Oil & Gas Stocks Are Here To Stay

Posted on by Matt Thalman

During his State of the Union address, President Joe Biden noted that the U.S. will still need oil and gas for at least another decade. This comes as the President has pushed for a significant transition in our country to renewable energy.

President Biden has fought against the oil and gas companies since the beginning of his tenure. He has told Americans that we need to reduce our reliance on oil and gas and move towards renewable energy as soon as possible.

The President has pushed for legislation to make renewable energy more affordable. All this while telling oil and gas companies that they need to invest more to grow supply but not offer them the same concessions.

More so, the Biden administration has tried to reduce the number of oil and gas leases the federal government can sell. Thus making it more difficult to increase supply. Some government policies are also making the industry smaller since new and smaller companies are getting squeezed out due to regulations.

I think most people would agree that burning oil and gas is not ideal for the environment and more so that we need to reduce our reliance on foreign oil and gas producers such as Russia (which we primarily have done since the start of the war with Ukraine) and those countries in the middle east that are not so friendly to the U.S.

However, it will be more than even the decade President Biden admitted to in the State of the Union address until we are indeed off the oil and gas addiction our country currently has.

For example, even the most aggressive state legislation coming out of California and New York doesn't ban the sale of internal combustion engines until 2035, more than a decade from now. While electric vehicle sales rapidly increase in the U.S., they are growing from a super low starting point.

The reality is that the government is making it more difficult for oil and gas companies to expand supply either with laws, not selling leases, or banning gasoline vehicles in the future, making long-term investments less appealing. This inadvertently pushes oil and gas prices higher and makes these companies more profitable.

And remember, this is all during a time when the President, a Democrat, is not 'pro' oil and gas. Take a moment to imagine how well the industry could be doing if the President and Congress were both 'pro' or even indifferent about the oil and gas industry.

So with that being said, let's look at a few exchange-traded funds that you can buy today to possibly play the boom the oil and gas industry may be setting up for over the next few decades. Continue reading "Oil & Gas Stocks Are Here To Stay" →

2 Gold Stocks To Add To Your Watchlist

Posted on by Taylor Dart

2023 has been a great year for investors thus far, with several asset classes enjoying double-digit year-to-date percentage gains, including the Nasdaq 100 Index (QQQ).

While it may be lagging short-term after a strong November and December, the strongest performance has come from the Gold Miners Index (GDX), which outperformed the Nasdaq 100 by more than 3500 basis points in 2022, and is up 46% off its Q3 2022 lows.

Following this strong rally in the GDX and a surge in optimism among investors, some consolidation or a deeper pullback would not be surprising.

However, it’s worth building a watchlist of undervalued now to prepare for sharp pullbacks, assuming these stocks retreat into a low-risk buy zone.

In this update, we’ll look at two gold names still trading at deep discounts to fair value and highlight their low-risk buy zones:

Argonaut Gold (ARNGF)

Argonaut Gold (ARNGF) is a gold producer with a market cap of $430 million and was a name I highlighted in November as one to keep a very close eye on, and I stated the following:

To summarize, this pullback in the stock has provided a fire sale, and I don’t recall the last time I saw sentiment this bad for a producer in years.

Since that update, the stock has soared by more than 60% and is one of the top-performing gold producers by a wide margin.

This is partially attributed to the strong recovery in the gold price that has placed a relentless bid on gold miners but also due to several positive developments.

The major one worth discussing is the appointment of a new Chief Executive Officer, Richard Young, who is well known for transforming Teranga Gold from a junior producer into a $2.0 billion miner before its eventual takeover in late 2020. Continue reading "2 Gold Stocks To Add To Your Watchlist" →

Up 66%, Is SOFI Stock Now a Buy?

Posted on by The MarketClub Team

Personal finance fintech company SoFi Technologies, Inc. (SOFI) reported solid fourth-quarter results.

Its loss per share came below analyst estimates, and its revenue beat the consensus estimate by 4.1%. The company’s adjusted net revenue in the fourth quarter came in 4.2% above its guidance range high of $425 million, and its adjusted EBITDA came $23 million above the high-end of its guidance.

SOFI’s CEO Anthony Noto said, “Record revenue across all three of our business segments – Lending, Technology Platform, and Financial. Our continued strong growth and significant improvement in GAAP net income margin position us very well in 2023 for another year of significant revenue and EBITDA growth and for reaching GAAP net income profitability in the fourth quarter.”

