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June 8, 2022 | AMAT, Daily JAM, Millennial, Top 50 Stocks |
My second Fundamental Value Pick in my Special Report 5 Fundamental Value Picks is Applied Materials (AMAT). Let’s go to the classic formula for calculating fundamental value of an asset, the Capital Asset Pricing Model, known affectionately by generations of MBA students as CAPM. Don’t worry. I’m not going to force you into the sometimes arcane mathematics of CAPM. Instead I’m going to use the formula as a framework for understanding what matters in calculating a fundamental value for a stock–as well for understanding how these factors fit together.
June 8, 2022 | Daily JAM, Millennial, Top 50 Stocks, TSM, You Might Have Missed |
Taiwan Semiconductor Manufacturing (TSM), the world’s largest independent chip producer, expects revenue to grow about 30% in 2022. Sales growth this year should accelerate from 2021’s 24.9% (in dollar terms), Chairman Mark Liu said at the company’s annual shareholder meeting on Wednesday, June 8. That’s a bump higher on company guidance in April of growth topping mid- to high-20% in 2022.
June 7, 2022 | Daily JAM, NTR, Top 50 Stocks |
Logic says that demand for fertilizer should be soaring as North American farmers look to increase production at a time when grain prices are near record highs thanks to the severe reduction in exports from the Ukraine and Russia. Logic, however, looks to be wrong. An article in the Financial Times on June 4 reports that demand for fertilizer is falling in response to record prices–for fertilizer. Farmers faced with higher costs for everything from fertilizer to diesel fuel are feeling themselves squeezed in spite of higher grain prices. So they’re buying less fertilizer and shifting away from crops such as corn that require heavy fertilizer use and toward crops such as soybeans, that require less fertilizer. U.S. farmers, the Financial Times reports, have told the U.S. Department of Agriculture that they intend to plant 4% fewer acres with corn n this spring and boost the number of acres dedicated to soybeans.
June 7, 2022 | COST, Daily JAM, Jubak Picks, WMT |
Target (TGT) cut its profit outlook for the second time in three weeks. The company will attack oaring inventories in discretionary categories such as home furnishings with price mark downs, cancelling orders from vendors, and “off-loading excess inventory. (To deep discount sellers, I’d assume.) Three weeks ago, on May 18, the retailer’s shares slumped more than 25% after reporting that net profit shrank 52% in the first quarter. In those quarterly results, Target said its inventory rose 43%, compared with a year earlier.
In its guidance for the second quarter on May 18 Target said operating margins for the second quarter would be in a range centered around 5.3%. In today’s inventory warning the company said that orating margin would fall to 2%. Target’s stock, which fell as much as 7% today on the news, closed down 2.22% today. Shares of competitors Walmart (WMT) and Costco (COST) were down only 1.24% and 0.15%, respectively.
June 6, 2022 | ALB, Daily JAM, Jubak Picks, Top 50 Stocks |
My one-hundredth-and-forty-first YouTube video “Trend of the Week: Danger of a Lithium Drought” went up today. My Trend of the Week video looks at the effects of Chile’s 15-year drought on global lithium production and prices. In particular, I look at Chilean-based national producer SQM in comparison with Albemarle (ALB.) Albemarle has more diversified production and I think it is a better bet due to this diversity of supply, but lithium will still be a volatile area for the short term. Albemarle is a member of my Jubak Picks Portfolio (up 162% from August 10, 2018) and my long-term, 50 Stocks Portfolio (up 180% from February 17, 2017.)
June 1, 2022 | CHPT, Daily JAM, Volatility |
Yesterday, May 31, after the close electric-vehicle-charging company ChargePoint Holdings (CHPT) reported a huge jump in revenue–way above Wall Street and management projections–but a big miss on earnings. Today, June 1, the shares finished down 2.66%. Sales for the fiscal first quarter of 2023 came to $81.6 million. The Wall Street consensus projection called for $75.7 million. Management had guided investors to expect $72 million to $77 million for the quarter. In the first fiscal quarter of 2022, revenue was $40.51 million. That’s a year over year revenue growth rate of 101% But…
May 31, 2022 | Daily JAM, Millennial, Top 50 Stocks, TSM |
On May 31 I made Taiwan Semiconductor Manufacturing (TSM) the first pick in my new Special Report: Fundamentals are back, Baby! 5 Fundamental Value Picks. The stock is already a member of my long-term 50 Stocks Portfolio (where it is up 98.75% from my October 7, 2019 buy as of the close on May 31). On June 1 I will add it to my Millennial Portfolio (for investors with more time than money).
