Daily General Discussion and spitballin thread - June 01, 2021 Investing |
- Daily General Discussion and spitballin thread - June 01, 2021
- Daily Advice Thread - All basic help or advice questions must be posted here.
- 10 more interesting and useful ETFs with less than $1b AUM
- SEC HOSTS DISCUSSION FOR RETAIL TRADERS • Might be helpful for new investors
- Assessment of the Uranium Market and Future Outlook (long post)
- Why Intel ($INTC) is Undervalued
- The US Mint’s May gold and silver sales figures were a surprise
- FRX, Beachbody, & MYX Fitness Merger Revenue & Upside Discussion
- KemPharm ($KMPH) - THE SLEEPING GIANT
- VDE negative return for ten years... Thoughts?
- What is the reasonable equity risk premium for US, Europe, and other markets nowadays?
- What is an example of good share ownership by management and how important is this metric?
- Fat Tail Distributions and Hunting Dirty Beta Plays
- What does everyone think above the Squarespace (SQSP) IPO?
- Any reason why not to consider JETS?
- Investors Cheer After RBI Clarifies Crypto Trading Isn’t Banned
- Technical Analysis: Why does support become resistance?
- Do weekly distribution ETFs are better for dollar-cost averaging or just a gimmick?
- Has anyone used the Republic app?
- Investing in Canadian Banks
- Private securities and tZero
| Daily General Discussion and spitballin thread - June 01, 2021 Posted: 01 Jun 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: 01 Jun 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]  |
| 10 more interesting and useful ETFs with less than $1b AUM Posted: 01 Jun 2021 04:04 AM PDT As a sequel to "10 interesting and useful ETFs with less than $1b AUM", I'm back with 10 more ETFs that have less than $1b AUM but that I think are interesting and possibly useful and some comments on each. Too often only the biggest ETFs, or most popular, get people's attention. I think it's worth looking further to see what's out there. Starting with a Peter Lynch inspired strategy (Lynch popularized the price/earnings-to-growth ratio),
Moving on to Factor ETFs,
Let us not forget commodities,
Seeking dividends?
Finally, like it or not, blockchain is here to stay,
Disclaimers: this is not financial advice. I currently have a position in FVAL, but no position in any of the other ETFs at time of posting. That may change at any point in the future. I am not predicting future performance for any of these funds. Do your own due diligence (and please post in reply with what you find!). What do you guys think? Any of those look like something you might invest in? Anyone else want to comment on a personal favorite small/medium sized fund? [link] [comments]  |
| SEC HOSTS DISCUSSION FOR RETAIL TRADERS • Might be helpful for new investors Posted: 31 May 2021 07:18 PM PDT There will be a discussion by SEC's New York Regional Office and the Retail Strategy Task Force covering: •trading based upon information on social media • things to consider when using a brokerage firm that does not charge commissions • cryptocurrency Co-hosted by Fordham's Law School and Fordham's Gabelli School of Business, this panel will feature representatives from the SEC, the CTFC, and FINRA who will cover topics that include the following: · Online investing misinformation · Options and margin trading · Zero commission trading · How to research investments and investment professionals JUNE 8, 2021 | 5:00 PM Register: https://fordham.zoom.us/webinar/register/WN_E1NX7RhMRb-MYFvrdlMysg Note: I have no personal opinion on this discussion. I'm just passing it along in case it is of interest to anyone new, or experienced. I don't endorse the subject matter in any way. [link] [comments]  |
| Assessment of the Uranium Market and Future Outlook (long post) Posted: 01 Jun 2021 09:10 AM PDT For the past few weeks, I've been doing a deep dive into the uranium market to learn more about it and thought I'd share the results. This post is an abridged version of a longer report (with charts!) that you can find as a PDF below. Uranium bulls will already be familiar with pretty much everything I cover, so this is designed to be a comprehensive, well-sourced introduction to the fundamentals of the uranium market and an assessment of the bull thesis that an imminent supply shortage will drive up the spot price of uranium and initiate a new long-term contracting cycle between mining companies and utilities. I hope some of you find this helpful in your own research. Assessment of the Uranium Market and Future OutlookDisclaimer and disclosure: I am not a financial advisor and none of the below research constitutes investment advice or a recommendation to buy or sell. Always do your own due diligence. I currently have small positions in some of the securities mentioned. Note: Any constructive criticism to improve this DD would be welcome. If you see any red flags or risks I may have missed, please highlight them. Highlights
IntroductionThis report examines the current uranium market and the thesis that, as demand for nuclear energy grows and supply dwindles, utilities will have to sign new long-term contracts for uranium delivery, causing the price of uranium to increase and initiate a new bull market. While this report covers the uranium market, the politics of nuclear energy, and upcoming catalysts, it does not analyze any specific uranium stocks nor does it recommend any particular investment strategies. Like most mineral commodity markets, uranium has a history of volatility and typically moves with supply and demand as well as geopolitical forces. For context, in 2017, the world's top uranium producers were Kazakhstan (39% of world production), Canada (22%), and Australia (10%) with Namibia, Niger, and Uzbekistan playing smaller roles in the market. The largest and most significant uranium exploration and mining companies include state-owned Kazatomprom (22% of world production), France's Orano (11%), Cameco (9%), Uranium One (8%), and CNNC (7%). Finally, the most productive uranium mine is Cigar Lake in Canada (owned by Cameco/Orano with 13% of world production). Notably, Cameco's McArthur River mine, the world's largest high-grade uranium deposit, was placed under care and maintenance in 2018 due to low uranium prices. Before uranium can be used as fuel in nuclear reactors, it goes through a process known as the front end of the nuclear fuel cycle where the uranium is (1) mined and milled into U3O8 (also known as yellowcake, a uranium concentrate powder), (2) converted into UF6, (3) enriched, and then (4) fabricated into fuel. This process is time-consuming and geographically spread out; over the course of 1-2 years, uranium might be mined in Canada, converted and enriched in France, and sent to fuel a reactor in the United States, and utility inventories of uranium might be spread out along this cycle with only a small portion of it immediately ready to fuel a reactor. Sentiment on Nuclear EnergyAs one article puts it, "nuclear power has been something of an unloved stepchild in the energy sector." Indeed, since the 2011 Fukushima Daiichi nuclear disaster, public opinion has been focused on safety and environmental concerns. In Europe, Germany has reduced their number of reactors from 17 to 6 (and the remaining six are scheduled to be decommissioned by the end of 2022), with the German public broadly opposed to constructing new reactors. In the U.S., according to the Nuclear Regulatory Commission as of November 2019, there were 23 nuclear power reactors in various stages of decommissioning, with only two new reactors being built. So is nuclear energy on its way out? Probably not. In France, where 56 reactors operate, officials recently extended the 40-year lifespan of nuclear plants an additional 10 years. In March, China released its 14th 5-year plan, which aims for 70GW of power generation through nuclear energy before 2025 (it hit 51GW in 2020), and the country is currently building 16 new reactors to meet this goal. In India, 9 new reactors are under construction. In the U.S., described in more detail below, the Biden administration has adopted a positive stance towards nuclear energy, and some U.S. reactors are starting to receive license renewals to operate beyond their original lifespan. Nuclear energy, though it can be controversial even among some experts, is increasingly seen as essential to meeting decarbonization targets. Overall, the number of new reactors is expected to outpace shutdowns, and as a result, the demand for uranium is projected to increase 1-3% per year in the coming decades. Market OverviewGlobal demand for uranium rose from the 1950s through the 1970s, largely driven by nuclear weapons procurement programs. Then, in the 1980s, various environmental, safety, and economic concerns