Market Views
Top U.S stocks making investors very rich
As the year comes to a close, here are a few US stocks that have been making investors happy and rich.
Despite Bitcoin having touched a new milestone on Christmas day by hitting a new all-time high of $24,600 with yearly gains of about 236%, it still lags behind a handful of listed American stocks in terms of yearly returns.
Nio $NIO +1,069%
The leader of the pack remains Chinese car company, Nio, often tagged the Chinese Tesla. Nio has outperformed by 11-fold gain this year alone, pushing the car company’s market value past car giants like American based General Motors.
READ: Tesla’s market value bigger than any African country
With the world’s biggest car market thriving well amid an era of COVID-19, investors are betting hard on the expectation that China’s electric-car market will expand rapidly over the coming years; though it seems its best model will be tested in the future as Nio’s sales volumes are still far smaller when compared with bigger auto-industry rivals, and have never turned a profit as research cost and marketing costs rise.
READ: Fear of U.S Financial regulators cripple XRP, tumbles by 61%
Plug Power $PLUG +1,043
Clean-power stocks like Plug Power have been hitting record highs amid a time when President-elect Joe Biden’s main objective includes tackling climate change.
- Plug Power Inc., a fast-rising company that makes fuel cells for forklifts, mainly used by heavy industries and factories, has soared more than 1000% this year.
- Leading stock experts are anticipating that the roughly $900 billion pandemic relief bill now awaiting President Donald Trump’s approval would benefit Plug Power on the account that the stimulus deal extends tax credits for solar and wind power projects as well as fuel cells.
READ: Apple to start producing cars by 2024
Tesla $TSLA +779%
Electric vehicle and clean energy company Tesla (TSLA), unsurprisingly, also makes this list of most performing listed U.S stocks.
Tesla remains by far the world’s most valuable carmaker and its present value has printed gains of over 779% after climbing from $84.90 at the start of 2020 to its current value of $661.77 this month. Tesla’s impressive rally far exceeds the flagship crypto’s run of over 236%.
- Elon Musk, its founder, has gained $132 billion to his net worth just in 2020, the most by anyone in the Bloomberg Billionaires Index – a ranking of the world’s 500 richest people.
- Tesla remains the only major foreign-based carmaker to have a huge physical presence in the world’s biggest car market, China. With the electric-car maker’s launch of a new factory in China in 2019, and the beginning of its Model Y models earlier this year, investors may want to continue holding.
READ: How tech is disrupting Nigeria’s transport ecosystem – part 2
Enphase $ENPH +688%
The fast-rising NASDAQ-listed company Enphase energy, known for energy management (ENPH), has produced incredible returns of about 688% this year.
After burning cash for three straight years, Enphase finally turned cash-profitable in 2018, then GAAP profitable in 2019. The leading energy innovator started this year trading at $26.37, investors have now pushed the price of Enphase to $181.39 today.
- In addition, the recently endorsed U.S stimulus bill, which includes $35 billion in funding for “new renewable energy measures,” has increased the bias among many stock traders to go long on the clean energy company stock, taking to account that it stands to benefit from the U.S government planned allocated sum of $1.1 billion to energy storage.
READ: AfDB approves a grant of $7m for renewable mini-grid industry in Africa
Moderna $MRNA +631%
In an era where the COVID-19 pandemic has disrupted the lives of humanity at levels not seen before, it becomes unsurprising to see a fast-rising Covid-19 vaccine drug maker, Moderna, making this list.
- Moderna is on the side of humanity in battling hard to keep the deadly Covid-19 virus under check.
- The Cambridge-based firm’s Covid-19 vaccine maker started trading at $19.57 in January 2020 and it is presently trading at $123.39, printing yearly gains of about 631%.
- Recently, investors have been super excited as its Covid-19 vaccine became the second to receive emergency use authorization from the U.S. Food and Drug Administration.
READ: Apple co-founder’s crypto gains over 1,300% within a few days after launch
Data source: Bloomberg
Cryptocurrency
List of Cryptos expected to outperform many financial assets in 2021
A list of cryptos expected to do very well in 2021 has been unveiled by a renowned crypto expert.
Widely respected crypto trader, Michaël van de Poppe recently unveiled the list of cryptos expected to do very well in 2021 amid the prevailing bullish run in the Crypto verse.
He started by mentioning Polkadot (DOT) and looking at levels where investors can buy on dips.