May 31, 2022 | Daily JAM, Long Term, Millennial, Special Reports, Top 50 Stocks, TSM |
There are bargains in this market. But how do you find them? Not, clearly, by looking to see what is cheaper than it was. The fear that’s stopping so many investors from loading up the truck now on Nvidia or Disney or Microsoft or Johnson Controls–all stocks that I really, really like for the long term–is that today’s “cheap” stocks will be tomorrow’s even “cheaper” stocks. So it’s time to dig into your investor’s toolbox and dust off those tried and true techniques for using company fundamentals to figure out the value of a stock. And for separating the real values in this sell off from those cheap stocks on the road to being cheaper.
May 25, 2022 | Daily JAM, Millennial, NVDA, Top 50 Stocks |
Nvidia (NVDA) reported fiscal first quarter 2022 earnings after the after the bell close today, Wednesday, May 25, of $1.36 a share against Wall Street projections of $1.30. Revenue of $8.29 billion beat projections of $8.10 billion. Revenue fromm the data center unit was $3.75 billion, topping estimates of $3.63 billion. Game revenue of $3.62 billion beat expectations for $3.53 billion.
But the company guided lower for the fiscal second quarter with revenue of just $8.1 billion against Wall Street projection of $8.4 billings. The war in Ukraine and COVID lockdowns in Chia will cost the company $500 million in revenue, the company said.
In after-hours trading Nvidia shares were down 6.62% as of 5 p.m. today, May 25.
May 24, 2022 | ALB, Daily JAM, Jubak Picks, Top 50 Stocks |
Lithium producer Albemarle (ALB) has been staging a very important experiment over the last few days. Here’s the question being tested: The overall market is in a serious decline–a bear or almost bear market depending on what index you track–that looks likely to go on for a while. In this environment can any individual stock deliver enough good news to buck the market trend and post gains for more than a day or two? On May 4 Albemarle raised its sales guidance for 2022 when it reported first quarter earnings. And then Monday, May 23, the company raised estimates again to a range of $5.8 billion to $6.2 billion. That was up from a previous estimated range of $5.2 billion to $5.6 billion. In total, the midpoint for the company’s estimate of 2022 revenue 38% higher than it was a month ago. And what happened to the shares?
May 24, 2022 | Daily JAM, DIS, Dividend Income, DUK, Jubak Picks, KO, MRK, PEP, PFE, Top 50 Stocks, XLU |
Of course, there’s nothing even vaguely normal about a day when a stock falls 43% and takes much of the market with it.Snap’s (SNAP) plunge did take some surprising candidates along for the ride. Tesla (TSLA) dropped 6.93% on yet more bad news on production in its Shanghai factory. Disney (DIS) fell 4.01% just because. SentinelOne (S) was lower by 8.11% since everyone knows that cybersecurity stocks are just a fad.
But on balance, on the green side (and yes, there was a green side to the market) the market did what markets are supposed to do in the face of bad news and an increase in fear.
May 23, 2022 | Daily JAM, Jubak Picks, NVDA, Top 50 Stocks |
The most important indicator of market direction and sentiment this week will be Nvidia’s (NVDA) earnings report for the quarter that ended in April on Wednesday, May 25\ Wall Street analysts and expect earnings of $1.09 a share. Last year Nvidia reported 78 cents for the quarter so hitting the analyst target this year would represented year over year earnings growth of 39.7% That kind of earnings growth is what investors expect from a stock trading at 43.76 times trailing 12-month earnings per share. In a normal market I’d expect traders to bid up Nvidia shares and Call options ahead of earnings
