we suspect there will be large support in the form of bank credit lines or arrangements similar in nature.” A little success and the lenders are falling all over themselves to get in on the action. What’s the old saying? A banker will always give you an umbrella when the sun is shining and there’s not a cloud in the sky. Anyway, a $70 share price puts Nio’s market cap at $109 billion, about the same value as BYD’s current market cap. However, I think it’s fair to say that if Nio moves higher over the next 12 months, then BYD and Volkswagen, not too far behind at $107 billion, should too. It’s Got to Go to $80 or Higher to Grab the Third Spot Based on 1.56 billion shares outstanding, an $80 share price by this time next year puts its market cap at $125 billion, giving it a little breathing room over its two peers. Can it get there? I think it can gain 34% over the next 12 months to get to the magic number. Here’s how. In 2020, Nio delivered 43,728 vehicles. Based on its current market cap of $93.6 billion, that’s $2.14 million per delivered vehicle. In 2019, it delivered 20,565 vehicles. It had 831.9 million shares outstanding as of Dec. 31, 2019, and a share price of $3.72. That’s $150,482 per delivered vehicle. I’m going to assume that Nio doubles its deliveries once more in 2021. So, based on $93.6 billion, that’s $1.07 million for each of the 87,456 estimated vehicle deliveries in 2021. However, Nio could have a fourth vehicle, the EE7 sedan, in production by the fourth quarter, most certainly adding to these numbers. Also, it’s got a fifth vehicle on the drawing board for 2022. So, based on $1.07 million per delivered vehicle, it will have to deliver 116,822 vehicles in 2021. While possible, I think that’s pushing it. Assuming a vehicle delivery number roughly halfway between 87,456 and 113,636 and $1.65 million per delivered vehicle [halfway between $1.1 million and $2.2 million] and we get 100,546 vehicles delivered at $1.65 million for a market cap of $166 billion or $106.40 per share [1.56 billion outstanding]. I can’t believe I’m saying this, but I think it’s got an excellent chance of blowing through Yu’s target on its way to the third spot in the global pecking order. Long term, Nio’s a buy. On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post An $80 Price Would Drive Nio To Become the Third-Largest Automaker appeared first on InvestorPlace.
1d ago
Barrons.com
Airlines Will Emerge From Turbulence. This One Looks Like the Best Bet.
While everyone appears to agree about what will happen—consumer travel will come back quickly, business travel not so much—airline valuations are all over the place. What investors can do.
1d ago
MarketWatch
I’m 64, single, considering retirement after fighting cancer — I have $1.6 million. Should I retire?
Have a question about your retirement, including where to live? Email us at HelpMeRetire@MarketWatch.com
2d ago
InvestorPlace
7 Cheap Tech Stocks to Hop On Now
Editor’s Note: This article was updated to include information on Gluu Mobile’s merger. There’s no doubt that the headline tech stocks have been guiding this market to new highs. The big ones are in all the major indexes for this very reason. Are tech stocks really deserving of a place in the Dow Jones Industrial Average, when most don’t even build the goods they sell in the U.S.? Apparently they do, because there’s a lot of them in the 30 stocks that make up the index.InvestorPlace - Stock Market News, Stock Advice & Trading Tips And they’re the same companies that make up big weightings in the NASDAQ 100 and S&P 500. Of course, as the old saying goes, don’t fight the tape. But also, look for other opportunities. Smaller, lesser-known tech stocks are getting noticed as well. And as they gain shareholders they’ll gain capital to expand. Now is a great opportunity to get in on that growth. 8 Cheap Stocks Under $20 That Could Double The seven cheap tech stocks that I highlight below are exactly those kinds of stocks. And all of them have either “A” or “B” ratings in my Portfolio Grader. Let’s take a look: Blackberry (NYSE:BB) Ideanomics (NASDAQ:IDEX) Zynga (NASDAQ:ZNGA) Cango (NASDAQ:CANG) Glu Mobile (NASDAQ:GLUU) DouYu International (NASDAQ:DOYU) Wipro (NYSE:WIT) Cheap Tech Stocks: Blackberry (BB) Source: Shutterstock Depending on your age, you either remember this device because you saw it as a youngster at the dawn of the mobile age, or you remember using one of the pioneers in smartphones. This Canada-based company stormed into the market as mobile technology was rewriting the world. There were mobile phones that sold more, but few had the network security and reliability that this Canada-based phone maker provided. Its phones were supported by its network, and it was so secure that it was the go-to work phone for Wall Street and the players in Washington, DC. It was a great device, and also as cool as the iPhone, with its physical QWERTY keypad. But then the iPhone came along with a slew of other touchscreen competitors, with apps and new designs, and Blackberry was left in the dust as a symbol of the past. And as attention moved away, BB continued to do what it did best — securing networks. Recently, the stock was one of those stocks lifted from obscurity by Reddit group investors. But it’s a real cutting-edge tech stock with a lot of promise. And it’s even licensed its phone to a new manufacturer. The stock is up 83% year-to-date, which shows the massive interest in this low-priced player recently. But it’s still a solid company that has a big future. Ideanomics (IDEX) Source: Shutterstock Basically, Ideanomics is a venture capital firm that focuses on promising tech companies that need capital to grow their businesses. Its biggest focus at this point is electric vehicles (EV), commercial electric vehicle funding, and batteries and energy storage. It also has a capital division that provides financial services using artificial intelligence (AI) and blockchain technologies. The company has been of keen interest in the past year or so as ESG (environmental, social and governance) investing has ramped up on the institutional side, and electric vehicles have become very hot tech stocks. IDEX is involved in EV work in both the U.S. and Asia, including with vehicles like electric tractors and motor bikes. 