"Dr. Copper's" Prescription Proves Effective

Posted on by Aibek Burabayev

In February, I presented my analysis of copper and gold/copper price trends in a post titled, Dr. Copper Prescribes Gold. Now, it's time to update both charts.

In the previous analysis, most readers preferred a conservative outlook for copper futures prices, predicting a drop to only the equal distance in the CD part, which is $2.45. Since then, the price has declined, but not as rapidly as anticipated.

Let me show you the updated copper futures chart below.

Copper Futures Weekly

Source: TradingView

As expected, the price action on the Rising Wedge pattern's support played out in textbook fashion, with the price breaking below it and then spiking up to retest it before continuing its downward trend.

The price has now reached a double support zone formed by the purple moving average and the black horizontal trendline, between the $3.78 and $3.83 levels. Continue reading ""Dr. Copper's" Prescription Proves Effective" →

3 Beverage Stocks that Could Win on Bud Light's Bad Publicity

Posted on by The INO.com Team

Editor’s Note: In this piece, we look at how Bud Light’s self-inflicted pain could become its rivals’ gain.

Bud Light’s support for diversity and inclusivity backfired when an Instagram video by trans influencer Dylan Mulvaney featuring herself drinking a Bud Light as part of an ad campaign by the brand to celebrate the end of March Madness and promote a sweepstakes contest for the company drew flak from some its outspoken conservative fans.

With Mulvaney sharing a photo of a commemorative Bud Light can with her face on it celebrating her "365 days of girlhood" series on TikTok documenting her gender transition, affiliate brands such as Bud Light and Maybelline have become a target of the ire of conservatives over transgender rights.

The vocal and explicit outrage ranged from calls to boycott the brand, with rapper-singer Kid Rock going as far as shooting up cases of Bud Light with an automatic rifle while wearing a MAGA hat, to death threats to Anheuser-Busch InBev SA/NV (BUD) marketing executives who supervised the campaign with Dylan Mulvaney.

This has prompted Alissa Heinerscheid, vice president of marketing for Bud Light, and her boss, Daniel Blake, Budweiser's group vice president for marketing, to take a leave of absence.

In an attempt to pacify its irked consumers and restore their images, Bud Light’s sister brands have pivoted away from their inclusive messaging. On April 14, Budweiser released an ad featuring its signature Clydesdale horse mascot to invoke patriotic sentiments in its patrons.

According to the experts, changing demographics suggest that Bud Light’s inclusive ad campaigns make good sense in the long run and are expected to keep the brand in what, according to BUD’s CEO, is “the business of bringing people together over a beer.”

However, the soup the brand has landed in might warm up the prospects of other beverage stocks. While the “woke-free” beer being brewed by “Conservative Dad” may not make the cut, here are some contenders to look out for. Continue reading "3 Beverage Stocks that Could Win on Bud Light's Bad Publicity" →

Tesla (TSLA) - How Should You Play It?

Posted on by Matt Thalman

Shares of Tesla (TSLA) are once again giving traders big daily moves. After the stock hit a 52-week low of $101, it bounced back above $210, and now it appears to be heading lower again.

The catalyst for the move lower was primarily the company's most recent earnings report, which, despite sales, revenue, and earnings all coming in strong, margins took a hit.

Tesla has dropped prices on its vehicles five times over the last year, so margins taking a hit should not have been as much of a surprise as it was to the market.

However, Tesla still has a strong market position and is still producing industry-leading margins. The issue is that those margins are shrinking, and at some point, Tesla may see its margins fall more in line with the rest of the auto industry.

We have seen these types are situations play out in other sectors as companies grow and mature. The best example I can think of is Whole Foods.

When Whole Foods was a young, fresh company, it commanded upwards of 5% margins on its products. But, as the company grew and the rest of the grocery industry noticed what Whole Foods could do with selling premium products and commanding higher margins, other grocery store chains began to offer similar products.

This competition for the customer naturally puts pressure on Whole Foods' margins, thus forcing them to lower prices and lose their high margins.

