The FANG stocks are some of the hottest stocks in the market YTD. The Young Research Bubble Basket which includes the FANGs plus Tesla is up 39% in 2017. Here, Bloomberg points out that even though the FANGs are widely recognized as a crowded trade and overpriced segment of the market, short interest is unusually low. When it comes to calling the FANG stocks a bubble, few are willing to put their money where their mouth is. A number of people have pointed out that shares of some of the most dominant technology companies, including Facebook Inc., Apple Inc., Amazon.com Inc., Netflix Inc. … [Read more...]
Fire, Corruption, and the Best Profits Ever
Despite a year of scandal, Samsung has just recorded is highest quarterly profits ever. Driving Samsung's profits are sales of new chips and screens, even to competitors like Apple. Timothy W. Martin and MinJung Kim report: America knows Samsung by its consumer brands. But the company owes its fortunes to its less visible but increasingly dominant position in the memory chips and screens from which smartphones are built. Its dominance in those components is so pronounced that rivals like Apple have few other places to turn. Components now represent about 70% of the company’s overall … [Read more...]
Tech Stocks Top DotCom Highs, Finally
After nine straight days of gains, the S&P 500's info-tech sector index has reached a new record, beating its previous peak set in 2000 just before the dotcom bubble burst. It has taken 17 years for tech investors to get back to zero if they were invested in 2000. Leading the charge have been Apple and Google. Today Apple's market cap is nearing $800 billion, and Google's is nearing the $700 billion threshold. Driving the sector have been a relatively low number of stocks, frequently referred to here on Youngresearch.com as the "Bubble Basket." It hasn't just been the info-tech … [Read more...]
Portfolio Strategy: Looking Past the End of the Bull
The current bull market which started in March of 2009 is now the third longest bull market on record. I’m using the Dow as the yardstick for bull and bear markets. Bear markets are defined as a 20% drop from a prior peak. The fuel that has kept this bull running is of course the most aggressive and prolonged use of monetary stimulus in U.S., and probably world, history. How do stocks perform following historic bull markets? The chart below shows the four longest Dow bull markets on record. The table on the chart shows the subsequent ten year capital gain performance from the day prior to … [Read more...]
Are the Bulls Right about Netflix?
Netflix reported second quarter results earlier this week that “blew away” expectations according to many financial news outlets. It wasn’t a beat on earnings, which actually missed expectations, or a beat on revenue which was inline with expectations. Subscriptions are the metric Netflix investors care most about. Netflix's beat on subscriptions pushed the shares up almost 14% for an increase in market value of about $10 billion. The jump in Netflix shares yesterday pulled the shares of the rest of the FANG group higher with it. Young Research’s Bubble Basket is now back near its … [Read more...]
Famous Last Words: “This Time It’s Different.”
Howard Gold, a columnist at MarketWatch, explains that Millennials are making the same investing mistakes their parents made. But rather than making those mistakes on a clunky old desktop, they're making them on their smartphones. Millennials' favorite stocks are those without dividends, and instead of trading for value, they're trading the stocks of companies they're familiar with. According to TD Ameritrade, the five stocks most owned by its millennial customers are—wait for it—Apple Inc. AAPL, +0.26% Facebook Inc. FB, +2.39% Amazon.com Inc. AMZN, +1.35% Tesla Inc. TSLA, +1.03% and … [Read more...]
Blue Apron IPO Flounders
"After 2 months of Blue Apron @ $10/serving, customers can always return to the Trader Joe's freezer case, and a nice social experience, @ $2.79 per serving,” writes a commenter at WSJ re: food delivery IPO from Blue Apron which looks to be having trouble attracting investors. The company had hoped for shares to sell for between $15 and $17. Instead they are priced for $10. The Wall Street Journal reports that investors may have been worried about profitability, a welcome change from recent history. The outcome is far from what Blue Apron anticipated when the company launched its … [Read more...]
Blue Apron IPO Brings Meal Prep Play to the NYSE
Blue Apron is a company that sells meal prep kits delivered to your door. Rather than shopping for food and then deciding what recipe you can make with what you've got on hand, Blue Apron and other meal prep services will sell you a recipe and the ingredients for it. The company describes its service like this: Blue Apron is a fresh ingredient and recipe delivery service that helps chefs of all levels cook incredible meals at home. We take care of the menu planning and shopping (providing you with fresh, locally sourced ingredients in pre-measured quantities), so all you have to do is cook … [Read more...]
Should You Buy Apple Stock?
The Wall Street Journal ran a feature on Apple yesterday which included the chart below. The article highlighted the transformation of Apple from a purveyor of personal computers to one of the largest mobile phone manufacturer in the world. The chart shows the percentage of revenue that comes from various apple products. As you can clearly see, in the span of ten years Apple has completely transformed itself into a company almost entirely reliant on mobile phones. Apple should be applauded for its success over the last decade, but if there is any industry where the past is rarely … [Read more...]
China Stocks Enter the MSCI Emerging Market Indices
For four years MSCI has talked with Chinese regulators about including Chinese "A-shares" in its Emerging Markets index. Until now the restrictions on access to Chinese markets have prevented MSCI from including the shares. But yesterday MSCI announced that it would include Chinese shares in the Emerging Markets index, with a selection of 222 large cap stocks making the cut. Reuters reports: The bulk of the shares will be financial and industrial companies, many state-owned. According to Credit Suisse, among the 222 stocks on the simulated list of constituents for the new proposal of China … [Read more...]
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