Best Oversold Stocks to Buy Now for May 2022

Markets and Big Money in the Last Six Months

See, I like to look at data. My research firm, MAPsignals, tracks the Big Money because we believe that’s what tends to move markets. Right now, there’s tons of selling (red bars), but making matters worse is the lack of buying (blue bars):

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When red bars run rampant, great names can get crushed. They can become what I call “oversold.” When this happens, even the best stocks can get caught in the selling rush – and that can mean opportunity.

Two sectors that have been getting slammed for a while are financials and technology. So, this is where I’m going to look for the best oversold stocks. These areas beaten down right now, but they tend to be big growers historically, so it’s time to be opportunistic.

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There are some great stocks being sold right now in these sectors. They’re fundamentally sound companies with good histories, which means discounts for long-term investors. Here are five stocks seeing lots of red that appear to be near-term oversold: FB, AAPL, GRMN, GOOGL, and V.

Meta Platforms Inc. (FB) Analysis

Up first is Meta, formerly Facebook, which is the social media and advertising heavyweight.

Even though great companies’ stocks can be volatile, like FB over the past year, they’re worthy of attention, especially on pullbacks. Check out Meta:

  • Year-to-date month performance (-37.0%)
  • Recent Big Money sell signals

To show you what our Big Money signals look like on a stock, have a look at all the buys and sells in FB over the past year:

Looking more broadly, Meta has been a high-quality stock for years. The blue bars in the chart below show when FB was a high-ranking stock likely being bought by a Big Money player, according to MAPsignals. When you see a lot of blue, it can be very bullish:

Source: www.MAPsignals.com

Those blue signals indicate Big Money buying and solid fundamentals. As you can see, Meta’s sales growth and earnings outlook have been strong, making it worthy of attention:

  • 3-year sales growth rate (+28.5%)
  • 2-year vs. 1-year EPS growth rate estimate (+18.5%)

Apple Inc. (AAPL) Analysis

Next up is Apple, the technology giant famous for its iPhones, Mac computers, and more.

Check out these technicals for AAPL:

  • Year-to-date performance (-17.0%)
  • Recent Big Money sell signals

It’s been getting bought and sold, but the uptrend is undeniable:

Now let’s look long-term. Below are the top buy signals for Apple since 2010. The Big Money has been on it for a while:

Source: www.MAPsignals.com

Let’s look under the hood. As you can see, Apple has had rock-solid, double-digit growth in earnings and owns a nice profit margin:

  • 3-year EPS growth rate (+67.2%)
  • Profit margin (+25.9%)

Garmin Ltd. (GRMN) Analysis

Another growth name is Garmin, the navigation company offering global positioning system and fitness solutions across a wide range of customers.

Strong candidates for growth usually have Big Money buying the shares. Garmin has historically had that. But recently, it’s full of red, which could be an opportunity:

  • Year-to-date performance (-18.0%)
  • Historical Big Money signals

Below are the blue Big Money signals GRMN has made since 2014. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s dig deeper. Earnings growth for Garmin has been impressive. I expect more of the same in the coming years. Its tiny debt is also encouraging for the future.

  • 3-year EPS growth rate (+16.1%)
  • Debt/equity ratio (1.5%)

Alphabet Inc. Class A (GOOGL) Analysis

Number four on the list is Alphabet, which is a huge tech firm and the parent company of Google.

Here are the technicals important to me:

  • 1-month performance (-16.3%)
  • Historical Big Money signals

Since last winter it’s been on a steep downward slide, with more Big Money selling than buying:

But Alphabet is a Big Money favorite. Below are the Big Money Top 20 buy signals for GOOGL since 2004:

Source: www.MAPsignals.com

Let’s look under the hood. Despite the price slide, Alphabet sales have jumped quite a bit, and earnings are expected to keep growing:

  • 3-year sales growth rate (+24.0%)
  • 2-year vs. 1-year EPS growth rate estimate (+19.2%)

Visa Inc. (V) Analysis

Our last growth candidate is Visa, the enormous credit card and payment company. Like most financial stocks, it’s not had the easiest year:

Check out these technicals:

