According to Morningstar research in the middle of 2019 almost half of all US stocks were part of some passive index fund. This number almost doubled since 2009. In the meantime, active management is on a steady decline, especially active managed funds. Around the same time Dr. Michael Burry compared index funds to CDOs. Let’s look into this case and try to draw something from it for our benefit. submitted by negovany to wallstreetbets [link] [comments] 1. How come index funds are compared to CDOs if they only track industries or sectors of economy? What we often miss is that the index fund, instead of being a neutral observer, is an active participant in the fundamentals of the companies that compose a particular index. The fund does so by providing capital and influencing market value of a security (this also opens a window of opportunities for the company behind the ticker to raise capital via bank loans or private investments). What’s so bad about this? Well, passive funds don’t go through balance sheets, there is no fair value assessment, no analysis and no risk taking. They just buy whatever company is big enough to make it into the index. This company can then use provided capital to stay afloat or influence it’s price by share buybacks, dividends or simply pay huge bonuses to it’s management. Just like banks didn’t care about subprime mortgages that were packed into CDOs, index funds managers don’t care about what exactly goes into their ‘soup’. With the banks it was just greed and ignorance – in case of index funds it’s by design. When there is a stable influx of new capital into passive funds, zombie companies are dragged higher and higher. WSB goddess Cathie Wood called this the greatest misallocation of funds in the history. But why is so much cash flowing into index funds? Is it a trend? Is someone incentivized to promote them? Well, yes, but the main reason is different: boomer psychology and our friend, the FED. See, boomers have massive capitals. All those pension funds, retiring firefighters, trust babies, capital heirs – they all seek safety. They don’t try to get 500% returns YOY or lose it all. They are very content with just beating inflation. Throw few percents above inflation and they will be over the moon. For a long time their favorite asset class were treasuries. 2. What is happening to the bond market? In 2016 US bond market was almost $40 trillion in value, compared to less than $20 trillion for the domestic stock market. Now, I haven’t seen yet the data about the size of US bond market of 2020, but everything points that it’s ratio to stock market is deteriorating. The US 10-year government-bond yield fell from nearly 2.00% at the beginning of the year to an all-time low of just 0.31% in early March. That’s what Rick Rule called ‘return free risk’, since allocating capital into these treasuries almost guarantees you to lose money to inflation. https://preview.redd.it/q6r2fhqfu6961.png?width=1372&format=png&auto=webp&s=b72fad038a47ee1a0adca587881f46bafc25cc89 Look at what is happening in Europe: “The ECB, which added 500 billion euros ($606 billion) to its pandemic bond buying program, is set to own around 43% of Germany’s sovereign bond market by the end of next year and around two-fifths of Italian notes, according to Bloomberg Intelligence. That’s up from around 30% and 25% respectively at the end of 2019... Trading volumes in bund futures have collapsed 62% since the ECB started buying bonds, according to Axa, while ranges the lifeblood of traders have nosedived across Europe. In both the safest and riskiest nations, this quarter’s spread between the highest and lowest yields is the tightest it’s been since at least the global financial crisis.” The FED is doing quite the same. Buying bonds (including corporate) all over the place and lowering interest rates to the ground. What’s even more devastating for boomers is that there’s no hope on the horizon: the FED promises to keep interest rates low for the next few years. We are really heading towards Japan situation where the central bank is that fat ugly bully kid playing all by himself in the sandbox. 3. Where to go if the bonds are not so hot? This all causes big money to chase the next best thing. What do people consider safe? Real Estate. And indeed it rose: according to Knight Frank Global House price index US housing prices rose 7% from Q3 2019 to Q3 2020. But that’s a lot of hustle for big money. And that is hardly a passive income, rather a career. So the next best thing is index funds. What can be better than tracking the whole US economy? Never bet against America, am I right? Even if we stumble upon a market crash sending S&P down – the economy will recover, it always does, right? The influx of cash into ETFs is basically a self fulfilling prophecy: it drives prices up and those yearly returns get even more lucrative compared to sexy 0.31% provided by treasuries. The data shows that 2019-2020 saw again a spike in passive management allocation, but I couldn't find more up to date graph Even worse is that actively managed funds and bank investments start to, basically, replicate index funds. That is due to the risk/reward factor: if the funds outperform the market - they get some good rep and few new customers; but when they underperform the market – they get absolutely obliterated. Only few outsiders can risk picking deep value stocks or plays, that are not common portfolio dwellers. Or it takes someone with huge authority like Warren Buffett or Howard Marks. 4. Bubbles everywhere Now, at this point you might be on the edge of your seat, banging your fist and thinking that this is nothing but a bubble and the boomers, index funds and the FED are to blame. Well, it is. Hard truth is that fundamentals in the long run always kick-in. So-called Buffett indicator (total stocks market cap to GDP) is almost at a record high. And on top of that we have Dot.com bubble 2.0 with crazy tech enthusiasm. And a second real estate bubble too. But I urge you to notice, that bubbles are not all the same with the same outcome. Well, they all go burst, but that’s not the point. There are bubbles that I would call ‘General Market Heat’ - situations when too much money goes into the market, causing it to overheat. Then some sort of event, panic, fear, or rumor, not necessary caused by declining fundamentals, sends the market to downward spiral. As an example: panic of 1857, 1929, 1987, etc. The better the fundamentals were and the least the government gets involved – the faster it rebounds. Those bubbles do nothing but attract more speculators and their only result is the number of bankruptcies. Then there are bubbles that I would call ‘Thematic Bubbles’ - those are dedicated to some specific industry or a number of particular stocks that are expected to grow enormously. Tulip Mania in Netherlands (1637), Railway Mania in UK (1840s), Video Games Crash of 1983, Dot Com Bubble (2000). They all chased some particular novelty and all landed on their faces. But doing so they provided huge capital to developing industries. Dot Com Bubble gave us rapid growth of internet usage. Video Games chase of the late 70s and early 80s gave us the golden age of arcade gaming and huge inventions in graphics and game tech. Railway Mania left Britain with the largest system of railroads in the world. And guess who is the biggest exporter of tulips and holds 49 % of the global flower market? Yep, Netherlands, to this day, almost 400 years since the mania! This did not in any way benefit the majority of investors who went down with the bubble. But you can view this as a sacrifice of dumb and greedy people for the benefit of the progress. I get a sense of pride in this noble cause, as a member of WSB community. Back to boomers and index funds. By pouring money into index funds they provide capital both to disruptive industries and to zombie companies. The good thing is that the tech gets the majority of it, since it has the biggest share. Just look at the SPY top 6 holdings: https://preview.redd.it/ien160wku6961.png?width=361&format=png&auto=webp&s=b4fb8528478110ff0f2d5f9e1a793d7b5e5a9085 It’s genuinely good that companies like Tesla will get allocation of billions and billions which they (frankly) do not quite deserve at current fundamentals. This will accelerate their growth. The bad thing is that such allocations cement big tech monopolies, damaging competition. And it also provides liquidity to zombie companies big enough to make it into indexes. Difference is that innovative companies use this cash to reinvest into future growth. That’s exactly why their P/E ratios are so bad. Zombies spend cash on buybacks and management bonuses. Because of how all these companies are tied together in index funds and due to the nature of modern margin calls – once any segment of the stock market falls, there will be a massive dip. Tech can drown any industry stocks with them and vice versa. But the Tech will be able to cut investments, R&D and expansions and become profitable, while zombies with a big debt will go bankrupt. Either way it’s investors, who will bear the pain. 5. What shall we draw from here:
