Author: Editor

  • Nokia Stock – The Tale of the Rise and Fall

    Nokia Stock – The Tale of the Rise and Fall

    Nokia Stock - The Tale of the Rise and Fall

    Nokia’s problems around 5G networks may lead to sustained per share loss and limited margin expansion over the next 12-24 months

    Nokia stock is falling. On Friday, November, 8 shares of Nokia Corporation, (NYSE: NOK) displayed a change of 0. That day session it closed at $3.57. Nokia Corporation, a Finland based company, is the technological and communication equipment business. The shares of Nokia Corporation was among the active stocks on that day.

    What did happen?

    The famous manufacturer of telecom-grade networking equipment posted on October, 24 a Q3 report. And shares of Nokia fell 27.9% in the aftermath. The stock price fell due to disappointing undershooting of the guidance targets. Also, it fell in the Helsinki trade because Credit Suisse downgraded Nokia to neutral from outperform. Credit Suisse lowered Nokia’s target price to 3.85 euros from 5.70 euros. Credit Suisse thinks that Nokia may also lose 5G market share due to product delays and high costs.

    The Q3 report points to the 5G network as the main problem. 

    The company’s revenue rose 4% to $6.31 billion. Adjusted earnings lowered from $0.06 to $0.05 per American depositary receipt. Nokia also cut its earnings guidance by 22%. The reason behind, as the report declares, are the growing costs of keeping the company competitive in 5G business.

    Nokia also redirected its dividend funds into even more 5G investments. But don’t be so happy if Nokia is your favorite one. This move will not make Nokia a titan among others because the company is losing 5G contracts with important network operators, for example with Telecom Italia.

    The sudden drop in price isn’t recognized as a buying solution for Nokia shares. Wall Street issued some downgrades too and critical statements after the Q3 report. J.P. Morgan cut its price target on Nokia by 44% and excluded this stock from the list of top recommended.

    It is hard for Nokia’s stock to survive under these difficult conditions. The dividend cut is a clear sign for many investors to stay away and sell stocks, cheaper and cheaper.

    Nokia is suffering now due to stupid business decisions and strong-minded competition. It looks that 5G is a too big bite for this company. Do you remember what did Nokia with the possibility of develope smartphones? It was almost 10 years ago. Instead to took part, Nokia stepped away and made space for others. Only to enter the market late in the game with the Windows Mobile platform, which was dead on arrival due to illogical design decisions. It looks that market shifts with the speed that Nokia isn’t able to catch.

    This became obvious in late October when Nokia made important cuts in its guidance and suspended its dividend. 

    Are there better times for Nokia stock?

    Well, the company made all these moves with an explanation that Nokia has the goal: huge capital investments into 5G networking. That could be a good hunch. But, on the other hand, Nokia may place a big bet, bigger than the company can afford at this time. Increasing investments in the way Nokia is doing may produce some income in the long term, but it has to survive on that path. Is it able? 

    Investors say no. Nokia stock is currently displaying a down return of -2.46 all last week and we can see the bearish return of -27.73 for the last 30 days.

    Some can ask why decreasing the Nokia stock price is not a good buying opportunity. Well, it looks that Nokia came too late on this battlefield.

    5G technology is in development for some time and the biggest players in tech were preparing for a long time to take advantage. Despite the thinking that a low price is a good chance to buy stock, this stock looks very suspicions. Maybe it is better to stay away for some time and watch in which direction the company will go. 

    Bottom line

    Today is November 12, 2019. It’s Tuesday and the current price of NOK stock is $3.535. Our data shows that the price is in a downtrend during the past 12 months with a sharp drop after the Q3 report. This stock should tend to fall more. Should you add a Nokia stock to your portfolio now? It’s up to you. Our opinion is that NOK may decline further in the next 12 months, even to 35%. But in the long run, NOK may be a good investment if you can wait for several years.

  • Brookfield Renewable Partners – High Yielding Stock

    Brookfield Renewable Partners – High Yielding Stock

    Brookfield Renewable Partners - High Yielding Stock

    Brookfield Renewable Partners trades on the Toronto Stock Exchange under the ticker symbol BEP.UN and on the New York Stock Exchange under the ticker symbol BEP.

    On November, 11. Brookfield Renewable Partners, a Canadian company, reported financial results for the three and nine months ended September 30, 2019. 

    The company has been doing great work last year to sustain its renewable energy portfolio and its balance sheet. The work showed great results over the third quarter. Brookfield Renewable Partners presented important cash flow growth. Moreover, the company plans to keep that success and to continue growing its 4.6%-yielding dividend.

    The company proceeded to execute on strategic priorities in the third quarter. There were many new investments, operations, and creating liquidity to reinforce its strong balance sheet.