“We do see these retests at $15. That was one of the levels I discussed. Another one is this $13-level which is lower timeframes and then we’ve got this area around $10.50,” he said.
Polkadot protocol connects private and public chains, oracles future technologies, and permission-less networks allowing such independent networks to share information and transactions through the Polkadot relay chain,
Van de Poppe expects the next leg of the bull run to catapult DOT to his targets at $25, $29, and $45.
In addition to Polkadot, the analyst says he’s also bullish on smart contract platform Cardano (ADA), blockchain for enterprise solutions Zilliqa (ZIL), hybrid blockchain platform ICON (ICX), high throughput blockchain Elrond (EGLD), and interoperable blockchain network Cosmos (ATOM).
Cardano is a type of blockchain that permits people to receive and send funds.
- ADA coin is the name of the cryptocurrency.
- It uses the Cardano blockchain and it also allows people to design smart contracts just like Ethereum.
Elrond is a type of blockchain architecture, created to facilitate a 1000-fold cumulative improvement in the execution of speed.
Its architecture combines a secure Proof of Stake (PoS) algorithm facilitating unlimited scalability.
Zilliqa is a type of cryptocurrency that focuses on making blockchains more scalable and much faster; It uses sharding technology to simplify the consensus process so that blockchains like Ethereum can provide fast transaction processing successfully.
Another solid crypto on the crypto expert’s radar is Celer Network (CELR). He says the layer-two scaling platform can potentially rise to $0.035, representing a potential return of 400% from its present value of $0.007.
Last but not least is chainlink on the bias it has more room for upsides as its still upcoming crypto and has a solid fundamental;
“Chainlink itself has a very big market share of the oracle niche. Other oracles are just starting up their first,” Poppe said.
Chainlink is a blockchain that is designed to bridge the space between blockchain technology-based smart contracts (created by ETH), and other user programs.
Market Views
Analysts pick Nigerian stocks Warren Buffett may likely buy
Financial market experts talk on what Nigerian stocks Warren Buffet may likely consider, based on his unique principles.
Warren Buffett’s strategy as regards investments has earned him the popular nickname the “world’s greatest investor.”
The global investment community holds the 90-year-old man with so much high esteem when his successful investment strides is considered and the fact that he is now worth about $88.4 billion, and seats on the boards of so many blue-chip companies.
Buffet has long believed in the value-based investing model, as he only invests in companies that exhibit solid fundamentals such as strong earning power, the potential for continued growth, and most importantly, selecting those with low or no debt.
READ: Why Warren Buffett’s company is buying shares of a gold mining company
Consequently, Nairametrics has sought the opinions of selected financial market experts on what Nigerian stocks the world’s most powerful investor may likely consider, based on his unique principles.
Angela Aya, Head, Institutional Sales at Alonati in an exclusive interview with Nairametrics spoke on key insights Buffett usually looks out for when selecting stocks.
“Warren Buffet’s investment philosophy centers around traditional yet intricate qualities like company debt profile, profitability, historical performance, exposure to commodities, product offerings, and historical dividend payouts.
“He is considered a value investor focusing on high dividend-paying blue-chip companies that show robust earnings characterized by strong balance sheets holding investments over the long term,” Aya said.
READ: Why You Should Not Invest Like Warren Buffet
She elaborated on the impressive performance of the Nigerian Stock market in relation to the value they bring in the long haul by stating;
“Despite the Nigerian All Share Index outperforming the rest of the world in 2020, Nigerian stocks are relatively cheap from a purchasing power parity standpoint.
“Therefore, in a long-term strategic value investment play, bellwether stocks that offer stability, show profitability, and are resistant to systemic shocks will be the picks. They may not be trendy or might seem out-right boring, but they are reliable and proven to outperform given time. “
READ: Is Zenith Bank thriving on the strength of sound financial indices?
Adetayo Teluwo, a Portfolio Manager at one of Nigeria’s most valuable firms spoke on key metrics accustomed to Warren Buffet’s investment style;
Teluwo said, “I will focus on the long term, adopt a buy-and-hold mentality and prioritize blue-chip dividend-paying stocks that have proven their worth over decades.
Since I do not have bottomless pockets, I will make out time to shortlist based on ROE, D/E, and a blend of perceived ‘intrinsic value’
ROE = Net Income ÷ Shareholder’s Equity
Debt-to-Equity Ratio = Total Liabilities ÷ Shareholders’ Equity
READ: What Warren Buffet will do if he traded Nigerian stocks
Following Buffett’s investment principle, Adetayo went further by revealing the type of Nigerian stocks he would select. He said;
“According to Warren, if you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.