TL;DR: The bond market is similar to boomers wives: sexy in the 80s, not so much today. Constant intrusions by their relatives (the FED) into their relationships makes things even worse. That sends boomers chasing young girls - the stocks. But their dongles aren’t so active anymore, so boomers prefer passive approach, using a dating app - index funds. Unfortunately, there are only so many hot girls among young ladies on the app. This leads to ugly ones receiving attention and money from boomers, which they otherwise wouldn’t deserve. Some of those ladies spend money wisely and will be good to go once the boomer dies out. Others immediately waste it on shopping. Now, if a young man wants to find a truly beautiful lady with reasonable expectations – he has a better chance searching outside of the boomer dating app. Obligatory pictograph of a rocket for those of us who are not yet fully developed for an alphabet 🚀 🚀 🚀 |
So, the day has come, and MicroVision's market cap is finally big enough so that you won't get banned for mentioning it on WSB. But what is it? Why have they seen an 800%+ increase in three months? Where are they headed? Allow me to explain. submitted by BigBlackWifey to wallstreetbets [link] [comments] About Them MicroVision, Inc. (MVIS) makes futuristic-as-fuck laser technology that's used in self driving cars and augmented reality headsets. This already sets them apart from a major competitors like Velodyne (VLDR), which focuses solely on LiDAR for self driving cars. Sumit Sharma, the CEO, was head of operations at Google's Project GLASS and has worked to map hardware development at Motorola, also worked at Jawbone. Source Why have they been increasing 800% in three months while similar companies in the same sector see a fraction of that gain? Because their tech is much more advanced than the competition, and they were (are) criminally undervalued. The reason they're so undervalued is because the first thing hedge funds see when they research a potential investment is the balance sheet, and on paper MVIS looks like shit. (Low assets, high liabilities) Even I saw the movement back in December, did some research, and was like "Wtf is this? I need to get puts" But once you do research into their product, who their customers are, and the future of the industry that they are involved in, you see that MicroVision is a turnaround story similar to that of Plug Power; both are 90's futuristic companies that people got way too excited about in 2000, have struggled to make it to 2020, but now are about to finally have their heyday. And they got a $13 million equity facility (loan) in December that greatly improved their balance sheet, making them appeal to institutions, and bringing Vanguard and Blackrock to invest in MVIS days later. I actually had a hedge fund manager tell me that MVIS was doomed to run out of cash in Q1 2020, but if they secured funds then they would have a lot of potential. I go over that in the comments. MVIS (left) vs PLUG (right) 1990's until present Anyways, what is this "much more advanced" technology? I'll just let this chart do the talking: The MicroVision Consumer LIDAR being compared here isn't even their model designed for self-driving cars, that will be coming in April. The resolution it can take as input/second, the points per second, is key when it comes to how clearly the LiDAR sensor can see, how accurately it can identify what it is seeing, and how quickly it can react. That chart is from 2 years ago and still the best resolution Velodyne can provide today is only 4,800,000 pps in their most advanced model, the "Alpha Prime" 3D Lidar Data Points Generated 2- Single Return Mode: ~ 2,400,000 points per second- Dual Return Mode: ~ 4,800,000 points per second.VLDR has not publicly announced a price for their Alpha Prime yet, but historically their top of the line devices cost $75,000. I have seen unsourced numbers of the Alpha Prime costing $100,000. That was last year, will probably be brought down to be more reasonable for automakers to purchase. They did announce a $500 model called the Velarray H800 in November, but the only thing they said about its pps resolution is that its "outstanding"... lol. As for Luminar (LAZR), they will launch the new model "Iris" in 2022, which will cost about $1,000: (the same price as MicroVision's device to be revealed in April). It will also only operate at 10Hz. This is similar to playing a racing game at 10FPS. If you know anything about video games, you know that this is unplayable. Iris will cost less than $1,000 per unit for production vehicles seeking serious autonomy, and for $500 you can get a more limited version for more limited purposes like driver assistance, or ADAS. Luminar says Iris is 'slated to launch commercially on production vehicles beginning in 2022,' but that doesn't mean necessarily that it's shipping to customers right now. The company is negotiating more than a billion dollars in contracts at present, a representative told me, and 2022 would be the earliest that vehicles with Iris could be made available.A lengthy post has been make comparing Luminar's resolutions with MicroVision's, which was not easy to calculate because Luminar said their resolution was "300dpi/spdeg", a statistic that is incomprehensible for shareholders because its not the common specification of millions (3D) points per second. Here's the math, I sum it all up at the bottom: Luminar's Hydra claims resolution of "up to 200 points per square degree" and a FOV of 120° x 30° (degrees). (and 300 points for Iris, the one coming in 2022.)TLDR: The best case scenario for Luminar is that their 2022 model will have 10.8 million pps, but in reality its probably much lower than that because of FOV configurations, careful wording by press releases, and Hz limitations. Additional Interesting insight on Luminar and their tech lagging behind is in the comments, this post is long enough already. Again the MicroVision Consumer LIDAR (specifications) being used for comparison here isn't even their model designed for self-driving cars. Their device specialized for cars, the "1st gen Long Range LiDAR (LRL) Sensor", will be coming in April. We expect our 1st generation LRL Sensor to have range of at least 250 meters and the highest resolution at range of any lidar with 340 vertical lines up to 250 meters, 568 vertical lines up to 120 meters and 944 vertical lines up to 60 meters. This equates to 520 points per square degree.(For those who read the math on LAZR, notice he doesn't say up to) It testing is successful, the 1st Generation LRL Sensor will be able to calculate velocity of objects relative to itself, and be able to be used in Level 3 and Level 4 self-driving applications Our LRL Sensor will also output velocity of moving objects relative to an ego vehicle across our dynamic field of view in real-time 30 Hz sensor output. This sensor would accelerate development of Level 3 (L3) autonomous safety and Level 4 (L4) autonomous driving features that are important to potential customers and interested parties.What is Level 3 and Level 4 autonomous driving? https://preview.redd.it/n4c8831l9dh61.png?width=848&format=png&auto=webp&s=0652984c72da3159b53a4fc4058c9d9e33cc6b05 Level 1 is feet off, level 2 is hands off, level 3 is eyes off, level 4 is mind off, and level 5 is full passenger (you can sit in the back). So basically, they have that 2045 technology today, while everyone else is trying to play catch-up. How is it so advanced? It all lies in the high resolution of the laser sensors. I've seen MVIS's LiDAR in action at a shareholder meeting. It can recognize people. This has been described on MicroVision's conference calls, and has been described with significant additional safety and convenience features.If their devices can really recognize people, objects, and pets, it could integrate security verticals in MicroVision's business model. (Video surveillance is expected to reach a 144.5 B market size by 2027) Why not just use cameras? Cameras are worse at long distances, LiDAR is the only sensor that gives you resolution at range: the ability to get very fine and very accurate detection of objects in space.that's why Teslas use radar systems in addition to their cameras, still not good enough to prevent fatalities on the road using Tesla's "full self-driving" software. Also, cameras struggle with light glare, weather, and 3D imaging, while LiDAR fixes all those issues. The main advantage of cameras are their resolution, and MicroVision is bridging the gap. So, will testing be successful? We expect the capability of our LRL Sensor to meet or exceed OEM requirements, based on technology we have scaled multiple times over the last decade, as being a very strong strategic advantage. (Same source)This product has been getting fine tuned for years and I am personally confident that they will be able to outperform in their testing. Demonstration(YT links aren't allowed apparently) of their consumer LiDAR product from 2018 (make sure your quality is all the way up). Growing Industry The self-driving cars market is expected to reach 220.44 billion dollars by 2025. This includes taxi, civil, public transport, heavy duty trucks, ride shares, and ride hail (UBER - 72 B mkt cap) applications. Traffic Accidents in the US alone Cost 871 Billion A Year, even just yesterday there was an insane pileup on the I-35W highway in Texas that killed 6, injured 36, and damaged 133 vehicles. Not only self-driven cars need LiDAR. In a few years, as soon as MicroVision's 1st Gen LRL is available, LiDAR systems will certainly become mandatory for (still) human-controlled cars to avoid collisions. This tech could become as revolutionary and successful as airbags. Airbags are a 37.3 billion dollar industry. If only 10% of the cars produced annually contain four Microvision LRL systems, this will result in a volume of 364 million units in ten years. (9.1 million cars * 4 modules * 10 years) And this is a conservative calculation, both a higher market share, more cars produced, and more modules per car are conceivable. At least 4 LRL devices will be necessary to establish a \"circle of safety.