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Rothschild & Co.'s Five Arrows Acquires Rimes: A Strategic MoveRothschild & Co.'s alternative assets unit, Five Arrows, recently made a strategic acquisition by purchasing Rimes from Swedish investment firm EQT. Rimes, a leading provider of enterprise data management and investment intelligence solutions, has been a significant player in the investment industry, empowering asset managers to efficiently handle market data. The deal marks a significant milestone in Rimes' journey, which has been bolstered by EQT's support since 2020. Under EQT's ownership, Rimes experienced notable growth, expanding its technology offerings and acquiring Matrix IDM, an Australian investment data management platform. Additionally, Rimes ventured into AI with the establishment of a dedicated product division last year. Five Arrows' decision to acquire Rimes underscores its commitment to the alternative assets space. With global assets under management exceeding €26 billion, Five Arrows is well-positioned to leverage its long-term fund FALT and principal investments division FAPI to facilitate the acquisition. The transaction, expected to close in the coming months pending regulatory approval, holds promise for both parties. Brad Hunt, CEO of Rimes, expressed optimism about the acquisition, emphasizing its potential to propel Rimes' growth trajectory. Meanwhile, FAPI partners Vivek Kumar and Sacha Oshry highlighted Five Arrows' intention to unlock new avenues of growth for Rimes. As the transaction unfolds, industry observers eagerly anticipate how Five Arrows' strategic vision will shape Rimes' future. The move underscores the evolving landscape of data management and investment intelligence, signaling potential shifts in the competitive dynamics within the sector. In conclusion, Five Arrows' acquisition of Rimes marks a pivotal moment for both companies, poised to catalyze growth and innovation in the ever-evolving realm of enterprise data management and investment solutions.
NYSE:EQT
by DEXWireNews
Why Corporate Bonds are not a good option for Retail InvestorsCorporate bonds or tradeable debt instruments issued by corporations are a type of fixed income security. Given the recent media attention and the rising demand for fixed income investments among retail investors, it may come as a surprise that they are not suitable for all investors. Corporate bonds have different risks associated with them than other fixed income investments like savings accounts, money market funds, and even municipal bonds. If you are considering investing in corporate bonds or are already holding some in your portfolio, here is why you should avoid them as a retail investor What is a Corporate Bond? A corporate bond is a debt instrument issued by a corporation to raise money. Corporate bonds typically have a set maturity date after which the outstanding principal will be repaid. There are many kinds of corporate bonds, including investment grade and high yield, government and non-government, and they can be issued in local or foreign currencies. Corporate bonds are often traded on the secondary market, which means they are liquid and can be bought and sold easily. Investors earn a return on corporate bonds by receiving interest payments and by the increase in the bond’s value as it matures. The interest rate on a corporate bond is based on factors like the company’s credit rating, the length of time the bond is outstanding, and the bond yield in the market at that time. Corporate bonds are typically less liquid than stocks, and may have shorter holding periods, especially if you purchase them on the secondary market. Risks of investing in Corporate Bonds Corporate bonds are considered a form of debt financing, and as such, there are risks associated with holding them. The main ones are default, liquidity, and interest rate risk. - Default risk - Investing in corporate bonds entails the risk that the issuing company will default on the payment of interest or the repayment of principal. However, since corporate bonds are issued by companies in different industries, there is a low probability that they will all default at the same time. - Liquidity risk - The risk that you will not be able to sell the investment in a timely fashion at a price that is attractive to you. - Interest rate risk - The risk that if you hold the investment until maturity, you will earn a lower rate of return because interest rates will have risen in the meantime. Why you should avoid Corporate Bonds as a Retail Investor While corporate bonds may be suitable for institutional investors, they are not a good option for the average retail investor. For one, you will have to educate yourself on the various types of corporate bonds, their risks and returns, and what kind of companies you should be investing in. Even if you are successful at taking this on, you are likely to end up with a very concentrated portfolio, which brings us to the next problem. The other issue is that retail investors typically hold a small number of bonds and these bonds are often concentrated in a few issuers. This is not a good strategy because if a company defaults, you could lose a large portion of your capital. This is clearly a bad strategy. So, How about Investment grade debt ETFs? LQD, In a rising interest-rate scenario. The bonds' tenure is clearly working against them, especially since unemployment continues to fall at an astonishing rate. This is not the time to invest in this ETF if the Fed raises interest rates to combat inflation. In order to completely comprehend this analysis we must know how important the duration is, while investing in bonds. Duration is an important topic. It is the bond's effective maturity, which means it is oriented to something lesser than the time of the bond's final payment since part of the bond's value, generally from coupons, happens earlier in the bond's existence. If a bond has a longer effective maturity at a fixed interest rate, it indicates that investors are tied to an interest rate that was once market for a longer period of time, and if rates increase as they are currently, you will be bound to an uneconomical rate for a longer period of time. Simply put, longer term bonds lose value more severely when interest rates increase. How maturity of a these bonds (Duration) is affecting LQD Unemployment has gone down despite the increased rates, which has surprised many analysts. The Phillips Curve is back in force, where low unemployment yields high inflation if inflation is kept down, and contrary to common perception, Consumer spending has declined, but unemployment is so low that it might rise again unless the Federal Reserve, which is committed to lowering inflation, continues its anti-inflation campaign. The Federal Reserve has raised rates as well as given gloomy recession predictions, and more banks are following its lead, including the Bank of England. LQD, which has dropped 14% this year, have long-duration bonds, majority of fixed-rate, which is concering for this ETF. Credit Spread Global Cooperate Bonds in general Corporate bonds continuing their strong performance in July, producing $80 million (+76% year on year).  July was the most profitable month of the year for CBs . Their  revenues in 2022 have exceeded from 2021 ($512 million). Average balances increased by 9.8% year on year, average costs increased by 59% year on year, and usage have increased by 27% year on year. Spreads on non-investment grade and high yield bonds continue to widen as corporate prospects deteriorate owing to weakening consumer demand and stricter financial conditions. In-turns , asset values fall, yields rises, and borrower demand increases. However, CG Debt funds have seen the highest monthly outflows in May and June (-$73.7 billion) In July, High Yield Bonds enjoyed the relieve rally. Interest rates vs Corporate Bonds comparison Alternatives to Corporate Bonds for retail investors For retail investors, the most advisable option is to go with government bonds. Government bonds have historically offered a lower risk profile compared to corporate bonds. The best way to go about investing in government bonds is to go for a diversified bond fund. Using a bond fund reduces the risk associated with investing in bonds further as the fund manager may hold a large number of different bonds. If you are looking at a short-term investment horizon (less than 10 years), then you could also opt for short-term government bonds. If you have a long-term horizon, then you could consider a long-term government bond fund. Savings accounts, money market funds, and short-term government bonds are very liquid forms of low risk investment options. Conclusion It is important to understand that the corporate bond market is not risk-free. When interest rates are rising, corporate bonds are generally falling in price as they are competing against government bonds with lower interest rates. In times of economic uncertainty or when interest rates are rising, the risk of default is generally higher for companies issuing corporate bonds. Thus, it is advisable to invest in corporate bonds only when the economy is growing steadily. For retail investors, the best options are to go with government bonds or short-term government bonds. These are low risk, liquid investments and will help you achieve your financial goals.
