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BenzingaEditorial

COVID-19 Might be Giving Unique Opportunities

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Stock Market Tumble

If we were to define “blue chips”, we should just name the well-established and financially-sound companies in the stock market that are the leaders, the advocates and representatives of an entire industry. Their attributes are that they are safe, stable, profitable, and long-lasting companies and this is why they are considered as relatively safe, low volatility investments. Due to historically posting steady earnings results year after year, blue chip companies are generally considered to be safer investments because of their ability to generate profits even during an economic downturn.

But this was before COVID-19 that caused some of the best businesses on the market are trading at massive discounts. And there are many blue-chip stocks which are in for an impressive Phoenix-like return once we leave these scary times behind us.

Disney

Disney (NYSE:DIS) shares are cheap for good reason as the things that made its business model so successful are what made it impossible to protect the company from the pandemics. The stock is trading 32% below its 52-week highs and the next several quarters will be incredibly rocky due to plunging revenues, unpredictable earnings, and so much uncertainty. But Disney will survive and it still has Bob Iger to count on as its executive chairman. The legendary House of Mouse ensured 7 billion of senior debt to smooth over daily cash flow damages as it is losing 30 million per day. And there still could be even lower buy-in price points as its theme parks and cruises are on lockdown and production over the world is halted. But investors know that Disney will reward them and the company should be able to hit the ground running as soon as it’s allowed to lace up those running shoes again. But until then, a 30% discount on this top-shelf stock is surely a rare scenario that can be taken advantage of!

Coca Cola

Coca-Cola (NYSE:KO) also added some debt cash to its balance sheet last month. Also, like Disney, it won’t be needing that $5 billion cash reserve anytime soon. But unlike Disney, Coca-Cola continues to generate substantial revenues even during these dark times as it is a dear companion in self-quarantine. If only Disney Plus made more of Disney’s overall business… It makes sense, as even though they are not existential goods, these goods are treats that help us feel better. Coca Cola has also differentiated itself from Disney in its unwavering commitment to strong dividend payments as it has boosted its annual payouts without fail in each of the last 57 years. And those include market crashes, recessions and crises of many sorts. But even if we consider the worst scenario since this is a unique situation the world has never found itself in, Coke’s board of directors could free up another $6.9 billions of annual cash flows if they break the trend and pause their dividend policy. But that’s highly unlikely to happen, and this 20% discount is a unique opportunity to entitle yourself to Coke’s 3.4% effective dividend yield. Just like Disney, Coca-Cola is sure to land on its feet when the economy and living in general restart.

General Motors 

Auto factories in the US won’t be opening any time soon. Like its peers, General Motors (NYSE:GM) has shut down its plants in Mid-March. And no one knows when will those factories reopen as the situation is being evaluated week to week. But along with negotiating with UAW, it is also in discussion with Ford Motor Company (NYSE:F) and Fiat Chrysler Automobiles (NYSE:FCAU) working on a plan to restart production while protecting workers. It may be months before things go back to ‘normal’ but then again, GM already survived the strike last year, and one that was the longest in 50 years. GM is been relatively silent, yet, it has assured its investors that it’s in better financial shape its rivals, at least for now. The company which once was the world’s largest motor-vehicle manufacturer has disclosed that it has drawn down its credit lines like Ford, but it didn’t suspend its dividend like Ford did. Is it “fake it until you make it” strategy or self-confidence with a background, only time will show!

COVID-19 has redefined blue chips?

A blue-chip company is considered to be a leading company in its sector as its final products or service is dominant in the market. And such a company is seen as relatively impervious to economic downturns, but there is no company that was unaffected by this unprecedented health crisis that has put half of the world’s population in lockdown. Even Big Tech such as Apple (NASDAQ:AAPL) suffered immense supply chain disruptions when China was on lockdown, not to mention the effect on revenue due to store closures. So, COVID-19 has annulled the “God-like” part of the blue-chip definition. The new heroes will be the companies which will be able to survive this pause which has been forced upon the economy and their status will ultimately depend on how quickly they can resume their operations once things restart. And if these companies have anything, it is reputation and the proof of withstanding the test of time and those speak for themselves.