\" Augmented Reality The Hololens 2 is an example of a Virtual Reality Device (VRD) manufactured by Microsoft that uses MicroVision MEMS Laser Scanning display modules inside. NASA & Lockeed Martin using Hololens (Video)(YT links aren't allowed apparently) 'When a technician puts on the Hololens, they instantly see the work instruction, instead of having to go through stacks of rectangular data, whether its paper or another form of a screen'...From 2002-2006, MVIS commercialized versions of a monochrome (red) VRD for industry and the military. It was called Nomad. Microvision also developed a full color version for the military, the Spectrum SD2500. The military alone currently intends to spend almost $3B on IVAS, augmented reality devices that use MicroVision tech, in the next several years. (Video at 1:12 - "based on Microsoft's Hololens" - amazing, must watch - "lets you see around corners.. see through smoke") (There is a money trail to confirm too: financial report) One of the many capabilities of the IVAS heasets. MicroVision revolutionizing the way people use GPS systems, to launch in July. (GPS industry will be 146.4 B by 2025) This new GPS system comes equipped with an augmented reality heads-up-display (HUD) that attaches directly to your sun visor. This laser-projected GPS micro-display, developed in collaboration with MicroVision, makes it appear that your route directions show directly on top of the road, letting you keep your eyes on the road at the same time.There's a reason that Apple CEO Tim Cook said a few weeks ago that Augmented Reality is the "Next Big Thing." Cook was asked about what he expects to be the biggest tech developments in the next five to 10 years. Cook’s response made it clear that he sees augmented reality as the future, calling it the “next big thing.”Imperial College Healthcare using Hololens 2 to fight the coronavirus. While attending a trauma call in the early stages of the pandemic, Mr Kinross noticed that 29 people were working in close proximity. He realized the established way of working would have to change dramatically.Mercedes-Benz using Microsoft HoloLens 2 for faster, safer vehicle service. Mercedes-Benz Virtual Remote Support The technician is then linked with a Mercedes-Benz specialist working remotely who can see what the tech sees and communicate in real-time -- manipulating the holographic information with annotations, highlighting areas of focus, pointing at things in the real world and presenting documents and service manuals.In the next few years, business verticals will be possible in the markets for smart glasses (Video)(YT links aren't allowed apparently) and projections with touchless input(YT links aren't allowed apparently) and gesture control. For example, an eyewear company could develop the smallest and lightest smart glasses device on the market using the chip in that smart glasses video. In the MicroVision Augmented Reality video, for example, we share a potential module design using our existing MEMS technology platform that could offer the lightest, smallest in volume, low power module with up to 40 degrees field of view packaged into eye wear that resembles frames currently accepted in the market. I believe one could see how our module in the design example would be compelling for a mass-market product. Source Patents MicroVision has 484 patents granted and pending. This was enough to get them on the Ocean Tomo 300 Patent Value Index. What is that you ask? The Ocean Tomo 300® Patent Value Index includes the top value companies of the broad- market Ocean Tomo 300® Patent Index, as determined by the price-to-book ratio, and is diversified across market capitalization. It is the industry’s first value index based on the value of intellectual property and represents a portfolio of 60 companies with the highest innovation ratio (i.e., patent maintenance value relative to book value). SourceThis index also outperforms the Russel 1000 and the S&P 500. Their intellectual property includes in-house developed custom MEMS, custom optics, proprietary digital and analog silicon chips, embedded real-time firmware and software, manufacturing processes, custom automation and strategic partnerships that allow them to operate in a sleek model. MicroVision patents and products therefore serve many future markets:
All Notable Competition: Velodyne LiDAR, Luminar, Sense Photonics, Robosense, Valeo, SureStar MicroVision: founded in 1993 Velodyne Lidar VLDR: founded in 1983, but as a subwoofer company 😂 and only got into LiDAR in 2005 LAZR: founded in 2012 Non-Public: Valeo: Founded in 1998 Robosense: Founded in 2014 SureStar: Founded in 2005 Basically, MVIS is all these other companies' daddy. They have been working on LiDAR for almost 30 years and it shows, just imagine what they will be able to develop in a few years with more funding. https://preview.redd.it/eh5csdcz9dh61.png?width=1600&format=png&auto=webp&s=068fe6f5508e693ace5c6c56d4d2a5d9294836fb Insider Activity MicroVision is very transparent with its inner workings of the company, you can easily reach out to them on their website under "Investors." One of many conferences held with Vice President David Westgor, investor relations manager Dave Allen, and investors of MVIS revealed: As to the employee incentive plan, Steve Holt made the point that in his 7 years of experience (I think it was) with MVIS, NO EMPLOYEE had actually ever cashed out in the money options.Case in point, on December 1s, 2020, the day after she joined the team, Judith Curran was paid with 3 million dollars worth of $3 calls expiring in 2022, and she has not cashed out. On Yahoo it reports that the last insider sale was in 2014. Institutional Investments For reasons stated earlier, institutions have been late to the game on this one, but now are starting to get on the rocket ship before it takes off. MVIS is now the largest holding in the S&P Kensho Moonshots Index, (KMOONP), which is literally an ETF of stocks that are going go the moon 🌙 . Blackrock purchased 2.44 million shares on December 31, 2020. Vanguard purchased 6.61 million shares on the same day. Recent Events MVIS's stagnation really started to break on December 1st 2020, with MVIS when former Ford Executive Judith Curran was added to MVIS's board of directors. Curran is an accomplished senior automotive executive with over 30 years of experience in vehicle program, engineering and technology leadership. Curran has a strong record of leading innovation at Ford Motor Company where she served in a number of executive positions including Director of Technology Strategy, where she developed the cross-vehicle global strategy for key new technologies including assisted driving, infotainment, new electrical architectures, and connectivity.Doesn't take a genius to figure out they were about to ride the EV wave, and were appointing the right people to be poised to do so. Eight days later on December 8th 2020, the US Congress approved approximately $700M for the roll-out of IVAS in 2021. 7 days after that on December 15th, MVIS broke $4 for the first time in nine years. December 29, 2020: MicroVision Announces $13 Million At-the-Market Equity Facility (this is huge for improving balance sheet and attracting hedge funds/institutional ownership) So far, our team remains on track to complete our Long Range Lidar sensor sample in April 2021. We believe this financing will further solidify our balance sheet as we remain committed to pursuing strategic alternatives and establishing value for our shareholders,” said Sumit Sharma, MicroVision Chief Executive Officer. “We expect a stronger balance sheet will provide the Company with runway through 2021 and into the first quarter of 2022 to enable us to continue development of our lidar sensor while pursuing strategic alternatives,” said Steve Holt, MicroVision Chief Financial Officer.December 31: Vanguard adds 6.6 million shares, Blackrock adds adds 2.4. January 20, 2021: Apple CEO Tim Cook says Augmented Reality is the "Next Big Thing." Feb 2, 2021 YooToob stock analyst Deadnsyde covers(YT links aren't allowed apparently) MVIS, causing the beginning of a large breakout past $8. Feb 4: MicroVision granted patent (WSB bot is blocking source from being posted- thinks it contains a ticker), essentially lidar on a chip, this patent in particular is huge. (solid state lidar) Feb 10: Cramer mentions MVIS, says LIDAR is one of three battlegrounds for EV competition. Feb 10 after hours: MVIS announces Progress on Automotive Long Range LiDAR, saying “We expect MicroVision’s Long Range Lidar Sensor, (LRL Sensor) which has been in development for over two years, to meet or exceed requirements established by OEMs for autonomous safety and autonomous driving features,” said Sumit Sharma, Chief Executive Officer of MicroVision. Feb 11: Volkswagen and Microsoft team up on automated driving (potential for MVIS to get involved). Talent at MicroVision Sumit Sharma became the CEO in February of 2020, he is a mechanical engineer that has been with MVIS for five years after having been the head of operations at Google Project Glass, and working for Motorola and Jawbone. Dr. Mark Spitzer is on the board of directors having previously worked at Google X, Darpa, Kopin and having founded Myvu and Photonic Glass. Judy Curran joined the board this year after spending 30 years at Ford, where she was the Director of Technical Strategy. She is also the Head of Global Automotive Strategy for Ansys, a simulation software company that works with ADAS systems. Technical analysis Resistance at 46.75, 123. 