SOFI’s solid results could be attributed to its total deposits, which rose 46% sequentially and more than 700% in 2022 to $7.34 billion. The company benefited from the Fed’s aggressive interest rate hikes leading to its rise in net interest income.

The company added 480K members in the fourth quarter. Its total members came in at 5.22 million, rising 51% year-over-year. It added 695K new products in the fourth quarter, bringing total products to 7.89 million in 2022, increasing 53% year-over-year.

Noto said, “Our strong momentum in member and product adds, and the momentum in products added from cross-buy, reflects the benefits of our broad product suite and Financial Services Productivity Loop (FSPL) strategy.”

“Total deposits at SoFi Bank grew 46% sequentially during the fourth quarter to $7.30 billion at year-end, and 88% of SoFi Money deposits are from direct deposit members. We continued to see nearly half of newly funded SoFi Money accounts set up direct deposit by day 30, and average spend in the fourth quarter rose 25% versus the third quarter. As a result of this growth in high-quality deposits, we are benefiting from a lower cost of funding for our loans,” he added.

For the first quarter of fiscal 2023, the company guided its adjusted net revenue between $430 million to $440 million.

In addition, it expects its adjusted EBITDA to come between $40 million to $45 million. In the fourth quarter of fiscal 2023, the company expects positive GAAP net income and a 20% incremental GAAP net income margin for the full year. Continue reading "Up 66%, Is SOFI Stock Now a Buy?" →

What Is A Buyback? 1 Company Buying Back Its Stock in 2023

Posted on by The MarketClub Team

A business with excess cash on its books can return value to shareholders in various ways. One of them is distributing the surplus among shareholders as dividends. However, they are more tax-efficient ways to reward existing shareholders with delayed gratification.

A business can choose to reinvest its earnings into its own business or acquire other businesses to upgrade or expand its operations organically or inorganically to increase its future earnings and consequentially increase the intrinsic value of each of its outstanding shares.

Alternatively, the business may choose to decrease the number of outstanding shares, making each share worth a greater percentage of the corporation. All else being equal, this increases the earnings attributable to each share almost immediately. This method of allocating excess capital is called a buyback.

Buybacks are initiated through tender offers or open market transactions when the management of an organization feels that its shares are undervalued. In addition to signaling financial health and increased confidence in their own prospects, businesses also repurchase their own shares to reduce supply and dilution by shrinking the float to prevent other shareholders from taking a controlling stake.

In a nutshell, a buyback is a way for a business to get its skin deeper in the game with the hope of rewarding investors who choose to keep supporting it.

Can Meta Platforms Be a Good Investment Given Its Buyback Program?

On February 1, Meta Platforms, Inc. (META) announced that it had repurchased $6.91 billion and $27.93 billion of its Class A common stock in the fourth quarter and full year of 2022, respectively.

It also announced a $40 billion increase in its share repurchase authorization, in addition to the $10.87 billion available and authorized for repurchases as of December 31, 2022.

As the parent company of world-renowned social networking platforms, such as Facebook and Instagram, META builds technologies that help people find communities and grow businesses through mobile devices, personal computers, virtual reality (VR) headsets, wearables, and in-home devices. The company operates through two segments: Family of Apps (FoA) and Reality Labs (RL). Continue reading "What Is A Buyback? 1 Company Buying Back Its Stock in 2023" →

Are Stock Investors "Dazed & Confused"?

Posted on by The INO.com Team

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.

Click Here to learn more about Reitmeister Total Return

The stock market (SPY) has been up, down and all around since last week’s commentary. That’s because bulls and bears are slugging it out for dominance during this “Dazed & Confused” phase for the market.

What does that mean?

What happens next?

What should an investor do about it?

We will explore the answers for each of these pressing questions in this week’s Reitmeister Total Return commentary.

Market Commentary

Now let’s a step back to last week’s commentary where I outlined 4 possible outcomes for the market after the very important Fed rate announcement on Wednesday 2/1. Indeed, we landed on the least of attractive of which. That being…

Scenario 4: Dazed & Confused

"This is where the Fed gives mixed signals. Still hawkish for a long time to save face given previous statements. And yet do tip their hat a little to moderating inflation.

This gray area leads to a trading range until investors have more facts in hand. I suspect that 4,000 is the low end with 4,200 at the high end. This comes hand in hand with a ton of volatility as each new headline has investors recalibrate the bull/bear odds."

The market since then has lived up to ever single syllable of the above expectations. Especially the part about the volatility that comes after every key headline. Continue reading "Are Stock Investors "Dazed & Confused"?" →