Lets see what SA is up to in terms of Risk/Reward as of 2022-07-25:
- Silvergate Capital leads week’s financial gainers, while SVB Financial dips the most
- Chainlink Top Holders May Have Moved Off Holdings While Network Is Undervalued
- Bitcoin: 3 Signs It’s Warming Up Into A New ‘Crypto Spring’:
- Bitcoin was able to hold the critical $20k level of support with the trading action turning more positive in recent weeks.
- Despite the volatility this year, the long-term bullish case for Bitcoin as the leading cryptocurrency and store of value remains in play.
- A pullback in the Dollar strength may be a catalyst for the next leg higher in Bitcoin through the rest of the year.
SA Morning Briefing:
SPY: Overbought Demand Testing Resistance (Technical Analysis)
- CrowdStrike: Down 40%, Net Cash Balance Sheet, Positive Cash Flows, Hyper Growth Ahead
- XYLD: 12% Yield, Monthly Payer Vs. S&P Alternatives
- Delivering just its fourth up-week in the past sixteen weeks, the S&P 500 advanced 2.6% while expectations of U.S. economic leadership powered the Mid-Cap 400 and Small-Cap 600 to 4%.
- The dividend yield of STORE Capital has risen to a mouth-watering (and hence suspicious) level of 5.6%.
Wall Street Breakfast:
In arguably the most important week for Wall Street this summer, with the Fed decision and GDP on tap, earnings could actually end up determining direction. There are 175 S&P 500 (SP500) (SPY) companies set to report Q2 results, including 12 Dow (DJI) (DIA) components. Big names on this week’s calendar include McDonald’s (MCD), ExxonMobil (XOM), Ford (F) and the rest of the megacaps: Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), Meta (META) and Alphabet (GOOG) (GOOGL). To date, results have been below par. Of the 21% of S&P companies reporting, 68% have topped expectations. That’s below the five-year average of 77%, according to FactSet. The average beat of 3.6% is shy of the 8.8% average. The earnings growth rate of 4.8% is improving, but would be the lowest since Q4 2020. The 65% of companies beating on the top line is below the average of 69%. Still, the S&P is up 7% since the reporting period started and Citi says results are showing “resilience” that will push the broader market higher in the second half of the year.
SA Must Reads:
- ZIM Integrated Shipping: Shipping A Monster 20% Dividend And Undervalued
- ASML: Don’t Fear The Negative Media Headlines – Likely Formed Its Long-Term Bottom
- SPY: Overbought Demand Testing Resistance
- Warner Bros. Discovery: Ridiculous Valuation And Michael Burry Is A Buyer
$SPY: Overbought Demand Testing Resistance – we have identified resistance near $404 and, with a bit of a reach, $412.
$TBLD: Flexible Hybrid Fund With A Distribution Yield Of 8.30%
$ECC: The Story Of 1% Total Annual Returns For 5 Years
- CrossingBridge Funds – Stolt-Nielsen: An Attractive Short-Term Yield Opportunity
Stolt has experienced cumulative average growth in revenue and EBITDA of 9.1% and 10.3%, respectively, since 2015.
- Cannabis Reform In Congress: For Real This Time?
XYLD: 12% Yield, Monthly Payer Vs. S&P Alternatives
- Cardinal Energy Now Suddenly Is An 8% Yielding Income Stock
- Forget ARKK ETF: Invest In Innovative Tech
- Deere: A Very Favorable Risk/Reward Thanks To Strong Agriculture Fundamentals
- Hawaiian Electric Industries: Bet On Stability For The Upcoming Recession
ASML: Don’t Fear The Negative Media Headlines – Likely Formed Its Long-Term Bottom
- ASML’s Q2 earnings card disappointed the media. But it didn’t seem to disappoint investors, as it staged a remarkable recovery from its July lows. So is it a dead cat bounce?
- The company is navigating a series of macro headwinds and company-specific challenges. And the US government wants to ban China from accessing ASML’s lithography systems.
CrowdStrike: Down 40%, Net Cash Balance Sheet, Positive Cash Flows, Hyper Growth Ahead
- CrowdStrike, one of the highest quality stocks in the tech sector, is now down 40% from all-time highs.
- The company continues to deliver surprisingly resilient growth rates even after lapping pandemic comparable.
- The company has $1.8 billion of net cash and is flowing cash.
- The stock is looking highly buyable here with a growth runway for as long as the eye can see.
Warner Bros. Discovery: Ridiculous Valuation And Michael Burry Is A Buyer
- The combination of WarnerMedia and Discovery created a true media giant, arguably at par with Disney and Netflix.
- However, there’s something the market did not like as the stock sold off approximately 50% since the deal has been announced.
- Now the stock trades at a very favourable risk/reward ratio and is valued too cheap to not be a buy.
- Notably, WBD is Michael Burry’s fourth largest holding, and he saw value at prices above $20/share.
- I calculate a base-case target price of $27.51/share, indicating 90% upside.
Check Point Software: Stable And Reliable Cybersecurity Player
- Check Point Software Technologies is a cybersecurity firm.
- The competition in the market for information and network security solutions is fierce, and I believe that, due to the attractiveness of the industry outlook, it will only get fiercer.
- I believe that Check Point Software owns some unique assets that make them a respected company and a serious competitor in the cybersecurity space.
- I think that the stock can be categorized as a low-risk stock due to its low beta, high free cash flow margin, large cash in the bank, zero debt, and long and reliable operating history.
- In my opinion, it’s worth buying a 17 forward P/E low-risk stock in current unstable times with surging interest rates. Hence, I set the recommendation for this stock to “buy”.
Pandora: Great Business At A Fair Price
- The Pandora brand is recognized globally and has an excellent reputation. This is a competitive advantage that allows the company to be a leader in the affordable jewelry sector.
- Pandora’s business model is exceptional, being vertically integrated from the design phase to the distribution phase the margins and ROIC are really high.
- In my opinion the greatest risk derives from the medium-term macroeconomic situation, the current valuation of the company is however very attractive and these risks are partly already priced.