COVID 19 didn’t only hit blue chips stocks here a few Small and Micro Caps to watch

We all know too well that there can be no light without darkness. Oil companies are collapsing but despite the dark days we are currently experiences as half of the world is on lockdown, the future of solar is bright – just as bright as you the Sun shining outside your window!  Many are struggling, even the giant First Solar, Inc. (NASDAQ: FSLR) as back in February, it reported a terrible fourth quarter with a surprise loss and weak revenue as its own high expectations were too much and the company was overburdened with system development. But this is still a business in transition and a company making strategic changes in its core business. And many companies will have to face this scenario.

Renewables sector will expand

U.S.’ National Renewable Energy laboratory  has achieved a record in solar efficiency, more precisely the cell reached as high as 39.2 percent efficiency under unconcentrated solar conditions and as much as 47.1 percent using concentrated light. On the other side, SunPower Corp. (NASDAQ:SPWR), designer and manufacturer of silicon photovoltaic cells recently announced an expansion into New England, where it is slated to deliver approximately 11 MW of direct current solar power.

Meanwhile, JinkoSolar Holding Co. Ltd. (NYSE:JKS) announced total solar module shipments for FY 2019 of 14.3 GW in March, within its guidance and up 25.6% year-over-year (YOY).2

Inventions ahead

Moreover, there are innovative companies who are combining this sophisticated technology to change even other industries and our lives for the better. One example is Franchise Holdings International’s (OTC:FNHI) Worksport which made solar technology accessible and combined it with the auto industry with its TerraVis patent. This pioneering company is soon to launch the world’s first solar powered tonneau covers which will breathe in new life to any pickup truck! With solar costs continuously falling and therefore no longer being unaffordable, it’s no longer unlikely to imagine a future where almost everything will be powered by the Sun.

The renewables sector will keep growing only at a slower than expected pace. Solar panels as well as wind turbines are now producing electricity more cheaply compared to coal and natural gas. And this is an appeal both for electric utilities and investors so this investment can only become even more attractive with further inventions. Of course, the damage that the COVID-19 outbreak has made to the economy has taking a toll on this industry as well. But over the long run, rest assured that this sector should be well positioned.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

BenzingaEditorial

This Week Will Be About More Than Inauguration Day Alone

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Since 2020 March lows, the market saw a nothing short of extraordinary record-shattering rally. But how much higher can it go as COVID continues to rage across the US and Europe? That answer will become a bit clearer as traders have returned from the long holiday weekend and equity markets have reopened. This week will be defined by the first days of the Biden administration and by another batch of corporate earnings reports.

Inauguration in times of COVID-19

On Wednesday, president-elect Joe Biden’s inauguration ceremony will take place as a dialed-down event, due to the ongoing pandemic. Americans have been urged to avoid the city on the day, given the risk of violence surrounding the event. Last Wednesday, Airbnb (NASDAQ: ABNB) announced it would block and cancel reservations in the D.C. metro area this week, refunding guests and reimbursing hosts who already made bookings. Interestingly, the stock rallied nearly 6% upon the announcement. Marriott (NASDAQ: MAR) which has close to 200 hotels in the D.C. area and owns brands including The Ritz-Carlton said it would honor existing reservations, along with IntercontinentalHotelGroup (NYSE: IHG), Hilton (NYSE: HLT), Hyatt (NYSE: H) and Expedia-owned VRBO (NASDAQ: EXPE).

Biden also said he aims to roll out 100 million vaccines in his first 100 days in office, which would significantly accelerate the pace of current efforts to counteract the pandemic. On January 20th, Biden is seeking to sign about a dozen executive actions to address the pandemic, as well as a virus-stricken economy, climate change and racial equity.

Earnings

One of this week’s key earnings reports will come from Netflix (NASDAQ: NFLX) on Tuesday after market close. Last quarter’s results showed disappointing signs that the skyrocketing user growth that Netflix enjoyed during pandemic was slowing down. The streaming giant missed even its own conservative third-quarter new subscriber guidance for the summer, adding just 2.2 million new members as opposed the 2.5 million the company had expected. For the fourth quarter, Netflix expects 6 million net paid additions to its streaming platform, representing another YoY decline after adding 8.8 million in the fourth quarter of 2019.