  • 1-month performance (-7.9%)
  • Historical Big Money signals

But V is a high-quality stock since it’s made the MAPsignals Top 20 report. As you can see below, it’s been a Big Money favorite for years. Right now, it’s on a bit of a pullback and could be an opportunity:

Source: www.MAPsignals.com

Now let’s look below the surface a bit. Sales have been growing, it’s highly profitable, and the earnings outlook is solid:

  • 1-year sales growth rate (+10.3%)
  • Profit margin (+49.8%)
  • 2-year vs. 1-year EPS growth estimate (+16.9%)

Bottom Line and Explanatory Video

 

FB, AAPL, GRMN, GOOGL, and V represent the top oversold stocks for May 2022. They’ve been sold a lot lately…perhaps too much. Strong, fundamentally-sound stocks seeing near-term sell signals are worthy of extra attention because of their long-term potential.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in GRMN, GOOGL, and V in personal and managed accounts.

Contact

https://mapsignals.com/contact/

Visa Is Up By 8%, Here Is Why

Key Insights

  • Visa beats analyst estimates on both earnings and revenue. 
  • The company expects that robust travel demand will boost its results. 
  • General market weakness is the main risk for Visa stock. 

Visa Rallies After Strong Quarterly Report

Shares of Visa gained strong upside momentum after the company released  its fiscal Q2 2022 results. Visa reported revenue of $7.2 billion and adjusted earnings of $1.79 per share, beating analyst estimates on both earnings and revenue.

Visa noted that it “had solid growth in most countries around the globe and across all elements of our business, with revenue growth of over 20% in consumer payments, new flows and value added services”.

The company believes that additional growth will be driven by the robust travel recovery. It should be noted that expectations of such a recovery have already provided significant support to airline stocks, which are very sensitive to travel demand outlook.

What’s Next For Visa Stock?

Analysts expect that Visa will report earnings of $7.06 per share in the current fiscal year and earnings of $8.33 per share in the next fiscal year, so the stock is trading at 26 forward P/E.

This is not cheap, but traders are ready to pay a premium for Visa’s leading position in the payments market. Analyst estimates have been moving lower in recent weeks, but this trend could change after the release of the better-than-expected quarterly report.

I’d also note that concerns that established leaders like Visa and Mastercard could be displaced by new companies have subsided. Stocks like Affirm , which provides BNPL (buy now, pay later) services, have crashed from their recent highs, and it looks that some capital has flown into the stocks of established players.

While Visa’s performance was strong, traders should note that current valuation levels do not provide a material margin of safety. In case the general market pullback continues, Visa stock will move closer to recent lows.

For a look at all of today’s economic events, check out our economic calendar.

Crypto.Com Commits to a Four-Year Crypto Research Program with MIT

Key Insights:

  • The platform views the Initiative as critical to building a sustainable blockchain ecosystem.
  • Crypto.com has a goal of becoming a top 20 brand within the next 3-5 years.
  • Cronos (CRO) technical indicators are bearish, with CRO sitting below the 50-day EMA.

Founded in 2016, Crypto.com provides users with more than just a crypto exchange. The platform offers multiple features enabling users to earn, spend, and borrow against cryptos. Cronos is the platform’s native token.

The exchange has enjoyed plenty of crypto news airtime in recent months. Aiming to become a top 20 global brand within 3-5 years, Crypto.com has been on a marketing blitz through advertising and sponsorship deals.

Crypto.com recognizes that to build a top 20 brand, it takes more than lucrative sponsorship deals and clever advertising.

Crypto.Com Announces Support for New Acadmic Research

On Friday, Crypto.com announced it has committed to a four-year gift to the Digital Currency Initiative (DCI) at the Massachusetts Institute of Technology’s (MIT) Media Lab.

According to the announcement,

“The gift aims to support DCI’s research in the security of Bitcoin (BTC) and to support open-source development of protocols that underlie the network.”

Crypto.com went on to say,

“The gift is designed to support continuing research efforts into the stability of fee-based rewards and software to provide strong robustness and correctness guarantees.”

Crypto.com views MIT’s Digital Currency Initiative as critical to building a ‘sustainable blockchain ecosystem.’