    The stock is strongly bullish.
    Market Cap): $13.42 B
    Current price: $43.485

    Brookfield Renewable Partners - High Yielding Stock

     

    Sachin Shah, CEO of Brookfield Renewable said:

    “We are also pleased to announce our intention to create a Canadian corporation with publicly-traded shares that we expect will be economically-equivalent to the units of the partnership. This should position us well to continue attracting new investors to our globally-diversified renewable power portfolio.”

    Brookfield Renewable summarized Funds from operations (FFO) growth of 27% which is in currency $133 million or $0.43 per unit. It is for the last three months, until September 30, 2019.
    The net loss for the same period was $53 million or $0.17 per unit. These results were backed by recent acquisitions and the execution of its operating initiatives.

    The company’s portfolio is growing

    This Canadian company invested $100 million BEP equity into TerraForm Power and there was the acquisition of a 200-megawatt wind farm in China. Also, it sold two mature European wind portfolios for $74 million net to BEP,  from selling five of its six assets in South Africa, BEP gains $42 million of net profit. That selling of, returned nearly two times its capital invested.

    Brookfield Renewable Partners completed a C$600 million green bond issuance. That is the largest corporate level green bond ever issued in Canada. This transaction provides the company to increase the average duration of the corporate debt by 5 years to 10 years and to maintain a strong total available liquidity of $2.5 billion.

    Canadian Corporation

    The company announced an intention to form a Canadian corporation “in order to provide investors with greater flexibility in how they invest in Brookfield Renewable’s globally diversified, multi-technology renewable power portfolio” as they said in a statement. 

    The new entity will be publicly listed on the same exchanges as BEP. The quite interesting idea will give investors the possibility to invest in Brookfield Renewable Partners through a partnership or Canadian corporation. That could increase demand and improved liquidity for the company.

    Moreover, Brookfield Renewable Partners plans to distribute on a tax-free basis to the majority of unitholders, class A shares of the new corporation, Brookfield Renewable Corporation (BEPC). This will be an adjustment for the number of shares outstanding, without changing the aggregate cash flows or net asset value 

    The class A shares will be convertible for one BEP share. 

     

    The success of Brookfield Renewable Partners operations

    Its hydroelectric operations increased its cash flow by 20%. Although the company produced less electricity in the U.S. Northeast and Canada due to climate issues, BEP balanced that problem by making better results in its operations in South American and boosted the profitability of its businesses in Brazil and Colombia.
    Its wind business grew its cash flow by 24%. The benefits came from the acquisition of 210 megawatts of wind capacity in India and a 51 MW wind farm in Ireland. At the same time, its investment in TerraForm Power proceeded to pay dividends.
    Brookfield’s solar, storage, and other sections were flat for many years. But this year its solar business grew 16% thanks to growth at TerraForm.
    On the other side, earnings from storage were down 45.5%. That is the result of a 33% drop in actual production over the period.

    Bottom line

    Brookfield Renewable Partners’ third-quarter results reveal that its strategic plan manages to pay dividends. Hence, it is reasonable to expect that the company will be successful in the future.
    Its aim is to increase its cash flow at a more than 10% annual rate in the next 4 years. So, it will be easy for them to increase their high-yielding payout to 9% per year. So, what do you think, is this a good choice for investors willing to invest in renewable energy? For us, it looks like a good pick.

     

  • International Paper Company Could Be Great Stock In 2020

    International Paper Company Could Be Great Stock In 2020

    International Paper (IP) Could Be Great Stock In 2020

    International Paper Company is quite capable of surprise, it is undervalued due to its EPS growth, but dividends are steady
    Market Cap: $17.7 billion
    Yield: 4.5%
    Revenue: $22.8 billion

    International Paper Company (IP) is a producer of packaging, paper, and pulp, based on fiber. You might think how a paper producer can be a good choice for investing in when everything around us is already digitized, who and why would need paper. Well, that is true, but only this part about digitalization. The usage of paper isn’t dead and the paper isn’t going to lose the battle in the digital era. Okay, we are ordering things online but do they come to our doors? Packed in one of International Paper’s products. Or from some other producer, of course, but we are talking about IP now.

    Not to be forgotten, some news appears that IP is about to go ex-dividend on November 14. So, you have to buy their shares before that date to receive the dividend. It will be paid on December 16.

    International paper dividend

    The company’s next dividend payment to shareholders will be $0.5 per share. That is less than the last year when they paid $2.1. If we take a look at payments from the past year, the company has a trailing yield of about 4.4% on the share price of $46.21. 

     

    Some data is very important when you have to decide to buy or not some stock because of its dividend. 