Netflix, while still the leader among U.S. streaming platforms when it comes to total users, has also faced increasing competition over the past year, especially from relative newcomer Disney+ (NYSE: DIS). Disney’s streaming service had 86.8 million paying subscribers as of December 2nd, compared to the more than 195 million Netflix reported at the end of September. Disney also revealed it would be raising the monthly price of its streaming subscription starting in March, suggesting the entertainment giant believes it has the user demand and pricing power to command higher fees. Netflix needs to prove it can maintain its status as the king of streaming among this intense competition.

Wall Street expects earnings $1.38 per share on revenue of $6.61 billion, compared to the year-ago quarter when earnings were $1.30 per share on $5.47 billion in revenue.

Also, on Tuesday, Tuesday: Halliburton (NYSE: HAL), Charles Schwab (NYSE: SCHW), Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) will report their earnings before market open.

Wednesday

Morgan Stanley (NYSE: MS), US Bancorp (NYSE: USB), Citizens Financial Group (NYSE: CFG), Bank of New York Mellon Co. (NYSE: BK), Procter & Gamble (NYSE: PG), UnitedHealth Group (NYSE: UNH) will report before market open whereas Alcoa (NYSE: AA) and United Airlines (NASDAQ: UAL) will report after market close. Wall Street expects United Airlines to lose $6.58 per share on revenue of $3.46 billion. This compares to the year-ago quarter when earnings came to $2.67 per share on revenue of $10.89 billion. United had some $24 billion of capital expenditure commitments as of Q3 so amid the decline in travel demand, its aim is to reduce that spending as much as possible. Investors will be looking at such economic improvements to justify the argument that UAL is better positioned than other airlines to survive this downturn.

Thursday will feature IBM and Intel

Wall Street expects International Business Machines Corporation (NYSE: IBM) to earn $1.79 per share on revenue of $20.63 billion but what investors are really wondering is when will the real turnaround begin? Its cloud ambitions have promised to return value to shareholders, but shares still haven’t regained even their pre-COVID levels while the rest of the market has seen record highs. Cloud leaders such as Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG)(NASDAQ: GOOGL) are seemingly too far ahead for IBM to catch up. The new CEO Arvind Krishna is tasked with elevating Big Blue into a leading cloud and AI position, while distancing the company from the legacy business. Investors want to hear progress on these fronts.

Truist Financial (NYSE: TFC), Baker Hughes (NYSE: BKR), Union Pacific (NYSE: UNP) will also report on the same day before market open and Intel (NASDAQ: INTC) will make its appearance after market close.  Wall Street expects Intel to earn $1.10 per share on revenue of $17.48 billion, whereas the same quarter last year saw earnings of $1.52 per share on revenue of $20.21 billion. Intel shares have soared more than 10% Wednesday after the company confirmed that CEO Bob Swan will step down on February 15 and be replaced by Pat Gelsinger, the current CEO of VMWare (NYSE: VMW). On several important chip development fronts, Intel has lost ground to rivals AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). On Thursday, it must show the right things to support the confidence that Gelsinger can turn things around and quickly.

The week will be closed on Friday with earnings from Kansas City Southern (NYSE: KSU), Schlumberger (NYSE: SLB) and Ally Invest (NYSE: ALLY) who will all report before the stock market opens.

The inauguration may signal a dramatic shift and increase in government spending, but it remains to be seen whether hopes of a transformation can survive the reality of a narrowly divided Congress.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

This Week’s IPOs

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This week brings us four IPOs which are aiming to raise $1.8 billion. These four companies operate in different markets and they come from different countries, but they share at least one thing, they all want to go public.

RLX Technology

RLX Technology (NYSE: RLX) is a leading e-cigarette brand in China. The company announced its terms for its IPO on Friday, and it plans to $1.0 billion through offering 116.5 million units at a price between $8 and $10. That means RLX Technology would have a market cap of $14.0 billion. This company is profitable and fast-growing. In 2019, it was holding around 63% of the e-vapor market share in China. RLX believes in the strength of the retails sales, therefore it has more than 110 authorized distributors, so their products are present in more than 250 cities in China, through 5,000 branded stores and over 100,000 other retail outlets. As of the end of September 2020, the revenues have doubled compared to 2019. This is all very promising having in mind that the company was founded in 2018.