Editors' picks
AMEX:LQDEducation
by EQTSHARES
12
Alibaba Group Holding Limited - Risk Assessment ReportAlibaba Group Holding Limited (NYSE:BABA) shares gained over 7% in pre-market trading August 4 after posting good results for its difficult first fiscal quarter. Both sales and earnings per share were higher than expected. For the June quarter, revenue was  $30.7 billion, similar to the previous year. Even though it was the weakest rate of growth on record, investors welcomed it because consensus had previously predicted a fall for the very first time in Alibaba's history owing to sweeping city-wide lockdowns in April and May. Earnings for the June quarter also above consensus projections by $0.19 per share, coming in at $1.75, highlighting smart cost reductions in the face of inflationary pressures and the higher expenses of navigating through COVID interruptions.  However, sentiment toward Alibaba shares remains shaky. All of its gains from the May to July rise have been erased in recent weeks, with the stock now down over 22% since the start of the year. The broad theme for Alibaba stock remains volatility, as positive uptrends supported by signs of easing regulatory crackdowns, an improving COVID situation in China, and government stimulus to shore up the Chinese economy have been shattered in recent weeks by news of heightened concerns about a faltering domestic economy and renewed regulatory concerns. The market's scepticism over Alibaba shares is underscored by the limited gain in pre-market trading following a favourable earnings surprise this morning. However, sentiment toward Alibaba shares remains shaky. All of its gains from the May to July rise have been erased in recent weeks, with the stock now down over 20% since the start of the year. The broad theme for Alibaba stock remains volatility, as optimistic uptrends bolstered by signs of easing regulatory crackdowns, improved COVID situation in China, and government stimulus to sustain the Chinese economy have been shattered in recent weeks by news of heightened concerns about a faltering domestic economy and renewed regulatory concerns. The market's scepticism over Alibaba shares is underscored by the limited gain in pre-market trading following a favourable earnings surprise this morning. Although Alibaba's valuation seems reasonable at present levels, given its strong balance sheet and continued dominance in e-commerce and cloud-computing services in China, the stock is nonetheless overshadowed by dangers that are in flux. The instability of Alibaba's comeback over the last year demonstrates that the fundamental dangers to the stock continue to overshadow any advantageous valuation. With all of Alibaba's key underlying concerns continuing in a very volatile condition with no structural signs of change, the stock has practically nothing to stand on its own against the extra challenge of brewing broad-based macro headwinds. Alibaba might fall in the short term as its primary Chinese market and surrounding overseas markets battle with a weakening macroeconomic environment, making it a high-risk investment decision despite what appear to be good pricing compared to rivals in a comparable company. Risk Factors The decline in Alibaba shares occurred in late 2020, when rising regulatory worries prompted a valuation adjustment in U.S listed Chinese securities. Since then, the condition has deteriorated as regulatory obstacles began to have an impact on Alibaba's basic performance. Subsequent macroeconomic challenges, like COVID interruptions in China and a deteriorating local and global economy, have only worsened the bad outcomes. Despite recent optimism emanating from the conclusion of high-profile inquiries, such as the cybersecurity inquiry into DiDi Global (OTCPK:DIDIY) and the announcement of fresh gaming license permits, regulatory concerns remain apparent, and investors' trust is eroding. Markets continued to penalise the stock at the first indication of regulatory shortcomings, as seen by recent drops in response to reports that Alibaba was fined $375,000 in early July for breaking state guidelines on past acquisition disclosures. Its cloud division was being probed for its possible involvement in one of the country's greatest ever data breaches. Regulatory probing of Alibaba's operations has had additional negative effects on its core performance. Due to growing national security concerns in the public sector, the company's cloud-computing business, Alicloud, is gradually declining in market share to its state-backed counterparts. In China, the unit's market share plummeted from 45.9 percent in 2019 to 36.7 percent in 2021, while state-backed rival Huawei's cloud market share more than quadrupled during the same period. Despite remaining China's top public cloud service provider, Alicloud is no longer the favoured option as the CCP intensifies efforts for data security within government entities. As a result, the Chinese government has eliminated foreign PCs and has accelerated the transition from private clouds like Alicloud to governmental cloud platforms, jeopardizing Alibaba's unified bottom-line performance. This is supported by a slowdown in Alibaba's highly successful cloud business in the first quarter, when sales increased by only 9% year on year, the weakest rate on record. Alibaba annual report FY22 Chinese stocks are still kept captive by the HFCAA, as the US SEC ramps up efforts to guarantee that all securities on the United States stock market are governed by the same regulations and regulatory procedures, particularly complying with PCAOB audit inspection requirements. Investors' worries about the prospect of the company being delisted have recently returned as Alibaba was recently added to the list of delinquent firms whose auditors have disobeyed PCAOB inspection requirements. This essentially starts a countdown for Alibaba, putting it at risk of delisting from the NYSE if Chinese officials are unable to achieve a settlement with the SEC and PCAOB on giving up the books of its domestic firms for scrutiny. The global economy's slowdown threatens to undermine Alibaba's recent change in focus to expanding its overseas e-commerce platforms. During the June quarter, Alibaba's foreign commerce retail sector sales fell by 2.7% year on year, while order volumes fell by 4.1% year on year. Rising inflation and restrictive central bank policies in Alibaba's key abroad markets, like the United States and Europe, have resulted in lower consumer discretionary spending, complicating Alibaba's efforts to compensate for domestic commerce slowdown with worldwide growth. In the long run, we anticipate that the combined business will expand at a moderate five-year CAGR of 5.7 percent, with Alicloud serving as the catalyst. As noted in the preceding study, Beijing's regulatory makeover of the private sector over the last two years has fundamentally altered the exponential growth that Chinese big tech previously enjoyed. we anticipate that any long-term revival in Alibaba's business would be modest. However, given the macro uncertainties in both domestic and international markets, Alibaba's share price could possibly hit $70-75 range