    The International Paper paid out 58% of its profit to shareholders last year. Nothing strange with that payout,  it is a regular level for most companies. But take a look at its cash flow since it is more valuable than profits when estimating a dividend. Well, IP did it well last year, it paid 35% of free cash flow. It’s good to see that the dividend is well covered, so the dividend is sustainable. Of course, it will be until earnings drop sharply.

    Is it a good dividend stock? 

    International Paper shareholders have seen a support expansion from the money managers in the past several months. After the second quarter of this year, about 30 hedge funds held IP in their portfolios. But the surprising thing is that IP stock isn’t amongst the 30 most popular. That has to be noticed.

    This company is paying dividends over 10 years now. For long-term investors, the companies that are paying dividends can be worthwhile.  International Paper Company is yielding 4.8% so for some investors it is a good opportunity if they want to buy the stock because of it.  The company has significant debts, so you will need to check its balance sheet to see if there is any debt risks.
    International Paper has a net debt of 2.61 times its EBITDA. Yes, debts are good to stimulate business growth but can boost the risks. During the last 10 years, the IP dividend has been constant. That is a sign that the company had a consistent earnings dynamic. 

    International Paper Company paid $1,00 per share in 2019, last year it paid $2,00 which is a CAGR of about 7.2% a year. This is very worthy over the long term investors if the rate of growth can be kept or increased. Also, IP would have a better result if earnings per share could grow too. Instead, the company’s EPS are flat over the past 5 years. 

    Bottom line

    When we want to buy a dividend stock, we want to know will the dividend grow, is the company is capable to support it in different economic conditions and is the dividend payout is sustainable. International Paper company’s dividend payments look fully covered. Moreover, International Paper appears like a great chance. It could be a good fit.

  • Qorvo Is Ready to Trade Higher

    Qorvo Is Ready to Trade Higher

    Qorvo Is Ready to Trade Higher
    Qorvo shares rose 20% last week.
    Its current-year earnings increasing almost 10% over the last two months

    By Guy Avtalyon

    Qorvo (QRVO) shares had been trading higher last week. Have you ever been thinking about owning a tech company’s stock? No? Well, it’s time to think about it. Avoid some regrets later. The people that didn’t recognize the potential of holding stocks of Apple or Microsoft are regretting now. 5G profit is unquestionable now. 

    5G stocks are in focus now. Technology has great potential and tech companies are always a good choice. 5G networks easily can be a sign of the opening of a new golden era for this technology.

    Investors who are able to recognize the potential in early-stage could profit a great. One of them could be QRVO.

    What is Qorvo

    Qorvo Inc. develops, produces, and sells scalable and dynamic radio-frequency modules for mobile, infrastructure, and defense applications. It is a wireless semiconductor industry and high tech. Qorvo designs amplifiers, integrated modules, optical components, oscillators, filters, duplexers, frequency converters, switches, and other facilities for apps that run wireless and broadband communications.

    Qorvo, Inc. is a provider of technologies and RF solutions and markets its products to the United States and international original equipment manufacturers and original design manufacturers. Its sections cover Mobile Products and Infrastructure and Defense Products. It works design, sales and manufacturing departments located in Asia, Europe, and North America.

    Qorvo stock

    The company trades on NASDAQ and its headquarters are in Greensboro, North Carolina. Its products end up on other products almost everywhere. The wireless industry is still expanding and it will be part of our lives for a long time.

    The 5G stocks are better than ever and last week’s earnings from Qorvo showed it is a great beginning. Its current-year earnings growing almost 10% over the last two months.

    GAAP earnings weren’t quite great but they are still notable strong. In the Q2 earnings report, the company reported GAAP earnings of $0.70 per share. That is almost three times the $0.25 Qorvo earned last year. But, also, the company reported sales to drop 9%.

    The news looks like it’s going to get better as the year advances. In its financial guidance for Q3, the company’s management stated the expectation that sales should rise regularly from $840 million to $860 million. It will be much over the almost flat revenues of $758 million, which is the Wall Street prediction.

    Earnings should be about $1.67 per share which is a great discrepancy with Wall Street is looking for $1.35.

    Does Qorvo’s stock has potential? 

    Mobile demand is healthy and increasing which is good news for this company. Investors who are buying this stock are truly right. If we have info about the developments of 5G in our mind and how Qorvo plans its role among other companies, it sounds like a good choice. As we had the opportunity to see, Qorvo shares climbed 20% last week and it was aligned with its progress over the past two months.

    In the third quarter of fiscal 2020, the company expects a non-GAAP gross margin of nearly 48%, and non-GAAP diluted earnings per share of $1.67 is stated in its guidance for the third quarter. 

