This Warren Buffett Holding Has Upside Potential

Posted on by The MarketClub Team

With retail sales declining more sharply than expected during the holiday month and the third consecutive month of contraction in industrial activity, there is concern on Wall Street that the Federal Reserve may have overcooked it with respect to interest-rate hikes to cool down and contain inflation.

Amid widespread bearish sentiments, it could be wise to bank on fundamentally strong, profitable, and fairly-priced sector-leading businesses, such as Taiwan Semiconductor Manufacturing Company Limited (TSM).

Headquartered in Hsinchu City, Taiwan, TSM provides integrated circuit manufacturing services globally. This involves manufacturing, packaging, testing, and selling integrated circuits and other semiconductor devices.

The super-advanced semiconductor chips that TSM produces are difficult to fabricate due to their high development costs. Hence, this presents a significant barrier to entry into the competition.

On December 29, 2022, TSM held a 3 nanometer (3nm) Volume Production and Capacity Expansion Ceremony at its Fab 18 new construction site in the Southern Taiwan Science Park (STSP).

TSM announced that 3nm technology has successfully entered volume production with good yields. The company estimates that the technology will create end products with a market value of $1.5 trillion within five years of volume production.

On December 6, TSM updated that in addition to its first fab in Arizona, which is scheduled to begin production in 2024, it has also started the construction of a second fab, scheduled to begin production in 2026.

The overall investment for these two fabs will be approximately $40 billion. When complete, TSM Arizona’s two fabs will manufacture over 600,000 wafers annually, with an estimated end-product value of more than $40 billion.

On November 15, it was revealed that Warren Buffett’s Berkshire Hathaway (BRK.B) spent $4.1 billion to acquire a stake in the world’s largest contract chipmaker during the third quarter. According to SEC filings, the fabled conglomerate bought just over 60 million of TSM’s New York-listed American Depositary Shares at an average price of around $68.56.

Mirroring the positive developments, the stock has gained 16.9% over the past month to close the last trading session at $89.47. Continue reading "This Warren Buffett Holding Has Upside Potential" →

Invest In Women With This New ETF

Posted on by Matt Thalman

A new Exchange Traded Fund is taking the next step with gender diversity investing. The Hypatia Women CEO ETF (WCEO) is the first ETF to focus strictly on women-run companies.

The only two requirements for a company be owned in WCEO are that it has a market cap of at least $500 million and a woman runs the company, either from the CEO or Chairperson position.

WCEO will have at least 80% of its assets in US companies that female Chief Executive Officers lead. Furthermore, the fund may invest up to 20% of holdings in US companies with an Executive Chairperson or a Chairperson who is female.

WCEO is a one-of-a-kind ETF, but it does have some competition if an investor is looking for a woman-focused ETF.

The Impact Shares YWCA Women’s Empowerment ETF (WOMN) tracks an index of large and mid-cap US equities selected and weighted to maximize exposure to firms that score highly on gender diversity.

WCEO has an expense ratio of 0.85% and just began trading in January. WOMN has an expense ratio of 0.75%, has been trading for about four years, and has over 200 holdings. Year-to-date, the fund is up 4.7%, down 12.41% over the last year, but up 11.83% annualized over the previous three years.

Another ETF focusing on women in the workforce is the SPDR MSCI USA Gender Diversity ETF (SHE). SHE tracks a market cap-weighted index of large and mid-size US companies that promote gender diversity through a relatively high proportion of women throughout all levels of their organization.

SHE has been trading for about seven years and has an expense ratio of 0.20%, the best out of this group. Year-to-date SHE is up 3.88%, down 14.48%, but up 2.53% annualized over the last three years and 4.82% annualized over the previous five years.

While each of these three ETFs promotes the idea of gender diversity in the workplace, WCEO has taken it to the next level, and I believe the requirement for a company to be run by a woman will set this ETF apart from the rest over the next few years. Continue reading "Invest In Women With This New ETF" →

2 Tech Stocks That Have Finally Bottomed

Posted on by Taylor Dart

2022 was a year to forget for investors and one of the worst years in history for the 60/40 stock/bond portfolio strategy in history.