7 Must-Own Stocks in February The stock is up 121% year-to-date, and its market capitalization is $1.64 billion. Zynga (ZNGA) Source: Sundry Photography / Shutterstock.com Launched in 2007, this social gaming company has been through both the Great Recession and the pandemic. And both of those events, as well as everything that has happened in between, has helped build this tech stock’s street cred. We know how popular gaming stocks have become while we’re all remaining socially distant, here and around the world. And the same is true of games that are being played on social media platforms as well. ZNGA is the king in that sector. It just released its Q4 numbers and reported record annual and quarterly revenue and bookings. Yet the crazy thing is, it hasn’t gone wild like most tech stocks. It’s up 20% year-to-date and is a great buy in a hot space. Also, there’s always the possibility that a buyer may come in and take it out at a big premium. Cango (CANG) Source: lumen-digital / Shutterstock.com What’s Cango? It’s the leading automotive transaction service in China. What does that mean? It links financial institutions to dealerships and customers to offer financing for vehicles. As you well know, China’s growing middle class is playing catch-up in the car ownership world. And there are many players from outside and inside China looking for a foothold. But just like in the U.S., homegrown companies are usually favored by businesses and consumers alike for significant transactions. In its Q3 report out in late November, revenue was up 24%, which beat the company’s guidance by 32%. What’s more, late payments on outstanding financing was down significantly. 7 Safe Stocks for Reddit's WSB Bull Gang This tech stock is up 74% year-to-date, but it still only has a current price-to-earnings (P/E) ratio of 7.5. Glu Mobile (GLUU) Source: OpturaDesign / Shutterstock.com Yes, niche gaming company Glu Mobile recently announced it will be acquired by Electronic Arts (NASDAQ:EA). But with the deal not set to close until the second quarter of this year, there is still time to get in on GLUU stock. Glu Mobile has been around since 2001, after the tech bubble burst. And back then, its focus on mobile phones and tablets seemed a bit hopeful. But no more. Most of the other gaming stocks have been late adopters of mobile gaming. GLUU derives much of its revenue with purchases from apps that are promoting products within its games. These are usually apps that are available in most major app stores. Some of the most well-know games produced by Glu Mobile are MLB Tap Sports Baseball and Covet Fashion. Overall, Glu Mobile’s portfolio and potential are likely part of the reason why EA struck the deal. And it’s also why, even if the deal were to somehow collapse, GLUU is still a great company in its own right. DouYu International (DOYU) Source: Shutterstock As one of China’s leading livestream gaming companies, DouYu has garnered a lot of attention as many American investors have looked to these types of tech stocks that are familiar to U.S. audiences. Given the fact that whatever is hot in the U.S. is likely hot in China, and China has orders of magnitude more people, it makes sense that if gaming hot here, it’s even hotter in China and its region. There is talk that DOYU and another big player in the space may merge, but that hasn’t happened yet. And given Chinese authorities’ crackdown on anti-competitive moves by large companies, this could be delayed. But that doesn’t change the fact that DOYU is a top Chinese tech stock that is seeing significant growth. 7 F-Rated Growth Stocks to Sell Sooner Than Later The stock is up 57% year-to-date. Wipro (WIT) Source: Shutterstock It has been an interesting journey for this India-based multination tech firm. In 1945, the company was founded as the Western India Palm Refined Oil Limited. It sold edible refined oils. Over the years it found opportunities as India grew. It also began to partner with major U.S. corporations as the West became interested in India’s growing economy. By the mid-1990s, WIT was transitioning into a tech firm. By 2012 it had sold off most of its non-tech business divisions. And now it’s a multinational IT solutions and services firm with significant operations outside South Asia. The stock has a $32 billion market cap, so it’s a good-sized player but the Indian market isn’t very open and few companies list outside the nation. There are only a couple of Indian tech stocks available in the U.S. But this is a solid company with a very broad base in growing markets. The stock is up 19% year-to-date, and it’s trading near its 52-week highs, yet still has a P/E far below the S&P 500 average. On the date of publication, Louis Navellier has a position in ZNGA in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article. Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post 7 Cheap Tech Stocks to Hop On Now appeared first on InvestorPlace.
2d ago
MoneyWise
The timing of your next stimulus check just got a lot clearer
Speaker Pelosi has given new details as the checks legislation blazes through Congress.
2d ago
Investor's Business Daily
These Are The Best Robinhood Stocks To Buy Or Watch Now
Buying a stock is easy, but purchasing the right stock without a proven strategy is incredibly hard. Here are the best Robinhood stocks to buy now.