    For mobile, the company expects December quarter sales to grow as 5G handsets launch with its integrated solutions. There are also other contracts, for example, sales will increase on higher-defense business volumes. Also, increasing 5G infrastructure customer demand promises good days for Qorvo.

  • Yield Curve Turned Positive

    Yield Curve Turned Positive

    Yield Curve Turned Positive

    The yield curve, an indicator from the bond market a few months ago was inverted and started alerts about the risk of a recession. Yield curve turned positive now, and that brings relief to the markets.

    The inverted yield curve is recognized as a recession warning. And now it isn’t inverted, the yield curve has turned positive now. So, can we speak about recession further? Well, that is not how these things work.

    OK, the stocks are rising, but they have turned into the new high. And what investors have to do now, to wait or hop? It looks like investors are cautious. 

    The market is an all-time high, as a difference from the past two years.

    The statistic is looking good for income investors since the 21 of the 30 Dow Jones Industrial stocks have yields of over 2%.

    But a 10-year US Treasury bond yield is below 2%, that level seems to be too low. Therefore, there seems to be risk without a proper return from holding bonds now. This means, there is a reasonable expectation that investors could turn to stocks. When bond prices are low and yield is low, such as right now, the investors could move out of bonds into stocks because stocks are offering a better return now.

    This is something known as great rotation.

    The positive yield curve should be a sign that rationality has returned and the markets are in regular condition now. Are investors ready for this situation and are able to adjust immediately? We are afraid that changes happened too fast and investors couldn’t be efficient at making instant trades. Only a few months ago, investors were convinced that the recession is coming, since the yield curve was inverted. And now the inverted yield curve turned positive. Earnings reports are great, stocks are growing, consumer confidence is returning, conditions look excellent. How can we mention the recession anymore?

    And this is something we have to make more clear.

    The yield curve inversions virtually ever lead recessions, but it isn’t necessarily happening right now, in the same moment. What experts noticed is that we will need about 20 months or 2-3 months more or less to see the recession triggered by inversion of the yield curve.  

    What can we expect when the yield curve turned positive?

    That should produce a change to the markets, and to forget a recession fears. This positive economic turn should produce stock prices to grow. How this can happen? Only if investors take action and invest. Their actions must have turned direction, they have to leave low yield bonds and jump into the stocks. So simple? Yes.

    The truth is, we are in an atmosphere where even the smallest piece of negative news adds fears in our lives. When the negative yield curve appeared everyone was talking about it. The newspapers were reporting, the experts were screaming from TVs, investors moved to bonds. And what we had is that yield curve was inverted and now shifts very quickly to positive giving us no breath. 

    The stock market is driven by expectations but we all have to turn to reality. The reality is clear when it comes to investing: stay focused on long-term goals and avoid emotional reactions. Don’t pay attention to a daily stock price’s changes. We must have a bigger horizon.

  • Canadian Solar Inc CSIQ Is Expected To Report Q3 2019 Results

    Canadian Solar Inc CSIQ Is Expected To Report Q3 2019 Results

    Canadian Solar Inc CSIQ Is Expected To Report Q3 2019 Results

    Canadian Solar (CSIQ) is a producer of silicon ingots, cells, wafers,  solar panels, and custom-designed solar energy applications. It has a 3-5 year EPS growth rate of 32%.
    Market cap – 1.015B
    Current price – $17.12
    Volume – 819,112

     Canadian Solar Inc CSIQ will report Q3 for the 2019 result on Nov 12, before the market open.

    The last reported quarter was surprising in a positive meaning. The company released huge earnings of 234.78% with an average of 115.66%.

    Since the company is a producer of solar panels it is expected that the biggest growth in Q3 results will come from the sales of solar modules. We didn’t notice any change in the company’s fundamental business. It is still strong due to the stable average selling prices and stable demand. So, what we expect is the company will declare a rising in sales.

    There were some interesting sales in the last quarter. Canadian Solar Inc finished the sale to Duke Energy Renewables. It was a big project, a 266 megawatt-peak solar. Also, it looks that the company finished the sales of its projects in Brazil. That is the reason to believe that the company’s main growth is coming from that operations.

    Some experts estimated the company’s Q3 revenue at almost $800 million. That would be an increase of around 4% in comparison to the previous quartal.

    But, the company had an important rise in operating expenses in the past several quarters, and the income tax expenses have risen in the same period. Speaking about a year over year earnings, it might be a decrease of around 8% in comparison to the same quartal last year.

    Should you sell or buy Canadian solar stock

    The CSIQ stock price:

    30 day high was $19.04 and low was $16.72.
    90 day high was $24.82 and low was $16.72.
    52 week high for Canadian Solar Inc.  $25.89 and low $13.24

    A buy signal was issued from a pivot bottom point on Wednesday, November 06, 2019. That shows further profits until a new highest pivot has been found. But some negative signals were issued too. So there are some possibilities of impact on short-term growth.