over nuclear power plants reduced demand; at the same time, the market was flooded with excess uranium, and prices remained depressed throughout the 1990s. As uranium prices fell, producers began curtailing operations or exiting the business entirely, leaving only a few actively involved in uranium mining and causing uranium inventories to shrink significantly. Uranium prices reached an all-time low in 2001, costing about $7/lb. This was followed by a period of gradual rise (during which three mines either flooded or suffered extreme weather, tightening supply and causing the price to increase further), followed by a bubble culminating in mid-2007, during which the price peaked at around $137/lb. The higher price during the bubble spurred new prospecting and reopening of old mines. The Fukushima nuclear disaster in March 2011, however, sparked renewed fears about the safety of nuclear reactors and set in motion a decade-long bear market. Demand fell as Japan took all of their reactors offline, and prices ultimately reached a low of around $18/lb. in November 2016 before hitting about $29/lb. in April 2021. The low price of uranium has caused some mining companies to leave the business entirely, such as Westwater Resources (previously Uranium Resources); by some estimates, there were nearly 600 uranium mining companies in 2011, but today there are only about 50. Significantly, prices still remain far below the $50-$60/lb. figure often cited as the all-in cost of production (though some companies can produce for much cheaper), and as long as the spot price remains below the cost of production, mining companies will lack incentive to add more uranium to the market, invest in new mines, or engage in higher-cost production. (Some sources distinguish between the all-in cost of production, which Canada's Skyharbour Resources estimates at around $40/lb., and the "incentive price," estimated at $50-$60/lb., needed to spur meaningful new production.) As a result of weak uranium prices and in an effort to reduce available supply, mining companies have strategically cut back on uranium production over the last few years. According to the WSJ, in 2017 both Kazatomprom and Cameco, two of the three largest mining companies, reduced or suspended production at uranium mines, and other high-cost mines have been idled or closed down. Further, mines can take more than a decade to plan, build, and begin operation, but low uranium prices make these kinds of large long-term investments financially unsound. As Cameco put it in their Q1 2021 earnings call, "Given the timelines it takes, we should be investing now to replace that lost production, but at today's prices, that makes zero sense." As a result, over the last few years, production of mined uranium (i.e., the primary supply) has not kept up with demand, and utility companies have had to purchase uranium from secondary sources such as the spot market, stockpiles, re-enriched depleted uranium tails, and ex-military weapons-grade uranium to keep their reactors going. The vast majority of uranium is not sold on the open market but through private, long-term contracts between buyers (usually utility companies) and sellers (usually mining companies) with delivery typically beginning about two years after the signing of the contract. In addition, the amount delivered can usually be adjusted plus or minus some percent, depending on the utility companies' needs, and the price to deliver the uranium may be adjusted with changes in the spot market; Cameco, for instance, targets a ratio of 40% fixed-pricing and 60% market-related pricing in their portfolio of long-term contracts. Roughly 76% of U.S.-purchased uranium delivered in 2020 was bought through long-term contracts and about 24% through spot market purchases. (This is actually historically low; in 2006, it was 90% long term, reflecting the fact that utilities have been relying more on spot purchases in recent years.) There is some speculation that the spot price of uranium will begin to rise when utility companies sign new long-term contracts, a scenario discussed in more detail under "Long-term Contracts." Supply and DemandTracking the current levels of supply and demand of uranium can be extremely useful for determining if utilities will begin to enter long-term contracts or continue to purchase from the spot market or other sources. So, how much supply of uranium is in the market and how much demand is there for that supply? Roughly speaking, each year, about 175-180 million lbs. of uranium are consumed globally. Of that, about 120 million lbs. are supplied by miners and the rest is made up from secondary supplies and utility inventories. Though the exact size of the secondary market is difficult to estimate, Uranium 2020: Resources, Production and Demand, a joint report by the Nuclear Energy Agency and the International Atomic Energy Agency, suggests the figure is around 10,000 metric tons per year, or 22 million lbs., suggesting a structural deficit between supply and demand that is made up by drawing on material that utilities already have in inventory. As I mentioned above, in recent years, mining companies have been intentionally reducing the primary supply of uranium on the market. Over the past decade, the primary supply has continually fallen short of global demand, causing a deficit that is filled by a limited and, as the thesis goes, dwindling secondary supply. We can see from the World Nuclear Association that after the 2017 production cuts, mined uranium only covered about 80% of world demand. Tracking secondary supply is both more difficult and more important as its reserves are a key indicator of when utilities will need to enter into long-term contracts. Secondary supply includes stockpiles and inventories of natural and enriched uranium, both civilian and military in origin; nuclear fuel from the reprocessing of spent reactor fuels and from surplus military plutonium; underfeeding; and uranium produced by the re-enrichment of depleted uranium tails. The World Nuclear Association's Nuclear Fuel Report notes, "The majority of secondary supplies are derived from uranium that has undergone transformation in reactors, enrichment plants and reprocessing facilities. The second largest potential secondary resource by mass is the world's inventory of not-yet-treated used nuclear fuel, held largely at reactor sites." While this inventory normally accounts for only a relatively small portion of total supply, with low uranium prices and limited mining production, this source has become more significant not only for primary producers and utilities but also for traders and holding companies. BMO Capital Markets and Morgan Stanley have also written research notes predicting "a rally in [uranium] prices over the next few years to the ~$50 [per pound] level by 2024." Importantly, both groups also point to uncertainty surrounding just how long existing inventories will last:
These are important sources of uncertainty that are worth paying attention to. If the uranium bull thesis of an imminent supply deficit ends up being wrong, a miscalculation of existing inventories and market supply will likely be one of the main reasons why (this would, of course, just delay the thesis, if all other factors remained equal). With that said, I somewhat disagree with BMO's assessment (or maybe just their use of the phrase "near future"), as there is evidence that new/more primary production will be needed by the middle or end of the decade, meaning companies should be investing in those projects today. Remember, utilities and miners operate on a longer timescale than other markets; they sign contracts for 5-10 years, and a reactor with only two years' worth of uranium is operating akin to just-in-time delivery. Now, what about demand? According to the International Atomic Energy Agency, there are currently 443 reactors in operation and 52 under construction. Although these reactors require an established, predictable amount of uranium, demand for the metal can still be difficult to estimate, since delays in the construction of new reactors as well as license renewals of old ones can add complications. In the U.S., reactors require about one-fourth of global demand, about 45 million lbs. per year. In February, Bank of America analyst Lawson Winder speculated that the planned closure of 12 U.S. nuclear power plants this decade could be postponed beyond 2030, adding 26 million pounds to 2021-2030 uranium demand." Indeed, license renewal has been a growing topic of interest among nuclear and policy experts (as an example, Virginia's Surry Power Station was recently granted a 20-year extension and several more U.S. renewals are under review; even Japan has given the green light to operate