9h ago
Investor's Business Daily
These Are The 5 Best Stocks To Buy And Watch Now
Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. So what are the best stocks to buy now or put on a watchlist?
9h ago
TipRanks
Goldman Sachs: These 2 “Strong Buy” Stocks Could Surge at Least 30%
We’re well into the first quarter of 2021 now, and it’s a good time to take stock of what’s behind us, and how it will impact what lies ahead. Goldman Sachs strategist Jan Hatzius believes that we are on an upward trajectory, with better times ahead. Hatzius sees the developed economies expanding as the corona crisis recedes. For the US, particularly, he is impressed by the ‘very substantial fiscal support’ implies in the latest COVID relief package. Even with that, however, Hatzius believes that Q4 was a weaker period, and we are still not quite out of it. He’s putting Q1 growth at 5%, and says that we’re going to see further expansion ‘concentrated in the spring,’ and an ‘acceleration to 10% growth rate in Q2.’ And by accelerations, Hatzius means that investors should expect Q2 GDP in the neighborhood of 6.6%. Hatzius credits that forecast to the ongoing vaccination programs, and the continued development of COVID vaccines. The Moderna and Pfizer vaccines are already in production and circulation. Hatzius says, in relation to these programs, “That fact that we are developing more options and that governments around the world are going to have more options to choose between different vaccines [means] production is likely to ramp up in pretty sharply in incoming months… It’s definitely a major reason for our optimistic growth forecast.” In addition to Hatzius' look at the macro situation, analysts from Goldman Sachs have also been diving into specific stocks. Using TipRanks' database, we identified two stocks that the firm predicts will show solid growth in 2021. The rest of the Street also backs both tickers, with each sporting a “Strong Buy” consensus rating. Stellantis (STLA) We’ve talked before about the Detroit automakers, and rightly so -- they are major players on the US economic scene. But the US hasn’t got a monopoly on the automotive sector, as proven by Netherlands-based Stellantis. This international conglomerate is the result of a merger between France’s Groupe PSA and the Italian-American Fiat-Chrysler. The deal was a 50-50 all stock agreement, and Stellantis boasts a market cap exceeding $50 billion, and a portfolio of near-legendary nameplates, including Alpha Romeo, Dodge Ram, Jeep, and Maserati. The deal that formed Stellantis, now the world’s fourth largest automotive manufacturer, took 16 months to accomplish, after it was first announced in October 2019. Now that it is reality – the merger was completed in January of this year – the combined entity promises cost savings of nearly 5 billion euros in the operations of both Fiat-Chrysler and PSA. These savings look to be realized through greater efficiency, and not through plant closures and cutbacks. Stellantis is new in the markets, and the STLA ticker has supplanted Fiat-Chrysler’s FCAU on New York Stock Exchange, giving the new company a storied history. The company’s share value has nearly tripled since its low point, reached last March during the ‘corona recession,’ and has stayed strong since the merger was completed. Goldman Sachs analyst George Galliers is upbeat on Stellantis’ future, writing, “We see four drivers which, in our view, will enable Stellantis to deliver. 1) PSA and FCA’s product portfolios in Europe cover similar segment sizes at similar price points… 2) Incremental economies of scale can potentially have a material impact on both companies... 3) Both companies are at a relatively nascent stage [in] electric vehicle programs. The merger will prevent duplication and deliver synergies. 4) Finally, we see some opportunities around central staffing where existing functions can likely be consolidated...” In line with this outlook, Galliers rates STLA a Buy and his $22 price target indicates room for 37% growth in the year ahead. (To watch Galliers’ track record, click here) Overall, this merger has generated plenty of buzz, and on Wall Street there is broad agreement that the combined company will generate returns. STLA has a Strong Buy consensus rating, based on a unanimous 7 buy-side reviews. The stock is priced at $16.04, and the average target of $21.59 is congruent with Galliers’, suggesting a 34.5% one-year upside potential. (See STLA stock analysis on TipRanks) NRG Energy (NRG) From automotive, we move to the energy sector. NRG is a $10 billion utility provider, with dual head offices in Texas and New Jersey. The company provides electricity to more than 3 million customers in 10 states plus DC, and boasts a over 23,000 MW was generating capacity, making it one of North America’s largest power utilities. NRG’s production includes coal, oil, and nuclear power plants, plus wind and solar farms. In its most recent quarterly report, for 3Q20, NRG showed $2.8 billion in total revenues, along with $1.02 EPS. While down year-over-year, this was still more than enough to maintain the company’s strong and reliable dividend payment f 32.5 cents per common share. This annualizes to $1.30 per common share, and gives a yield of 3.1%. Analyst Michael Lapides, in his coverage of this stock for Goldman Sachs, rates NRG a Buy. His $57 price target suggest an upside of 36% from current levels. (To watch Lapides’ track record, click here) Noting the recent acquisition of Direct Energy, Lapides says he expects the company to deleverage itself in the near-term. “After NRG’s acquisition of Direct Energy, one of the larger electricity and natural gas competitive retailers in the US, we view NRG’s business as somewhat transformed. The integrated business model — owning wholesale merchant power generation that supplies electricity that gets used to serve customers supplied by NRG’s competitive retail arm — reduces exposure to merchant power markets and commodity prices, while increasing FCF potential," Lapides wrote The analyst summed up, "We view 2021, from a capital allocation perspective, as a deleveraging year, but with NRG creating almost $2bn/year in FCF, we see a pick up in share buybacks as well as 8% dividend growth ahead in 2022-23." We’re looking at another stock here with a Strong Buy analyst consensus rating. This one based on a 3 to 1 split between Buy and Hold reviews. NRG is trading for $41.84 and its $52.75 average price target suggests a 26% upside from that level on the one-year time frame. (See NRG 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.
