Daily General Discussion and spitballin thread - May 29, 2021 Investing |
- Daily General Discussion and spitballin thread - May 29, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- This inflation wave is NOT driven by growth and it is just beginning
- Nasdaq Approves High Tide's Application to List
- What is your Due Diligence criteria?
- Is it possible to invest in or short - either directly or indirectly - Commercial Mortgage Backed Securities?
- Why I like $STIC soon to be $BARK aka BarkBox Risk range is $7 to $30.
- $HTZGQ - PART 4, LOL - RIGHTS OFFERING VS WARRANTS
- MRK special dividend distribution. What happen with option holders?
- Distribution vs consolidation?
- What does it mean when a share is priced below BV and Cash-per-share?
- Weedmaps merger vote set for June 10th SSPK>MAPS
- ENPH, but maybe I'll sell for....
- Geographic asset allocation
- Intel is over looked by AMD hype
- Is there a way to tell how much or how many shares of a company is bought through an etf or mutual fund?
- Best long-term, post-pandemic markets?
- Diversification Through Non-Corellated Assets During Crashes?
- Why do high earning multiples imply a likelihood of low or even negative returns?
- Almost Impossible Number For Pinduoduo PDD
| Daily General Discussion and spitballin thread - May 29, 2021 Posted: 29 May 2021 02:01 AM PDT 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: 29 May 2021 02:00 AM PDT 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]  |
| This inflation wave is NOT driven by growth and it is just beginning Posted: 29 May 2021 02:52 AM PDT I'm going to explain how I came to these conclusions, and although for some of you it may be obvious, I think that it is important to re-emphasize the effects of inflation. Inflation can be good, bad or neutral. The logic behind this is pretty simple: If inflation is driven by productive growth, it is good because the economy is benefiting. If however, there is no real growth but money in circulation expands, than businesses will need to adjust their prices to match the stagnating purchasing power of consumers. This is bad because not everyone has the (pricing) power to adjust prices accordingly. In fact the people with the least pricing power are wage earners, hence an even bigger problem as people can't afford to buy things. Inflation can be much worse than this, but let's focus on the current situation in the market. In this article https://www.thinkvalue.co/reports-tools/inflation-dashboard I try to illustrate visually where we are in regards to inflation. My main points are these:
--- I wont schil for you to buy gold because there are also other investment strategies and commodities to look at, but if you didn't get a chance, take a look at Damodaran's recent video on inflation https://www.youtube.com/watch?v=p0vqmjgF3E4 if you want to know which asset classes have historically performed best during inflation. --- Personally I am not jumping on the gold wagon at least until I see next month's CPI (release on 10th of June) [link] [comments]  |
| Nasdaq Approves High Tide's Application to List Posted: 28 May 2021 09:11 AM PDT
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| What is your Due Diligence criteria? Posted: 28 May 2021 05:10 PM PDT I assume when most of us started investing, it went something like; buying the cool stock, buying a stock that represents an ideal, buying a stock of what you think is a good business, learning about earnings, learning about the PE ratio, learning about a bunch of ratios, learning about financial statements, learning about how to read financial statements, copying a famous investors criteria, and so on until eventually you have your own set of metrics and criteria. What do you guys look for? What is your criteria and this scenario and your criteria in that scenario? What metrics do you focus on? [link] [comments]  |
| Posted: 29 May 2021 02:12 AM PDT So first off, is this even possible? I am interested in shorting companies who write these, or if possible, invest in a potential drop in the value or crash of CMBS's as a whole. I think there is a possibility litigation would be challenging in this situation, and the demand for this type of security will at least lessen slightly in the coming years. Can you profit off of this? If anyone has any insights on this idea, I would be happy to discuss it more in depth. I have been up all night trying to reason this out. [link] [comments]  |
| Why I like $STIC soon to be $BARK aka BarkBox Risk range is $7 to $30. Posted: 28 May 2021 11:58 AM PDT Disclosure I own shares at $10.50. BarkBox is a spac that today approved the merger. The Ticker $stic will be $bark on June 2nd. Many of these subscription box companies get a bad reputation because there were so many grocery ones that lose billions for years and the pet ones made no money because all they did was get existing products and package them where the margins were horrible. Nevertheless, barkbox is different. They own all of the products they put in the box, we call that vertically integrated. Have a retail store and sell the products at target and other online and offline stores. So, given the higher Margins, vertical integration, new revenue channels and fast growth I think the valuation should be more expensive than chewy on a price to sales multiple. Lets not discount that the subscription model will evolve over time churn is around 5% to 6% which is excellent. The company actually has a few revenue channels: buy subscription (you can customize as well), add on products to the box, dental (medical