39, and 204. 23, could turn to supports. Moving Average Analysis: On February 28, 2020, Market Cap of PLUG was 1.32B, on this date the 120 day MA touches the 8y moving average. 11 months later, PLUG has a market cap of 33.79B, an increase of 2459%. On September 3, 2020, Market Cap of MVIS was 0.21B, on this date 120 day MA touches the 8y moving average. 5 months later, MVIS has a market cap of 2.77B an increase of 1219%. 6 months forward price target: $34.348B Conclusion/Valuation/TLDR LAZR is currently valued at 12.22B VLDR at 3.92B MVIS at 2.77B MicroVision offers a quantitatively much higher performance product than both of its competitor companies. Because of their lack of focus on augmented reality technologies, competitors are not likely to have a future in the markets of smart glasses, healthcare, engineering, military equipment, GPS safety, entertainment, and interactive projectors. They are involved in an industry that is currently at an inflection point, due to grow massively in the near future. Their high number of extremely advanced patents will bring in significant revenue for the company in the coming years. I have never seen a company with such low insider selling, that the last case of a sale was in 2014. Institutional investors are piling in as MicroVision's balance sheet improves and they near the April LRL sensor test date, which has a high likelihood of being a success. I think this stock should currently be valued at 20 Billion dollars, taking all of this into account, and expect it to rise drastically over the next few years. This is not financial advice, I am not a financial advisor, do your own research before believing some retard on the internet. Positions: 300 shares, $19 call 5/21, $20 call 3/19, $31 call 2/19(FD), $28 call 2/19, $24 call 2/19. |
PLTR - I was in at 10.50 Telos - I was in at 20 C3ai - I was in at 95
Stocks head into the week ahead with a tailwind, as investors focus on a hefty fiscal stimulus package and the solid earnings season against a backdrop of rising interest rates.
There are several dozen S&P 500 companies reporting earnings, including Coca-Cola, Pepsico, Cisco and The Walt Disney Co. On the data front, there are just a few reports in the coming week, but the consumer price index inflation report is the important one to watch when it is released Wednesday.
Federal Reserve chairman Jerome Powell speaks mid-week at a webinar hosted by the Economics Club of New York.
Stocks surged in the past week, with the S&P 500 jumping 4.65% to a new record high, in its best week since November. The S&P 500 closed Friday at 3,886.
The hyper-activity around short-squeeze names, like GameStop, receded in the past week. Market chatter turned to rising interest rates, the steepening yield curve and market expectations for inflation.
“Rates are actually going up as really an expression of the potential that economic activity is likely to start accelerating, and we’ll likely see some inflation,” said Art Hogan, chief market strategist at National Securities.
Hogan said investors will stay most focused on the $1.9 trillion stimulus package, which Democrats are pushing forward. If it is signed into law at its current size, the total federal spending due to the pandemic would be $5.3 trillion, according to Cowen, an investment bank.
“I think the path of least resistance has resumed to a higher level. I think we had a mini correction a week ago and I think it happened pretty quickly,” said Hogan of National Securities.
“I think we continue to grind higher and the only bumps in the road that I can see are a delay in fiscal stimulus or some exogenous factor come in and changes the dynamics,” he added.
The market is also depending on continued improvement in new virus cases, said Hogan.
Higher interest rates
The prospect of more spending and an improving economy drove Treasury yields higher in the past week.
The benchmark 10-year Treasury yield was at 1.16% late Friday, after edging to 1.18% earlier in the day, near its recent high of 1.19%.
The 10-year is the most closely watched, as it influences the rates on mortgages and other consumer and business loans. Yields rise as the price of bonds decline.
Market pros have also been watching another bond market metric: the yield curve.
It is the spread between the yield on a short-term Treasury, like the 2-year note, and a longer duration Treasury, like the 10-year. In that case, the spread widened to reach 1.06% over the course of the week.
That is the highest level since the second quarter of 2017. A steeper curve — which is what we’re seeing today — is viewed as a sign of an improving economy.
Strategists say the move higher in Treasury yields so far is not detrimental to stocks, but instead is a reflection of the economic bounce that could come from the stimulus package.
Tom Lee, head of research at Fundstrat Global Advisors, said the steepening curve is good for the stock market, creating a tailwind for his “epicenter” trade in stocks that will benefit from an improving post-Covid economy.
His preferred sectors are the cyclicals — including industrials, consumer discretionary, materials, energy and financials.
Lee said the selling by hedge funds after short squeezes in a number of stocks and the record decline in the VIX, the volatility index, has led him to change his view on the stock market. He previously expected a sell-off in the first half of the year.
Now, Lee sees a “high probability that the first half 2021 correction is over.” The VIX, which is based on puts and calls in the S&P 500, started the week over 33 and fell to 20.87 when the market closed on Friday. A low VIX signals lowered expectations for market volatility.
The sectors that did well in the past week were mostly the ones that will do better in a financial rebound, or in a higher rate environment. Financials were 6.6% higher in the past week as big banks rose along with the yield curve. Higher long-term interest rates are a positive for bank profits.
The industrial group rose 4.9%, and materials were up 3.9%. Energy, lifted by a jump in oil prices, gained 8.3%. Tech recovered some ground, gaining 4.9%.
Sectors that do not do particularly well with rising rates, were up less, including utilities, up 2.3%, and real estate investment trusts, up 3%.
“It’s really about having an economic boom, allowing policy to support that boom,” said Jim Caron, head of global macro strategies on the global fixed income team at Morgan Stanley Investment Management. “That’s the key driver of why the curve is steepening.”
Some strategists say the curve is also steepening because of the U.S. will be issuing a lot of debt to pay for the trillions in fiscal stimulus, and that would cause interest rates to rise.
That has also triggered concerns about increasing inflation. While economists do not expect inflation to spike, they do see the potential, for the first time in years, for inflation to move meaningfully above 2%.
Markets will also be monitoring the Senate impeachment trial of President Donald Trump, which begins Feb. 9.
“It will get a lot of attention. Do the markets care? Maybe not, but everyone will be paying attention,” said Michael Schumacher, head of rate strategy at Wells Fargo Securities.
Super Bowl LV: Time to Break the Tie - Go Bucs!
This year's Super Bowl will be a first for many different reasons. It will be the first-ever game played in the home stadium of one of the teams playing. It will be the first-ever game with a 43 year old starting QB. The age difference between the starting QBs will be the widest ever (18+ years). The game will not be played to a full stadium (atendance capped at 25K). We could go on. Another interesting aspect of this year's game is that it will break the tie between the AFC and NFC for number of championships won (27). The last time the two conferences had an equal number of Super Bowl titles was back in 1990 after Super Bowl XXIV when each conference had 12. The New York Giants broke that tie in 1991 when Scott Norwood went 'wide ride' to give the NFC its 7th straight and 13th total Super Bowl victory. From there, the NFC continued its domination of the AFC (and the Bills) winning the next six championship games, including three against the Bills.