Crypto.com Chief Operating Officer Eric Anziani said,

“We are excited to further support blockchain research across the globe with such an  esteemed institution and help accelerate the world’s safe transition to using cryptocurrencies.”

For Crypto.com, it is not the first brush with academia, which also supports a Carnegie Mellon University Secure Blockchain Initiative. Crypto.com is a member of the Blockchain Association of Singapore. The Association collaborates with corporations and universities worldwide to ‘improve blockchain technology.’

This year, Crypto.com was a platinum sponsor of the MIT Fintech Conference alongside Visa.

The platform’s native token, Cronos, currently ranks #19 on CoinMarketCap, with a market cap of $12,246m.

Cronos (CRO) Price Action

At the time of writing, CRO was up 0.07% to $0.4045.

CROUSD 230422 Daily
CRO will need to avoid sub-$0.40 to support a bullish day ahead.

Technical Indicators

CRO will need to move through the $0.4052 pivot to target the First Major Resistance Level at $0.4134. CRO would need broader crypto market support the return to $0.41 levels.

In the event of an extended rally, CRO should test the Second Major Resistance Level at $0.4225 and resistance at $0.4250. The Third Major Resistance Level sits at $0.4398.

Failure to move through the pivot would bring the First Major Support Level at $0.3961 into play.

Barring an extended sell-off throughout the day, CRO should avoid sub-$0.39. The Second Major Support Level sits at $0.3879.

CROUSD 230422 Hourly
Failure to move through the pivot would bring sub-$0.40 support into play.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. CRO currently sits below the 50-day EMA at $0.4131. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also pulled back from the 200-day EMA, a bearish signal.

A move through the 50-day EMA would bring $0.4150 into play.

CROUSD 230422 4-Hourly
CRO will need to move through the 50-day EMA to avoid another pullback.

Dogecoin Rallies As Robinhood CEO Calls It ‘Currency of the Internet’

Key Insights:

  • Robinhood’s CEO Vladimir Tenev discussed the possibilities of DOGE becoming the ‘Currency of the Internet.’
  • DOGE is noting many mentions on social platforms recently, including the effects of Elon Musk’s Twitter purchase bid.
  • Consequently, Dogecoin has been up by over 10.15% in the last four days.

Dogecoin is becoming a paragon of rags to riches of the crypto world now that people advocate for it, calling it the future. In doing so, DOGE is being established as a prime cryptocurrency and as the go-to investment vehicle for novice crypto users.

Dogecoin – The Future??!

In my opinion, no. It doesn’t deserve to be. It does not hold the potential, and the only development it is seeing today is occurring on the back of Elon Musk’s support.

But according to the CEO of Robinhood, Vladimir Tenev, Dogecoin has what it takes to become the ‘Currency of the Internet.’

In a Twitter thread, the CEO “VLAD” discussed the altcoin network’s possibilities and how it can be tapped.

The first and foremost is the transaction fees. Although DOGE already has one of the lowest fees of $0.003 as per VLAD, it would need to be significantly lesser.

Secondly, the block time of 1 minute is too long for a network that aims to establish a global presence. Instead, a 10-second block would be much more suitable to conduct faster transactions and keep miners from building competing chains, thus saving power consumption.

Furthermore, he stated that to conduct faster transactions with VISA, which clears over 650,000 TPS (Transactions Per Second), DOGE would need to increase its potential by 10000. Similarly, moving to a bigger block could also make transactions quicker on the chain.

He also addressed the concerns and criticism of DOGE, one of which discussed the lack of deflation in Dogecoin. To this, Tenev replied,

“Another criticism of DOGE is that it’s inflationary and the supply is infinite, as opposed to Bitcoin’s finite supply of 21M coins. ~5B new Doge are created every year, and the current supply is about 132B. This results in a current inflation rate of <5% – less than USD!”

Dogecoin Is Better as a Social Coin

Dogecoin has always relied on significant crypto developments to make a move in the market. Be it Elon Musk, aka DOGEFather’s promotion of crypto or a simple announcement.

But the one from yesterday truly broke the market as Elon Musk put down a $41 billion bid to buy Twitter.