NYSE:BABAShort
by EQTSHARES
3
AMD is a Beautiful Opportunity - Earnings Report HighlightsSince the beginning of the second quarter, chip stocks have been steadily rising, amid deteriorating indicators of an economic downturn, particularly in the consumer end market. The Philadelphia Exchange Semiconductor Index (PHLX) rebounded more than 20% in July after falling almost 40% in the first half of the year. To a similar degree, AMD (NASDAQ:AMD) has surged in July, marginally beating the PHLX for the month but still below the benchmark year to date. Despite industry leader and major rival Intel's (INTC) disappointing quarterly earnings and future outlook last week, the rally maintained its pace. Investors are getting more optimistic about AMD's resiliency in the wake of Intel's recent setback, which suggests that the former is becoming a more major participant in both the high-performance PC and data centre CPU markets. T , the company's EPYC server processors are making significant headway into the data centre and high-performance computing (HPC) segments, while its powerful next-generation PC processors such as the Radeon GPUs and Ryzen CPUs are also drawing attention from Intel. Although most chip manufacturers that have reported second-quarter results so far are warning of a plausible decline in demand and inventory build-up - especially on consumer-centric products like memory chips used in consumer electronics products, the market for semiconductors used in data centres, auto, and premium equipment like enterprise workstations remains strong. As a result, AMD benefits from positive upswings as it strengthens its technological lead in data centre, high performance PCs, automobiles, and, more recently, telecom infrastructure prospects. Recent market trends, which support a healthy demand environment for AMD's primary data centre end market, as well as indicators of significant growth in market share, lead to the chipmaker's sales and profits beat streak continuing. The following study will go deeper into three key factors supporting AMD's long-term upsides and outperformance in the face of near-term industry challenges: First, declining consumer spending, Second, data centre growth, and Third, solid fundamentals. Given its high-growth potential, AMD is presently trading at roughly 5.5x projected EV/sales, which is still a big discount to the fabless semiconductor peer group mean of about 5.9x. Given that the company is currently lagging the PHLX, AMD remains a good buy at the moment. With investors incentivizing those who have proven perseverance this earnings season – as evidenced by last week's rigorous big tech earnings results, which supported the tech-heavy Nasdaq 100 add $1.5 trillion in market value in July – AMD's eagerly anticipated solid quarterly showing makes a beneficial near-term precursor in reigniting the stock for persistent uptrend momentum. Demand from Consumer Spending prospective Alarms from the industry about declining chip demand from consumer end markets, especially those found in consumer electronics such as cellphones and Computers, are becoming louder, reflecting prior investor fears about a declining semiconductor cycle after an outstanding growth. PC shipments globally have already begun to slow in the first half of the year, with first-quarter volumes falling 6.8 percent year on year to 78 million units, and second-quarter volumes falling more than 15 percent to 71 million units, as consumption and investment spending power dampens due to rising rising inflation. Global PC shipments are expected to fall by 9.5 percent this year, driven by a 13.1 percent reduction in consumer PCs and a 7.2 percent loss in corporate PCs. As a result, demand for similar chips is likely to fall by more than 5% this year. Conversely, semiconductor demand from phone manufacturers is predicted to rise by just little more than 3% this year, a major deceleration from the 25% surge seen in 2021. Nonetheless, despite evidence of a weakening consumer end market as consumers reduce discretionary spending due to relatively close economic uncertainty, AMD's growth in this sector is projected to be robust given its minimal direct exposure. Given observations that the present PC market is migrating to higher end and more expensive sectors, supported by commercial purchases to suit the concept that hybrid and remote work is the new future, the chipmaker is confident in its ability to overcome near-term difficulties. In particular, AMD expects persistent business demand for high-performance workstations to enable a "hybrid-virtual" work environment to largely offset any near-term repercussions on consumer-centric gaming PC sales owing to unpleasant economic difficulties in the consumer end market. This view is reinforced by recent results provided by PC makers such as Microsoft (MSFT), which verified that sales growth for its Surface devices were mostly robust in the second quarter due to sustained corporate demand. Other PC makers, such as Dell (DELL), have made similar remarks about the strength of enterprise demand, owing to the growing urgency of "modernising the technology infrastructure" to ensure intelligence, cyber-resiliency, automation, and multi-cloud adaptability" in the new baseline of remote co - operation. While AMD has chosen to be conservative in terms of PC prospects for the current year, indicating a year-on-year reduction in negative single digits for related sales, the firm is projected to recuperate some market share by selling its flagship, more costly models. AMD also has a number of commercial machines in the works for this year, including the recent debut of the (Ryzen 6000 Series) processors for upscale laptop applications, which maintains good PC performance for 2022 despite a wider market slump. With seasonal demand from back-to-school and Christmas sales in the second half of the year, AMD continues on track to increase its PC market share. How Data Center is ultimate strength Global demand for data centre processors will stay high in the next years, as cloud computing remains a crucial necessity in the business sector, with