2d ago
Investor's Business Daily
How Long It Takes To Be A Millionaire With Stocks
Many investors are piling into stocks — including in the S&P 500 — hoping to be millionaires. And while stocks are millionaire makers, the wait varies.
1d ago
Investor's Business Daily
These EV Stocks Have 'Most Compelling Strategies' In Crowded Field: Analyst
QuantumScape and Fisker stand apart from other EV stocks in a fast-moving landscape for vehicle and battery startups, Morgan Stanley said.
1d ago
Barrons.com
A Top Pension Bought More GE, Zoom, and Pfizer Stock. Here’s What It Sold.
The State of Wisconsin Investment Board oversees one of the best-run pensions in America, in terms of its funding.
18h ago
InvestorPlace
3 Undervalued Stocks Looking Up in 2021
It’s common knowledge that investing in undervalued stocks can generate some juicy returns over the long haul. However, the tricky part is investing in the right stocks at the right time. Investors often favor certain sectors over others and undervalued stocks tend to be in the latter category. Although 2021 is shaping up to be a bull cycle, there are still plenty of stocks trading below their value. Investors looking for a value play should consider buying these stocks as these gravitate towards the prices they are worth.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 8 Cheap Stocks Under $20 That Could Double Here are three stocks that should be in for greater upside this year. Ford (NYSE:F) IBM (NYSE:IBM) Intel Corporation (NASDAQ:INTC) Undervalued Stocks: Ford (F) Source: Jonathan Weiss / Shutterstock.com In the Ford versus General Motors (NYSE:GM) wars, GM comes out on top this year for its recent venture into the autonomous vehicle space. However, there is plenty of evidence to prove that Ford is in a great position to close the performance gap in the coming months. One key tailwind is Rivian, the electric truck manufacturer. In 2019, Ford announced a minority stake in the electric truck start-up which is worth $28 billion. Although the company is yet to generate sales, its first vehicle is expected to come out later this year. This could bolster Ford’s bottom line as well. Adding to its partnership with Rivian, Ford is also expected to develop a line of electric vehicles in-house. In 2020, the automaker started distribution of its Mustang-Mach E and deliveries of the electric F-150 truck will begin this year. Ford has a market cap of just $45 million with free-cash-flow (FCF) of $3 billion. At this ratio, Ford is among the top undervalued stocks in the market. Under the hem of its new CEO Jim Farley, the company is primed for a major comeback this year. IBM (IBM) Source: Laborant / Shutterstock.com For the period ended in December, IBM stock took a hit after the company reported some poor quarterly results. A major reason for the 6% dip in revenue (year-over-year) was its slow adoption of cloud-based solutions. As expected, the Q4 earnings resulted in a massive sell-off bringing its share price back to March 2019 lows. Although this should deter investors from throwing their support behind the stock, IBM’s future prospects make it a great investment at its current price. For one, IBM’s recent transition to cloud solutions gives the company plenty of opportunities to grow in the coming years. According to CEO Arvind Krishna, hybrid cloud computing will be a $1 trillion opportunity for the company. This along with developments in artificial intelligence (AI) will translate to higher revenue levels in the second half of this year. Given the positive trends, I think IBM remains one of the most undervalued stocks on the market right now. Investors should get behind the investment before prices go higher. Intel Corporation (INTC) Source: Kate Krav-Rude / Shutterstock.com Another company that’s had a tough run this year is the chipmaker Intel. During its earlier than expected earnings call, CEO Pat Gelsinger stated that the company will continue to manufacture its chips in-house. This came as a disappointment to many investors who were hoping the company would outsource the manufacturing to improve internal efficiency. The news overshadowed Intel’s earnings, which beat analyst estimates on both revenue and earnings per share. Although the reaction to the earnings was a mixed bag there are still plenty of reasons to hold on to Intel stock. Intel stated that it will not outsource the production of its chips but there is a possibility it could do so for its other line of products like GPUs. As far as CPUs go, keeping the production of this in-house is capital intensive and could very-well lower its market competitiveness. However, there is good reason to believe that it can catch up to rivals like Advanced Micro Devices (NASDAQ:AMD), an emerging leader in the space. Last month, Intel introduced a new line of processors that will hit the market this year. As CPU sales spike, Intel will be able to capture a greater share of the market this year. Intel definitely has its challenges but in the grand scheme of things, the company has numerous opportunities to come out on top in 2021. On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post 3 Undervalued Stocks Looking Up in 2021 appeared first on InvestorPlace.