After denying the Board Of Directors’ position, Elon Musk has decided to buy it off entirely and its effects to bring Twitter to the free speech standard.

And since the announcements, DOGE’s price has only been going higher as it is evident that the supporters are this cryptocurrency’s biggest strength.

Dogecoin’s price has risen by over 10% i the last few days | Source: TradingView

High Profile Names Invest $87m in Crypto Payment Firm MoonPay

Key Insights:

  • Crypto payment shop MoonPay gets the VIP seal of approval with $87m in investments.
  • Investors from the world of media & entertainment, music, and sport have invested with all eyes on Web3,
  • Earlier this year, MoonPay was in the news for purchasing NFTs for celebrity clients.

Investor interest in Web3 shows no sign of abating. Mainstream names have embraced what lies ahead, filing applications for NFT and Metaverse-related trademarks.

Digital asset platforms have also started to build investment divisions targeting Web3.

Following news of Uniswap Labs (UNI) launching Uniswap Labs Ventures to target Web3, MoonPay hit the newswires on Wednesday.

VIPs from Entertainment, Music, and Sport Invest in Moonpay

This week, MoonPay announced the investment of $87 million from high-profile names in entertainment, music, and sports.

According to today’s announcement,

“More than 60 influential figures and organizations from the worlds of music, sport, media, and entertainment have collectively invested $87m in the company.”

Big names from the world of films include Ashton Kutcher, Bruce Willis, Eva Longoria, Gal Gadot, Gwyneth Paltrow, Kate Hudson, and Matthew McConaughey.

Virtual world advocates Snoop Dogg and Justin Bieber were also among the list of high-profile investors.

MoonPay co-founder and CEO Ivan Soto-Wright said,

“Web3 is radically changing how we think about creative value. We’re on the cusp of a creative crypto renaissance, and our strategic investors are helping to lead that movement. We’re honored to work with them to help onboard the world to Web3.”

The $87m investment forms part of a $555 million Series A financing round that has funded the launch of NFT Checkout and MoonPay Concierge, which helps high-profile clients purchase NFTs.

Last November, MoonPay was in the news after raising $555 million in Series A funding to take the company’s value to $3.4bn.

MoonPay has seen plenty of media interest in recent months as interest in Web3 accelerates.

MoonPay Activity Draws Media Interest amidst a Rise in Web3 Activity

Following the launch of NFT Checkout and MoonPay Concierge, news hit the wires of MoonPay purchasing CryptoPunk NFTs.

In January, FX Empire reported MoonPay purchasing CryptoPunk #2681 for 900 ETH, equivalent to approximately $3m, at the time of purchase.

This month, MoonPay announced a new partnership with OpenSea, which removed the need for NFT buyers to purchase crypto to make payments. OpenSea will use MoonPay’s NFT Checkout to give OpenSea users better access to NFTs. As a result of the partnership, users can buy OpenSea NFTs with Mastercard, Visa, Apple Pay, and Google Pay.

What is MoonPay?

Launched in 2019, MoonPay supports the buying and selling of cryptos. Users can seamlessly exchange cryptos and fiat using credit and debit cards and payment platforms such as Apple Pay and Google Pay. In addition to cryptocurrencies, MoonPay has also moved into the NFT space in a bid to seize market share, as it did in the cryptocurrency space.

eToro to Make an Entry In the Blue-Chip NFT Space With $20M Fund

Key Insights:

  • eToro has launched a $20 million fund to purchase blue-chip NFTs.
  • The fund will be deployed through the company’s new ‘eToro.art’ platform.
  • The trading firm says it will be ‘one of the leading NFT collectors globally’ after the fund’s launch.

The Israeli social trading and multi-asset brokerage company eToro, is getting into the non-fungible token (NFT) game with a $20 million fund launch.

Blue-chip NFT Craze

A decade ago, the idea of million-dollar JPEGs would be hilarious. Still, now everyone wants an animated monkey NFT that could make them a millionaire. That’s how blue-chip NFTs have carved a niche for themselves.

In the traditional finance market, a ‘blue chip’ refers to a company that’s considered a reliable investment. A few NFTs that have skyrocketed in price, like Cryptopunks or BAYC, can be called blue-chip NFTs. Market watchers have started calling these projects’ blue-chip NFTs’ to believe they will retain their high valuations for a long time to come.