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We've all heard of the Super Bowl market indicator which says that a win for the NFC bodes well for the equity market while an AFC victory is a bearish signal. For years, there actually was a wide gap in performance for the market following wins by either conference in the past, but in recent years the disparity has narrowed. In the 27 years where the AFC has won the Super Bowl, the S&P 500 averaged a rest of year gain of 6.9% with positive returns 70% of the time. When the NFC wins, though, the S&P 500's average rest of year performance has been a gain of 10.5% with positive returns more than 77% of the time.
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When it comes to individual teams, 13 have won the Super Bowl more than once. The two teams with the most victories are the Steelers and Patriots each of which has won the game six times. The Dallas Cowboys otfen refer to themselves as 'America's Team' but Pittsburgh is the "Stock Market's Team". In the six years where the Steelers won the Super Bowl, the S&P 500 experienced positive returns for the remainder of the year every time for an average gain of 18.8%! Market returns for the Patriots following their six victories has been a much more muted 4.6%, including a decline more than 21% from the end of the team's first victory in 2002. The 49ers and the Broncos have 'only' won five and three Super Bowls, respectively, but following their victories, the S&P 500 has been up for the remainder of the year every time for an average gain of more then 20%!
So, what about this year's teams? The Chiefs have won the Super Bowl twice in their history, and the S&P 500 has averaged a rest of year gain of 8.1% following their victories. While the S&P 500 was down for the remainder of the year after they won in 1970, the decline was less than 1%. The one year the Chiefs made it to the championship but lost, the S&P 500 was up over 14% for the remainder of the year.
For the NFC, Tampa Bay's one and only appearance in the Super Bowl was in 2003 (XXXVII). They won that game, and the S&P 500's rest of year gain was over 29%. Additionally, while they're on a new team now, in the three Patriots vicotries where Tom Brady and Rob Gronkowski were both on the team, the S&P 500 was higher for the remainder of the year all three times for an average gain of 12.7%. Go Bucs!
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Should Investors Root For Tom Brady Or Patrick Mahomes?
The Super Bowl Indicator suggests stocks rise for the full year when the Super Bowl winner has come from the original National Football League (now the NFC), but when an original American Football League (now the AFC) team has won, stocks fall. We would be the first to admit that this indicator has no connection to the stock market, but “data don’t lie”: The S&P 500 Index has performed better, and posted positive gains with greater frequency, over the past 54 Super Bowl games when NFC teams have won. Of course, it doesn’t always work, as stocks did quite well the past two years even though AFC teams won.
It was originally discovered in 1978 by Leonard Kopett, a sportswriter for the New York Times. Up until that point, the indicator had never been wrong.
A simpler way to look at the Super Bowl Indicator is to look at the average gain for the S&P 500 when the NFC has won versus the AFC—and ignore the history of the franchises. As shown in the LPL Chart of the Day, this similar set of criteria has produced an average price return of 10.2% when an NFC team has won, compared with a return of 7.1% with an AFC winner. An NFC winner has produced a positive year 79% of the time, while the S&P 500 has been up only 65% of the time when the winner came from the AFC.
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Here’s the catch. Stocks have actually done just fine lately when the AFC has won. In fact, the S&P 500 Index gained 10 of the past 11 years after an AFC Super Bowl champ.
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“There have been 54 Super Bowl winners, yet only 20 teams account for those wins,” said LPL Financial Chief Market Strategist Ryan Detrick. “And wouldn’t you know it, the best stock market performance happens after the Bucs win the big game? But I don’t care, I’m still not rooting for Tom Brady.”
Here’s a breakdown of the 20 Super Bowl winners and how the S&P 500 has done following their victories. For some reason, the author’s favorite team, The Cincinnati Bengals, isn’t on this list. We double checked the data, but they still aren’t on there.
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Lastly, this is Tom Brady’s record 10th Super Bowl. It turns out; stocks don’t do well when he is in the game, up only 0.5% for the year. Meanwhile, should he lose (again, what the author is hoping for here), stocks actually do quite poorly, down 10.4% on average.
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Post-Election Februarys Have Been Even More Troublesome
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From yesterday’s post, we knew February has a tepid recent record. In post-election years, February’s historically record has been even worse as historical average losses swell. In order to include as much data as we have available, we are using DJIA data since 1901, S&P 500 since 1930, NASDAQ from 1971 and Russell 1000& 2000 data beginning in 1979. When comparing post-election year February to the recent 21-year February seasonal pattern, the overall shape and trend does not change greatly however, weakness becomes more prevalent as the mid-month surge is less pronounced and second half declines expand.
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Breaking down historical performance by year confirms frequent post-election-year February losses, most notably by NASDAQ and DJIA. Generally speaking, when February is positive it is an “ok” month, but when the month has been down, it has frequently been down by sizable amounts. There are seven double-digit losses in the table and not a single double-digit gain.
Typical February Trading: Lackluster Over Last 21 Years
February has historically been a rather bland month. Since 1950, S&P 500 has averaged a measly –0.04%. Over the last 21-year period S&P 500 average performance has declined to a loss of 0.6% in February. February’s first trading day has historically been good, like yesterday, and trading days eight, nine, ten and eleven have offered repeatable long opportunities over the last 21 years. Outside of these five days, the balance of February has been somewhat disappointing for bulls.
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As Goes January, So Goes The Year
Stocks got off to a nice start in 2021, until the late January selloff, as everyone got GameStop fever. Should bulls worry about what a down January might mean for the rest of 2021?
There’s an old adage on Wall Street that suggests, “As goes January, so goes the year.” This was first discussed in 1972 by Yale Hirsh of the Stock Trader’s Almanac, and it has an impressive track record. Simply put, when the first month of the year was green, it bodes well for the rest of the year (and vice versa). Given stocks closed red in January, how worried should investors be?
As shown below in the LPL Chart of the Day, the numbers confirm that when the S&P 500 has been green in January, the index has been up 11.9% on average over the rest of the year (final 11 months) and higher 86% of the time. However, when that first month was red, stocks rose only 1.7% on average over the final 11 months and were higher barely 60% of the time.
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“A weak January could foretell of rough times ahead in 2021,” explained LPL Financial Chief Market Strategist Ryan Detrick. “The good news is lately the trend has been broken, as stocks have done quite well after a weak January.” In fact, 8 of the past 9 times January saw stocks lower the final 11 months finished higher.
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Have We Seen the Top in Negative Yielding Debt?
Negative yielding debt has been one of the most extraordinary and peculiar consequences of global monetary policy initiatives, turning the basic premise of fixed income investing upside down. Instead of one party lending another party money, and the lender receiving interest in return for the risk incurred, since 2018 the levels of outstanding debt in which the lender pays the borrower for the privilege of loaning the borrower money has skyrocketed. This has left both lenders and fixed income investors in the unfortunate situation of attempting to “lose less” rather than “earn slightly more” than the value of the loan extended.
The total value of negative yielding debt around the globe set a new record in the final month of 2020, eclipsing more than $18 trillion as governments around the world issued debt to combat the COVID-19 pandemic. The majority of these bonds are issued by governments in the developed world such as Japan and Europe, while US Treasuries remain one of the few sovereign bonds in the developed world that held positive yields throughout the pandemic. Though the Federal Reserve has committed to keeping short-term rates near zero for the foreseeable future, it should come as a relief to investors that thus far, Fed Chair Jerome Powell has dismissed the idea of negative short-term rates in the U.S.