1d ago
Investor's Business Daily
Warren Buffett Stocks: LULU, Veeva, Logitech Among 12 Stocks On This Screen
See who joins Veeva, Logitech, LULU stock on this screen of Warren Buffett stocks based on the investing strategy of the Berkshire Hathaway CEO.
2d ago
InvestorPlace
Dogecoin Extends Tesla-Backed Rally, But DOGE Is Highly Speculative
Dogecoin (CCC:DOGE-USD), which joined the ranks of cryptocurrencies in 2013, has been making headlines in 2021. On Jan. 27, DOGE had a price of $0.0075. But just two days later it hit $0.0780, up 10 times in that short time. Now, it is around $0.0673. Source: Shutterstock Trading and investing in cryptocurrencies has been on the rise for many years now, with Bitcoin (CCC:BTC-USD) as the main name most people know. BTC is hovering at all-time highs of nearly $48,200. But the sudden surge in Dogecoin has meant increased attention for DOGE, too. Therefore, today’s article discusses what Dogecoin is and if you should put the cryptocurrency on your radar. Let’s take a look. Meme Cryptocurrencies Dogecoin is a cryptocurrency invented by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system that is instant, fun, and free from traditional banking fees. Dogecoin features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake. We could, thus, refer to it as a “meme” cryptocurrency. There are other cryptocurrencies based off popular memes or people.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Initially, Dogecoin was mainly used for “thanking” others on the Internet for “positive acts,” such as an idea or a web-related activity. Since 2013, interest has been slowly building up in DOGE. Unlike Bitcoin, Dogecoin does not limit the number of coins that can be produced. 8 Cheap Stocks Under $20 That Could Double Recent research by Usman W. Chohan of UNSW Business School, Australia highlights: The frenzied public interest in cryptocurrencies has meant that, as second-order capital rushes towards the Bitcoin trade, potential investors are also drawn toward alternative currencies that may serve specific purposes; but one such cryptoasset, Dogecoin, is not so much an alternative numismatic instrument as it is a leisured exploration of community-building around a cryptoasset. In recent weeks, as investors (both institutional and retail) took their profits from the crazy rallies in Gamestop (NYSE:GME) and AMC Entertainment (NYSE:AMC), the Internet (predominantly Reddit users) looked to find the next trend, and this meme currency, i.e., Dogecoin, mainly caught their attention. Along with retail interest came celebrity support, namely from Elon Musk, the successful entrepreneur and the world’s wealthiest person. Bloomberg Billionaires Index notes Mr. Musk’s estimated net worth is over $200 billion, surpassing Jeff Bezos of Amazon (NASDAQ:AMZN). Therefore, when Mr. Musk talks, the Street listens. Elon Musk Provides Tailwinds Tesla (NASDAQ:TSLA) CEO Elon Musk has not been shy to use Twitter‘s (NYSE:TWTR) platform to publicize his positive views on Bitcoin and Dogecoin. He has around 25 million followers on Twitter. Then, last week, an SEC filing showed that Tesla purchased $1.5 billion in Bitcoin in January. Now some on Wall Street wonder if Mr. Musk could come under an investigation by the SEC. Yet what is certain is that the CEO of Tesla has helped push the price of cryptocurrencies to new highs. Musk has a reputation for moving the stock market using tweets, once tweeting that Tesla’s stock price was too high, causing a crash of the price. He also tweeted that Tesla would go private at $420 a share, referring to a weed joke that later led to him being sued by the SEC. In recent weeks, Musk has tweeted on Dogecoin a few times, including one tweet stating, “Dogecoin is the people’s crypto.” He has also tweeted many pictures relating to the currency. Finally, on Feb. 11, he tweeted that he bought some Dogecoin for his toddler son, leading to more headlines. Now, the Street wonders if Dogecoin can reach $1, a level that seems to be plucked out of the air by retail investors. $1 seems an arbitrary value, not necessarily backed by anything tangible, other than investor sentiment. Also, there doesn’t seem to be any fundamental reason behind the price increase of Dogecoin. The Bottom Line on Dogecoin One of the most difficult elements is trying to ascertain what a fair value for DOGE is. From a fundamental point of view, buying Dogecoin at this level is hard to justify. Investors cannot really tell whether the current level reflects an undervaluation, or the complete opposite. As we currently stand, many retail investors seem to disregard this fact when they look for the next trade that could bring in the riches. Meanwhile, they move away from the time-tested investing strategies of billionaires such as Warren Buffet, based heavily around fundamentals, dividends, and consistent revenue and profit growth. What can happen next? It is not easy to predict whether DOGE will rally all the way to $1 as the Redditors and Musk hope. It could reach its potential of getting “to the moon.” But we could also see a similar situation as in the case of GME and AMC stocks, a momentum which died off nearly as quickly as it rose. But if DOGE were to hold its price, then it could become a currency that even more people flock to as the trend of crypto continues to grow. On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post Dogecoin Extends Tesla-Backed Rally, But DOGE Is Highly Speculative appeared first on InvestorPlace.