This was evidenced by both assets posting double-digit declines, with the S&P 500 (SPY) actually performing the best with a 20% decline for the year, which says a lot about the magnitude of the decline in bonds.

Fortunately, 2023 is off to a better start, and while the S&P 500 entered the year in rough shape, the Nasdaq Composite was over 30%, with sentiment for the tech sector arguably the worst it’s been in nearly a decade.

This has set up some oversold buying opportunities, and some tech names have ~65% of their value, placing them in an interesting position from a valuation standpoint.

In this update, we’ll look at two tech stocks that look to have finally bottomed and where investors could find some value in buying the dip.

Crowdstrike (CRWD)

Crowdstrike (CRWD) is a $24 billion company in the cybersecurity space, and it continues to be one of the fastest-growing companies globally, increasing annual revenue from $119 million in FY2018 to $1.45 billion in FY2022, and sales estimates are sitting at $3.8 billion for FY2025.

The company is currently the market leader in endpoint security. Its flagship product is the Falcon Platform, with continuous AI analytics on trillions of signals helping to defend the thousands of customers on its platform.

As of the company’s most recent quarter, it has 15 of the top 20 US banks on its platform, 537 of the Global 2000 companies, and 21,100 customers in total.

Notably, the company is certainly not seeing a slowdown in line with other S&P 500 companies in this recessionary environment, growing customers by 44% year-over-year and revenue by 53% to $580.9 million.

The result is that Crowdstrike is set to grow annual EPS yet again this year by a market-leading 130%, with annual EPS estimates sitting at $1.54, up from $0.67 last year. This growth is expected to continue in FY2024, with annual EPS set to come in at $2.02. Continue reading "2 Tech Stocks That Have Finally Bottomed" →

KISS Investing in 2023

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

It been roughly 40 years since investors have been faced with high inflation as the cause of a recession and bear market. And yet we have been dealt 5 bear markets since that time.

The point being that the majority of today’s investors have either never seen inflation cause a recession… or it is so far back in the memory banks that they don’t know how to properly react to the information in hand.

This begs us to get back to KISS investing.

Instead of what it usually means: Keep It Simple Stupid

In 2023 we will go with: Keep Inflation Separate Stupid

The reason for this pearl of investing wisdom will be fully illuminated in this week’s Reitmeister Total Return commentary.

Market Commentary

There have been quite a few joyous bear market rallies this past year based on the notion that inflation was cooling…which would mean the Fed would pivot to more dovish policies soon… which eventually fell apart when the Fed dumped cold water on the situation.

I sense the same set up is taking place now coming into their February 1st rate hike decision and announcement. And that is why I continue to be bearish even as the S&P 500 (SPY) is flirting with a breakout above the long term trend like (aka 200 day moving average) @ 3,978.

Yes, one could say that we have closed above for 2 straight sessions. Yet hard to call it a breakout when the psychologically important 4,000 level looms large overhead. Until we break above that key hurdle, then the bears are still in control.

Back to the KISS theme: Keep Inflation Separate Stupid Continue reading "KISS Investing in 2023" →

Is 'Crypto Spring' Coming?

Posted on by Aibek Burabayev

Last week, crypto enthusiasts got a boost when the crypto market cap almost reached the mark of $1 trillion, the highest level since last November.

That very month, I shared with you the bullish signal in the Bitcoin chart I spotted then. It was a Bullish Divergence on the weekly chart of the main coin.

Below is the distribution of your opinions on that bullish alert.

Poll Results

The "I am Bearish" option had gathered the most votes. The second largest bet was to see Bitcoin bounce back towards its prior consolidation area at $30-$35k. The price of digital gold was $16.5k at that time.

Before we check what happened to the price of Bitcoin since then, let us review the major crypto market.  
Top 5 Cryptos

Source: coinmarketcap.com

These are the five largest cryptocurrencies in the table above. Top coins are monumental at #1 Bitcoin with gain of 26% year-to-date (YTD) and #2 Ethereum with profit of 30% YTD. Binance’s native coin BNB has attained #3 spot (+28% YTD) long ago, surpassing the Ripple, which is now only #4 with gain of 20% YTD. Cardano closes the ranking at #5 with the largest gain of 47% YTD. Continue reading "Is 'Crypto Spring' Coming?" →