                                                                                                               Image source https://walletinvestor.com/

    Hence, there is a general sales signal (the long-term average is above the short-term average) but also sales signals from the short-term and long-term average moving averages.

    The resistance level could be somewhere between $17.18 and $18.52 when corrections up. The buy signals will be issued with break-up above these levels. Since the volume fell possible “turning point” is noticed.

    Canadian Solar Inc. is in the middle of a very wide and falling trend in the short term. There are signals of further fall within the trend. The experts expect the price to drop almost 27% in the next 3 months and that there is a 90% possibility hold price in the range from $10 to almost $14 after these 3 months. The experts estimate that CSIQ stock is a strong sell candidate. Anyway, we will wait for its Q3 report and see the plans for the future.

  • 5G Network The Next Technology Revolution

    5G Network The Next Technology Revolution

    5G Network Is Not Just The Next Revolution For Your Mobile
    The development of a 5G network will give us the ability to communicate faster. It will provide us the control of large numbers of devices at the same time.
    5G network can support large networks of low-power scanners able to send and receive data and it is a good opportunity for investors

    By Guy Avtalyon

    In the past few years, the development of a 5G network is in focus. For starters, don’t equate 5G with smartphones. 5G is much more than only higher-quality streaming and faster downloads on your mobiles. To quote Robert J. Topol, Intel’s general manager of 5G development: “5G will be the post-smartphone era” pointing that mobiles will be the first place for launching due to their strong presence in our lives. 

    And prevalent understanding of 5G has to be changed since the possibilities are enormous. Much bigger than we can imagine right now. For example, 5G lower latencies and jitter produces almost lack of any lag. 

    But, let’s say a few words about the 5G data network.

    5G could easily open the potential of many other advanced technologies.
    Due to the ability to share information in real-time, 5G will let a surgeon in London operate on a patient in Peru using wireless robotics with almost zero lag.

    Moreover, some technologies and apps unimaginable until now may soon be our reality.

    Speaking about mobiles, who was able to predict 25 years ago that we will have Bluetooth handsets or wi-fi coverage with the gigabit-speed internet? Okay, you are the smartest one! Thank you.

    And what about  AR glasses and VR headsets?

    Tech companies are convinced that these devices will finally replace our smartphones. With 5G, that could really occur with no doubts.

    5G’s extreme speed and functionality could lead to a new age of technological and entrepreneurial development. Forbes wrote that self-driving cars “won’t work until we have 5G”.
    And do you know what is an extremely important part of this?
    Experts are expecting that 22 million jobs could be created for improving existing infrastructure to the 5G standard.

    5Gs speed is up to 20 gigabits per second. That is more than 20 times faster than 4G’s limit.5G networks can support global connectivity for almost any industry.

    5G could make driverless cars effective and practical. We will have cars with 5G connections in a few years, directly interacting with other cars, traffic lights and we will know where open parking places or traffic congestions are.

    5G networks can support global connectivity for almost any industry.

    Can you imagine the future schools when implementing 5G? Can you recognize all the possibilities for the rising quality of learning? There will be no need to rely on textbooks. Instead, the kids will have real life in the classroom, virtual and augmented reality experience.
    Of course, this isn’t going to happen overnight. But you can be sure that the main changes will happen in the next several years.
    The 5G network is created to provide a signal for a far larger number of devices, at the same time, than a conventional cellular network can. 5G network can provide control of various devices, whether it’s a communicator or a refrigerator. 

    Moreover, it is created for managing and controlling the tools and machines needed in businesses. For example, agriculture equipment, ATMs, or some other device like a sensor for compost. In essence, they are low-power scanners that are able to operate on the same battery for almost 10 years and to send and receive data.

    And, sorry but you can’t just pick up 5G with your current smartphone. 5G technology needs a special set of antennas to communicate in specific radio-signal bands. You will need to buy a new one.

    5G is here. More and more countries come online and more 5G devices are available, and not just in the luxury high-end segments. Find one for you.

    We’ll start to recognize the full potential of 5G very soon. And forget about the fear-mongering of alleged health hazards due to high-frequency radio waves. The Wi-Fi uses 5GHz band, and is perfectly safe, so why wouldn’t 5G also be safe while operating on similar frequencies. And it is a good investment too.

  • How to Find Big Opportunities in Investing

    How to Find Big Opportunities in Investing

    How to Find Big Opportunities in Investing

    Everyone would like to know how to find big opportunities in investing. That’s the point, right? One of the best ways is to notify where traders are overreacting to the news.