no indications of abating. The market for data centre processors, in particular, is forecast to grow by at least 20% this year, more than offsetting any consumer-related slowdown that AMD may see owing to near-term macroeconomic downturn. The positive trends have been further supported by the rising urgency of business cloud migration to accommodate a new era of remote working, as indicated in the previous section. More than half of firms anticipate that cloud adoption would account for a substantial share of investments over the next two years, propelling the worldwide cloud-computing industry to more than $800 billion by 2025. Meanwhile, the market for Artificial intellegence hardware, such as data centre chips like AMD's EPYC server CPUs, is predicted to grow at a CAGR of 42% to $1.7 trillion by the end of this decade. Even in the face of a possibly tightened economic situation in the near future, these numbers continue to support a solid demand scenario for both cloud service providers and chipmakers like AMD. Furthermore, AMD's ongoing commitment to innovation helps the company's long-term position and market share in data centre possibilities. AMD's EPYC server CPUs have been a flagship product in recent times, driving the firm's break-out growth and data centre market share increases. EPYC CPUs are currently in their 4th generation, with a family of four chips encompassing (Genoa, Genoa-X, Bergamo, and Siena), all of which are geared to optimise performance across a wide range of use cases, from cloud applications to communication system and telecom installations. Server processors have grown into some of the most powerful and fastest CPUs utilised in HPC designs today. AMD's EPYC CPUs may now be found in 72 of the world's top 500 Fastest Super-computers, a threefold increase from 2020. The EPYC processors' dominance on the (Green-500) list attests to its power efficiency for sophisticated tasks. Till now, AMD's EPYC processors power 80 percent of the world's most efficient supercomputers, putting the company's HPC competency on able to compete with legacy competitor Intel's. AMD's growing strength in data centre and HPC prospects are also supported by key rival Intel's admission of (server market share loss) last week, which provide substantiated support for AMD's long-term growth path. All whilst, AMD's Gen 4 EPYC server cpus are well-positioned to benefit from Intel's delayed launch of its next-generation Sapphire Rapids server processor cores, which threatens to further weaken the other's market dominance. Fundamentals Strength Over the previous seven quarters, AMD has had a constant record of good sales and profit surprises. And we anticipate that AMD's 2Q22 earnings will be similarly robust, with top- and bottom-line growth driven by ongoing market share gains and the ramp-up of innovative products to scale. Top-line, AMD continues to illustrate its ability to capture market share gains in an extremely competitive industry by strengthening its technological capability to attract demand and growing its total addressable market (TAM) through recent acquisitions such as Xilinx and Pensando. Especially, the merging of Xilinx and Pensando is intended to provide new synergies when combined with AMD's current competence in CPUs and GPUs, propelling the firm into new excursions to diversify its income portfolio. AMD Total Revenue vs Total operating expenses Free Cash Flow
NASDAQ:AMDLong
by EQTSHARES
Geopolitical Risk Analysis - U.S DollarMajority of economists misjudged the US dollar valuation . The conventional consensus claimed that Quantitative easing (QE), or increasing the money supply, would depreciate the currency. However,  It doesn't appear to be as straightforward as it portrays. Valuation of a currency is determined by multiple factors like, where the new money supply gets channelized, whether the economy is expanding in tandem with the new money supply, the comparative perception of the currency's stability & safety, the income & capital appreciation provided to those holding assets denominated in that currency, and, in the broader context, the government or institution issuing the currency's resilience, transparency, and adaptability. Key traits of a stable global currency: • Currency Standard - The currency is free to float in any and all international markets; it is not tied to any other currency. • Global Market Transparency - which means that the market and governance systems are visible to everybody and are not vulnerable to overnight devaluations, confiscations, capital restraints, and other measures imposed by opaque governments. • Diversely Allocated - The currency is allocated by broad economic segments and not rely on imports & exports to maintain its essential stability and strength. (eg: Venezuela Hyperinflation) • Free Flow - The issuing country ensures ease of flow: capital, skills, and businesses enjoy basically unlimited freedom of movement within the jurisdiction of the issuing nation or entity. • Stable FX Rates - The official exchange rate and the street or OTC exchange rate are almost equal. • Store of wealth - Enough currency is issued to serve as a store of value and a medium of exchange worldwide.  Transparency and adaptation lead to systemic stability. The stability of a strict centrally planned economy is tenuous because it is a symptom of fragility and anxiety: fear that if the restraints are removed and markets are finally free to determine price, the entire system would eventually collapse. This takes us to the US dollar, with it's increasing purchasing power. using conventional methodology we can argue  that this is attributable to the Federal Reserve raising interest rates and limiting money supply in order to fight inflation. However, this emphasis on the domestic economy misses the fact that the Federal Reserve is also a global central bank. Many of the backstops and guarantees granted by the Fed to "rescue the world" during the 2008 Global Financial Meltdown went to non-U.S. institutions. The money issued by a nation or organisation is the basis of worldwide influence and power. Currency standard and exchange rates set by government are indicators of systemic instability, indicating that the authorities are aware that the market will not place the intended value on the currency. Markets, however, discover pricing independent of currency standard or authorized FX rates. Market participants value a currency that trades transparently on global marketplaces. This price-to-value is reliable. Currency standards  and authoritative currency rates are untrustworthy because they can be modified overnight by opaque organizations.
