seekingalpha
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March 25
- Lululemon: Consumer Brand Loyalty Is Faltering, Limiting Long-Term Margin Outlook1. Lululemon's Q4 earnings are expected to be strong, but future growth may falter due to economic risks and increased competition, especially from Chinese brands. 2. LULU's valuation is historically low, presenting a short-term dip-buying opportunity, but market saturation and shifting consumer preferences threaten long-term growth. 3. High gross margins and brand loyalty are critical for Lululemon, but economic pressures and price-sensitive consumers may erode these advantages over time.
- Northrop Grumman: The Forgotten Winner Of Boeing's F-471. Boeing's win of the US Air Force NGAD contract is significant, marking its first clean-sheet fighter jet design, estimated to be worth more than $300 billion; 2. The NGAD program includes two distinct fighter jets for the US Air Force and Navy, avoiding past complexities seen with the F-35's commonality approach; 3. Northrop Grumman, with its historical expertise and current success in digital engineering, is well positioned to win the F/A-XX contract, revitalizing its fighter jet capabilities.
March 24
- The Unraveling Of DNA Company 23andMe1. 23andMe, once valued at $6B, has filed for bankruptcy protection with a current market valuation of just under $50M. 2. The company's promise to revolutionize healthcare with affordable DNA tests has not materialized, and it has never reported a net profit. 3. A massive data breach and a lack of successful product development have contributed to the company's downfall.
- 2 Dirt-Cheap Dividend Sectors With Massive Tailwinds Investors Are Ignoring1. The article discusses two dividend-paying sectors that are undervalued and have strong fundamentals. 2. One sector offers a compelling combination of yields and growth. 3. The other sector could see significant upside in the near term.
- Alphabet: Wiz Doesn't Change The AI Plot1. Alphabet's $32 billion acquisition of Wiz in cybersecurity is seen as expensive but won't significantly impact the business. 2. Despite heavy capex spending, Google's strong cash flows and balance sheet can handle the Wiz deal without dipping into cash reserves. 3. Google's stock has dropped over 20%, presenting a buying opportunity as it trades at historically low multiples despite rising EPS estimates.
- Higher High, Lower High; AMD Is A Buy1. AMD has experienced a significant stock price correction from over $200 per share to around $100 per share; 2. The author believes there is a significant opportunity in AMD; 3. The author expects AMD's growth momentum to continue and for investor sentiment to improve.
- Apple: Here's The Looming Threat No One's Talking About1. Apple's high-margin Services growth is threatened by EU regulations; 2. The DMA forces competition, risking a revenue hit in Europe (25% of sales); 3. A 28x P/E makes Apple vulnerable if regulations spread.
- Tesla: Beaten Down, Out-Of-Favor And A Strong Buy1. Tesla's stock has dropped 40% YTD due to political controversies, Cybertruck issues, and market maturation; 2. Despite recent setbacks, Tesla's long-term growth potential remains strong; 3. Temporary factors like consumer boycotts and tariffs are expected to fade, offering a significant re-rating opportunity for investors.
- Apple: The Ultimate Capital Return Play (Rating Upgrade)1. Apple's valuation has recently corrected downwards due to trade war concerns and smartphone market saturation, but its free cash flow and stock buybacks remain strong investment points. 2. Apple has a strong track record in stock buybacks, with $95.0B worth of shares repurchased in FY 2024. 3. Despite risks of stalled iPhone growth, Apple's brand loyalty and potential new stock buyback plans make it a decent value at current valuations.
- Grab: A Great International Diversification Play (Rating Upgrade)1. Grab is a great choice for increasing international exposure this year due to U.S. weakness and the company's expected accelerating revenue growth in FY25. 2. Grab's strong Q4 earnings, diverse service offerings, and significant growth potential in Southeast Asia make it an attractive long-term hold. 3. Although expensive at ~28x forward adjusted EBITDA, Grab should be able to sustain a growth premium over better-known peers like Uber, especially as adjusted EBITDA is expected to grow ~40-50%.