    By Guy Avtalyon

    To find big opportunities in investing, other traders’ extreme fears will help you. For example, traders reacted to news that brokers were cutting their fees. But did you notice a massive rise in their stock price? During the past few weeks, online brokerage stock took hits.

    Let’s go step by step. When Charles Schwab announced it would cut all commissions for all trading, E-Trade, Interactive Brokers and TD Ameritrade fell. This news sent brokerage stocks lower because the traders overreacted.

    In that period, for example, TD Ameritrade (AMTD) dropped from $48 to $33. The other brokerages experienced a decline in stock price too. Interactive Brokers (IBKR) fell from nearly $54 to almost $45, Charles Schwab Corp. (SCHW) dropped from $43 to $35, etc.

    The traders responded to news that brokers are cutting their fees. They had fears about brokerage future without that income and started to sell. But the point is to overcome the fears and recognize the opportunity. When you recognize the bottom in some stocks you actually can see great returns. And let’s take a look at our example again.

    What happened with these stocks a bit more after?

    Charles Schwab moved from $35 to $42, TD Ameritrade moved from $33 to $39, Interactive Brokers stock rose from $45 to $48, etc. How did this happen? There are no tricks. When some stock becomes oversold and gets stretched in one direction too quickly, too far, you will notice bounce back. That is exactly the time when you have to buy the stock. So, you are profiting while others are feeling fears. 

    It is simple to recognize when the stock dropped on extreme fears. How to find those big opportunities in investing?

    Key technical pivot points 

    Bollinger Bands

    Let’s say you noticed that traders picked a moving average of 20 with two regular deviations up and under that average. When a stock reaches or enters the lower zone, you can be sure the stock is oversold.

    RSI and W%R

    Use RSI to confirm the indicators that are higher. The oversold condition will appear when RSI goes to or below its 30-line, also when W%R (Williams’ %R) comes to or up the -80-line the stock is considered to be oversold.

    MACD

    Moving Average Convergence-Divergence is helpful and simple. It helps to confirm the info we get from previously mentioned indicators. MACD is calculated by subtracting the 26-period EMA from the 12-period EMA (Exponential Moving Average). 

    How to identify investment opportunities?

    You will need a bit of magic to find big opportunities in investing.

    These four indicators must be matched with one another if you want this to work. They have to be aligned. And moreover, you don’t want to rely on one indicator. You must have all four.
    So, what we had with brokerages in October this year? Just to be said, we can use other examples, but this is fresh. We saw the stock dropped due to the fees-pricing fight. Though, we saw the precise time of extreme fear and, at the same time opportunity.

    When you see the stock dropped to its lower Bollinger Band, it is a sign that the stock is oversold. Use historical data for that stock and you will find that whenever the lower Bollinger Band is reached or entered the stock turned and bounced back higher from that point.

    Use RSI to find big opportunities in investing

    But you have to check RSI also. Find the confirmation on what Bollinger tells you. If the RSI is a below-set line the stock is oversold. That the confirmation of Bollinger Band’s story. Check this info in historical data to have a sense of how the stock was performing in case it had lower RSI and if the stock moved to its lower Band.
    If you see the stock bounced back higher quickly that is the confirmation and you should buy. 

    And as we mentioned before MACD and Williams’ %R have to confirm the described condition to be sure you can trade with 85% of success.

    Examples of how to find big opportunities in investing

    The list is really endless. Big investments may come fro different fields, different companies. For example, some small but developing company can be a better choice than a famous brand.
    In case you don’t believe this, let’s see what stats tell us. Small companies are the spine of any national economy. That’s the fact. Small companies employ many people, actually the majority. So, it is easy to conclude that the can be a big opportunity to invest in.
    Just keep in mind before you invest in one of them to examine its potential for growth, financial strength. When you go through this process try to find out how passionate management is about business, sometimes that will tell how serious they are about future growth and the company’s future. Especially if you want to invest in some startup.

    Big opportunities in investing can be detected in up to 85% of cases.
    Put all these indicators together with extreme traders’ fears based on news, and you will see how to find big opportunities in investing.

  • Alibaba Stock is Attractive for The Long Term Investment

    Alibaba Stock is Attractive for The Long Term Investment

    Alibaba stock is attractive for the long term investment
    Analysts have called e-tailer Alibaba Group Holding Ltd “Amazon of China” and for good reason.
    Alibaba is one of the few e-commerce companies in the world that can come close to Amazon’s size and growth potential.

    By Guy Avtalyon

    Update 08/11/2019: Alibaba stock (NYSE:BABA) broke out the  $185 level and scored the high. Yesterday it was traded at $186.66.