and preventative is new and will grow), meal plan (sends you monthly box of daily meals; crazy but people/dogs can be picky about food), ecommerce/retail where they sell the products on amazon, pet stores etc. this is an interesting business because it is not just ecommerce or subscription because they own a lot of the products they sell as their brand where they have exclusive supplychain and distribution agreements. They also have licensing with plush toys with NBA (example). They realized customers are crazy and treat dogs like people so do stuff accordingly. No doubt they will sell clothes, costumers, more medical stuff like fleak tick products to help keep the customes within the ecosystem. The ceo is actually new started in september 2020 and has options priced at $16 a share. He came from amazon and ebay and before that consultant at infosys. I think the management hire was an excellent decision as it allows then to scale their ecommerce business and get new customers into the ecosystem via subscriptions or not. I see the subscription revenue as potentially amazon prime stuff where people will just fill it up with what they need and not just junk all the time and people will be happy with that and some add-ons here and there. The pet business is a fantastic long-term business as boomers age, etc. strategy for this is to buy and either hold or sell when it hits $20 to $30 if there becomes too much hype. This range of valuation is based in Price to Sales. The bottom I used was 2 times given Its growth rate and almost double the gross margin of chewy and even pet supermarket stores. The guidance for this year has room for upside I built a ten year model and see then becoming profitable by 2023, however, all of their cash flow is going into growing the business as I think they can sustain a 30% revenue per year for a few years. I do think there are some potential risks such that the Barkeats business could do poorly if the pricing is not competitive or people change the product mix of the box to less profitable products or cancel all together. Interested in hearing your thoughts on this below. [link] [comments]  |
| $HTZGQ - PART 4, LOL - RIGHTS OFFERING VS WARRANTS Posted: 28 May 2021 07:01 PM PDT Again: I am a guy with Google. Not a financial analyst. Please consult yours before you invest. So, just to catch anyone up who is just joining: Hertz filed for bankruptcy. Turns out they were not that bankrupt. Everybody is getting made whole except for the shareholders. Shareholders of Class 11 stock that pre-pandemic traded at $20 (now trading $6) are getting bought out. The payout is in three parts: 1) Cash in the amount of $1.53 per share, plus 2) Pro Rata shares of (a) 3% of the Reorganized Hertz Parent Common Interests (estimated to be $1 per share), plus 3) Either: a) 30-year warrants for 18% of the equity in the Reorganized Debtors struck at an equity value of $6.5 billion, or b) rights to participate in a $1.635 billion offering for approximately 35% of Reorganized Hertz Parent Common Interests at a per share price based on a total equity value of approximately $4.7 billion. (Subscription Rights) This post is a "deep dive"/"open discussion" of the third portion above in bold. a) 30-year warrants - waiting for confirmation. It is believed that these warrants have a strike price of $10. So, an example would be a Warrant is issued with a strike price of $10. New Hertz shares are trading at $15 per share. Warrants can be sold or executed. If sold, warrants typically sell for market price less strike price. So, each warrant would be worth $5. Add to the cash of $1.53 + the equity distribution of $1. Total value $7.53. b) Subscription rights - there are 2 types of subscription rights 1) Eligible Shareholder - accredited investors and institutions. Look it up yourself if you don't know if you are. But basically, you must be a broker, bank or have a net cash worth of $1,000,000. 2) Ineligible Shareholder - everybody else. Probably 99% of the people reading this post. What I know about subscription rights: Basically, what I learned today is that you can participate in an auction prior to the conclusion of the bankruptcy for share in the new company. If you are an Eligible shareholder, you can enter a maximum auction price. If the auction goes above the price you set, then you do not purchase any shares. If you are an Ineligible shareholder, you can enter a minimum auction price. If the auction does not get to the price you set, you automatically are issued New Warrants in the Hertz. Actual language below. Item 9. Election Form for Ineligible Existing Hertz Shareholders The undersigned is an Ineligible Existing Hertz Shareholder and elects to sell its Subscription Rights pursuant to the Shareholder Subscription Rights Auction as follows: $__________ per Subscription Right (the "Minimum Auction Price") ________________ Subscription Rights To calculate the maximum number of Subscription Rights that an Ineligible Existing Hertz Shareholder may elect to sell, an Ineligible Existing Hertz Shareholder should multiply the number of Existing Hertz Parent Interests that it holds by 1.0467. Note: If you are an Ineligible Existing Hertz Shareholder and do not wish to elect to have your Pro Rata share of the Shareholder Subscription Rights sold pursuant to the Shareholder Subscription Rights Auction described below, no action is necessary, and you do not need to return this form. Item 10. Election Form for Eligible Existing Hertz Shareholders The undersigned is an Eligible Existing Hertz Shareholder and elects to purchase Subscription Rights (if any) pursuant to the Shareholder Subscription Rights Auction as follows: $_________ per Subscription Right (the "Maximum Auction Price") Up to ________________ Subscription Rights Note: If you are an Eligible Existing Hertz Shareholder and do not wish to elect to purchase Shareholder Subscription Rights that may be sold pursuant to the Shareholder Subscription Rights Auction, no action is necessary, and you do not need to return an election. Please feel free to discuss. I am personally leaning towards the New Warrants. I am a shareholder and bullish on Hertz. [link] [comments]  |