However, negative yielding debt does affect U.S. investors. Even after accounting for the costs of hedging out currency risks, Japanese investors can obtain 70 bps more in yield by investing in the U.S. 10-year Treasury note compared to a 10-year Japanese government bond, while German investors can earn 0.37% after hedging costs, compared with the -0.45% current yield of the German 10-year bund, which is the highest level in nearly five months. These factors increase demand for U.S. debt, which has helped to depress Treasuries yields and dampen the outlook for fixed income investors.
What does the future of negative yielding debt look like? As shown in the LPL Chart of the Day, the good news is that this amount of negative yielding debt has declined substantially in the past two months and fallen back below the previous record high set in 2019. We believe this amount should continue to fall in 2021 as global economies recover and safe-haven yields rise, contributing to the 10-year Treasury yield moving toward our year-end 2021 forecast of 1.25–1.75%.
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- $CGC
- $GM
- $CRSR
- $HAS
- $TWTR
- $KO
- $DIS
- $COTY
- $GPN
- $CSCO
- $ACB
- $CNC
- $CHGG
- $PEP
- $ENPH
- $ZNGA
- $UBER
- $CRNT
- $ENR
- $TTWO
- $NET
- $AMG
- $AZN
- $CRNC
- $TEVA
- $SPG
- $KHC
- $SAIA
- $SQNS
- $UAA
- $DDOG
- $GFN
- $IRBT
- $WCC
- $TSN
- $NRZ
- $LH
- $PERI
- $CNA
- $YETI
- $AYX
- $K
- $MAT
Monday 2.8.21 Before Market Open:
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Tuesday 2.9.21 Before Market Open:
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Canopy Growth Corporation $42.93
Canopy Growth Corporation (CGC) is confirmed to report earnings at approximately 6:00 AM ET on Tuesday, February 9, 2021. The consensus estimate is for a loss of $0.21 per share on revenue of $115.75 million and the Earnings Whisper ® number is ($0.10) per share. Investor sentiment going into the company's earnings release has 64% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 22.22% with revenue increasing by 23.44%. Short interest has decreased by 22.8% since the company's last earnings release while the stock has drifted higher by 60.3% from its open following the earnings release to be 106.2% above its 200 day moving average of $20.82. Overall earnings estimates have been unchanged since the company's last earnings release. On Friday, February 5, 2021 there was some notable buying of 24,236 contracts of the $35.00 put expiring on Friday, February 19, 2021. Option traders are pricing in a 12.7% move on earnings and the stock has averaged a 12.4% move in recent quarters.
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General Motors Corp. $54.41
General Motors Corp. (GM) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, February 10, 2021. The consensus earnings estimate is $1.62 per share on revenue of $36.90 billion and the Earnings Whisper ® number is $2.20 per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 852.94% with revenue increasing by 19.70%. Short interest has decreased by 10.7% since the company's last earnings release while the stock has drifted higher by 47.5% from its open following the earnings release to be 63.2% above its 200 day moving average of $33.34. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, January 19, 2021 there was some notable buying of 16,747 contracts of the $60.00 call expiring on Friday, February 19, 2021. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 2.8% move in recent quarters.
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Corsair Gaming, Inc. $45.23
Corsair Gaming, Inc. (CRSR) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, February 9, 2021. The consensus earnings estimate is $0.56 per share on revenue of $530.96 million and the Earnings Whisper ® number is $0.61 per share. Investor sentiment going into the company's earnings release has 77% expecting an earnings beat. The stock has drifted higher by 69.7% from its open following the earnings release. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, January 27, 2021 there was some notable buying of 11,342 contracts of the $50.00 call expiring on Friday, February 19, 2021. Option traders are pricing in a 19.8% move on earnings and the stock has averaged a 6.3% move in recent quarters.
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Hasbro, Inc. $97.28
Hasbro, Inc. (HAS) is confirmed to report earnings at approximately 6:30 AM ET on Monday, February 8, 2021. The consensus earnings estimate is $1.14 per share on revenue of $1.70 billion and the Earnings Whisper ® number is $1.23 per share. Investor sentiment going into the company's earnings release has 66% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 8.06% with revenue increasing by 19.05%. Short interest has increased by 5.2% since the company's last earnings release while the stock has drifted higher by 11.8% from its open following the earnings release to be 19.0% above its 200 day moving average of $81.74. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, January 15, 2021 there was some notable buying of 4,150 contracts of the $97.50 call expiring on Friday, February 19, 2021. Option traders are pricing in a 9.3% move on earnings and the stock has averaged a 8.4% move in recent quarters.
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Twitter, Inc. $56.78
Twitter, Inc. (TWTR) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, February 9, 2021. The consensus earnings estimate is $0.29 per share on revenue of $1.19 billion and the Earnings Whisper ® number is $0.38 per share. Investor sentiment going into the company's earnings release has 57% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 20.83% with revenue increasing by 18.13%. Short interest has decreased by 28.4% since the company's last earnings release while the stock has drifted higher by 27.5% from its open following the earnings release to be 37.3% above its 200 day moving average of $41.35. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, February 5, 2021 there was some notable buying of 13,531 contracts of the $60.00 call expiring on Friday, March 19, 2021. Option traders are pricing in a 12.5% move on earnings and the stock has averaged a 13.0% move in recent quarters.
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Coca-Cola Company $49.65
Coca-Cola Company (KO) is confirmed to report earnings at approximately 6:55 AM ET on Wednesday, February 10, 2021. The consensus earnings estimate is $0.41 per share on revenue of $8.65 billion and the Earnings Whisper ® number is $0.46 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 6.82% with revenue decreasing by 4.61%. Short interest has increased by 2.6% since the company's last earnings release while the stock has drifted lower by 3.0% from its open following the earnings release to be 1.6% above its 200 day moving average of $48.87. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, January 7, 2021 there was some notable buying of 8,599 contracts of the $50.00 put expiring on Friday, March 19, 2021. Option traders are pricing in a 3.4% move on earnings and the stock has averaged a 2.9% move in recent quarters.
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Walt Disney Co $181.16
Walt Disney Co (DIS) is confirmed to report earnings at approximately 4:05 PM ET on Thursday, February 11, 2021. The consensus estimate is for a loss of $0.47 per share on revenue of $15.64 billion and the Earnings Whisper ® number is ($0.22) per share. Investor sentiment going into the company's earnings release has 66% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 130.72% with revenue decreasing by 25.02%. Short interest has increased by 8.3% since the company's last earnings release while the stock has drifted higher by 28.6% from its open following the earnings release to be 35.8% above its 200 day moving average of $133.40. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, January 19, 2021 there was some notable buying of 8,283 contracts of the $150.00 put and 8,105 contracts of the $200.00 call expiring on Friday, January 21, 2022. Option traders are pricing in a 5.7% move on earnings and the stock has averaged a 3.7% move in recent quarters.
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Coty Inc. $7.64
Coty Inc. (COTY) is confirmed to report earnings at approximately 6:45 AM ET on Tuesday, February 9, 2021. The consensus earnings estimate is $0.08 per share on revenue of $1.40 billion and the Earnings Whisper ® number is $0.12 per share. Investor sentiment going into the company's earnings release has 68% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 70.37% with revenue decreasing by 40.30%. Short interest has decreased by 45.2% since the company's last earnings release while the stock has drifted higher by 101.6% from its open following the earnings release to be 18.0% above its 200 day moving average of $6.47. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, January 26, 2021 there was some notable buying of 8,662 contracts of the $7.00 call expiring on Friday, January 20, 2023. Option traders are pricing in a 20.4% move on earnings and the stock has averaged a 12.1% move in recent quarters.