I believe the same story is now playing out with Tesla. At this time, it is clear that the world is moving away from combustion engine vehicles, although slower than some would like. And as consumers move towards more electric vehicles, more companies are offering alternatives to just buying a Tesla. Continue reading "Tesla (TSLA) - How Should You Play It?" →

2 Gold Stocks Likely To Outperform

Posted on by Taylor Dart

While the Nasdaq 100 (QQQ) has continued its outperformance on the back of a strong start to the Q1 Earnings Season for Big Tech, the real outperformer has been the Gold Miners Index (GDX).

Not only is the index outperforming the major market averages with a 17% return but it’s also outperforming the price of gold, a healthy sign that suggests a potential change in character after years of underperformance.

The recent strength can be attributed to the sharp rise in the gold price towards the psychological $2,000/oz level, resulting in significant margin recovery for gold producers after a tough year plagued with supply chain headwinds and inflationary pressures.

The good news regarding the recent rally in the Gold Miners Index is that momentum is to the upside and sharp pullbacks are likely to find buying support.

The bad news? With the index up over 50% from its Q3 2022 lows, some of the easy money has been made and a few miners are actually looking fully valued.

Fortunately, there are exceptions, and in this update we’ll look at two names that look reasonably valued and are likely to outperform given their relative value compared to peers.

Marathon Gold (MGDPF)

Marathon Gold (MGDPF) is a development-stage gold company based out of Newfoundland, Canada, with the company currently busy constructing its Valentine Gold Project.

The project is home to nearly 3.0 million ounces of gold reserves and the company plans to operate an open-pit mine consisting of three pits (Berry, Valentine, Leprechaun) with average annual production of 195,000 ounces of gold (first 12 years) at industry-leading all-in sustaining costs of $1,007/oz.

Based on the current schedule, Marathon is aiming to start producing gold by year-end 2024, and the project should boast ~48% margins and generate $120 million per annum in free cash flow at a $1,950/oz gold price. Continue reading "2 Gold Stocks Likely To Outperform" →

Cruising To Profits

Posted on by The INO.com Team

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Demand is picking up again for the cruise industry, especially among the over-60 crowd. This demographic typically makes up a third of cruise passengers.

The Cruise Lines International Association (CLIA) expects the number of cruise passengers to reach 31.5 million this year, a 6% uplift on pre-pandemic levels, according to its annual forecast. And on a first-quarter earnings call last month, Josh Weinstein, CEO of Carnival Corporation (CCL), said bookings for the peak 2023 cruise season had been "phenomenal."

Carnival, the world's biggest cruise line operator, operates more than 90 ships, and reported customer deposits of $5.7 billion for the three months ending February 28 - well ahead of its previous first-quarter record of $4.9 billion in 2019. This meant it generated a positive cash flow from operations for the first time in almost three years!

The world's second-biggest cruise line, Royal Caribbean (RCL), also said in February it was seeing "record-breaking" bookings, with all seven of the strongest weeks in the company's history occurring since November 2022. The company, which operates 64 ships, expects its cash profit (EBITDA) in 2023 to exceed 2019 levels of around $3.3 billion, as it raises prices to reflect both higher demand and costs.

The industry expects the growth trend to continue.

More than half of the 71 ships currently on order are the mega-vessels capable of carrying more than 4,500 passengers, compared with just 12% of the active fleet. To fill that expanding capacity, the cruise industry will have to grow faster than other tourism sectors. But keep in mind that ship owners are retiring their older vessels, and the bigger ships are much more profitable in terms of accommodation, food, and service costs per passenger.

These bigger ships contain more family-focused attractions such as zip lines, water parks and more event venues, meaning there's a lot more to do onboard. The days when the experiences were all at port and the cruise ship was just your transport between destinations are long gone.

So, we thought we'd do a comparison of these two cruise companies - CCL and RCL - over this past, very volatile, year. The quick and easy way to do this is to ask Magnifi Personal to run the comparison for us. It's as simple as asking this investing AI to "Compare CCL to RCL." Continue reading "Cruising To Profits" →