     

    Alibaba stock was traded on Tuesday, November 5 at $182,00 which means that it needs to rally less than 2% to reach $185, the new maximum this year. The best Chinese stocks need to clear one crucial level to be able for a breakout. It is $185 level, a very important level that might give it the strength to move up and hit the $210 the highest price ever got in 2018.

    Over the last almost a year and a half we can notice a range of higher lows, so we can easily say it is positive. Yes, but we can also see a set of lower highs. If Alibaba move over $185 that will be a new high and good level for increasing to the $210, historically highest high. 

    It will be interesting to watch this stock over this month.

    Is Alibaba able to do so?

     

    Alibaba reported Q3 earnings on November 1. All expectations are beating because the company reported an incredible increase in sales. The online-retail business rose an awesome 40% year over year in the September quarter. 

    But that’s not all. The real rise will come on China’s Singles Day on November 11. That is a shopping storm. The original aim of this holiday was dedicated to single people to celebrate not being in relationships. But it turned into something like Black Friday but more huge, more intensive, a real shopping storm. Today it is an indicator of buyers’ sentiment and sales growth. Can you guess who played the big? Maybe the biggest role in turning this holiday to insane shopping of everything has Alibaba.

    Singles Day began as a weird celebration for single people in China back in the 1990s. Just write November 11as numbers only. It is 11. 11, right? Singles Day started as a kind of anti-Valentine’s Day when students at Nanjing University began celebrating the fact they are single.

    After 10 years Alibaba literally adopted that day and turned it in a day when everyone, no matter single or not, orders themselves a gift.
    Online shoppers in China made $30.8 billion in sales last year on that day. This spending orgy has surpassed Cyber Monday in the US for online shopping made on a single day.
    Since last year’s score was 27% higher than a year ago, what can we expect this year? We are afraid that any forecasts will be beaten. Have in mind that Alibaba made a billion dollars in sales in the first 2 minutes shopping (actually, it needed only 90 secs). A real retail phenomenon! And Alibaba is a recorder.

    Alibaba.com (NYSE:BABA) is the biggest e-commerce and cloud player in China.

    In its Q2 earnings report, we can see its revenue increased by 40% annually to $16.65 billion v.s. estimated $180 million.

    Company’s generally accepted accounting principles or GAAP net income, include a big profit from its stake in the fintech company Ant Financial, which rose 288% to R$9.9 billion, which is $3.85 per share. If we exclude that profit and some others, the net income increased 40% $4.58 billion, or $1.83 per share. Estimations were beaten again.

    After the Q2 earnings report the stock price jumped but for a short probably because of investors’ worries toward the U.S.-China trade war. Also, the economic slowdown in China had an influence.

    Should you enter a position in Alibaba?

    Alibaba’s focus commerce revenue grew 40% annually, its operating profit rose 32%, preserving its position as Alibaba’s entirely profitable venture.
    There are some concerns about the Chinese economy’s slowdown.

    Should you invest in Alibaba stock?

    Revenue growth of 40% is an amazing amount for a company of virtually any volume. But keep in mind that Alibaba is the world’s seventh-most valuable public company. So, that percentage is a miracle. 

    The number of their active consumers increased by 19 million last quarter and now they have 693 million users. They have 785 million mobile monthly active users, which is 30 million more over three months. Alibaba aims to have more than 1 billion buyers by 2024, and it looks like it will reach that goal.

    How to invest in Alibaba

    The best way to invest in Alibaba wisely is by having a long horizon. The company has a fantastic position, its strength in e-commerce is supported by its huge data insights on Chinese buyers, also its increase in market share in the cloud computing industry.

    Also, there’s the Chinese growing middle class with increased buying power. The extra income has proven to be important to Alibaba’s continued high growth. Also, there is the Chinese government as a safety net. China supports its favorite companies on the international stage, that’s a fact. Protectionism from the Chinese government works fully in favor of BABA stock, backing it to enter the “buy” choice.

    The drawbacks of Alibaba stock

    The founder, Jack Ma,  stepped down as chairman of the board in September this year. That is a signal the risk is here. What lies behind the company’s founder and former CEO leaving?  The other problem is an extremely high bar the Alibaba set for itself.
    The risk is that this growth will decelerate. But at what speed? The analysts predicted speed or it will be due to a quick sale by growth investors?

    Will Alibaba’s success continue?

    The company has one of the most advantageous competitive aspects.

    Alibaba’s large market share in plenty of high-growth, scalable, tech-based fields makes it dominate in the coming years. But something must be taken into consideration. China has a great impact on the company, honestly too great. China’s government’s influence is a risk by itself. The additional risks may come due to the trade war. Just compare Alibaba”s valuation to results they have in the last few quarters and you will conclude that investors are paying attention to the trade war.