- OXLCI: The Way To Invest In Oxford Lane If You Missed The Pullback In The Common Stock1. OXLC's recent stock offering raised over $500 million, affecting stock dynamics and presenting a shorting opportunity. 2. The 8.75% Notes due 06/30/2030 offer a profitable trading opportunity. 3. OXLCI's 8.39% yield-to-call and 8.6% yield-to-maturity make it the most appealing security. 4. The raised $500 million increases asset coverage and enhances the appeal of OXLC's debt. 5. The idea was discussed in depth with members of the author's private investing community.
March 23
- SCHD: Good Times Aren't Great (Rating Downgrade)1. SCHD consistently underperforms the S&P 500 due to focusing on dividend growth without considering valuation; 2. The ETF's top holdings often reach high valuations due to gains, not because they were bought cheaply; 3. SCHD's performance during market downturns is only slightly better than the market, failing to close the gap with the S&P 500.
- 5 Best CEFs This Month For Yields Up To 14%1. Closed-end funds (CEFs) are attractive for income investors with high distributions and reasonable returns; 2. This article highlights five CEFs with strong performance and 'excess' discounts; 3. The author's investment approach aims for lower drawdowns, higher current income, and market-beating growth.
- Forget The S&P 500 - Buy These 3 Dividend Stocks Instead1. Market uncertainty due to inflation, geopolitical risks, and Fed actions has increased volatility; 2. The S&P 500's reliance on a few tech giants has skewed performance; 3. Diversifying into undervalued dividend stocks can improve risk/reward in the current environment; 4. Focus has shifted to dividend-focused ETFs and undervalued stocks with strong growth potential; 5. This strategy aims to balance stability and long-term returns.
- Alpha Picks Weekly Market Recap1. Major indices were mixed following the Fed's revised economic projections; 2. The Fed held rates steady but revised inflation and GDP growth forecasts; 3. Alphabet's $32B Wiz deal and Meta AI's European expansion highlighted market activity.
- Broadcom: Trillion Dollar Timeout (Rating Downgrade)1. Broadcom's membership in the trillion-dollar club was short-lived; 2. Market optimism is fickle, and investors are not fully convinced about its $60-90B custom accelerator opportunity; 3. Broadcom's XPU dreams are massive, but it takes years of development, validation, and production scaling before revenue really kicks in.
- Nvidia: Ignore The Noise And Buy The Dip1. Nvidia's growth outlook is strong, driven by the transition to inferencing and the need for increased compute capacity across cloud services providers; 2. Despite concerns over Microsoft's data center lease cancellations, other hyperscalers have not followed suit; 3. Nvidia's volume shipments of Blackwell GPUs contributed $11b in sales in Q4'24; 4. The author raises the rating to a STRONG BUY due to the share price pullback and growth potential as AI expands across the digital to physical world.
- Walmart: Reality Check After The Disappointing Guidance (Rating Downgrade)1. Walmart's valuation multiples surged due to market share gains and digital business excitement, which are now coming back to earth. 2. Despite strong Q4 results, Walmart's disappointing FY26 guidance, including lower sales and EPS growth, caused an 18% selloff. 3. The margin expansion story is on hold, influenced by acquisitions and FX headwinds, leading to a conservative growth outlook.
- AMD: I'm Still Staying On The Sidelines After The GTC Week Rally1. AMD's recent bounce is attributed to external factors, particularly Nvidia's GTC week, not a fundamental shift or major announcements. 2. Analysts remain skeptical, with Mizuho Securities lowering AMD's price target due to AI growth challenges, but maintaining an outperform rating. 3. Upside is expected this year from the EPYC Turin CPU and the upcoming MI350 GPU launch, with the MI400 to be launched next year. Concerns about Q1 guidance underestimating inventory buildup may slow growth.
- KNG: A Defensive Covered Call ETF To Navigate Market Uncertainty (Rating Upgrade)1. Market volatility requires exposure to defensive ETFs like FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) for resilience and reliable dividend income. 2. KNG offers a generous 9% starting dividend yield with monthly distributions, supported by an ATM option strategy. 3. Despite a modest 4.5% price decline, KNG's price stability and income generation make it a buy in the current uncertain market environment.