three reactors for an additional 20 years, helping reach its goal of having 20-22% of its energy come from nuclear power by 2030). Further, we've also seen reports that the Biden administration supports subsidies for nuclear plants to prevent them from closing, and Biden's climate adviser supports the continued operation of existing nuclear reactors to achieve emissions goals—more on this under "Political and Policy Developments." Winder adds that a shift "could lead U.S. fuel buyers to move forward plans for major new contracting: Consider that those 26 million pounds are 23% of total U.S. utility inventories at year-end 2019 of 113 million pounds, and inventories today are quite likely lower post 2020's supply disruptions." If reactors are kept online longer than expected, utilities would only face greater urgency to sign new contracts for nuclear fuel. Political and Policy DevelopmentsUnited StatesIn the United States, throughout his tenure, President Trump exhibited a positive stance towards nuclear energy. In 2018, two U.S. uranium miners, Energy Fuels Inc and Ur-Energy Corporation, filed a Section 232 petition, essentially asking the government to investigate national security concerns regarding foreign uranium imports and asking that 25% of U.S. uranium consumption be met by U.S. producers. Though the Trump administration ultimately rejected this petition, it established the Nuclear Fuel Working Group to find alternative solutions to "restore American nuclear energy leadership." Framed as a way to increase national security and revitalize domestic uranium production, the Working Group aimed to "restore America's competitive nuclear [energy] advantages" and recommended, among other initiatives, to "directly purchase uranium by establishing a uranium reserve." In December 2020, Congress passed the Consolidated Appropriations Act of 2021 to fund the government through fiscal year 2021, which set aside $75 million for the Uranium Reserve Program, but the project is still in the early stages and it does not appear that any uranium purchases have actually been made by the U.S. government. (More information on the nuclear- and uranium-related provisions of the 2021 appropriations law can be found here.) The Biden administration has taken a similarly positive stance towards uranium and nuclear energy. Though there hasn't been much headline news on the topic, nuclear energy is included in one of the objectives of the American Jobs Plan to leverage "carbon pollution-free energy provided by existing sources like nuclear and hydropower" and to manufacture "critical technologies like advanced nuclear reactors and fuel." Separately, Reuters recently reported, "The White House has signaled privately to lawmakers and stakeholders in recent weeks that it supports taxpayer subsidies to keep nuclear facilities from closing and making it harder to meet U.S. climate goals." Biden's recently proposed 2022 budget, which will likely change before being signed into law, requests $9.75 billion in credits for "electricity generation from existing nuclear power facilities" and $5 billion to "procure advanced nuclear power" over the next ten years. Furthermore, there is currently a bill in the Senate—S.4897, the American Nuclear Infrastructure Act—that aims to "to reestablish United States global leadership in nuclear energy, revitalize domestic nuclear energy supply chain infrastructure, support the licensing of advanced nuclear technologies, and improve the regulation of nuclear energy." The bill has been approved by the Senate Committee on Environment and Public Works, but, so far, has not been passed or signed into law. A smaller, but still positive, signal for the uranium market is that Honeywell's Metropolis Works plant in Illinois—the U.S.'s sole uranium conversion facility—will restart production of uranium hexafluoride (UF6) by early 2023, citing customer demand and the depletion of secondary supplies of UF6. The plant was idled in 2018 due to the weak market. European UnionIn the European Union, countries are divided on nuclear energy, with Germany and Austria opposing it and France, Hungary, and eastern Europe supporting it. In March 2021, the Joint Research Center of the European Commission on nuclear energy released a report to help the Commission determine whether nuclear energy should be included in the EU taxonomy for sustainable activities, which would help incentivize and scale up investment in the industry. (This report followed a previous assessment from the Technical Expert Group [TEG] that found "nuclear energy has near to zero greenhouse gas emissions" but that more research was needed due to a "lack of operational permanent experience of high-level waste disposal sites.") The JRC report concludes that there is no evidence that "nuclear energy does more harm to human health or to the environment than other electricity production technologies already included in the Taxonomy." The report adds, "The nuclear energy-based electricity production and the associated activities in the whole nuclear fuel cycle (e.g. uranium mining, nuclear fuel fabrication, etc.) do not represent significant harm to any of the TEG [Technical Expert Group] objectives." While this is a positive sign for EU endorsement of nuclear energy, some uncertainty remains. This report is currently being reviewed by two sets of independent experts, the Group of Experts on radiation protection and waste management under Article 31 of the Euratom Treaty and the Scientific Committee on Health, Environmental and Emerging Risks on environmental impacts. The two Committees have three months to issue their assessment, and the two assessment reports, along with the JRC report, will inform the Commission's decision. Non-utility Purchasing of UraniumOne final significant development in the uranium market is the purchasing and stockpiling of the metal by non-utility companies, particularly miners and physical asset management companies, signaling growing positive sentiment in the market. Mining companies may buy uranium for a variety of reasons, such as in order to meet purchase agreements or to build up collateral, but the recent moves also suggest renewed optimism that uranium prices may finally be ready to move up. In its Q1 2021 financial results, Cameco noted that, in total, "Through April this year junior uranium companies and financial funds had purchased approximately 10.5 million pounds U3O8." (Additionally, pp. 7-8 of that link provides a good overview of the most recent developments in the uranium market.) Some recent purchases by miners include:
Trusts and funds have also been buying up uranium, with London-listed Yellow Cake purchasing nearly 4 million pounds in March 2021 by exercising an option to buy from Kazatomprom, bringing its total holdings to 12.96 million lbs. In April, Sprott Asset Management announced that it would take over management of and restructure the Uranium Participation Corporation to form the Sprott Physical Uranium Trust (SPUT) and list it on the NYSE—UPC currently holds 16.27 million lbs. of U3O8 and 660,000 lbs. of UF6. One of the main effects of these uranium holding companies purchasing the commodity is that they remove supply from the spot market, thus limiting the amount available for miners and utilities to buy and further pressuring utilities to enter into long-term contracts. There is also speculation that Sprott's upcoming purchases on the spot market will drive the uranium price up, making spot purchases less attractive for utilities. Sprott will likely utilize at-the-market raisings so that if its share price trades at a premium to NAV, it will issue new shares, raise funds, and purchase additional uranium. As one article puts it, "ATM [At-the-market] raisings are a well-worn path for Sprott, having raised around $4B this way into their bullion trusts over the past 15 months. This structure will enable SPUT to consistently nibble (if not gobble) at the bid in the spot market—the perfect way to fray fuel buyer nerves and terrify producers that need to obtain spot uranium for their contracted deliveries." The Sprott transaction is expected to close in the third quarter of 2021 (the shareholder meeting is currently set for July 7) and seek a listing on the NYSE. Sprott already manages four other physical commodity trusts across gold, silver, platinum, and palladium, and the addition of uranium suggests strong investor interest in the commodity. Cameco called the move by Sprott a "game changer" for the spot market. (I'll add that the Q1 2021 Cameco call had some interesting things to say about Sprott [on pp. 33 and 50] as well as the miner purchases [pp. 32-33, 39-40].) Long-term ContractsAs noted above, the majority of uranium purchased by utilities