2d ago
InvestorPlace
4 Solar Stocks Energizing the Market
Solar stocks have been popping recently and for good reason. According to the International Energy Agency, in the next 10 years solar output will create a surge in the renewable power supply. A report by Wood Mackenzie also estimates that solar energy will become the cheapest form of U.S. power by fiscal year 2030. Given these optimistic projections, solar stocks are likely to be in focus in the coming years. More importantly, if solar output grows at a robust pace in the coming decade, it’s likely that solar stocks will be portfolio catalysts.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 8 Cheap Stocks Under $20 That Could Double With President Joe Biden assuming office, solar stocks have already witnessed sharp moves in the recent past. For some stocks, buying on corrections is a good idea, but others are still attractively valued. Let’s discuss four solar stocks that are likely to benefit from the global push towards renewable energy sources. Azure Power Global (NYSE:AZRE) Maxeon Solar Technologies (NASDAQ:MAXN) Canadian Solar (NASDAQ:CSIQ) First Solar (NASDAQ:FSLR) 4 Solar Stocks Energizing the Market: Azure Power Global (AZRE) Source: Love Silhouette / Shutterstock.com AZRE stock has surged by 78% in the last six months and is among the top solar stocks to consider. The company is a manufacturer and operator of solar plants in India. As of September 2020, India had 38 gigawatts in renewable energy capacity. The plan is to increase the renewable capacity to 450gw by fiscal year 2030. This presents a big opportunity for Azure Power. While the focus has been on solar stocks in the United States, the company provides exposure to emerging markets. In terms of size, Azure Power has one of the largest solar portfolios in India. Currently, 1,834 megawatts is operational with 1,281mw under construction. In addition, the company has a committed pipeline of 4,000MW. Given this pipeline, I expect the company’s revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) growth to remain robust in the next few years. From a financial perspective, the company reported net-debt-to-adjusted-EBITDA of 5.9 as of September 2020. I am not worried about high leverage. The company is already reporting strong EBITDA growth coupled with positive operating cash flows. As more projects are operational, I expect leverage to decline. Overall, AZRE stock is worth considering at current levels. Given the push for renewables in India, the company is likely to deliver strong growth in the next decade. Maxeon Solar Technologies (MAXN) Source: Shutterstock MAXN stock has been surging in the current year with returns of 94%. It makes sense to wait for some correction after a big rally. The stock is worth accumulating on corrections for the long-term. Maxeon Solar is a spin-off from SunPower Corporation (NASDAQ:SPWR). Post-spin-off, the company’s major shareholders are Total (NYSE:TOT) and Tianjin Zhonghuan Semiconductor. With strong financial backing, the company is well-positioned for aggressive growth. Maxeon Solar has a presence in more than 100 global markets. The company also has a multi-year U.S. supply agreement with SunPower Corporation. Besides the sale of power panels to residential and commercial customers, the company is a leader in solar power plants. 7 Safe Stocks for Reddit's WSB Bull Gang Currently, the company has 5gw of SunPower panels installed across six continents and has more than 900 solar patents. Innovation is a big part of Maxeon’s plan. It’s worth noting that the company is looking to move beyond panels and make inroads in the storage and services segment. This is one of the key growth triggers. Maxeon is targeting top-line growth in excess of 20% in the next few years. Overall, MAXN stock is among the under-followed names among solar stocks. The stock has skyrocketed in the recent past. A 10% to 15% correction from current levels would be a good entry point. Solar Stocks to Buy: Canadian Solar (CSIQ) Source: Shutterstock CSIQ stock has also moved sharply higher by 139% in the last six months. The stock currently trades at $61. Even after the big rally, Citi remains bullish on the stock with a price target of $71. I agree with this view. CSIQ stock still trades at attractive levels. To underscore my point, the stock currently trades at a price-to-earnings ratio of 26.48. In the next five years, Canadian Solar’s average annual earnings growth is likely at 32.0%. Therefore, the stock trades at a price-earnings-to-growth ratio of less than one. That implies that the stock is undervalued. Canadian Solar manufactures solar modules and provides systems solutions. In the energy business, the company has 16gw of project pipeline with 500mw of projects in operation. With a presence in 23 countries, the company’s project pipeline is likely to swell in the coming years. It’s also worth noting that for the last year, the company reported shipments of 11.3gw. For the current year, the company’s shipment is likely to accelerate to 18-20gw. This is one of the reasons for the stock surge in the recent past. From a financial perspective, the company has deleveraged in the last few years. This has increased the financial flexibility. As EBITDA and cash flow accelerate, Canadian Solar is well-positioned for shareholder value creation. First Solar (FSLR) FSLR stock is another attractive name among solar stocks that’s worth considering on dips. Recently, UBS downgraded the share from “buy” to “neutral.” However, the share price target was raised from $95 to $110. Currently, First Solar trades at $100. Given the growth outlook, the stock remains attractive for the long-term and worth accumulating on dips. In terms of positives, the company has 12.2gw in module shipment backlog. This provides clear revenue and cash flow visibility for the coming quarters. For the current year, First Solar has 6.7gw of contracted deliveries. It also has potential booking opportunities of 8.3gw, which is likely to boost the order book for FY2022 and beyond. It’s also worth noting that for Q3 2020, First Solar reported capacity utilization averaging over 100% at all factories. With cash and equivalents of $1.6 billion, the company has ample financial resources for capacity expansion. Overall, the company has strong fundamentals and a steady growth outlook. With positive industry tailwinds, the stock is worth keeping on the radar. On the date of publication, Faisal Humayun did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored more than 1,500 stock specific articles with focus on the technology, energy and commodities sector. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post 4 Solar Stocks Energizing the Market appeared first on InvestorPlace.