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Global Payments, Inc. $198.27
Global Payments, Inc. (GPN) is confirmed to report earnings at approximately 6:55 AM ET on Monday, February 8, 2021. The consensus earnings estimate is $1.76 per share on revenue of $1.77 billion and the Earnings Whisper ® number is $1.84 per share. Investor sentiment going into the company's earnings release has 29% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 8.64% with revenue decreasing by 10.96%. Short interest has increased by 20.0% since the company's last earnings release while the stock has drifted higher by 28.7% from its open following the earnings release to be 10.7% above its 200 day moving average of $179.16. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, January 15, 2021 there was some notable buying of 764 contracts of the $190.00 put expiring on Friday, February 19, 2021. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 1.6% move in recent quarters.
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Cisco Systems, Inc. $48.08
Cisco Systems, Inc. (CSCO) is confirmed to report earnings at approximately 4:05 PM ET on Tuesday, February 9, 2021. The consensus earnings estimate is $0.75 per share on revenue of $11.92 billion and the Earnings Whisper ® number is $0.78 per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat The company's guidance was for earnings of $0.74 to $0.76 per share. Consensus estimates are for earnings to decline year-over-year by 5.06% with revenue decreasing by 0.71%. Short interest has decreased by 1.2% since the company's last earnings release while the stock has drifted higher by 16.7% from its open following the earnings release to be 11.6% above its 200 day moving average of $43.10. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, February 4, 2021 there was some notable buying of 25,762 contracts of the $50.00 call expiring on Friday, February 12, 2021. Option traders are pricing in a 5.8% move on earnings and the stock has averaged a 7.3% move in recent quarters.
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Listen up retards. Do you happen to feel regret because you always think “ohhh if I yoloed my savings on TSLA/AMD/NVDA 🚀 leaps years ago I could be rich by now!!!” submitted by Audacimmus to wallstreetbets [link] [comments] Well if you didn't know already, it doesn’t really matter what happened in the past. Hindsight will always be 20/20. You shouldn’t be harsh on yourself on your past self that your past self wasn’t retarded enough to yolo their savings into AMD/TSLA/.... Your past self doesn’t have the same knowledge that your current self has. It’s fine. If you judged those stocks with the best DD you could do at the time and didn’t think they were worth it, then you did a good job. If you always think about what you could/should have done in the past, then you don't have the right attitude to play the stock market casino imho. The single most important thing is to be able to look ahead. There are always plenty of opportunities around. There are thousands of rockets that are still on earth right now. Some may depart this year, others will stay a little longer on earth. The true strength lies in being able to identify those rockets with the knowledge you have right now. And if you still miss most rockets that will take-off this year that's fine, maybe you'll learn, get better and you'll do better next year. Now, what if I told you there’s a big rocket that’s parked right right here on earth and it has decent chance for take-off this year? Maybe it won't quite reach the moon this year yet, but hey leaving the exosphere should already be a cool milestone. It has rock-solid fundamentals and will see lots of growth in the following years/decade. It’s a company that has the fundamental technology to power all the computer vision tech, which is bound to boom this decade. The company we’re talking about is of course Sony, and it is extremely undervalued right now. Its P/E is only 14. They have a P/S of 1.65, a PEG of 0.92 (< 2 is already somewhat exceptional for a company/conglomerate of Sony’s size, under 1 is a steal) Much lower than all of its same-sector peers. This indicates significant undervaluation. Next up Sony has a P/CF 13.2, ROE of 20% (S&P 500 average is 14% which would already be considered pretty good. 20% ROE is excellent), PEGY of 0.89, P/B of 2.65 and finally Sony has $41.6B in cash on hand. This makes Sony one of the cheapest tech/entertainment/EV/semiconductor growth stocks you will find on the market. (ROE of 20% + PEGY of 0.89 + PEG of 0.92 means this company is a growth stock based on the numbers alone, but we’ll dig into the actual company and overall outlook in a moment) I challenge all retards to find a company with similar benchmarks in one of the mentioned sectors, seriously. Quite frankly doing this DD honestly blew my mind. I kept looking everywhere for reasons why the company could be so undervalued and why they may struggle in the future. Very important to look at all the challenges the company faces to make sure I’m not just doing confirmation bias DD. But all I could find was the opposite. After several weeks and months of working on this DD, I can only conclude that it is overall a very solid company for a bargain price. The new CEO is taking the company in a great direction imho and I'm begin to think he could be Sony's Satya Nadella. So if you want some easy tendies, maybe consider $SNE while it is still cheap, I’d say. For the autists out there who care about analyst ratings, SONY ($SNE) currently has 18 BUY ratings, 2 OVERWEIGHT, 4 HOLD and 0 SELL. (= analyst consensus is a STRONG BUY). Very little analysts cover this stock compared to other entertainment/tech companies, so this adds to my assertion that the stock is very much under the radar. Which means you have time to get in before it gets noticed by the larger investing world and before it starts to get a more fair valuation (P/E of around 30 would be more fair for this company I think, but still cheaper than many same sector peers). But, anyway the few analysts who do happen to cover this company are basically all saying it’s an instant-buy at its current price. Most boomer investors still think big Japanese tech companies are dinosaurs that have long been surpassed by China, South Korea and Apple etc ages ago. Young boomers may think Sony = PlayStation and that it's it. But the truth is that PlayStation, while very important (about 24% of Sony's total revenue last year), is a part of a larger story. Lots of investors in general associate Sony with the passé Japanese electronics companies from the 80’s and the 90’s. Just like a lot people may think BlackBerry is a struggling phone company. While Sony may not be the powerhouse in consumer electronics it was in the 80’s and the 90’s, in a lot of ways they are more relevant than ever before. Despite being a well-known brand and being known as the company behind PlayStation, for some reason its stock still seems to be under the radar among both retail and institutional investors. And boy, are they mind-blowingly undervalued. Even if a big part of its business would collapse tomorrow, they would still be slightly undervalued. And I am about to tell you why. (& btw compared to Japanese tech/entertainment stocks $SNE is still super cheap (Canon, Nikon, Toshiba, Sharp, Panasonic, Square Enix, Capcom, Nintendo, Fujitsu all have P/E ratios ranging from 18 to 77 and none of them have the combination of global clout, fundamentals & growth prospects that Sony has)) 2021 Sony as a corparation is not the fucking Sony from 2005-2015’s, just like BlackBerry in 2021 is not the fucking Blackberry from 2012. Just like Garmin in 2021 is not Garmin from 2011. Just like AMD in 2021 is not AMD from 2012. No, in 2021, Sony is the global leader in imaging technology and people do not fucking realize it. Sony has 50% marketshare in the CMOS image sensor market. There’s a very good chance the smartphone in your pocket has Sony image sensors (unless it’s a Samsung phone). Sony image sensors are powering a big part of today's vision/camera technology. And they will power even more of tomorrow's computer vision tech. In 2021, Sony is a behemoth in video games, music, anime, movies and TV show production. Sony is present in every segment of entertainment. Sony’s entertainment branches have been doing great business over the past 5 years, especially music and PlayStation. Additionally, Sony Pictures has completely turned around. In 2021, Sony is the world’s biggest music publisher (and second biggest music company overall). Music streaming has been a boon for Sony Music and will continue to be. In 2021, Sony is among the biggest mobile gaming companies in the world (yes, you read that right). And it’s mainly thanks to one game (Fate/Grand Order) that nets them over $1B revenue each year. One of the biggest mobile gaming companies + arguably biggest gaming brand in the world (PlayStation). In 2021, Sony is an EV company. They surprised the world when they revealed their “Vision-S” at CES 2020. At the reception was fantastic. It is seriously one of the best looking EV’s. They already sell sensors to Toyota. Sony will most like sell the Vision-S's tech to other car manufacturers (sensors for driving assistence / autonomous driving, LiDAR tech, infotainment system). 