Category: Stock Market

A Look At Pinterest’s (NYSE:PINS) Share Price Returns

Pinterest, Inc. (NYSE:PINS) shareholders should be happy to see the share price up 28% in the last quarter. But that…

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31 July 2020
Alphabet Up 8% After-Hours Despite First-Ever Revenue Decline

Shares in Alphabet (GOOGL) rose 7.6% in Thursday’s after-hours trading, despite the company posting its first-ever revenue decline.Nonetheless, earnings beat consensus estimates with Q2 GAAP EPS of $10.13 beating by $1.94. Meanwhile revenue of $38.29B dropped -1.7% year-over-year, but still beat Street estimates by $950M.“In the second quarter our total revenues were $38.3B, driven by gradual improvement in our ads business and strong growth in Google Cloud and Other Revenues,” commented Ruth Porat, CFO of Alphabet and Google. “We continue to navigate through a difficult global economic environment.”Search Revenue declined 10% Y/Y (vs 9% year-over-year growth in Q1), while YouTube Ads Revenue grew 6% year-over-year in Q2 vs 33% in Q1. However, Search Revenue recovered to flat year-over-year at the end of June, with signs of continued modest recovery in July.As for Google Cloud, it delivered $3B in revenue, up 43% year-over-year vs 52% in Q1, with the deceleration partially reflecting the G-Suite price increase last April. Meanwhile TAC (traffic acquisition cost) came in at $6.69B just higher than consensus of $6.67B alongside operating margin of 17% (vs. 15.7% consensus) and Capex of $5.39B (vs $5.42B consensus).Alphabet had ~$13.5B of its prior buyback authorization remaining at the end of 1Q20 and repurchased $6.9B of shares though 2Q quarter. However, the Board has now approved an additional $28B implying it now has a $34.6B authorization available to support the stock if headwinds arise.Following the report, RBC Capital analyst Mark Mahaney reiterated his buy rating while ramping up the price target from $1,500 to $1,700.“Despite a slightly elongated recovery curve, we continue to see GOOGL (along with AMZN and FB) as among the most resilient ’Net Advertisers” he commented. “Fundamentals are slowly but surely improving, and aggressive share repo continues. We model 8% Gross Revenue growth in Q3 with growth rate close to normalized by Q4 at 15%” the analyst concluded.Similarly, Youssef Squali reiterated his buy rating while boosting his price target from $1,805 to $1,850. “Google continues to be an attractive story at a compelling valuation in our view, despite posting its first ever revenue decline, as trends exiting 2Q and into 3Q suggest an improving demand environment” the analyst explained.While macro uncertainty remains, the pandemic has proven to be a major accelerant to several digitization trends, which Google stands to benefit from long-term, Squali concludes.Overall, Alphabet scores a bullish Strong Buy Street consensus with a $1,668 average analyst price target (8% upside potential). Shares in GOOGL are up 15% year-to-date. (See Alphabet stock analysis on TipRanks).Related News: Facebook Soars 6% After-Hours On Strong Beat, Ad Resilience Amazon Rises 5% As ‘King Of E-Commerce Shines Amidst The Pandemic’ Shopify Soars 10% On Earnings Beat More recent articles from Smarter Analyst: * Eli Lilly Drops 5% On Weak 2Q Sales; Analyst Says Hold * Flex Jumps 5% In Extended Trading On Earnings Beat, Upbeat Guidance * Apple Up 6% After-Hours On Blowout Quarter; Strong iPhone Demand * Amazon Rises 5% As ‘King Of E-Commerce Shines Amidst The Pandemic’

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31 July 2020
Nvidia in Advanced Talks to Buy SoftBank’s Chip Company Arm

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31 July 2020
Bill Gates: Dr. Fauci ‘rolls with the punches’ amid criticism

Microsoft Co-Founder Bill Gates joins ‘Influencers with Andy Serwer’ to discuss the Trump administration’s handling of the COVID-19 pandemic.

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31 July 2020
People Fear They’ve Got Too Much Cash in Their Bank Accounts