TVC:DXYLong
by EQTSHARES
AT&T - Future Growth and DividendsAT&T (NYSE:T) shares recently fell by approximately 10% after the firm released its second-quarter earnings. Despite better-than-expected earnings per share and revenue, excitement was muted by cash flow issues. Following the current drop, AT&T's stock yields around 7.3 percent. Furthermore, AT&T is dirt cheap again, trading at approximately 7.4 times forward EPS expectations. The market may be overreacting because the most recent earnings report was strong, and the cash flow decrease is most likely a one-time occurrence. AT&T Financials Furthermore, the corporation has set a clear strategy for future growth over the next several years. Furthermore, AT&T is recession-proof and may profit from a management shuffle. AT&T's downside looks to be limited, and the stock is appealing in this environment. Multiple growth and other factors might cause AT&T's stock price to rise significantly from here while also paying a sizable dividend. AT&T announced non-GAAP earnings per share of $0.65, above average projections by $0.03. Revenue of $29.6 billion was also $130 million more than expected. During the quarter, the business added over 800,000 postpaid phone net adds and over 300,000 AT&T Fiber net adds. While AT&T raised its mobile service revenue forecast to 4.5-5 percent, it lowered its free cash flow forecast to the $14 billion range. The headline statistics for AT&T are impressive, but the cash flow drop is depressing. Cashflows are being impacted by heavy expenditures in 5G and working capital requirements. However, inflation is most likely a role, and when the economy recovers, AT&T's cash flow problems may be resolved rapidly. AT&T's figures were pretty strong. Revenues from standalone companies were $29.7 billion, up 2% from $26 billion in the same period last year. Adjusted EBITDA increased by $175 million, or 1.7 percent, year on year. In the most recent quarter, standalone adjusted EPS climbed by 1 cent to 65 cents. Perhaps most critically, AT&T's core Wireless Service expanded by 4.6 percent year on year and is expected to rise similarly in 2022 and 2023. In addition, we observe certain FCF remarks implying that the decline in FCF is a transient event. While AT&T's performance have remained excellent, and the company has demonstrated persistence in exceeding consensus analyst predictions in recent quarters, this has not prevented the stock from underperforming its competitors. AT&T's stock has underperformed the market, falling nearly 32% in the previous five years. AT&T's nearest competition, Verizon (VZ), is up marginally over the same time period. T-Mobile US (TMUS) is also higher, while Comcast (CMCSA) has destroyed the competition over the previous five years. If we extend the picture further, we see that AT&T's is down by around one-third during the last 10 years. How much longer will shareholders have to wait for a genuine management revamp? For many years, AT&T's management has done nothing useful with the corporation. For decades, AT&T's stock has been worse than dead money, and it currently trades at the same price it did in 1996. AT&T has become extremely inefficient and has devolved into a bureaucracy that must be changed fast. AT&T requires new management to restore order and return the firm to growth and profitability. AT&T's previous regime, which we don't want. We'd like an expert. We are looking for someone who will offer a unique perspective and creativity to AT&T. We need someone to turn AT&T around and bring the firm back on track. A management revamp would likely be welcomed by the market. High Dividend Yield Furthermore, with its extremely low forward P/E multiple of 7.4, AT&T might experience a slight multiple expansion, resulting in a much higher stock price as time goes on. Even a P/E multiple of nine times, as Verizon has, would result in an increase of around 18% for AT&T. If the company's P/E multiple rises to 10, its share price will grow by around 30%. also,  because of the dividend and the potential for numerous expansions. We recommend owning AT&T
NYSE:TLong
by EQTSHARES
The Next Housing Crash will be Catastrophic - Prepare Now!American and international corporations are keeping a large number of properties off the market as investments. These unoccupied flats limit supply in sought locations, creating an artificial scarcity as a result of central bank policies that finally caused an Everything Bubble. The number of corporate purchases of houses has increased dramatically. This has fueled demand in market, but if rental income fall as a result of the recession, corporate purchasers will start liquidating those same assets. As mortgage rates are rising, people are having a difficult time to allocate their income towards mortgage payments especially in times where rising food inflation is also a major problem for majority of Americans and if unemployment rates goes slightly higher then mortgage default will occur on a national scale, leading to another catastrophic housing crisis. In one of our previous analysis we stated, how inflation will peak at 12% and in case of a recession it is certain that inflation will stay on it's trajectory to peak while, Home prices will start correcting. Demand and Supply comparison between U.S Population growth and overall Nonfarm payroll employees against total housing unit supply Listing count of houses actively on sale have increased significantly in June by 18.74% According to the MBA's Refinance Mortgage Applications Index, applications for mortgages refinance fell 5.7% in June and have fallen by 70% year on year to the lowest level since 2000. PPI for Construction material have increased by almost 50% since 2021, forcing builders to shrink margins by 10-12% Conclusion: Since owning a home is becoming increasingly costly, it is prudent to rent one because real estate prices will soon begin to correct. NOTE: Cost of Farmland which have adequate water supply will continue rising due to current geopolitical situation. To leave this analysis on a positive note, We have picked an undervalued stock for you, Unity Software Inc. (NYSE:U) Looking at the future, their is one aggressive company that should be in every tech growth investor's portfolio which have the potential to outpace market, Unity Game engine can render ultra-realistic graphics, The next decade will of The uncanny valley and unity software plays a major role in it, Unity software are down 70% this year and trading 40% below their IPO value, The stock is currently at discount and from a long-term prospective and we believe that it will provide 80% return within 24 months making it a best buying opportunity. To this wonderful community, Be safe and be prepared, Thank you. ❤️
ECONOMICS:USCSHPI
by EQTSHARES
4