2d ago
InvestorPlace
Hertz Stock Is Dirt-Cheap For Good Reasons
Bankrupt Hertz Global Holdings (OTC:HTZGQ) is a very enticing stock right now. Those looking to pick up some Hertz stock as a rebound play may be looking to score a quick win. Indeed, Hertz could bounce back nicely in a post-pandemic environment. A quick double-up or triple-up of one’s investment can bring a lot of deep value investors to the table. Hertz stock has actually rallied more than 400% from its 52-week low. That’s a pretty good return for deep value investors willing to scrape the bottom of the barrel.InvestorPlace - Stock Market News, Stock Advice & Trading Tips However, I think this is a dog with too many fleas right now. I’m going to highlight why I’m steering clear of this restructuring play right now. Hertz Stock Operating Results Worse than Expected Hertz reported some pretty underwhelming numbers in its most recent report. Revenues declined by 56% and the company reported a net loss of $222 million. Various debt restructuring moves have taken place in accordance with bankruptcy laws. Among these, the company took out a debtor-in possession (DIP) loan of $1.7 billion and a fleet financing commitment of $4 billion which was pending court approval. 8 Cheap Stocks Under $20 That Could Double These are prior quarter results, as Hertz is not expected to report earnings until later this month. Indeed, I think the upcoming earnings report will cause some volatility with Hertz stock. Whether this is on the upside or downside really depends on how strong the numbers are. If investors are willing to look past the pandemic toward the long-term, Hertz stock could catch a bid. However, if it looks like this stock has way too much hair on it, investors may cut their losses and move on. Chapter 11 Bankruptcy Issues Under bankruptcy law, a company has to show a realistic business plan showing a reasonable likelihood of survival to exit Chapter 11 bankruptcy. Such a plan would need to be approved by the court and would need to show the company is on solid footing. If further liquidation or restructuring is needed, a plan may not be confirmed. Hertz is currently still liquidating its fleet to right-size for existing demand. While Hertz has acknowledged the company has made progress toward emerging from Chapter 11 bankruptcy, and the company’s debt load has been reduced substantially, more work is likely needed for Hertz to be in a position to present a plan that is accepted by the court. Accordingly, it may take a while for this company to be re-listed once again and taken off of the OTC exchange. Given the losses and amount of restructuring that’s happened thus far with Hertz, I have no idea how long this stock will remain in bankruptcy protection. Any sort of indication that the restructuring plan isn’t on the right track could be detrimental to this stock. Again, I think there’s going to be some tremendous volatility in this stock in the coming weeks around earnings. Won’t Things Get Better Post-Pandemic? Broadly speaking, yes. Things can’t get much worse for rental car volumes. This is a stock that was trading around the $15 for the better part of the past five years. There’s real potential this stock could start to climb out of this mess if travel restrictions are loosened or removed sooner than expected. Vaccine rollouts around the world are being accelerated. Importantly, pent-up demand for discretionary travel will certainly drive a spike at some point. Indeed, these are all positive catalysts. The key here is the timing of when such catalysts materialize. For now, I think more downside exists with Hertz than is apparent on the surface. Until the company emerges from its Chapter 11 bankruptcy, I’ll be on the sidelines. Disclosure: On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post Hertz Stock Is Dirt-Cheap For Good Reasons appeared first on InvestorPlace.