(Bloomberg) — The savers are getting restless.Running out of guaranteed ways to get meaningful returns, some people are increasingly being tempted to raid their interest-earning cash savings to load up on assets such as bitcoin, gold and stocks. The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off.For a while, Brian Harrington, 28, had been satisfied with a high-yield savings account at Ally Bank, earning a risk-free 2%. Now, the marketing consultant in Anaheim, California, is planning to convert his remaining $15,000 in savings into bitcoin. He thinks the future is one of long-term economic stagnation and low rates.“I’m not rooting for Doomsday,” he said. “But you have to keep searching for yields.”The last few months have, in some respects, been a boon for account balances. Nationwide lockdowns enacted to slow the spread of Covid-19 have cut consumer spending, and stimulus checks arrived for millions of Americans. The personal savings rate rose to a record 32.2% in April. Mint, a financial planning platform, told Bloomberg that its customers deposited 16% more into their accounts between March and June compared with the same period last year.There’s one problem: Now isn’t a great time to hold onto money.It had become standard advice in personal-finance subreddits and Facebook groups to keep extra cash in high-yield savings accounts, but the rates on those have fallen steadily for the past year. Popular brands such as Ally and Marcus — the consumer arm of Goldman Sachs Group Inc. — offered rates in July of 1% and 1.05%, respectively; both were over 2% a little over a year ago, when the U.S. Federal Reserve cut rates for the first time since the 2008 financial crisis.“Some banks will drag their feet a bit to stand out from the crowd, but they’re all working their way down,” said Greg McBride, chief financial analyst at Bankrate.com, explaining the drop in returns across the board.There’s no guarantee that yields for these accounts will rebound any time soon.“The interest rates the Fed sets is a huge component, but it’s also related to the health of the overall economy,” said Anand Talwar, deposits and consumer strategy executive for Ally.Other traditionally safe vehicles have taken a hit as well. The average rate for five-year certificate of deposits is 0.47%, down from 1.88% the same period last year, according to Federal Deposit Insurance Corp. data.Bitcoin is up about 55% in 2020, while gold has risen 29%, smashing the record price set in 2011, as investors flock to the precious metal as a hedge against inflation. Stocks, meanwhile, have surged since bottoming out at the start of the coronavirus outbreak in the U.S.: From March 23 to July 1, the S&P 500 rallied 40%, its best 100-day performance since 1933, according to Bespoke Investment Group.The once-in-a-century rally has given Americans confidence about the market in the long run. A survey by Bankrate found that 28% of Americans said the stock market was their top choice for long-term investments, up from 20% last year. Only 18% of respondents chose cash investments such as savings accounts or CDs, the lowest level recorded in eight years.The results represent a remarkable shift toward risk, McBride said, noting that in previous surveys stocks came in a “distant third” to real estate and cash savings.For Meyer Denney, a software engineer from Seattle, saving to buy a new house within the next five years means striking a delicate balance between certainty and upside.The 35-year-old has most of his money parked in a high-yield savings account, for now. He’s looking at funds that invest in consumer staples, or corporate bonds that don’t carry the same volatility as typical stocks or index funds.“I’m worried that in three years we see our dream house — but [then] the market tanks 10 or 15%,” Denney said. “So I’m trying to err on the safer side.”Even in normal conditions, financial advisers recommend having a cash reserve of several months of expenses. In the middle of an economic downturn and a pandemic, that need for a cushion only increases.“Given the precarious state of the economy and heightened risk of incurring out-of-pocket medical expenses, it’s still important to have emergency funds in checking or savings accounts,” said Heidi Shierholz, senior economist at the think tank Economic Policy Institute.Edward Usuomon, 18, has no regrets about moving his money out of the bank. The Detroit native began working as a tutor last September; after a few months of saving he realized there were ways to make better returns that rates his Michigan First Credit Union account offered, which he recalls as being less than 0.5%.“I first started trying out stocks for fun,” he said. “Eventually I thought, ‘Why do I have all of this money just sitting in my account?’”So around the beginning of April he began withdrawing money from his savings account, a few hundred dollars at a time, to buy cryptocurrency, and shares of Tesla Inc. and Apple Inc. Usuomon now estimates he dedicates 25% of his salary to buying the higher-risk assets.“I don’t have too much to worry about now besides my apartment and my car,” he said. “I’m trying to get into investments early so I can hopefully get rich.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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31 July 2020
How Bill Gates would treat COVID-19 if he were President of the United States

Microsoft Co-Founder Bill Gates joins ‘Influencers with Andy Serwer’ to discuss the U.S. federal government’s pandemic response and how it can improve.

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31 July 2020
Forget gold and Bitcoin. I’d buy cheap stocks after the market crash to make a million
The stock market crash has provided numerous opportunities for investors to purchase cheap stocks. Despite this, some investors may feel that other assets such as gold and Bitcoin offer superior growth prospects. After all, they have risen sharply in price of late, and may have outperformed some stocks over recent months.

However, the track record of the stock market suggests that it offers long-term recovery potential. As such, and with gold and Bitcoin having their own risks, equities could prove to be a better means of making a million than other assets.

Cheap stocks: a buying opportunity

The stock market’s track record suggests that buying cheap stocks can be an effective means of making a million. It has always experienced periods of boom and bust, with neither of them lasting forever. Therefore, investors who can buy undervalued businesses during downturns can be among the biggest beneficiaries during the likely recovery.

