Daily General Discussion and spitballin thread - April 01, 2021 Investing |
- Daily General Discussion and spitballin thread - April 01, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- Microsoft wins U.S. Army contract for augmented-reality headsets, worth up to $21.9 billion over 10 years
- Goldman Sachs is close to offering bitcoin and other digital assets to its wealth management clients
- Biden’s $2.3 Trillion Infrastructure Plan Takes Broad Aim
- Quantifying Beta Slippage (Why Leveraged ETFs are Not as Scary as You Might Think)
- ZDGE - 80% revenue growth at a 45 PE ratio offers 90% upside (DD)
- MKTY, the undiscovered biggest competitor of Riot and Mara
| Daily General Discussion and spitballin thread - April 01, 2021 Posted: Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here! This thread is for:
Keep in mind that this subreddit, and this thread, is not an appropriate venue for questions that should be directed towards your broker's customer support or google. If you would like to ask a question about your personal situation or if you are asking for advice please keep these posts in the daily advice thread as that thread is more well suited for those questions. Any posts that should be comments in this thread will likely be removed. [link] [comments]  |
| Daily Advice Thread - All basic help or advice questions must be posted here. Posted: If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following:
Please consider consulting our FAQ first - https://www.reddit.com/r/investing/wiki/faq And our side bar also has useful resources. Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered financial rep before making any financial decisions! [link] [comments]  |
| Posted: News broke maybe 4 hours ago. MSFT shot up 1% on that news, up more than 2% on the day. Some highlights from the CNBC article:
Thoughts on this news? What do you guys think about some employees opposing the decision? All I know is Microsoft is a monster of a company. Just another reason to continue holding I guess [link] [comments]  |
| Goldman Sachs is close to offering bitcoin and other digital assets to its wealth management clients Posted: Goldman Sachs is close to offering its first investment vehicles for bitcoin and other digital assets to clients of its private wealth management group, CNBC has learned exclusively. The bank aims to begin offering investments in the emerging asset class in the second quarter, according to Mary Rich, who was recently named global head of digital assets for Goldman's private wealth management division. ″We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near term," Rich said in an interview this week. Goldman is looking at ultimately offering a "full spectrum" of investments in bitcoin and digital assets, "whether that's through the physical bitcoin, derivatives or traditional investment vehicles," she said. The move means that soon, clients of two of the world's preeminent investment banks – Goldman and Morgan Stanley – will have access to a nascent asset class that has intrigued billionaires and digital currency believers alike. Earlier this month, Morgan Stanley told its financial advisors that they could place clients into bitcoin funds starting in April, CNBC was first to report. It is the latest sign of the staying power of blockchain-related assets including bitcoin, a new kind of money that emerged out of the wreckage of the 2008 financial crisis and whose exact origins are still unknown. Until now, big U.S. banks have mostly shunned bitcoin, deeming it too speculative and volatile for clients. But the industry capitulated after the latest boom in bitcoin's price. The surge has drawn in institutional investors, corporations and fintech players, and the infrastructure to hold digital assets is continuing to mature. In the end, it was client demand that won out, according to Rich. "There's a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that," Rich said. "There are also a large contingent of clients who feel like we're sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space." Goldman's private wealth management business mostly targets individuals, families and endowments with at least $25 million to invest. The bank may offer bitcoin investment funds, similar to those that Morgan Stanley will have, as well as other ways to invest that are "more akin to the underlying asset class which trades 24-7 globally," Rich said. Some cryptofunds, such as the Galaxy Bitcoin Fund, can only be sold or bought once per quarter, she said. "We're still in the very nascent stages of this ecosystem; no one knows exactly how it will evolve or what shape it will be," Rich said. "But I think it's fairly safe to expect it will be part of our future." [link] [comments]  |
| Biden’s $2.3 Trillion Infrastructure Plan Takes Broad Aim Posted: Which companies are going to benefit from the announced plan? Tesla is already overvalued. Mr. Biden's proposal includes $621 billion to modernize transportation infrastructure, $400 billion to help care for the aging and those with disabilities, $300 billion to boost the manufacturing industry, $213 billion on retrofitting and building affordable housing and $100 billion to expand broadband access, among other investments. The plan, which requires congressional approval, calls for modernizing 20,000 miles of roadway; building 500,000 electric-vehicle charging stations; replacing the country's existing lead pipes and service lines; repairing aging schools; expanding home care for the elderly and disabled; and investing billions of dollars in domestic semiconductor manufacturing. Mr. Biden also proposes mandating that more of the country's electricity be generated from low-carbon sources, with a goal of eliminating carbon emissions from the power grid by 2035. [link] [comments]  |