comes from long-term contracts. Based on UxC data (found in a Cameco report), the last significant contracting "cycle" was from 2005-2012 with large numbers of contracting volumes from 2005-2007, 2010, and 2012. Since then, long-term contracting has dropped significantly, particularly from 2019 to 2020, where the volume of long-term contracting went from 95.8 million lbs. to about 53 million lbs. At the same time, spot contracting increased to ~80 million lbs. in 2020, the highest level in the past two decades (I apologize for the less-than-ideal quality of the chart; the fault is Cameco's or UxC's). In Cameco's view, lower contracting volumes in 2020 could be attributed in part to "utilities focusing on operational safety amidst the COVID-19 pandemic." During 2020, there were also a number of U.S. policy uncertainties stemming from the Nuclear Fuel Working Group and the Russian Suspension Agreement. One way of thinking about where utilities are today in terms of contracting is to look at how much uranium utilities anticipate needing each year compared to how much they've already contracted for delivery. As I mentioned above, when utilities sign long-term contracts the amount delivered can vary some amount to meet their needs, so there's a minimum and maximum range that might be delivered to utilities. The U.S. Energy Information Administration's (EIA) 2020 Uranium Marketing Annual Report, which just came out in May, gives us a helpful chart (below) showing the maximum amount of uranium already under contract as well as the unfilled market requirements (i.e., what utilities need but haven't contracted for). Combined, these values give us the maximum anticipated market requirements of uranium for U.S. nuclear reactors. We see that even as overall demand remains relatively steady, the maximum contracted amount of uranium falls steeply throughout the decade. For the next one to two years, that shortfall might be able to be made up by purchasing on the spot market or drawing on existing utility inventories, but considering that long-term contracts typically begin uranium delivery two years after the contract is signed, utilities will likely need to sign new contracts soon. Ultimately, no one knows when utilities will start to enter into long-term contracts again, but we know their inventories are shrinking, demand is growing, and future supply is becoming more uncertain as miners and investment funds purchase additional uranium from the spot market. Market PerformanceHow has the uranium market responded to all of these events? Generally, equities have run ahead of the spot price to the point where, since December of last year, many miners have doubled or tripled in share price. Year to date (up to May 27), the Global X Uranium ETF (URA) is up 43% and the North Shore Global Uranium Mining ETF (URNM) is up 50%. Other notable uranium stocks are also strong, including Denison Mines (DNN, +78%), Uranium Energy Corp (UEC, +73%), Cameco (CCJ, +46%), NexGen Energy (NXE, +62%), and Energy Fuels (UUUU, +50%) among others. The spot price, on the other hand, has remained around $30/lb. If you look at any of the charts for these equities, you see a spike around December, marking when a Bear Traps Report on uranium went out, and the URNM ETF saw record inflows. Looking at the charts, it can be tempting to think it's too late to get in. Even buying two or three months ago would put one in a good position leading up to catalysts in the second half of the year. But in a lot of ways the bull market is just getting started. The spot price is still currently sitting around $30/lb., and analysts like Canaccord predict the price may reach $60/lb. by the end of 2025. For me, the run-up in equities and the upcoming catalysts, like the U.S. listing of the Sprott Physical Uranium Trust, mean I can't be as patient as I'd like when building my positions. Upcoming CatalystsInvestors who believe a new uranium bull market is on the horizon or who are looking for additional evidence should keep the following catalysts in mind, in no particular order:
Risks and UncertaintyThough a number of market observers anticipate an increase in the price of uranium due to growing demand and tightening supply, some uncertainty and risk remains.
ConclusionAfter a decade-long bear market spurred by the 2011 Fukushima nuclear disaster, positive sentiment of uranium and nuclear energy is once again improving. But low uranium prices over the past several years have led to underinvestment in the sector, leading to a lack of new mining projects to fill projected demand. As a result, utilities may face a supply crunch in the coming years and will eventually be pressured to enter into long-term contracts at higher uranium prices. Furthermore, recent physical uranium purchases from junior miners and investment funds—a new development for the market—signal growing investor interest in the metal and put additional pressure on a limited supply. Investors hoping to profit from a potential bull market should expect a volatile 2-4-year trade, especially if they choose to hold positions in individual miners and explorers, though they may also choose to mitigate that volatility by holding ETFs or physical asset companies. [link] [comments]  |
| Why Intel ($INTC) is Undervalued Posted: 01 Jun 2021 10:02 AM PDT Why Intel ($INTC) is undervalued This is my first ever stock analysis, any tips will be appreciated. DISCLOSURE: I do not own any shares of Intel at the time of writing. Intel is a chipmaker who has been beaten down by the ongoing global chip shortage. Intel is down from it's high and has a relatively low P/E value. I am currently bullish on Intel. AMD is currently expensive and overvalued at the moment. AMD has had no availability in the consumer market for quite some time. Intel is finally the more affordable option again (in terms of consumer parts) due to AMD having very limited availability. In terms of stock, Intel is currently down from it's high and has potential to go back up. Finances First things first, let's get into Intel's financials. Over the past few years, Intel has had steady revenue growth: 2017: 62.76B 2018: 70.85B 2019: 71.97B 2020: 77.87B Intel has also been steadily buying back outstanding shares, declining in numbers every year: In 2018, Intel had 4.701B outstanding shares, a 2.77% decrease from 2017. In 2019, Intel had 4.473B outstanding shares, a 4.85% decrease from 2018. In 2020, Intel had 4.232B outstanding shares, a 5.39% decrease from 2019. In March 2021, Intel had 4.096B outstanding shares, a 5.01% decrease from 2020. Competition/Growth Potential Intel has a P/E ratio of 12.80. This is low, compared to the average P/E ratio of 22.69 for the rest of the industry. Intel is also still down from it's stock price high of ~$68 in April at ~$57 right now. The global chip shortage has been the main cause of Intel being down, along with fierce competition from AMD. As chip production begins to pick back up, Intel's stock should begin to go up as well. AMD has been hurt greatly from this chip shortage as well, giving Intel a chance to possibly undercut AMD and lead to growth. Intel also plans to build more production plants so that they can keep up with the ever-increasing demand for chips. Intel is still ahead of AMD in market share as well. Intel's new 11th Gen processors are back on top in terms of speed, especially in laptops. A subsidiary of Intel has also landed a deal with Toyota ($TM) to produce radar technology for Toyota. Final Thoughts Intel seems to be using the chip shortage as a way to come back from their drought. They seem to have been benefiting from it greatly. Intel is not out yet. They still have the market share and resources to compete with AMD. Intel is undervalued and has the capability to bounce back strong from the chip shortage and also has a chance to finally come out on top as the primary choice in the chip market. What are everyone else's thoughts? I personally believe that Intel is due for a breakout in the next months, but what does everyone else think? I was also wondering about Qualcomm ($QCOM), what does everyone think about that? EDIT: It seems that Intel is more unstable than I originally thought. Thanks for all the replies. [link] [comments]  |