Patria Investments

One of the leading private markets investment firms in Brazil and Latin America, Patria Investments Limited (NASDQAQ: PAX), announced that it has launched its IPO. The company offers 26,650,000 Class A common shares in total. The estimated price range of the offered units is between $14 and $16, so the plan is to raise $400 million at a $2.0 billion market cap. The net proceeds from the offering are planned to be used for general corporate purposes, expansion of the company’s operations (through new distribution channels, acquisitions of asset managers and portfolios), and to fund capital commitments to its existing and new contracts. As one of the leading PE firms in Brazil, the company’s investment portfolio includes over 55 companies and it has raised more than $8.7 billion since 2015.

MYT Netherlands

MYT Netherlands (NYSE: MYTE), a Germany-based luxury fashion site, which operates under the brand name Mytheresa, likes to say it offers the Finest Edit in Luxury Fashion. As in the company’s store with the same name (The Mytheresa store in Munich), fashion “doyens” can find some of the renowned brands like Balmain, Gucci, Prada, Saint Laurent, and Fendi, and their latest collections. As the pandemic has ravaged the luxury goods sector, the salvation might be in the online sales of luxury goods, which rose between 12% and 23%. Therefore, Mytheresa decided to go public, planning to raise $266 million at a $1.5 billion market cap and to focus on offering clothing, shoes, and accessories from many luxury brands through its e-commerce platform.

Dream Finders Homes 

After successful completion of several acquisitions and expanding nationally, the Florida-based homebuilder Dream Finders Homes (NASDAQ: DFH) decided to launch its IPO and to raise $130 million at a $1.2 billion market cap. For the first nine months of 2020, the company announced an increase of 29% of pro forma revenues (pro forma – a method of calculating financial results using certain projections or presumptions) and an increased EBITDA margin of 9%.

These companies and their IPOs are offering a lot of variety and potential. So far, 2021 looks promising.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

The EV Industry Is Worth More Than The Traditional Automakers

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Many things that were considered to be impossible actually happened in 2020. One of them is that electric vehicle makers became more valuable than traditional automakers and by about by about $100 billion, according to Barrons. EV makers are now worth about $1.3 trillion whereas traditional car makers combined have a market capitalization of about $1.2 trillion. This figure includes 100 auto makers around the globe with market caps ranging from $10 million all the way to Tesla’s (NASDAQ: TSLA). Based on its fully diluted share count, Tesla is worth about $1 trillion.

This feat is even more impressive if you consider that this is a much smaller industry based on actual number of cars. The last year taught us that the connection between the stock market and the economy is imprecise at best. However, the fact that technology enabled batteries to overpass ICEs is the kind of disruption that investors look for. Even though Tesla is the main contributor to the value of the EV market, the overall image is just as impressive as three of the top five most valuable are EV makers, with Tesla being followed by NIO (NYSE: NIO) and BYD (OTC: BYDDF). As for traditional automakers, Volkswagen (OTC: VWAGY) and Toyota (NYSE: TM) are the most valuable ones with both undergoing serious investments into electrification.

Traditional automakers are going electric

On Friday, BMW said it aims to double its sales of fully-electric vehicles this year. Including plug-in hybrids, it aims for a 50 percent increase in sales of electrified vehicles versus 2020. It did not give sales volumes for its fully electric vehicles but in data released on Tuesday, BMW said it sold close to 193,000 electrified vehicles, including fully electric and plug-in hybris in 2020. As a reminder, Tesla delivered almost half a million all-electric models last year, which is 75% of General Motor’s (NYSE: GM) third-quarter deliveries.

The automotive industry is at an inflection point

BEVs take approximately 1% of the total market for light vehicles, but the figure rises to about 3% if we include hybrid and plug-in hybrids. Why exactly it takes a relatively small market share to disrupt an industry is a bit of a mystery, but one reason is that more investment capital tends to flow in when market share come is within the 3% to 5% range. As more capital drives more innovation and improvement, investors are lured by high growth rates, bringing in even more capital and this is how success is made. Over the past year, EV makers have raised more than $20 billion in fresh capital, which is a fraction of what traditional auto companies spend on plants and equipment. However, on a per car basis, the EV industry is investing at roughly 10 times the rate of the traditional industry. Add to this President Joe Biden’s aim of a carbon-free future by 2035 and the drive toward adoption of EVs which is already seeing impressive results in Europe, the all-electric future is around the corner.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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