| Quantifying Beta Slippage (Why Leveraged ETFs are Not as Scary as You Might Think) Posted: (results linked below) If you are somewhat familiar with leveraged ETFs you have no doubt heard the many warnings that surround them. Warnings involving phrases like "decaying value" or "daily rebalancing". However, you, like I, may have also noticed that all of these warnings use hypothetical examples to show why leveraged ETFs are risky. These examples will be scenarios such as "daily SP500 returns oscillate between +10% and -10% for 50 days"; scenarios which are incredibly unlikely to occur in the actual market. Additionally, any novice trader can check the graphs of TQQQ and QQQ and see that (as of today) they would have outperformed QQQ if they had bought and held TQQQ at any point before September 2020. So what to do with leveraged ETFs? All of the fears relating to leveraged ETFs are neatly captured in the term "Beta Slippage": Beta (volatility) + Slippage (difference from expectation). It is true that the trend and volatility of a market/sector directly impacts the performance of leveraged ETFs based on them. But are all leveraged ETFs inevitably victims of Beta Slippage as some articles would imply? To answer these questions I set out to quantify Beta Slippage for the top 25 (by NAV) leveraged ETFs, and see if the fears were justified or overblown. If you aren't curious about how this was done, the results spreadsheet is linked at the bottom. If you are: I used TD Ameritrade's API to get price data for leveraged ETFs and their underlying securities. I then looked at all of the possible 1-day, 1-week, 1-month, and 1-year holding timeframes a trader could have held the ETF for. I then found, for each timeframe, the return of the underlying security. I then calculated the return of an ideal leveraged ETF using the return of the underlying security and the ETF's leverage factor. This ideal leveraged ETF perfectly scales performance over any timeframe. Finally, I found the % difference between the price of the actual leveraged ETF and the price of the ideal ETF. I called this % difference Beta Slippage, as I could not find a formula for it elsewhere. So, in short, the results in the data show the average % difference between an actual leveraged ETF and its perfectly leveraged version (no beta slippage) if you hold it over various timeframes. Please take a look at the data, let me know how you think it could be improved! I could not find exact indices for some of the underlying funds so I had to settle for ETF versions of them, also some symbols had very limited data so take that into account. [link] [comments]  |
| ZDGE - 80% revenue growth at a 45 PE ratio offers 90% upside (DD) Posted: (First DD, constructive criticism appreciated) What is Zedge? Zedge is a phone customization app that runs a marketplace for users to download wallpapers and ringtones. As of the latest earnings report, Zedge had 482M installs on both the play store and app store, and 35.4M monthly active users. The app generates revenue from a combination of advertising, paid subscriptions, and their Zedge Premium marketplace, which allows creators to sell their own digital content. It has a current market cap of $168M dollars Ticker symbol : ZDGE The growth story While zedge's user growth has been unimpressive over the pandemic (13.7% for installs and 3.3% for monthly active users), its revenue growth is likely behind its recent increase in stock price. Q2 2020: $2.6M Revenue, $0.1M Earnings, $0.026 ARPMAU, $0.6M cash flow Q2 2021: $5.3M Revenue, $2.5M earnings $0.049 ARPMAU, $2.3M cash flow 101% revenue growth, 3087% earnings growth, 87.7% ARPMAU growth, 269% cash flow growth Zedge has had revenue growth quarter on quarter for the past three quarters, with advertising revenue being the main driver. This growth was due to "optimization of ad waterfall and an increase in advertising rates relating to year-end ad budge", as per their most recent earnings call. While I could talk about more numbers, I think it would be easier to look at the 3rd table from their latest earnings report. Link: https://imgur.com/lrByTCo This 100% revenue increase has occurred while operating expenses have stayed almost the same, increasing marginally from $2.25M to $2.4M, leading to greater profit margins. Management is forecasting revenue to increase between 75% to 80% for FY21, which would be an increase in revenues from $9.4m to $16.45M. (Management were previously Heavy Insider buying The stock has seen significant insider buying by the CEO and directors as early as when the stock price was $1 in March of 2020. The good news is that this insider buying has continued on the way up, with insider buying by the CEO and a director at $7 on 01/19/20 and 01/20/20. This (almost) cluster buy shows a high level of conviction by insiders in their company. However, the CFO did sell at $15 on 03/24/21, but when the stock price has risen this much (almost 1400%) it is natural to take some profits, so this does not worry me. The CEO and director are still yet to reduce their holdings. Solid balance sheet According to yahoo finance, Zedge has a current ratio of 4.65. It is cash rich with over $13.5M on the balance sheet, and almost debt free with only 492k. **In their latest earnings call, they have said that they would like to acquire a company related to "**mobile gaming, social video, and even mindfulness" A reasonable valuation As of writing, Zedge trades for $12.55, a 25% decrease from its high of $16.93, which it reached after its stellar earnings report. This tumble in stock price has not been due to any news or change in fundamentals and likely due to the recent downturn in tech and growth stocks. Zedge, at its current price has a P/S ratio of 13 based on TTM revenue. If revenue meets management's guidance for FY21, it trades at a P/S ratio of 10.5. The PE ratio is currently 45, and the forward p/e is 29 based on analyst recommendations. Prior to the most recent earnings release, the stock was trading at a 130 PE ratio Although this is not cheap, this in my opinion is a reasonable valuation for an almost adtech-like company that is experiencing rapid growth. I believe that this stock would have been trading upwards of $20 dollars if it weren't for the recent downturn in growth tech stocks. If we value the stock at a forward PE ratio of 50, my price target for this stock is $21.60, ( which is a conservative estimate considering that this is a growth tech stock. The price target by analysts is $24 (although price targets often mean very little.) This could certainly go much further should market conditions for growth stocks change. The company could also expand into the NFT market, as it provides a marketplace for unique content like wallpapers. However, this is pure speculation and should not be the reason for investment. When considering risks, there is the possibility that growth in advertising revenue starts to slow down, however management see no sign of this currently due to their current forecasts. It may be important to note management were forecasting 20% revenue growth for FY21 in prior earnings calls. Thanks for reading, and would like to hear any thoughts Disclosure: Long ZDGE obviously TLDR: 80% revenue growth for FY21, heavy insider buying, pe ratio of 45 [link] [comments]  |
| MKTY, the undiscovered biggest competitor of Riot and Mara Posted: Early Feb, miners have been in a tailwind. Given high valuations of MARA and RIOT, I've been looking at under-the-radar companies operating in miners industry. I found out that MKTY was pretty interesting. MKTY Edge:
Cost to mine
Currently trading at an heavy discount compared to MARA and RIOT
Why is MKTY under-the-radar?
Conclusion Disclaimer: [link] [comments]  |
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