| The US Mint’s May gold and silver sales figures were a surprise Posted: 01 Jun 2021 02:26 AM PDT Only 20.5 thousand ounces of gold eagles were sold in May. This is about half of the April volume (38.5 thousand). Demand seems to continue to fall steadily, but there is one "but". Sales of gold "buffalo" more than doubled (44 thousand) sales of "eagles". This is not typical. "Eagles" are always sold more actively than "Buffalo". Therefore, everyone who is interested in the volume of retail sales is watching the "eagles". The aggregate data from May is fundamentally changing the picture of what is happening. The total sales in May of "eagles" and "buffalo" in the amount of 64.5 thousand ounces were 30% higher than the results of April (49.5 thousand). After a slight downturn, retail demand began to grow again. Even more surprising was the May silver eagles sales figures, when no ounces were sold. I have been following this market for a long time, but I cannot remember anything like this in the past. It looks like the global silver shortage is much more serious than the mint reported. [link] [comments]  |
| FRX, Beachbody, & MYX Fitness Merger Revenue & Upside Discussion Posted: 31 May 2021 04:23 PM PDT FRX, Beachbody, & MYX Fitness recently announced the three-way merger vote date. It is scheduled for 6/24/21 at 10AM. Beachbody is marketing themselves as the PTON for the masses. Here are my thoughts: $PTON had $1.82B of revenue in 2020. It currently trades at a market cap of roughly 32.9B. $FRX / $BODY is on track for $1.1B in revenue this year and is being valued at roughly 2.9B after the merger is completed.... I think we have some upside here... Peloton's trailing 12 months revenue is currently at 3.692B. Again $FRX soon to be $BODY is on track to hit 1.1B this year. That's plenty of upside for the short term. Long term they are projected to hit 3.3B by 2025. With the integration of all parts of their business (Bikes, Supplements, Connected Fitness Subscriptions Services, OpenFit App, BODi, etc.) the value for each new customer acquired goes up. Plus, they will have a marketing war chest (400M+ in cash if I remember correctly from an interview) after the merger to achieve their growth target. Beachbody has also been profitable for the 18 of the last 20 years they've been in business. Unlike many other SPACs and growth companies they've proven they can generate income. Once all aspects of their NEW business model come together, they will be able to sell the equipment, the subscriptions, and nutrition supplements directly on their platforms. Imagine completing an interactive workout from the bike and being able to purchase all your nutritional supplements directly from the screen with a few taps. Each customer acquired will mean much more revenue than strictly subscriptions can bring in alone. Are you buying? What are your reasons for and against the Beachbody, MYX Fitness, and FRX three-way merger? EDIT: Combined earnings for Q1 of 2021 can be found here: https://finance.yahoo.com/news/forest-road-acquisition-corp-beachbody-131000153.html Note: This is before the infusion of cash from the merger they plan to use for marketing. [link] [comments]  |
| KemPharm ($KMPH) - THE SLEEPING GIANT Posted: 01 Jun 2021 11:31 AM PDT Original Post Composed by - u/BankruptcySpeedrun DISCLAIMER: I own 515,000 shares of KMPH @ ~$9.50. Yes, that is ~$5 million. You can check my profile for proof and I say with full confidence that I intend to hold this position indefinitely. I only ask that you read this report in its entirety before drawing your conclusions because nothing about this company is as it seems. --------------------------------------------------- PART I - DILUTION, DEBT, DOUBT --------------------------------------------------- On its surface, KemPharm looks particularly depressing. A casual glance at the KMPH chart will show you their stock price seems to know only one direction. Down. A deeper dive into their financial history doesn't improve their outlook either. Dilution, debt, and doubt. The triple-Ds of woe that spell out doom for any company that dares to enter the biotech arena. Their earnings are dismal and their quarterly reports are depressing. Dreary forecasts and dreadful prospects detail a dismal decline of depleted reserves and desperate delusion. In a word… dangerous. So why would anyone invest in this company? Better yet, why would anyone spend a single moment of their valuable time researching this company when everything they need to know is right out there in the open? Had I looked at this company a few months ago I might have come to that exact conclusion... But on March 3, 2021… everything changed. Azstarys is KemPharm's latest FDA-approved medication specifically formulated for the treatment of ADHD. A once daily pill of serdexmethylphenidate and dexmethylphenidate. This is undoubtably decent news but, despite the medication showing promising potential, this alone wasn't enough to convince me to make my investment. The first glimmer of potential that caught my eye appeared, like most things about this company, in the smallest of details. If you have ADHD as I do, you may have noticed that you've never heard of SERdexmethylphenidate. Dexmethylphenidate, the more active isomer of methylphenidate, is in Focalin and Focalin XR but the SER is a new development. Looking deeper into Azstarys, I noted that SERdexmethylphenidate was described as a prodrug. And the only other ADHD med with that designation is Vyvanse. I was familiar with Vyvanse because it was my prescription prior to Focalin XR. But I wasn't familiar of why it was called a prodrug so I decided to dig a little deeper. …and deeper… …and deeper… …and deeper… ...until I found a thread... A thread that led me all the way back to the year 2006. A year where a man by the name of Dr. Travis Mickle made a rather important discovery.
Source: https://kempharm.com/team/ In 2006, after tendering his resignation to New River Pharmaceuticals, the MickleMeister founded KemPharm with the sole intention of producing a plethora of prodrugs. Shortly after his departure, New River Pharmaceuticals was purchased by Shire for the bargain price of $2.6 billion. I say bargain because Vyvanse now generates around $2 billion dollars in revenue every single year. Subsequently, Shire was purchased by Takeda in 2019 for the slightly higher price of $62 billion but this information will come into play a little later. So this begs the question; how did Vyvanse, a single ADHD medication, create such eye-watering returns on an, at the time, equally eye-watering $2.6 billion dollar investment? The answer, once again, is hidden in the itty bitty details. Vyvanse is a prodrug of dextroamphetamine known as LISdexamfetamine. And here is where the pattern finally begins to align (after 800 words of backstory, damn). Basically, a prodrug is a modified version of a drug that attaches another molecule, a ligand in Azstarys's case, that renders the active ingredient inert unless cleaved through your body's metabolic processes. In summary, it only work if you eat it. This has quite a few benefits. Not least of which is a longer duration as your body can only metabolize things so quickly due to the limitations of enzymatic action. This "gating" effect even has the potential to reduce side effects. Essentially a prodrug can improve qualities of the base medication. But the more important distinction is that you can patent it. Shire already had experience with ADHD medications. They're flagship product Adderall XR had seen monumental success but was about to go off-patent. This would expose Shire to the profit-decimating world of generics and so they eyeballed Vyvanse, being the novel prodrug lisdexamfetamine, for its brand new patent. Considering Shire's experienced sales team and established connections, converting Adderall users to Vyvanse would likely be as easy as informing doctor's and pharmacies of Vyvanse's improved qualities. SO WHAT?! "So what?" I hear you ask. Apples and oranges. That's a different drug with a different company so what does it have to do with KemPharm and Azstarys? I promise you, all of this backstory was necessary to explain exactly why KemPharm has so much potential. ------------------------------------------------------------ PART II - CONTRACTS, CORIUM, CAPITAL ------------------------------------------------------------ Azstarys will be brought to market Summer 2021 through their partner company Corium Inc. The sales contract between the companies offers up to $590M in sales and regulatory milestone guarantees in addition to tiered royalty payments ranging from ~9% to ~25%. This contract was recently renegotiated from $468M to $590M with a new higher top-level royalty tier and the addition of 4 new sales milestones guarantees in exchange for $28M less on the upfront. All in all, a decent agreement. Not earth-shattering but probably good enough to keep KemPharm afloat for the foreseeable future. But this still isn't enough to warrant an investment. Guarantees mean nothing unless the drug can sell. Sure, Azstarys is a prodrug but the performance of Vyvanse can't guarantee the success of Azstarys especially considering that Corium doesn't have the sales experience of Shire. …but what if they did?