Palantir - The King of Cyberspace Security is on SalePalantir Technologies Inc. (NYSE:PLTR) is one of the most contentious business. More than 10 times TTM revenues, the company's market valuation is now floating at over $20 billion. The business is also notorious for diluting its stock and has never produced a net profit in a single quarter. Palantir has been among the worst-hit equities since the growth catastrophe started last year, which should come as no surprise. The company's share price has started to rebound despite an enormous decline of 70% from peak to trough. Palantir Financials Palantir was once the talk of the market when the stock was trading at $20 or $30, but not anymore. After the IPO, the equity was significantly diluted, and stock-based compensation is still under fire today. The market is voting "No" on Palantir because growth and high multiple stocks are less popular now than they were for the most of 2021 and because a potential recession is on the horizon. Palantir is not an exception to the general IPO phenomena of dilution and SBC compensation. Instead of focusing on previous sales, let's consider the company's revenue expansion and earning potential. Let's also think about Palantir's distinct, leading, and dominant market position and how it can affect possible future growth and profitability. Additionally, Palantir has a huge growth runway and a sizable profit margin potential, making the company one of the greatest investments in the long term. Palantir's dominating position as a government contractor is one of its most distinctive features. Through its Gotham programme, the firm offers software solutions to several governmental organisations. The American military, intelligence community, and police are just a few of Palantir's government customers. More precisely, Palantir's connected databases, data mining tools, analytical software, and much more are used by the FBI, DOD, CIA, NSA, and many other organisations. Palantir also provides services to the FDA, the NHS, and other organisations. Despite actively expanding its corporate division, Palantir nevertheless received 51% of its income from federal contracts in the most recent quarter. Palantir benefits from the government providing a sizable chunk of its earnings because of the government's well-known propensity for extravagant spending. The growth numbers for Palantir are outstanding. Revenue increased by 30% YoY, commercial revenue increased by 51% YoY, U.S. commercial revenue increased by 131% YoY, and client base increased by 87% YoY. While Palantir's governmental business continues to be its core, we now witness strong commercial business growth. Furthermore, as the business develops, we expect continue to notice strong growth from the company's corporate and government clients. The business forecasts an adjusted operating margin of about 28 percent for the whole 2022 fiscal year and 30 percent yearly growth or more until 2024. Palantir is a business with rapid growth. Therefore, it is not necessary for it to be profitable at this time. The business must put its efforts on expanding business, gaining market share, and establishing prospects for future success. Palantir should, nevertheless, be incredibly profitable when the time comes. The company's gross profit rose by 31% year over year during the most recent quarter. Palantir's operational costs rose only 2.5 percent YoY at the same period. As a result, the operational loss for the third quarter was substantially smaller than the same period last year—just $38.9 million as opposed to $114 million. Additionally, Palantir's gross margin for the preceding quarter was a staggering 78.7 percent, surpassing the 78.2 percent from a year before. As a result, Palantir is becoming more successful. Operating income, net profit, and EPS will considerably grow if the company's gross profit keeps rising and begins to greatly surpass operating expenditures. Palantir's share count increased by around 11% YoY, as can be seen. Palantir is still diluting as a result, although far less so than it was when the business first went public. Palantir only issued 476 million shares when it went public. The corporation now has more than 2 billion outstanding shares, nevertheless. However, a large portion of the devaluation took place early, practically directly after the business became public. The corporation had almost 1.8 billion shares after becoming public, which was around six months ago. Since then, SBC expenses have decreased dramatically and are probably going to keep decreasing as the business grows. Furthermore, rising SBC is not a Palantir-exclusive issue but a typical IPO phenomenon. SBC is down roughly 22% YoY, despite much increasing revenues and profits. This scenario suggests that the downward trend in SBC costs will persist. In addition, if the costs associated with SBC are taken into account, Palantir should become astonishingly lucrative. With SBC excluded, the company's cost of revenue was just roughly $82.7 million, which suggests that Palantir had a gross margin of over 81 percent. Palantir's operational income last quarter would have been around $111 million without SBC, showing an operating margin of about 25.1%. When SBC charges are factored out, the corporation would have had a little net profit of around $10 million. The firm posted an adjusted EPS of $0.02, demonstrating that it can be profitable right now despite expanding revenues by more than 30% year on year. As a result, we may conclude that Palantir has the potential to grow increasingly lucrative. As the company's revenues and gross profit climb, so should its operational expenditures, yet the SBC continues to fall dramatically in relation to the company's revenues. As a result, Palantir's profitability indicators should increase considerably over the next few years. There is widespread fear about the impending recession. However, Palantir is in a unique situation because the majority of their revenue comes from government contracts. Palantir's corporate clients are unlikely to diminish their reliance on the business's services, as the company provides important solutions in data analytics, cybersecurity, and other critical areas. As a result, even in a downturn, Palantir's growth should continue, making it one of the strongest long-term investments in the market right now. Palantir is expected to generate $2.7 billion in revenue next year, putting its forward P/S multiple at around 7. Palantir, on the other hand, is a dominant and high-growth business with exceptional profitability potential. When the stock dropped to $6, it was voted down to a 5x forward sales multiple. Palantir is now selling at roughly 7 times projected sales at $10, but it might trade at a substantially higher sales multiple in the future. Many firms with substantially less potential for growth trade at far greater revenue multiples. The 6-7 times forward sales multiple predictions are reasonable given Palantir's strong growth and huge profitability potential. Microsoft (MSFT), a software corporation with far slower growth, trades at approximately eight times projected revenues. Nvidia (NVDA), a growth business with substantially slower growth, trades at about 12 times forward sales expectations. Furthermore, many other growing firms are selling at far greater multiples than 10 times revenues. In the future years, Palantir might fetch a P/S multiple of 6-7 or much higher, potentially making the company one of the finest buys for the next decade. As a result, the market will most likely begin assessing the company's shares rather than voting for it in the next years, and Palantir's share price will certainly skyrocket. They are one of the few publicly listed companies capable of withstanding Geopolitical shocks and will most certainly gain from higher military expenditure by the United Nations and its European allies, as the recent NATO Summit in Madrid demonstrated member states' readiness to significantly expand their defence budgets. Palantir's space and geospatial intelligence capabilities are also likely to gain new clients as a result of its performance on the Ukrainian battlefield.