At the present time, the continued risk of a second market crash means that many shares are trading on low valuations. In some cases, they are not wholly merited due to the financial strength and competitive advantage of businesses in sectors that have long-term growth potential. As such, there appear to be opportunities for investors to purchase bargain shares even after the stock market’s recent rebound from its decline in February/March.

Clearly, some cheap stocks are unlikely to survive the challenging outlook faced by the world economy. As such, it is imperative for investors to try and purchase the best quality companies they can find, and to diversify across numerous industries and regions. This may reduce your overall risks, and help to provide sustained growth for your portfolio.

Bitcoin and gold: an attractive risk/reward opportunity?

Of course, some investors may seek to avoid cheap stocks in favour of other assets such as Bitcoin and gold. While their prices may have risen sharply, they appear to offer less attractive risk/reward investing opportunities than a portfolio of equities.

For example, gold’s appeal could deteriorate in the coming years as investor sentiment gradually improves. Furthermore, it currently trades close to a record high, which may indicate that there is limited scope for a price rise over the coming years.

Similarly, Bitcoin may not be an attractive investment opportunity. Its limited size and ongoing regulatory risks could mean that its price level is overly generous. And, with the virtual currency lacking fundamentals, challenges in valuing it may mean that buying cheap stocks is a far more logical step for long-term investors.

Therefore, while further difficulties may be ahead for stock market investors, low price levels and the recovery potential of equities mean that now could be the right time to buy a diverse range of companies to make a million.

5 stocks under $5

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Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Forget gold and Bitcoin. I’d buy cheap stocks after the market crash to make a million appeared first on Motley Fool Australia.

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31 July 2020
Nokia shares jump after cull of low-margin business sees earnings beat

Finnish telecom network equipment maker Nokia reported an unexpected rise in second-quarter underlying profit on Friday as it took on less low-margin business particularly in China, sending its shares up 13% in early trade. Cutting less-profitable service business and not winning 5G radio deals in the cut-throat Chinese market helped Nokia, where new Chief Executive Pekka Lundmark takes over this weekend, upgrade its earnings outlook for 2020. “We do not mind trading poor revenue which doesn’t have high quality margin for better revenue,” outgoing chief executive Rajeev Suri told Reuters.

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31 July 2020
Is Southwest Airlines Co.’s (NYSE:LUV) Stock Price Struggling As A Result Of Its Mixed Financials?

Southwest Airlines (NYSE:LUV) has had a rough month with its share price down 9.3%. It is possible that the markets…

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31 July 2020
Stock market crash: why I’d grab this rare chance to buy cheap shares
Despite the recent market rebound, there are still a relatively large number of cheap shares that could deliver high returns in the long run.

Certainly, their prices could fall further in the short run due to risks such as a continued rise in global coronavirus cases. However, the recovery potential of the stock market suggests that buying undervalued companies today can lead to high returns compared to other assets.

Moreover, some share prices are rarely as cheap as they are at the moment. Grabbing wide margins of safety that may be temporary in nature could, therefore, be a logical move.

A rare opportunity to buy cheap shares

The last time there were so many cheap shares available to buy was probably during the global financial crisis in 2008/09. Although the recent market rebound means that some sectors now appear to be fully valued, other industries continue to have extremely undervalued shares on offer. In some cases, they trade well below their historic average valuations. This could indicate that they offer good value for money, and that investors have priced in many of the risks they face.

Such opportunities are generally rare. Over a decade has elapsed since the last global bear market and recession, and many investors are likely to be able to count on one hand how many times they have experienced such periods in their own lives. Therefore, taking advantage of the opportunities available today could be a sound move that allows you to buy stocks when they are unusually low, and sell them at a later date when they are relatively likely to trade at higher prices.

Recovery potential

Buying cheap shares today could allow investors to capitalise on a sustained recovery over the long term. As per the global financial crisis, and other past bear markets, a recovery in the stock market’s price level seems likely. Even though there are risks facing the world economy, the impact of stimulus packages such as quantitative easing and tax changes in many major economies could lead to a strong recovery over the coming years.

As such, focusing your capital on undervalued shares could be a more profitable strategy than buying other assets such as cash and bonds. Although less risky assets may offer a higher chance of a return of capital, their profit potential may be very limited in an era when interest rates look set to persist at low levels. In fact, fixed-income securities and cash savings accounts may erode your spending power if monetary policy measures such as quantitative easing prompt a period of higher inflation.

While buying cheap shares today may not necessarily feel like a natural move for any investor to make, history suggests that it is a logical step for those individuals with long-term horizons. Some stocks are rarely this cheap, and could offer high total returns in the coming years.

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Motley Fool contributor Peter Stephens has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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31 July 2020