Source: https://www.linkedin.com/pulse/kempharm-inc-kmph-builds-repurposing-molecules-dan-sfera The current CEO of Corium is Perry Sternberg. The very same Perry Sternberg that spearheaded the commercialization of Vyvanse during his tenure at Shire. That alone raises an eyebrow but I invite you to go to Corium's website and look at their "Leadership" page: https://corium.com/leadership.html Tell me if you can spot the pattern: Robyn Lynch, Head of Corporate Strategy - Former Chief of Staff for U.S. Commercial Business and Neuroscience Division at Shire. John Miller, CFO - Former Head of Finance for Global Commercial at Shire. John Neeley, Head of Market Access - Former Head of Market Access at Shire. Jamie Spaeth, Head of HR - Former Head of HR at Shire. When I saw this I couldn't help but ask myself, "Why the hell are all these former Shire heads now working at Corium?" The answer… Gurnet Point Capital.
Source: kp415-market-opportunity-and-commercialization-strategy Ok... so who is Gurnet Point Capital? Gurnet Point Capital (GPC) is a healthcare fund founded by Ernesto Bertarelli, former CEO of Serono.
Source: https://www.gurnetpointcapital.com/about In late 2018 Gurnet Point Capital purchased Corium for a flat fee of $500 million. The former CEO, Peter Staple, was replaced with Perry Sternberg in April of 2019. But it wasn't just Sternyburgy that came along for the ride. GPC made a point to acquire his entire team. Specifically the team that made Vyvanse a commercial success. So why did they feel the need to recruit this exact team from Shire? The answer… Azstarys. Obviously this has been a lot of information so let me try to summarize everything I've detailed so far:
The thread is long and winding but the details are out there in the open. You can look up and verify every single piece of information so far and I encourage you to do so and come to your own conclusions. But I assure you that all of this information was needed to understand this next part. ------------------------------------------------------ PART III - MARKETS, MONEY, MATH ------------------------------------------------------ — WARNING: HERE THERE BE PERSONAL OPINIONS — What follows from this point on is my investment thesis and represents the reason why I decided to make a substantial investment into KemPharm. I want to be very clear that this is not financial advice nor a recommendation that you should invest in this company. As always, do your own research. With that warning out of the way, let's talk about the stock. During KemPharm's latest Earnings Call on March 11, 2021, Travis Mickle and team detailed the various changes that have taken place just in the past few months:
Source: https://www.transcriptshare.com/s/kmph/q4-2020 All of these events occurred in Q1 and have led to considerable confusion across the internet in regards to the accuracy of information regarding KMPH. But taking these new developments into account, a very different picture begins to form in regards to KemPharm's future. The current stock price as of the very moment I'm writing this is $8.70. Assuming a full dilution of all 38.6M shares that gives a market cap of ~$340M. Accounting for Cash on Hand, that means that ~$260M of this company's worth is attributed to Azstarys, Apadaz, their pipeline, their technology, and Dr. Mickle's brain in a jar. NOTE: This doesn't account for cash due from converted warrants and approval guarantees which could net an additional ~$80M and bring their CoH to ~$150M. This will be clarified in the next ER. Taking all of this into consideration, I asked myself 2 questions:
To answer the first question, I needed to gain a better understanding of the ADHD market as a whole. The ~$18B industry currently has 21 existing treatments spread across 3 primary classes:
The current largest player in the field is Vyvanse at a whopping 13% of the TOTAL market and 18% of the stimulant category (class 1 & 2). Competitors like Focalin XR & Concerta comprise about 1% each. So we have some comparatives for market performance but I still prefer to take the pessimistic approach. My question is, what is the bare minimum performance required to simply NOT GO BANKRUPT. According to KemPharm they have a projected Annual Cash Burn of ~$4M (source) Considering this and assuming a low-ball 10% royalty rate (~8-25% potential) with only 5% of the potential $550M in milestone guarantees received over a 10 year period, how much market size would Azstarys have to capture in order for KemPharm to not go bankrupt in a worst case scenario? — WARNING: HERE THERE BE NAPKIN MATH — (operating expenses) = (total annual market)(required market share)(royalty rate) + ((milestone payments)(percent received))/(10 year period) x = required market share ($4,000,000) = ($18,000,000,000)(x)(0.1) + (($550,000,000)(0.05))/(10) 4,000,000 = 1,800,000,000x + 2,750,000 1,250,000 = 1,800,000,000x x = 0.00069 = 0.069% required market share This obviously relies on guesswork and doesn't account for things like CAGR, taxes, manufacturing costs, or inflation, so let's make it even harder for KemPharm and double the required market share. So in order for KemPharm to not go bankrupt, assuming they sit on their ass and do nothing until the end of time, Azstarys needs just 0.14% of the market or $25.2M in average annual sales over a 10 year period to earn an income of $4M. Obviously this ignores the scaling royalty rate and any further sales milestones but I prefer err on the side of caution when making wild, speculative assumptions. Helps to keep things in perspective. So that's the bare minimum amount that Azstarys is allowed to suck before KemPharm implodes. Should Azstarys manage to perform on the same level as the lower competitors at around 1% you would certainly see a rise in KemPharm's stock price even with a below-average P/E ratio. And given their partner Corium's experience with the commercialization of Vyvanse there's very little reason to believe that this goal couldn't be achieved. Furthermore, I believe that Azstarys will exceed it. Source: https://www.transcriptshare.com/s/kmph/kp415-approval-call Additional data: https://kempharm.gcs-web.com/static-files/af3b9f16-a8f5-462d-80be-55266dccab75 ------------------------------------------------ PART IV - ALL AHEAD AZSTARYS ------------------------------------------------ It is my personal belief that KemPharm has crossed the threshold of uncertainty and has secured the financial stability necessary to confidently pursue the development of exponentially more prodrugs. I believe that KemPharm's partner Corium has the ideal combination of experience and financial backing to optimize Azstarys's success. I believe that Azstarys offers unique benefits that will improve the quality of care for patients with ADHD, myself included. I believe that KemPharm is extremely undervalued. To view KemPharm as a company in peril is simply a matter of outdated information. It seems to me that their value is hidden beneath layers of historical uncertainty and investor pessimism which makes it an excellent buying opportunity for those capable and willing to see its potential. The arguments that Azstarys will fail to be competitive against its competitors or generics doesn't hold water considering the fact that Azstarys has no therapeutic equivalents (source) and is patented until 2037. An additional point is that Azstarys was approved for all ages 6 and up (https://www.azstarys.com) instead of just 6-17 which was a surprise inclusion upon approval and serves to further expand the potential market. The FDA also included a section in the label with clinical data suggesting that Azstarys has reduced impedance of childhood growth and development (Section 6.1). This particular issue is often cited as the primary complaint from parents of children with ADHD. Critics of Azstarys focus heavily on the obscurity of it's potential duration (the often referenced 30/13) and consider the inclusion of a chart without this specific language on the label as sufficient cause for dismissal. To me, this argument comes from a place of ignorance and a severe lack of perspective. Yes, certain terms of the sales agreement are contingent on this specific