NYSE:PLTRLong
by EQTSHARES
3
Don't Stop Believing in Tesla - Earnings Report ProjectionTesla's stock has fallen by roughly 40% this year as a result of oversold conditions. During the negative market phase, Tesla has experienced a greater decrease than the typical corporation, making its value appear more and more appealing. In addition, the business will undoubtedly outperform profits projections when it reports earnings on 20th July, and likely announce a stock split next month. Tesla also has an interesting new product that should hit the market next year, so the business may continue to outperform even if the slowdown lasts for a while. As the firm develops, Tesla is expected to continue exceeding consensus profit projections. As a result, Tesla's stock is now rather affordable, should be purchased during periods of weakness, and is expected to increase significantly over the next few years. Tesla Financials Tesla has not seen the dramatic EPS adjustments that the majority of corporations have. Forecasts for 2023 EPS are currently greater than they were quarter ago. This scenario shows that analysts may believe that earlier EPS predictions may have been overly low and that the firm may weather a slump better than other companies. Finally, this dynamic suggests that a temporary slowdown is unlikely to have an effect on Tesla's longer-term profitability. In the rapidly developing EV market, Tesla continues to dominate. Tesla is the holy grail of electric vehicles, therefore even while a recession might temporarily have a small negative influence on the company's expansion, it is unlikely to have a long-term impact. The Ukraine conflict, rising oil prices, and inflation have all contributed to sky-high gas and electricity costs. Record-high gas costs will likely encourage more people to purchase electric vehicles, with Tesla standing to gain the most from this trend. Therefore, over the long run, a recession should have little impact on Tesla's growth, profitability potential, and stock price trajectory, making the stock a great buy on any recession-related dip as we move forward. If the shareholders accept it on August 4th, Tesla will split its stock once more. The majority of the time, stock splits are a positive move for equities. Tesla's share price would decrease from over $700 to approximately $277 as a result of the planned 3-1 split, making them more accessible to investors. Tesla P.E Ratio Tesla released its manufacturing and delivery figures. In the previous quarter, the business delivered 16,162 Model S/X vehicles and 238,533 Model 3/Y automobiles. The tremendous 750 percent increase in Model S/X sales was the first item that stood out in the positive data. Last year, there were some worries that the Model S/X car market would be oversupplied or that demand was waning. However, there is a substantial demand for Tesla's more expensive cars. Due to Tesla's temporary manufacturing prioritising of Model 3/Y automobiles, sales last year decreased. This sales pattern suggests that Tesla should continue to make significant profits from the luxury vehicle sector in the upcoming years. Positive Cashflow Tesla recorded a net income margin of 17.7 percent for last quarter. The most lucrative (conventional) carmaker Toyota (TM), which just recorded a gross revenue margin of 19 percent and a net income margin of 9 percent, is far less profitable than Tesla in terms of profitability indicators. Honda (HMC) has a gross profit margin of roughly 20% and a net profit margin of about 5%. Most of the time, their American equivalents have even lower profitability margins, with General Motors (GM) recently claiming a gross margin of roughly 15% and a net income margin of about 7%. Although the average expectations for Tesla's future P/E ratio are only around 40, the business may have stronger than expected profits in the current quarter and in 2023. Higher-end 2023 EPS forecasts range up to roughly $21.37, and Tesla has outperformed consensus estimates by an average of 27.9 percent over the past four quarters. Given how consistently Tesla exceeds consensus expectations, many analysts may still be underestimating the company's profitability potential. Therefore, Tesla's EPS statistics may continue to grow more quickly than expected. The Tesla Semi should also start selling by the end of the next year. As Semi truck deliveries and bulk production get underway, Tesla's revenue will probably experience a significant increase. Tesla's future P/E ratio appears to be excessively low given the company's rapid growth pace. Therefore, in the future, Tesla's forward P/E might increase to about 37 and stay in the 32 to 40 area. In the upcoming years, Tesla's EPS should rise significantly, and as the company develops, its stock price may rise significantly.
Editors' picks
NASDAQ:TSLALong
by EQTSHARES
57
Disney is a realm of escapism - Recession Proof & Cash Flow RichThe Walt Disney Company recorded negative operating cash flow for the first quarter of the year. Even in the second quarter, cash from operating activities was still outpaced by investments in diverse activities. This was mostly caused by a lack of action during the coronavirus demand destruction in fiscal year 2020. But now that the parks are reopened, there are less ramp-up requirements. The majority of Disney's movie ticket sales will result in revenue generation because the majority of the backlog of films has already been paid for. The free cash flow should significantly increase during the following quarters. Despite the most severe criticism, "Thor: Love & Thunder" is on track to surpass $500 million worldwide. The success of the movie was another evidence that the conventional approach is still effective. 10 Year TSR Value Disney's track record of making more money than it needs is quite extensive. As a result, advancements into further growth areas can still be made in the future. Disney may be a sizable business, but it has plenty of room to expand as long as there are measures in place to produce adequate cash flow. They have a strong economic moat. The brand is extremely well-known, and the market is now discounting the Disney+ streaming component of the company's operations as the excitement surrounding it fades due to Netflix's (NFLX) sluggish member growth. We have to consider that Netflix have peaked their user base. However, Disney+ have enough tier to grow their client base. Due to the parks being open again and new movies being released, cash flow is expected to increase significantly soon. In the long run, this corporation has a significantly more profitable method of producing films than many of its rivals. However, One of the biggest disadvantage of holding this stock is due to their high operating costs, Disney's value will increase to about twice what it is currently trading for if operating margins return to the mean of around 17%. As operating costs increased and park and cruise revenues decreased during the pandemic, Disney had to cut dividend payout. Undoubtedly, the dividend's reinstatement will be a bullish event that many are anticipating. Although market players despise dividend cutbacks, Disney's management at the time made a wise decision in doing this. Disney was able to leverage money from eliminating the dividend to make a splash in the streaming industry. However, it is in their best interests to compensate shareholders by resuming dividend payments in situations where the value of their firm is dwindling. The market seemed to be concentrating too much on downside risks, that continue to drive Disney's share price lower, despite the fact that revenue growth continued to rise. In the future, Disney's earning power might increase significantly, just like it did a decade ago. The stock might surge once more with an operating margin returning to regular levels of 17-21%. As the company's free cash flows and direct-to-consumer operations may grow, Disney has a lot of potential in the long run. Disney produced record EPS and nearly $10 billion in free cash flows in 2019. Now that the theatrical industry is recovering from COVID the company is expected to generate record breaking free cashflow. Total Revenue vs Total Operating Expenses They have already begun to report positive financial outcomes for its fiscal year 2022. Revenue increased from $31.86 billion last year to $41.07 billion this year, a 28.9 percent increase over the same period previous year. From $918 million to $1.57 billion, net income has grown by 71.5 percent. Operating cash flow increased from $1.47 billion to $1.56 billion, an increase of just 6%. However, if working capital adjustments were taken into account, it would have increased from $1.84 billion to $4.67 billion. That is a 153.7 percent increase from the previous year. Excellent Management & Strategic Growth over the years. People seek escapism during recessions, and Disney's content offers them hope. Every week, 80 million Americans went to the movies, even during the Great Depression and since then movie businesses have won the label of "Recession Proof", The movie business has generally been one of the few industries that has been able to retain its place in the market or even grow admissions, even in some of the worst economic downturns ever. This is a result of people's continued consumption behavior. Even if they were impacted by economic downturns, The release of "Avatar: The Way of Water" this year and Disney's 100th anniversary celebration in 2023 will boost the company's marketing efforts and help them generate more sales revenue.