March 22
- SoFi Technologies: Don't Let This Steep Selloff Go To Waste (Rating Upgrade)1. Investors in SoFi Technologies experienced a 40% drop from recent highs, highlighting the risks associated with investing in SOFI. 2. Despite economic uncertainties, SOFI's previous earnings multiples suggested that overstating the bullish case was not wise. 3. However, recent stock performance indicates that the bearish outlook on SOFI may be reconsidered. 4. The author argues that investors who have been patient should not let the selloff go to waste.
- What Moved Markets This Week1. The S&P 500 managed to end a four-week losing streak with a slight increase. The Federal Reserve's decision to hold interest rates steady and Jerome Powell's comments on inflation were key factors. 2. FedEx, Micron Technology, and Nike reported their quarterly results, with FedEx cutting its annual revenue guidance for the third consecutive quarter. 3. The S&P 500 advanced +0.5%, while the tech-heavy Nasdaq Composite added +0.2%.
- Pfizer: Bulls Need To Check Out Its Graham P/E1. Bulls have good reasons to love PFE, with attractive dividend yield and low P/E ratio being two of the frequently mentioned ones. 2. However, potential investors should consider the contradicting factors against the bullish sentiments. 3. The Graham P/E ratio suggests a valuation premium instead of a discount with PFE's bleak growth outlook. 4. PFE's elevated debt levels also suggest that simple accounting P/E ratios understate its current valuation risks.
- Shopify: Prime Candidate To Join The $500 Billion Club One Day1. Shopify's shares are down 21% from February highs, reflecting a significant correction compared to the market. 2. Shopify's growth is driven by an accelerating flywheel of e-commerce penetration, market share gains, merchant growth, product expansion, and high margins. 3. Despite a high valuation at 68x forward earnings, Shopify's prospects are justified by its quality and growth potential, making it a 'Buy' on dips.
- Nebius: A 10x AI Growth Story Still Flying Under Wall Street's Radar1. The stock decline of Nebius is attributed to the broader S&P 500 selloff rather than company fundamentals. 2. Nebius' AAR could see a surge from $90M in Q4 2024 to $750M-$1B by year-end 2025, indicating a 10x growth potential. 3. Early signs of institutional buying are observed, but Wall Street analyst coverage remains insignificant. 4. Despite execution risks and potential back-loaded AAR growth, the projected growth justifies the 11 P/S ratio, and a strong buy rating is maintained.
- Sibanye Stillwater: Possibly Overbought After Its Latest Surge1. Sibanye Stillwater Limited's ADRs have returned over 30% YTD, outperforming global and South African stocks. 2. Rising macro-level tensions and ongoing palladium headwinds are impacting the company's growth. 3. Despite supportive gold prices and smooth operations, mine impairments have affected Sibanye's profitability. 4. RBC upgraded Sibanye, setting a price target of $5.30, but the author's model suggests a best-case target of $3.75.
- Dividend Champion, Contender, And Challenger Highlights: Week Of March 231. This article provides a weekly summary of dividend activity for Dividend Champions, Contenders, and Challengers, including companies that have changed their dividends, upcoming ex-dividend dates, and upcoming pay dates. 2. It highlights the importance of staying updated with dividend information, especially for those who follow dividend-paying stocks. 3. The author mentions that The Dividend Kings offers more in-depth analysis and resources for investors interested in high-quality dividend stocks.
- U.S. Recession Risks Not As High As The Media Suggests1. The U.S. recession risks have been a topic of concern in recent weeks due to market sell-offs; 2. Despite the market downturn, economic data does not yet support the narrative of an imminent downturn; 3. Investors are weighing whether the current correction is just a correction or a sign of increasing recession risk.
- ASML: On The Verge Of Exploding1. ASML is uniquely positioned to benefit from the surging demand driven by reasoning AI models; 2. Efficiency improvements in AI create even greater overall demand; 3. ASML holds a strategic monopoly on advanced lithography machines crucial for manufacturing cutting-edge AI chips.
March 21
- Amazon: Great Buy Following Its 4th Largest Selloff In 10 Years1. Amazon.com, Inc. has experienced its 4th largest selloff in the last 10 years; 2. The article highlights the attractive nature of AWS, referred to as the 'Modern Oil Supermajor'; 3. The author provides valuation considerations indicating that AMZN stock is a great buy today.