language but this point has yet to be confirmed or denied. Furthermore this language's effect on actual sales is largely overestimated. All extended release products are long lasting by design but the key differentiating factor between Azstarys and its competitors is that it is, in fact, a prodrug. And as a prodrug its primary differentiation between it and other medications is the smooth downward efficacy ramp as the body metabolizes the medication at a consistent rate. (Section 12.3 Figure 1) To put it plainly, other extended release products are equivalent to a caffeine crash. I know this because I experience it every single day. The more interesting takeaway is that this medication's formula and prodrug status allows it to differentiate from not just Methylphenidate products, but from Vyvanse itself. The primary criticism for Vyvanse is its slow onset (Up to 1.5 Hours) but Azstarys is formulated with instant release dexmethylphenidate alongside serdexmethylphenidate for faster onset. This opens up the possibility that Azstarys won't just be competing for market share on the Methylphenidate side but may be able to cross over to the Amphetamine side and capture market share directly from Vyvanse. And while I don't assume that its performance will be equivalent to Vyvanse, it is impossible to ignore the potent combination of product and people at play. Corium's recruitment of the former Shire team has given Azstarys the best possible chance to succeed. Who better to have on your product's side than the very same people that made Vyvanse the leading ADHD medication in the business. And as a final anecdote, I have already spoken to my doctor about Azstarys and we both agree that it will be my next medication. Not because I believe in the company or want to help with sales. But because I've tried just about every medication on the market and want the best treatment possible. And Azstarys just seems better. So that just leaves one last question: can KemPharm continue to innovate? The answer… Travis Mickle. While there is no data in the world that can anticipate the future actions of any one person, I have a gut feeling that there might just be some magic left in the old Mickster. I'll end this overly long DD with a simple quote and leave it to you to decide for yourself:
Source: https://www.linkedin.com/pulse/kempharm-inc-kmph-builds-repurposing-molecules-dan-sfera/ [link] [comments]  |
| VDE negative return for ten years... Thoughts? Posted: 01 Jun 2021 11:30 AM PDT Hey all, I've a pretty decent chunk in VDE currently, and am just kind of shocked to see how this ETF has had a return of about -2.5% for the past ten years. I'm interested to hear people's thoughts as this ETF relates to the energy sector and why it has been performing so abysmally for such a long time now. Surely there is growth in the energy sector, no? I'm not sure if this particular etf is invested in the wrong energy stocks, or if the whole sector has been lagging. Ten years ago, I was sure that an ETF like this could be relied upon for a dependable return. I hate to turn tale and run after having been invested in this for so long, but it does not seem to be turning. Does anybody have any thoughts on a strategic way if going about this. Is there reason to believe this ETF might have a brighter future? TIA [link] [comments]  |
| What is the reasonable equity risk premium for US, Europe, and other markets nowadays? Posted: 01 Jun 2021 04:29 AM PDT One article about history: https://globalfinancialdata.com/the-equity-risk-premium My opinion: assuming we will use PE ratio, S&P currently has 37.24 PE ratio, while US 10 year bond yield is 1.58%, my estimation is that S&P 500 has an expected yield of 2.68%, which means equtiy market premium is 1.10%. Vanguard FTSE Developed Europe ex UK has 20.9 PE, its expected yield is therefore 4.78%, its 10-year yield is 0.24% (ECB), therefore I estimate equity market premium at 4.54%. Since inflation is on the way, and higher yields starting 2023 could be expected, I'd expect that S&P 500 has no more than 10% space for a correction this year, while the European market has less than 5% space for a correction. [link] [comments]  |
| What is an example of good share ownership by management and how important is this metric? Posted: 01 Jun 2021 07:11 AM PDT I have read in many articles and books that you should also look at how much shares are owned by the management. If the value is high, then its good for the company since the management have their own money invested in the company and will take good decisions. Currently, I am doing some DD on TSMC and going through their 10k (20F) and came across the share ownership table. But I do not know what values are considered to be good when looking at the ownership and how important is this metric? [link] [comments]  |
| Fat Tail Distributions and Hunting Dirty Beta Plays Posted: 01 Jun 2021 01:45 AM PDT After an exhausting but fruitful hunt for OTM calls that are priced as if the possibility of tail risk was ignored or underestimated by options underwriters using the same model for all small cap energy stocks. After looking over tons of historical data and running through every scenario that could result in a:
Current Examples: BTE July and June Calls 1.5 Strike picked up at 15 cents. Look at my post history: The numbers don't lie and BIR, TK, DBA calls have been major gains. I studied energy infrastructure in China and spoke to officials in the government overseeing energy legislation. I interviewed the top commentators and public + private fund managers. I have 5 papers and a ton of reports to back up my FA. Empirical evidence mounting and market validation up the wazooo. Spoiler Alert: Natural Gas and Condensate producers are priced as if they will rise in a linear and predictable way that mirrors their 5 year downward trend caused by an event that cannot be replicated to the extent it was 5 years ago. I have waited until a significant number of these experimental trades have been executed and studied by myself in an open and transparent process involving me making posts in communities on the internet including this forum outlining the opportunity and specific rational for that contract. So far the average position size of $122.5 USD has returned $660.00 dollars net of tcosts and borrowing fees over a period of 1 year. 2 contracts have expired worthless and only one of them was never ITM. Why do electricity and nat gas prices SPIKE when expressed as the share price of ETPs employing a VIX like rolling of (constant maturity futures)? The inability to store the physical commodity in order to offset the risk of delivering a future contract at a price many times higher than both spot and long dated contracts cannot be mitigated for volatility, gas and electricity like with other commodities. In a 2018 study by Avellaneda and Papanicolaou the VIX volatility skew and tail size compared to that only of other commodities that can not be stored and distributed easily (electricity and nat gas). Partial backwardation periods for Nat Gas are common during severe weather events and create periods where the spot price rises well above the long term average price. A temporary rise in commodity price is enough to generate a slightly delayed and less significant, but both in absolute/relative terms large enough to cause the intrinsic and extrinsic value of the calls to more than double in addition to premiums for hedges to increase as well. Because the lower liquidity of natural gas derivatives, hedging using longer dated futures as opposed to options is far more common and retail investors can take advantage by needing less liquidity to hedge long positions in small cap stocks and realize gains by exercising or selling the calls. The time decay is offset by several unique characteristics. The first consideration is the ability of the natural gas producer to lock in sales at peak prices due to the extreme social and economic cost of forgoing electricity generation using gas turbines and diverting residential heating fuel. This means selling cash secured puts and exercising some calls with the residual risk capital left over from subtracting the cost of buying the calls from the return. The long term change in retained earnings and book value of the company will prevent a mean reversion in the stock price following the spot prices rapid correction. The common shares left over then become ideal for CC writing and selling cash secured puts while IV is high but new earnings and sticky commodity prices help prop up share prices. The importance lies in timing of buying of options contracts designed to cost small amounts of premium over time, in exchange for a return on investment that is many times the value of expired contracts. During periods of very low volatility, purchasing the majority of OTM and longer dated contracts gives the ability to max the return on capital due to gamma and the lower marginal cost increases when buying longer dated contracts. [link] [comments]  |