NYSE:DISLong
by EQTSHARES
2
Anticipating the next moves of BITCOINThe Dollar Index (DXY) and Bitcoin have an intriguing correlation. Afterall, Bitcoin is developed as an alternative to U.S Dollar and other fiat currencies. DXY is a useful correlation comparison to track because, in this case, when the dollar is strong, Bitcoin is weak, and vice versa. Technical Analysis We think that the volatility we have been seeing since Oct 2021 is a part of a larger upswing as long as Bitcoin holds the $14,000 mark. It's critical to remember that, over the past 10+ years, the number of Bitcoin transactions and users has increased steadily, with only modest setbacks. The probabilities will be even more in favour of the beginning of a final 5th wave push higher if Bitcoin can break over the $32,000 level and maintain a push above this zone. Mass Psychology Bitcoin's price is unaffected by earnings announcements, management changes, or supply chain interruptions. In other words, despite the fact that the crypto market fluctuates often, there isn't much news that affects it. It's human instinct to think that a news event is the cause, but with crypto, this is just not the situation. Technical analysis is extremely effective in the crypto markets because human sentiment is the main factor driving prices. Any time people engage in trading an item with their innate desire for security acting as the dominant motivator in a formal setting, patterns in price history emerge. What we are measuring is this. An uptrend volatility that has potential to reach 29000 mark, Current level is holding at the peak of first major bull run, 13800 is the second level which represents investor confidence. Cause of Concerns The amount of bankruptcies and restructurings that have occurred, as well as the capitulation of miners who are being compelled to sell their Bitcoin holdings or even cease operations, are the largest causes for concern. Although there is compelling evidence that, at the absolute least, this capitulation is about to come to an end, there is also reason to believe that Bitcoin's price may decline slightly over the next several weeks. Upcoming Events In 2021, the Mt. Gox Rehabilitation Plan was implemented to pay creditors. Creditors were notified through email on July 6th that the "Rehabilitation Trustee" was about to make payments. All of this suggests that these creditors could get about $3 billion worth of Bitcoin within the next few weeks. It's hard to anticipate whether creditors will sell or hold their Bitcoins. DISCLAIMER --------------- This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that this information shall not be construed as an investment advise or endorsing any methodology. The cases included in the report are not an endorsement of the people, products, or firms mentioned in the cases; investment product returns are unpredictable.
TVC:DXY
by EQTSHARES
AUDCAD - Oversold Reversal (50 PIPS TARGET)We are expecting AUDCAD to show a reversal based on oversold ratios, Risk Management 1.75% > 2% If you find this analysis useful then Like, Comment and Share 👍 DISCLAIMER --------------- This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that this information shall not be construed as an investment advise or endorsing any methodology. The cases included in the report are not an endorsement of the people, products, or firms mentioned in the cases; investment product returns are unpredictable.
Long
by EQTSHARES
2
Swiss Franc - CHF Correction and Correlation On June 16th, SNB Surprises with first interest-rate hike in 15 years due to which market reacted with bullish CHF sentiments. SNB also started selling foreign currencies by CHF Buybacks which also contributed to recent spikes in Swiss Franc Valuation. However, repurchasing of CHF is advantageous for the balance sheet but if the CHF doesn't gain strength then it could also lose even more value. Technical Analysis, 1.) Oversold and Overbought ratios (CHF Correction is expected due to recent reactionary bullish spike) 2.) All targets are set in accordance with Fibonacci sequence 3.) Head and Shoulder Conclusion: Short position on CHFJPY, Long EURCHF and CADCHF DISCLAIMER --------------- This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that this information shall not be construed as an investment advise or endorsing any methodology. The cases included in the report are not an endorsement of the people, products, or firms mentioned in the cases; investment product returns are unpredictable.
by EQTSHARES
1
BITCOIN - Short Term Bullish RecoveryCryptocurrencies had a great week recovering, Bitcoin is on track for it's best weekly gain since October last year. As Global markets are adapting to rate hikes we are positive that Bitcoin will continue a short term bullish recovery However, It is certain that following rate hikes will going to make U.S Dollar even more stronger and reducing investor sentiment. Ergo, Cryptocurrencies will have to continue facing the turbulent times. Technical Analysis, 1.) Strong Monthly Support - Monthly Candlestick Reversal 2.) Impulse Wave pattern - Bullish Formation 3.) Crossed 50 Month M.A - Bearish Sign Conclusion: BTCUSD expected to reach 28000 level before it starts correcting. DISCLAIMER --------------- This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that this information shall not be construed as an investment advise or endorsing any methodology. The cases included in the report are not an endorsement of the people, products, or firms mentioned in the cases; investment product returns are unpredictable.
BITSTAMP:BTCUSDLong
by EQTSHARES
SPX - Calculating the odds of a RecessionUnderstanding the possibility and consequences of a recession by determine the strength of U.S Economy using key economic indicators GDP - In order to sustain the economy consumption must be increased meanwhile, Fed trying to tame inflation by implementing policies that will going to reduce the demand. Ergo, The GDP is expected to fall by 1.25 next quarter. UNEMPLOYMENT RATE - Every time a huge trend of layoffs starts 45 days prior to a recession. at this point, No major corporate layoffs have taken place and currently the unemployment rate is at historically low levels. INFLATION RATE - High oil prices, Supply Chain disruption, Hyper inflation risks across the globe and most importantly higher interest rates, There is no doubt that inflation rate will counting rising. CONSUMER SENTIMENT INDEX - Current level is below 60 which reflects lower consumer confidence which will result in lower consumer spending DOLLAR's PURCHASING POWER - U.S Dollar getting stronger against other fiat currencies, However it's purchasing power is eroding, High interest rates have strengthened the U.S dollar and it's expected to continue rising. 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - Short term vs Long term treasury inflows, Whenever yield nears the zero or becomes negative then recession follows. Federal Funds Rate - Interest rates are expected to hit 3.75% by the end of this year, There will be several rate hikes in the following months that will result in global economic slowdown. Geopolitical Risk - Disruption of world order has already begun with Russia's Invasion of Ukraine, Growing risks of China and Taiwan conflicts, Shri Lanka's Crisis, Turkey's Hyperinflation risk and if U.S economy crashes then a new world order is imminent. Conclusion: Current Health status of U.S economy is bearable However, projection for upcoming quarter is uncertain, the most optimistic part is low unemployment rates, Financially strong businesses and Strong households with higher savings rate, in turns following rate hikes cannot be associated with an inevitable recession. Health care and defense sectors with high dividend yield stocks are greater alternatives to invest in.
SP:SPX
by EQTSHARES
2