Today Albemarle (ALB) announced that it would sell $1.75 billion in ADRs to fund capital spending during the collapse in lithium prices. The offer will be for a mandatory convertible preferred with a 7% to 7.5% coupon. The plunge is a reaction to the company having to do a capital raise at the bottom for the lithium market
Going into Wednesday earnings, Nvidia was the third largest short on the U.S market with about $18.3 billion in shares borrowed and then sold short, according to S3 Partners. Those short sellers wound up with $3 billion in paper loses after the stock soared Thursday on a big earnings and revenue beat.
Well, optimistic analysts just weren’t optimistic enough about Nvidia’s (NVDA) fourth quarter 2023 earnings. The company reported adjusted earnings of $5.16 per share on revenue of $22.1 billion. Analysts were expecting earnings of $4.60 a share and revenue of $20.4 billion.
Can you hear the barkers yelling to the crowd? It’s Wall Street analysts rushing to raise their target prices for Nvidia (NVDA) ahead of next week’s quarterly earnings report. On February 21, after the close, Nvidia is expected to report earnings of $4.18 share, up from $0.65 a share in the quarter a year ago, on revenue of $20.5 billion. And even though the stock is up 47% for 2024 as of the February 15 close and up 219% for the last year, Wall Street analysts are rushing to increase their target price on the shares.
My 10 Penny Stock Homeruns Pick #5: Vestas Wind Systems (VWDRY).
Technically, the Vestas Wind Systems ADR (VWDRY) isn’t a penny stock. By the strict definition, a penny stock sells for $5 or less and the Vestas ADR closed on $9.06 today, February 14. But I included Vestas in my previous penny stock list back on July 11, 2022, even though the stock closed at $7.80 that day. With the company reporting a return to profitability for 2023 in its fourth quarter earnings report released today, I think Vestas has (finally) turned the corner. And, frankly, I just don’t want drop it from this list just as things get good again for the company and its investors. (Vestas is a member of my Jubak’s Picks Portfolio. The position is up 65.6% since initiation on March 4, 2019.) Tomorrow, February 15, I’ll also add Vestas to my long-term 50 Stocks Portfolio.
This one is very simple. When the price of lithium rebounds, high-quality low-cost lithium producers will see the revenue roll in. That’s why I’d got the world’s leading lithium-producer Albemarle (ALB) in my long-term 50 Stock Portfolio. But a smaller, high-quality, low-cost producer like Australia’s Pilbara Minerals will show gains even higher than Albemarle since the current price of $2.29 a share comes close to discounting the company’s survival.
It is perhaps too early to draw meaningful conclusions, but Microsoft’s failure to jump in after-hours trading on better than expected earnings sure seems like more evidence that this is a market priced to perfection.
After the close yesterday, Visa (V) reported earnings of $2.41 a share (after adjusting for one-time items) for the December 2023 quarter. (That the company’s fiscal first quarter.) Analysts had been looking for $2.34 a share in adjusted earnings. Revenue grew 8.8% to $8.63 billion, again beating analyst forecasts for $8.55 billion in revenue. Visa said payments volume grew 8%, and that its processed transactions rose 9% in the period. And yet the stock was down $4.70 a share, or 1.72%, to $267.91 at the close today, Friday, January 26. Why?
Shares of ASML Holding (ASML) closed up 8.85% today after the company reported record orders for its chip-making equipment in the fourth quarter. ASML sales grew 12.5% year-over-year. And orders more than tripled from the third-quarter. I added shares of ASML Holding to my long-term 50 Stocks Portfolio on December 12, 2023. The position is up 17.6% since then as of the close on January 24.
It’s important to remember exactly how young artificial intelligence is as a market product. I certainly don’t think it’s possible to project the long-term winners on either the software or hardware side. Remember the days when Apple (AAPL) thought it was worth buying a Super Bowl add to urge consumers to smash the IBM PC empire? But I do think the hardware road map is petty clear for the next two to three years. Which is why I’m adding shares of Advanced Micro Devices to my portfolios tomorrow.
GREATER Growth Stock Pick #9: Palo Alto Networks (PANW). I’m not going to try to convince you that shares of cyber-security favorite Palo Alto Networks are a value stock. It trades at 166 times trialing 12-month earnings per share. And I’m not going to try to convince you that this is an undiscovered stock that’s going to sneak up on anyone. The shares was up 111% in 2023. (The stock has been a member of my long-term 50 Stocks Portfolio since July 17, 2019. In that time the position is up 296%.) But remember the point of this Special Report–I’m looking for great growth stocks, which aren’t cheap in this market by any means, with catalysts in the next year or two that will push growth higher. And here I think Palo Alto Systems rings the bell three times over.
GREATER Growth Stock Pick #8: BYD (BYDDF). I know; I know. What’s a Chinese stock doing on this list? It’s here because BYD, not Tesla (TSLA) is the big growth story in electric vehicles and not just for this month–but for years. And because I can see two catalysts that are about to power this stock higher. Morningstar calculates that BYD is 20% undervalued right now. Because this is a China stock we’ll need to take a deep look at valuation later in this post. But first, the growth story.