40 sensors in the Sony Vision-S Considering the overwhelmingly good reception of the Vision-S so far, I suspect the Vision-S could be another catalyst that will put Sony as a company on the radar of investors and consumers. We've seen insane investment hype for anything even remotely related to EV over the past year. We've seen a company that barely had a few EV design concepts (oh wait, they had a gravity-powered truck though) even get a $30B market cap at some point lmao. But somehow a profitable company ($SNE) that has an EV that you can actually drive, doesn't even have a fair valuation? In 2020’s Sony’s brand value is at their highest point since 12 years. In 2021, it is projected to be a its highest point since 2001 assuming same growth as average yearly growth from 2015 to 2020. Keep in mind brand valuation is a bit bullshitty as there’s no standardization to compare brands from different sectors, let alone non-consumer-facing brands with consumer-facing brands. But one thing we can note is that Sony both as B2C brand and as a B2B company is on a big upwards trend. https://interbrand.com/best-global-brands/sony/ https://careers.uw.edu/blog/2020/03/17/these-are-the-10-biggest-video-game-companies-in-north-america-shared-article-from-zippia/ In 2021, Sony is an entertainment behemoth. They have grown their entertainment branches by a huge amount over the past 5 to 10 years (they made some big acquisitions in the music space especially and they’re now also all-in in anime). I don’t think people realize how big Sony is as an entertainment company. I dug up the numbers and as of Q3 2020, PlayStation is the second biggest video game company in the world (Tencent is #1) in revenue (I suspect Sony might dethrone Tencent after Sony’s FY Q3 2020 is released). But Sony already comes very close to Tencent especially if you add Fate/Grand Order (which is under Sony Music and not under PlayStation) under PlayStation. There’s no single other company that has this unique combination of a dominant/important position in all entertainment segments. (video games + music + movies + TV series + anime + TV networks). I guess Tencent maybe? In 2021, Sony has amazing momentum in the camera space. If you’re familiar with the enthusiast photography space, you should know this. Basically, the market is slowly shifting from SLR to mirrorless cameras. This is because mirrorless cameras tend to smallelighter, have faster AF, better low light performance, better battery life and better video performance. Sony is the company that has been specializing in the development for mirrorless cameras for over a decade while Canon’s bread and butter has always been SLR cameras. Sony is in the lead when it comes to mirrorless cameras and that’s where the market is shifting towards. Because the advantages of mirrorless have become more and more apparent and Sony’s cameras have become technically superior, Sony has gained quite a bit of market share over Canon and Nikon in the last few years. In 2019, Sony overtook Nikon as the #2 camera manufacturer. Sony is in an upwards trend here. (they have the ambition to become the world’s #1 camera brand) Sony also has very good marketing for their cameras. (Sony has a lot of YouTubers / influencers / brand ambassadors for their cameras despite being a smaller brand than Canon) (just search on YouTube and/or Google “switching to Sony from Canon” just to give you an idea that they do have amazing brand momentum in the camera space. You won’t get as many hits for the opposite) A huge portion of Sony’s profit comes from image sensors in addition to music and video games. This is in addition to their highly profitable financial holdings division & their more moderately profitable electronics division. Sony’s electronics division, unlike other Japanese brands, has shown great resilience against the very strong competition from China & South Korea. They have been able to maintain their position in the audio space and as of 2020 are still the global market leader in high-end TV’s (a position they have been holding for decades) and it seems they will continue to be able to maintain that. But seriously this company is dirt-cheap compared to any of its peers in any segment and there’s various huge growth prospects for Sony:
PS+ growth and software digital ratio growth
Sony Entertainment While Netflix, Disney, AT&T, Amazon, and Apple are waging the great streaming war, Sony has been quietly building its anime streaming empire over the past years.
Anime growth “The global size is expected to reach USD 36.26 billion by 2025, registering a CAGR of 8.8% over the forecast period, according to a study conducted by Grand View Research, Inc. Growing popularity and sales of Japanese anime content across the globe apart from Japan is driving the growth” (tl;dr anime 🚀🚀🚀🚀🚀, Sony is all in on anime and they have pretty much no competition) Anime is the fastest growing subsegment of movies/video entertainment worldwide.
Sony Music Entertainment Japan Aniplex
US video game market growth (worldwide growth has a 13% CAGR) PlayStation revenue and operating profit growth
But so far the tl;dr Image sensors: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 IoT/Industry 4.0 chipsets: 🚀🚀🚀🚀🚀🚀🚀 PS5/PSN/PS+: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Online medical services (M3 inc.): 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Anime: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Fate/Grand Order: 🚀🚀🚀🚀🚀 Demon Slayer: Mugen Train 🚀🚀🚀🚀🚀 Sony Music / music streaming (the performance of Sony Music’s in Sony’s business is seriously understated. The numbers speak for themselves): 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Sony Electronics 🚀 Sony Financial Holdings (very stable & profitable business, even managed to grow slightly during pandemic when most insurance companies performed more poorly): 🚀🚀🚀 Still have to cover Sony Pictures, but their upcoming movie slate looks pretty good honestly (Spider-Man sequel, Venom: Let There Be Darkness, Ghostbusters: Afterlife, Uncharted, Morbius, Hotel Transylvania 4 so that's worth one rocket as well imho 🚀 tl;dr of tl;dr: 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀 Disclaimer: I am not a financial advisor. I am an idiot that's trying to understand why $SNE stock is so cheap. Positions: SNE 105C 21st January 22 |
The global online gambling market is largely dominated by International Game Technology, GVC Holdings, Bet365, Scientific Games, Paddy Power Betfair, and William Hill. Based on the overall revenue of the top 10 online gambling companies in the world are: International Game Technology PLC : USD 4.83 billion. Other Notable Gaming Companies. While these are some of the most successful gaming companies in the world, there are still several prominent ones to remember. Valve Corporation. Valve Corporation is a gaming studio known for several of its popular titles. This includes Left 4 Dead, Team Fortress, Dota, Half-Life, and the Portal series. Biggest Video Game Companies #1 Tencent. It should come as no surprise that Tencent takes the top spot on this list with ease. They boast total game revenue of $15,092 million, more than 50% higher than that of Sony. As the largest video game company in the world, Tencent dominates the Chinese gaming industry. WeGame, Tencent’s online gaming Unlike other companies who frown on software modifications, they completely embraced it which brought Counter Strike to Gaming, a game series that to this day remains one of the most often played comparative games of all time. They then made Half-Life 2, which was even better than the first one, and introduced Steam. Which now is bar none the most popular digital distribution system on the web The video gaming industry is one of the most competitive businesses in the world. Heavy-hitters like Sony and Microsoft are backed by decades of profit making in other electronics and computers. Other companies are on the list on the strength of strong sales for historically popular games. The newer players – mostly companies outside the US – are players in the mobile gaming divisions. The It is a US based company founded in 1991 makes it name amongst the top 10 gaming companies. Some of the famous games developed by this company include, Fortnight, Zombie Army, etc. Epic games also... Top 30 mobile gaming companies in the world 2019 1. Supercell. One of the leading and recognizable mobile gaming companies, Supercell is based in Helsinki, Finland. Founded in 2010, Supercell has had an astonishing growth curve thanks to popular game offerings like ‘Clash of Clans’ and ‘Hay Day.’ In 2017, the company scored a profit of around $1 billion with 100 million active monthly Now the gaming industry is blooming high on its success and has become one of the richest industries in the world. However, no company gets success overnight, it takes years of hard work and dedication as shown by these top game development companies of the world, depicted below – 10 Gaming Companies Of The World In 2020 As one of the wealthiest gaming companies in the world, it boasts of total assets worth $2.875 billion as of 2020. A majority of the richest gaming companies are multinational corporations that have developed and published record-breaking video games. Others have also made a lot of money from selling gaming hardware and utilising the games as a This Chinese video gaming company earned the distinction of being the largest gaming company in the world, it is also one of the world’s top online gaming companies in terms of revenue. The supporters of one of the most successful MOBA League of the Legends, Tencent holds the credit of bringing China’s local games onto the global platform.
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