| MRK special dividend distribution. What happen with option holders? Posted: 29 May 2021 04:10 AM PDT https://www.merck.com/news/merck-declares-record-date-and-dividend-for-the-organon-co-spinoff/
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| Distribution vs consolidation? Posted: 29 May 2021 03:44 AM PDT I'm trying to learn the difference between consolidation which will likely lead to a continuation of a bullish trend and distribution which likely signifies the end of a bullish trend and the beginning of a reversal. I'm hoping you can give me some characteristics of each and possibly even some examples. THE PARTICULAR CHART THAT I HAVE IN MIND IS THE NASDAQ FUTURES. IF YOU LOOK AT THE DAILY, I THINK A CASE CAN BE MADE FOR BOTH, WHAT DO YOU THINK? [link] [comments]  |
| What does it mean when a share is priced below BV and Cash-per-share? Posted: 28 May 2021 08:00 PM PDT Seems to me that if they have more cash per share than the price of the share, and same with BV, then the stock is literally like free money. I am looking at a company trading at P/S = 0.1, P/BV =0.3, and Cash per Share = 2x the price of 1 share. Almost no debt either. What could I be missing? Or is this just a very undervalued stock? I know in Peter Lynch's books he mentions finding stocks like this which are undervalued because nobody paid attention and they had more cash holdings per share than you had to pay to own that share. So you were paying like $5 for a share that had $10 attached to it [link] [comments]  |
| Weedmaps merger vote set for June 10th SSPK>MAPS Posted: 28 May 2021 07:17 AM PDT A vote date of June 10th was set for the SSPK>MAPS merger to bring weedmaps to the NASDAQ. This is a great way to get cannabis exposure without having to buy OTC. In my opinion this has a large growth potential. The valuation was good. Forward projections in the investor presentation were very conservative as they did not include new states/countries opening up(NY,etc). Large market share with a rapidly expanding market. A very well put together DD https://www.reddit.com/r/SPACs/comments/mppj5z/sspk_weedmaps_dd_merger_q2/ [link] [comments]  |
| ENPH, but maybe I'll sell for.... Posted: 28 May 2021 08:26 PM PDT As the title reads, all my money are tied into enph leaps. Jan 2023 190 to be exact. I do beilve in the company and I think it could head back to 200 end of year which will be great! I was thinking about selling them and going after something more aggressive like SQ leaps or AI leaps. I was looking at the 230 Jan 2023 leaps for SQ and AI leaps 65 stirke for 2023. I think SQ could retest 280 end of year and AI 110. Chime in ... [link] [comments]  |
| Posted: 29 May 2021 02:08 AM PDT I'm late to the game (kind of) late thirties live in a country far far away from the US where capital controls are in full effect for the average joe but the wealthiest always seem to find a way to get their cash out and invest in equities in either EU or US. We have a small equity market where you can make money but you have to follow momentum as most stocks double or even triple based on either inside information or flows plus I work as an AM so I can't personally buy/sell without a lot of hurdles. Enough with the background, I managed to get some cash deposited somewhere and got an account with IBKR to invest in us/eu and emerging markets it's not a big sum but I'm just testing water here. Also the tax ramifications are unknown to me so don't want to risk a whole lot capital. I started with VTI as 20% of my ptf VXUS as 8%, some apple, square baba and amzn I only invested 40% of my cash do far and thinking of adding other ETFs but question remains is it the right time or should I wait. I'm eying some VGK and more VTI as well as some IWN. I'm leaving 10% for fun, I already made 130% on AMC mania but looking to experiment more with options for that 10%. What regions or sectors you think I should add ? Thanks for reading [link] [comments]  |
| Intel is over looked by AMD hype Posted: 28 May 2021 02:21 PM PDT Intel is possibly the only chip maker that's fairly or under valued atm, amd is making 800m free cash flow a year and worth 90b, nvidia makes 4.3b and valued at 348b (insane) and intel has 15b free cash flow and valued at 218b, regardless of what your personal favourite brand/company is for making chips, intel is the clear winner financially and price wise. It also pays a dividend which means little but it's a bonus for what is a growing company numbers wise. I would also add I love dell and is a personal favourite stock to buy Atm but as they are not a chip maker doesn't really fit in here [link] [comments]  |
| Posted: 29 May 2021 01:02 AM PDT SPY is the most liquid etf in the world and has a mkt cap of around 380 billion, but I don't know if that is the total value of shares held or a fractional value of the index. Not to mention the several other mutual funds and etfs that uses the S&P 500 as its portfolio. There also various other etfs in industries such as semiconductors, finance, consumer products, oil etc... that can contribute to ownership of the stock. [link] [comments]  |