2d ago
Benzinga
Palantir's Q&A Platform For Investors Is Open All Weekend Ahead Of Q4 Earnings On Tuesday
Big-data analytics company Palantir Technologies Inc (NYSE: PLTR) is scheduled to release fourth-quarter earnings Feb. 16, and the Denver-based company wants to hear from shareholders. What Happened: Palantir opened a shareholder Q&A platform to be used in its upcoming earnings call. The company is inviting investors to ask and upvote questions that they would like addressed on their earnings call. The Q&A platform is open for use starting today, and retail and institutional shareholders will be able to submit and upvote questions to management. View more earnings on PLTR Interested traders and investors can submit questions to the Palantir team ahead of earnings here. Top Subjects: Some of the top-voted questions on the shareholder Q&A platform right now? Here they are, lightly edited: With the partnership recently announced with IBM, I believe sales at the Enterprise level will increase greatly. Will Foundry be the main software used? And finally does Palantir have plans to create a more scaled-down version to serve small- to medium-sized businesses? While the IBM announcement is great, their public cloud share is miniscule. Can you commit to expanding managed offerings to other public cloud providers such as Microsoft Corporation (NASDAQ: MSFT) Azure, Amazon.com, Inc. (NASDAQ: AMZN) AWS, and Google Alphabet Inc Class A (NASDAQ: GOOGL) Cloud? When does Palantir expect to achieve a level where it can repeatedly and continually achieve profitability?< Which two or three things should long-term investors focus on most to track Palantir’s progress towards long-term growth targets? Palantir says the Q&A platform will remain open until 24 hours before the earnings call. Photo courtesy: Cory Doctorow via Flickr. See more from BenzingaClick here for options trades from BenzingaHere's Why Palantir, Pinterest, Ford, Activision Are Moving© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
18h ago
InvestorPlace
Here’s Why You Might Want to Bail From Your Ethereum Bet
Ethereum (CCC:ETH-USD) is trading over $1,800 as I write this early on Feb. 11. It’s up 150% year-to-date (YTD). A similar story is told about Bitcoin (CCC:BTC-USD), the world’s largest cryptocurrency. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading Tips When it comes to stocks and other investments, generally, I’m not particularly eager to write about them unless I’m bullish about their prospects. I’ll never short a stock as a result. It’s just not in my nature to recommend someone sell a particular investment, especially when they’ve bought for the long haul. Sure, I’ll make sell calls based on valuation, but more often than not, it’s for stocks I like that have gotten ahead of themselves. What’s happening in the markets at the moment is unsettling to me. Not because I’ve never lived through a major correction; I’ve lived through many in my adult life (I’m 56). I know from experience that markets always recover. Some, however, take longer than others. 8 Cheap Stocks Under $20 That Could Double It’s a big reason why you might want to consider taking profits on your Ethereum bet. Let me explain. History Is a Good Teacher If You Own Ethereum Successful investors are generally interested in history. That’s because so much of what happens in the world repeats itself, over and over, and over. The markets are no different. History gives us perspective. Ben Carlson, one of my favorite financial bloggers anywhere, wrote a piece for his blog, A Wealth Of Common Sense, in March 2019 that discussed the worst entry point in stock market history. I recommend that you read it. Carlson plays with total returns in the markets over various 35-year periods. In one example from 1965 through 1999, the S&P 500 delivered an annual return of 12.4%. In another period from 1984 through 2018, the annual return was a respectable 10.7%, including the 1987 crash. I was one year into a financial services career at that point and figured the world as we knew it was over and done. It wasn’t. Carlson compared the 1965 to 1999 period to the performance of the index from 2000 through 2018. That delivered an annual return of 4.9%, or about one-third of the performance over the 35 years. However, that’s not his best argument. He points out that to generate a 12.4% return over 35 years from 2000 through 2034, an investor would need to achieve an annual return of 22% between 2019 and 2034 to generate the identical 35-year performance. So, the question you want to ask yourself as you sit on your significant unrealized gains YTD is whether, in 35 years, $1,800 will be considered the worst entry point in the cryptocurrency’s history or one of the best. What you do with this analysis should determine whether you bail on your Ethereum bet or not. The Bitcoin Parallel InvestorPlace’s Josh Enomoto recently wrote a piece that explained why he had unloaded most of his Bitcoin investment as his personal wall of worry got too hot to handle. Bitcoin is up 60% YTD and 358% over the past year as I write this. In May 2020, Josh discussed the concept of Bitcoin halving. He owned Bitcoin at the time. He held it at the end of 2019. At the beginning of 2019, he owned it. In 2018, he owned Bitcoin, arguing that investors had an opportunity to buy before the price really took off. Using the dates when each of these articles was published, Bitcoin traded at approximately $10,000 (February 2018), $3,800 (January 2019), $7,200 (December 2019), $4,900 (May 2020) and $37,000 (beginning of February). I can’t tell you if Josh bought once in February 2018 and held through February 2020, or if he averaged down through 2019 and 2020, but what I can tell you is that $37,000, give or take a few thousand to account for the actual timing of the sale, was his time to bail. “You see, when all your money is tied up in volatile investment markets, it’s difficult to get any peace. While I’d never take such outlandish risks, I did have a sizable profit in Bitcoin,” Josh wrote on Feb. 10. “But as the price kept ticking higher and higher, the pressure got to me. Knowing how wild Bitcoin trading is, I could hold on for dear life and risk losing everything or I could get out while the going was good and take something, anything out of this experience.” As Clint Eastwood said in Magnum Force, “A man’s [or woman] got to know his limitations.” Indeed he or she does. I could continue with clichés and quotes for the next several hours. The point is, my colleague, who writes about investments for a living — and has for many years — chose to exit most of his Bitcoin position for a sizable gain after it had appreciated by 329% over the past year. By comparison, Ethereum is up 547% over the same period. Take from this what you will. On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post Hereâs Why You Might Want to Bail From Your Ethereum Bet appeared first on InvestorPlace.
1d ago

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