    Alibaba stock trades at 32 times earnings. Is it in line with revenue growth of 40% and earnings per share increased by 36 %? It’s low multiple. Maybe that’s not a wonder, with shares trading lower than they did 18 months ago. Buying Alibaba stock is a calculated risk and one that could pay very soon if the trade war ends.

  • Recession Fears Overflowed Americans

    Recession Fears Overflowed Americans

    Recession Fears Overflowed Americans
    42% of Americans plan to reduce spending, according to the research held by the Consumer Education team at LendEDU
    32% reported having no money in an emergency fund and 55% of respondents reported having $1,000 or less.
    37% believe their finances are too low to resist a recession 

    By Guy Avtalyon

    Recession fears overflowed not only Americans, but the whole world is also in it too. In late August, the Consumer Education team at the LendEDU conducted a nationally-representative survey of Americans to gauge their sentiment towards the situation of an economic recession. The aim of this nationally-representative survey of Americans to gauge was to better understand how the risk of a recession may change consumer spending and investing habits has been said from the Team. 

    And if you have some fears and concerns about the coming recession, you are in the right club. According to this survey, more than half of Americans are somewhat or completely worried about a recession and willing to change their habits.

    The survey revealed that fears of a recession are modifying habits and, also, that many Americans haven’t positive feelings about their current financial conditions.

    Here are some data from the survey:

    42% of respondents are planning to spend less and save more due to recession fears
    32% of respondents reported having no money in an emergency fund and 55% of respondents reported having $1,000 or less. The median amount was $712.
    37% of respondents believe their finances are too weak to withstand a recession and 22% are unsure.

    HERE IS THE FULL REPORT

    We are all afraid of recession

    Even if we are living in a safe-heaven with a booming economy the question of when, not if, a recession will come. The history isn’t helpful, it is contrary. All we know about recession is scary.
    When it occurs, many people could be in a very hard financial situation. Some of them are still trying to stand on their feet after the Great Recession in 2008. 

    That is our reality. The media are full of reports about recession and how fast we will be faced with it. Massive unemployment, doom, misery, and, of course, the stock market breakdown. That is exactly what media reports say.

    To make clear what the recession is. When the GDP is negative for two or more running quarters. The decline in personal income or corporate profits, or when the employment decreases, also the production or retail sales are falling, we can say we have a recession.

    Many factors may cause a recession. But one thing you have to keep in mind, a recession is only part of the business cycle. And it never lasts forever. The economy will never fall forever.

    Why do recession fears grow?  

    The fears come from a willingness to survive. Sounds controversy, but when you are faced with something you don’t know, or you don’t understand, or you already had a bad experience, you feel fear. But the other side of your brain commands you must survive. So, what are you doing? You are going to find a way to meet your brain’s expectations. Well, when we are afraid of recession the first thing we can do is to cut our expenses if our salaries are decreasing. That means, we have to change our habits. 

    And this LendEDU survey showed exactly that. The majority prefer to change their habits in order to survive a possible recession. 

    But when it comes to their investments some intriguing things arose. On a question from the mentioned survey: “Recently, there has been talk about the possibility of an economic recession. While a recession is far from certain, are you planning to change your investment allocation (ex. stocks, bonds, etc.) or investment preferences?”

    The majority of participants responded that they would not change investment allocation.

    Here are the answers:

    No, I am planning to continue investing per usual (44%)
    Yes, I am planning to invest more conservatively (16.1%)
    Yes, I am planning to invest more aggressively (3.8%)
    Unsure, or none of the above (36.1%) 

    Let’s say that 70% of this 44 % have a well-diversified portfolio. That is in the best case. The other 30% maybe are not informed about how dangerous can be if they don’t change the investment allocation in time of recession or awaiting it.

    Recession fears 

    The stock market can also warn of an approaching recession, but that’s not always the case. The member of the Traders-Paradise team has a witty remark on this, saying that the stock market has guessed ten out of five recessions. Yes, it is a joke but in some cases, the stock market can forecast the recession.

    The inverted yield curve, for instance, can show that there will be a recession but not when. One thing is certain, the market can move but the economy couldn’t be changed overnight. The bad data has to be present in the market for a longer period than one month and not even than you cannot be sure that recession is coming. 

    Claudia Sahm, a Federal Reserve economist suggested a method to detect a recession more quickly. In a new paper, she introduced a system to more quickly detect and react to a recession. The full paper is here

    Who can say for indisputable when the next recession will happen? No-one. But if you have recession fears, you are in the great club. A lot of surveys show that Americans are afraid that a new recession will come soon and they are taking some steps as a response. The recession fears are well-known in the whole world. We all feel fears of a recession. 

    So, Americans, you are not alone.