| Best long-term, post-pandemic markets? Posted: 28 May 2021 09:06 AM PDT For those of us who invest long term (>1 yr) into broad markets, what might be some good markets for post-pandemic adaptation? For example, the gaming and esports industries have been great this past year with everyone stuck at home, but my confidence in continued growth is low. Which markets are going to perform well this next year or two and why? And because there's some ridiculous rule about this post not being long enough, I thought I'd at least let everyone know there are free cowboy hats in the restrooms. Please take one on your way out. Edit: to clarify, I'm specifically wondering what markets are going to be RECOVERING from the pandemic, in addition to doing well from their own merits. Not just one or the other. [link] [comments]  |
| Diversification Through Non-Corellated Assets During Crashes? Posted: 28 May 2021 11:12 AM PDT I've heard that in selecting a portfolio, it's best to find assets that have (historically) weak/negative price correlation. The problem I've run up against is that, when the market dumps, everything seems to dump together - in other words, assets that didn't seem correlated or were inversely correlated sometimes become strongly correlated when the market is doing poorly, thus sort of defeating some of the protective intent of diversify through non-correlated assets. According to your experience, is there any way around this, statistically speaking? Are there different correlation tests that you've found to be more effective for diversification? Is it perhaps best to invest in newer assets in price discovery mode, or to invest broadly by small amounts in any assets that have been least affected by market-wide downturns in the past? Any advice would be appreciated. I'm writing this mostly because of the recent crypto downturn, but I imagine strategies would transfer approximately between crypto and more traditional assets. [link] [comments]  |
| Why do high earning multiples imply a likelihood of low or even negative returns? Posted: 28 May 2021 11:08 AM PDT I quote Burton Malkiel in his May 4 2020 dialogue with Robert Shiller.
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| Almost Impossible Number For Pinduoduo PDD Posted: 28 May 2021 09:00 AM PDT Maybe many of you never heard of Pinduoduo because the company main target is in China, not the people outside China. Their app and website don't even have any language other than Simplified Chinese. However, it is a public company listed in the US stock market. Pinduoduo an e-commerce platform. It offers a suite of product categories just like Amazon and Walmart in the US. The Numbers Seem Impossible Yet It is We do believe whatever in the 26 May, 2021 quarterly financial report is definitely real. However, even we do believe it is real, still it raises some concerns to the company. We do assume no one is using Pinduoduo outside China. The User Numbers It stated that the average monthly active users in the quarter was 724.6 million. Also, the monthly active users refers to the number of user accounts that visited the Pinduoduo mobile app during a given month, which does not include those that accessed the platform through social networks and access point. Active buyers on Pinduoduo in the 12-month period ended March was about 824 million. Active buyers refers to the number of user accounts that placed one or more orders, regardless of whether the products and services are actually sold, delivered or returned. However, let's compare some well known e-commerce companies in China. Alibaba has 811 million active buyers, and JD has 499 million active buyers. The last two definitely have more people know outside or within China. Even a lesser know Meituan has 510.6 million paying users and you do see their delivery bicycles on every street in China. They are also all having much longer history than Pinduoduo. What is the concept of 824 million in China alone, let's quote the Chinese Official data. Chinese netizens have 898 million in 2020. The internet availability rate was 70.4%. A total of 986 million Chinese used mobile phones to surf the internet, accounting for 99.7 percent of the online population. Around 309 million, or 31.3% of the online population, live in rural areas. Which means more than 90% people in China who have internet access are using Pinduoduo and made a purchase on the website or the app within this 12 month period. It included part of those those around 300 million people who lived in rural areas and there monthly salary is less than $2000 RMB ($314). Underweight We are not by any means questioning the authenticity of the report, we do believe it is real. However, there would not be a huge growth rate for Pinduoduo active users. The average revenue per user is just one-fifth of Alibaba's because Pinduoduo targets the lower end users, and the way they attract users is by giving them a subsidiary (coupons or cash equivalent) to keep their products price lower than other e-commerce platform. That's just like burning money no matter which way you see it. It can be doing that forever. Because of that, many big brands are hesitant, if not, unwilling to open an official online flagship store in Pinduoduo. Hence, these are the reasons why we believed that Pinduoduo stock price is overpriced by a lot. [link] [comments]  |
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