“If I had the conviction of Warren, these will be my top stock picks:
“Julius Berger, UBA, Zenith Bank, GTBank, Custodian, NAHCO, CHI Plc, NEM, Jaiz Bank, WAPIC, Unilever, GSK, MANSARD, Dangote Sugar, Afrinsure”
READ: Import substitution, devaluation spur revenue growth for Dangote Sugar
Silas Ozoya, President/CEO, SUBA Capital adds up to our remarkable respondents as he discloses that Nigeria’s stock market’s most liquid sector would be on Buffett’s top list, not forgetting his love for consumer staple stocks;
“Banking stocks for a start would be his first pick because he has a history of investing in financial institutions.
“So, he would go with stocks like Zenith Bank, GTBank, and FCMB because of profitability in the case of Zenith. Cutting edge technology in the case of GTBank, and versatile banking products in the case of FCMB.
“Warren Buffet is also big with daily consumables and beverages. So, he would go with the stocks of Nigerian Breweries Plc, Dangote Sugar, and Guinness Nigeria Plc.
“I’ve been following Warren Buffet’s investment strategy for a while and three things I’ve noticed are that he says the money would always exchange hands, financial institutions would always make money, and people would always consume daily consumables.”
READ: Why Warren Buffett is making less money now
Bottom line
- It’s key to highlight the rarity of Warren Buffet’s tenets in selecting stocks on the account that he has remained relatively consistent over many decades.
- Still, it remains critical for readers to understand that applying Buffet’s strategy takes a whole lot of discipline and patience.
- However, the few who have followed the founder of the world’s biggest conglomerate, (Berkshire Hathaway) on applying his analytical investment tools have had no regrets in the long term.
Market Views
Netflix gains 17% after beating investors expectation
Netflix for the first time ever passed the 200 million subscriber mark and had an impressive reserve of $8.2 billion in cash.
Netflix’s share price bounced about 17% higher after it beat market expectation, powering the video streaming stock to close high after adding more customers than expected and revealed it no longer needs debt in building its entertainment empire.
The positive upbeat guidance on free cash prompted bullish remarks from Wall Street analysts, though some questioned how much of the subscriber growth was pulled forward.
Stock traders increased their buying pressure on Netflix stock because of the surprisingly strong growth, as well as news that Netflix balance sheets are solid enough for Netflix considering share buybacks. Shares jumped 17% percent to $586.34 in recent trading Wednesday.
Netflix for the first time ever passed the 200 million subscriber mark and had an impressive reserve of $8.2 billion in cash.
READ: Netflix, Amazon, Zoom, Shopify drop over 10%
COVID-19 pandemic has aided Netflix’s business, forcing people in spending more time indoors coupled with curbing other traditional entertainment options like movie theaters and concerts.
Netflix added 25.9 million customers in H1, 2020, and ended up adding 36.6 million customers in all – a record.
“Investors come out of the fourth quarter incrementally more bullish on the potential of a powerful developing shareholder return story for Netflix in the coming years,” Evercore ISI analyst, Lee Horowitz wrote in a note to Bloomberg News.
READ: McCaleb, co-founder of Ripple sells 28.6 million XRP
Analysts at J.P. Morgan Securities said the company is likely to begin share buybacks in the second half of the year.
Quick fact: Netflix is an American streaming company that allows subscribers to watch movies, documentaries, different popular TV shows, and many more through internet-connected hardwires.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics also spoke on the impressive gains sighted in the $259 Billion valued company;
“Earnings reports also underpinned equity sentiment. Netflix rose 16% after noting its subscriber numbers increased by a record 37 million in 2020. Serenely, it seems lockdowns and TV go hand in hand.
READ: Nigeria leads the world in Bitcoin searches on Google
“A testament to the maximum policy overdrive, investors wasted little time getting their feet wet after Janet Yellen espoused by the Biden “go big” policy approach to repair the economic damage caused by the pandemic, which also highlights the importance of helping small businesses and the unemployed.”
What to expect: The Stock market is seeing through longer lockdowns on the premise that COVID vaccinations will lead us out of the pandemic quickly and had helped triggered significant buying pressure on stocks like Netflix taking advantage of reduced social mobility in play