| What does everyone think above the Squarespace (SQSP) IPO? Posted: 31 May 2021 08:06 PM PDT Squarespace IPOed this past month and is currently sitting around 7 billion. So far it's moved ~+20% so far. The positive: This company is already making money, which isn't that common with IPOs. https://www.iposcoop.com/ipo/squarespace-inc/ The market cap isn't at a ridiculous valuation relative to a few I've seen this past year. I do think the business will have a place in the future. Every business no matter the size needs a website now days. Squarespace is an affordable affective service that will accomplish the customer needs. Squarespace is also a great way to start your blog. Along with there common products they can assist and help improve the effectiveness of your website. The negative: Yes the company is making money, but at an expensive evaluation if there isn't high growth. There are a ton of competitors. The margins will be thin and will more than likely be a bumpy road ahead. I'm sure there's more. Anyways, what does everyone think about this IPO, does it have a future? Any one willing to guess how big it will get? I'd like to hear both bear and bull cases! [link] [comments]  |
| Any reason why not to consider JETS? Posted: 01 Jun 2021 01:13 AM PDT It seems like almost every industry recovered to their pre-pandemic levels well before the pandemic was even half way over. Even FDLSX which is 70+% Restaurants, Hotels, Resorts & Cruise Lines is up ~30% from Jan 2020! Airlines, not so much though. LUV & ALK have finally just reached close to pre-pandemic levels... but many others are still way down. Does anyone else think JETS might be a good value play? I try to stick to industry-level mutual funds over individual stock picks because reasons... [link] [comments]  |
| Investors Cheer After RBI Clarifies Crypto Trading Isn’t Banned Posted: 01 Jun 2021 09:09 AM PDT Investors Cheer After RBI Clarifies Crypto Trading Isn't Banned The Reserve Bank of India's decision to remove a 2018 rule that forbid banks from facilitating cryptocurrency trades comes as a welcome relief for a community facing push-back from traditional lenders needed to help settle these deals. The regulator late on Monday told banks not to cite a 2018 central bank circular as a reason to hinder crypto trades. The 2018 note had forbid banks from facilitating such transactions, but has since been struck down by the Supreme Court. Banks must continue with other routine due diligence measures on the deals, the RBI said. "The circular is no longer valid from the date of the Supreme Court judgment, and therefore cannot be cited or quoted from," the RBI said. The RBI order follows local media reports that financial firms, including SBI Cards & Payment Services Ltd., one of India's biggest credit card issuers, and the nation's largest private-sector bank HDFC Bank Ltd. had cautioned customers against dealing in virtual currencies. Indian authorities have repeatedly expressed concern that crypto assets could be used for criminal activity such as money laundering and funding terrorism. "Investing in crypto has always been 100% legal in India and the new RBI circular clearly confirms the right to do business with crypto firms," said Avinash Shekhar, co-Chief Executive Officer at ZebPay, India's oldest crypto exchange. He added that the clarification will attract more investors to the virtual currencies. Read: How to Use 50 Trillion Shiba Inu in Covid-Hit, Crypto-Wary India The RBI's broader concerns and banks' worries around money laundering should help to spur regulations and make the industry safer and stronger, said Sumit Gupta, CEO and co-founder of crypto exchange CoinDCX. Bitcoin, the largest cryptocurrency, was little changed as of 12:15 p.m. in Hong Kong on Tuesday, after having gained in the two previous sessions. [link] [comments]  |
| Technical Analysis: Why does support become resistance? Posted: 01 Jun 2021 08:12 AM PDT I'm confused on why support becomes resistance when it breaks (or other way around). When the support breaks, all we know is that the group of people willing to buy at that level has disappeared; maybe they already bought, or maybe they changed their mind. This doesn't mean that this level magically becomes a resistance though. Maybe the resistance forms lower or higher. It all depends on what the sellers want, and that has nothing to do with the support level. [link] [comments]  |
| Do weekly distribution ETFs are better for dollar-cost averaging or just a gimmick? Posted: 01 Jun 2021 08:01 AM PDT I keep a small amount of cash with SoFi Invest to qualify for their bonuses, and hence get notified of their ETF products, the newest ones being TGIF and WKLY - respectively bonds and equity ETFs whose defining characteristic is weekly distributions. Does anyone have a particular like/dislike or a strong opinion about either? Is it a decent option for lazy "set-it-and-forget-it" style of investment, where I can just choose to reinvest distributions and eventually dollar-cost average in case of big market hiccups? Or am I better off with Schwab's SCHD and SCHZ, which do have lower expense ratio? [link] [comments]  |
| Has anyone used the Republic app? Posted: 31 May 2021 01:55 PM PDT Does anyone in this sub have money in the Republic app actually invested in any companies available there? I am not necessarily concerned about the legitimacy of the app itself - i've done my research and the app looks very legitimate and has excellent reviews. The companies available to invest in also all look great (for the most part) and there are definitely 2-3 that look enticing. However - I can not find any stories of companies that originated on this app making the jump to go public and actually rewarding anyone active on the app. I know the app itself has only been around for a short while, so I can't expect to see a ton of success stories so far, but 1-2 would be reassuring. Does anyone know of any companies listed on Republic that have gone public or are the process of filing an IPO? [link] [comments]  |
| Posted: 31 May 2021 09:06 AM PDT I would like to put in 10-20K into financials, and was thinking maybe equal split among these the top 5 Canadian banks? I have a small position in Bank of Montreal, and it has been doing quite well (about 50% up since I bought it about 8 months ago). The other Canadian banks have also performed quite well, and still seem attractive, and all have good dividends ranging from 3 to almost 5%. https://dividendearner.com/best-canadian-bank-stocks/ https://wealthawesome.com/best-canadian-bank-stocks/ Any recommendations? [link] [comments]  |
| Posted: 31 May 2021 11:19 AM PDT Posted this in r/personalfinance but this may be a better place. Has anyone used tZero before? I've seen it referenced a number of times and spoken highly of. It appears that it's a brokerage service which uses blockchain to digitize securities and facilitate secondary market trading of previously illiquid assets. The platform also offers crypto trading. I'm curious to access what would essentially be private equity on a secondary market as a way of augmenting my risk premiums within my portfolio. Would love to learn more about people's experiences and perceptions of this platform and what sort of securities actually trade on it [link] [comments]  |
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