With the NFT fever rising, every collector aims to find a project that could be a blue-chip NFT. However, it isn’t easy to find the right project early. Intending to purchase blue-chip NFTs and support emerging projects in the space, eToro announced the launch of its $20 million fund on Thursday.

eToro’s Entry in NFTs

According to a press release by eToro, the fund allocated will be deployed through the company’s newly launched ‘eToro.art’ platform. The platform aims to bring the ‘fun and community’ of the NFT industry to its 27 million users.

Furthermore, eToro claims that it will be ‘one of the leading NFT collectors in the world’ after its funds are fully deployed. The eToro.art platform has a collection that already includes NFTs from projects like Bored Ape Yacht Club, CryptoPunks and World of Women, and others.

Yoni Assia, Co-Founder, and CEO at eToro said,

“As a company with one eye constantly on ‘what’s next,’ eToro sees huge potential in the metaverse and a range of new digital assets.”

Of late, more prominent brands are circling towards NFTs. Notably, since Visa purchased CryptoPunk in August 2021, high-profile names have followed its lead. KPMG Canada bought a World of Women NFT in February. At the same time, Universal Music Group constructed an NFT band around a Bored Ape figurehead.

OpenSea to Allow NFT Purchases with Bank Cards, Apple Pay, and Google Pay

Key Insights:

  • OpenSea partners with MoonPay to allow NFT purchases with bank cards, Apple Pay, and Google Pay.
  • Trading volumes have retreated since January’s record high, with rising crypto prices of influence.
  • More diversified NFT payment options could decouple the NFT marketplace from the crypto market.

OpenSea has seen NFT trading volumes retreat since January’s all-time highs. The fall in trading volumes has coincided with an upward trend in cryptocurrency prices.

On Friday, we reported recent monthly trading volume trends and the root causes of the marked decline in volumes. A link to the value of cryptocurrencies is evident when considering the trend in NFT trading volumes.

Rising crypto prices translate into more expensive NFTs, where NFT prices are crypto-based. In March, ETH rose by 12.4% and 8.6% in February.

A shift away from crypto pricing and payment could decouple the inverse relationship between NFTs and the crypto market.

OpenSea Partners with MoonPay to Allow Bank Card Payments

On Friday, MoonPay announced a new partnership with OpenSea. OpenSea will use MoonPay’s NFT Checkout to give OpenSea users better access to NFTs.

As per Friday’s announcement,

“The integration, which will be rolled out in phases, allows OpenSea users to easily purchase an NFT using a debit or credit card, sidestepping the need to first acquire cryptocurrency. This simplifies the purchasing process and opens up the marketplace to a wider customer base.”

MoonPay added,

“For the first time, OpenSea customers will be able to purchase NFTs using a card through MoonPay’s NFT Checkout. Collectors can pay directly with major payment methods like MasterCard, Visa, Apple Pay, and Google Pay.”

MoonPay’s co-founder and CEO said,

“MoonPay’s mission is to unlock ownership and onboard the world to Web3. To be successful, we have to make the process as simple as possible. MoonPay has done that for crypto. And now, in partnership with OpenSea, we’re doing it for NFTs as well.”

On Twitter, MoonPay tweeted that OpenSea users will soon be able to buy NFTs with Visa, Mastercard, Apple Pay, Google Play, and more.

NFT Marketplaces Partner with Payment Platforms to Broaden Customer Base

In January, MoonPay announced the launch of its NFT Checkout service.

MoonPay’s deal with OpenSea follows a partnership with NFT marketplace Nifty Gateway, an OpenSea competitor.

This year, Coinbase will also be entering the NFT space with the launch of CoinbaseNFT. Earlier this month, FX Empire reported that Coinbase met with more than one hundred creators looking to expedite the launch of the NFT marketplace.

In January, Coinbase announced a deal with Mastercard to allow users to buy NFTs using Mastercard credit and debit cards.

NFT Regulatory Scrutiny Likely to Intensify Near-Term

As more NFT marketplaces forge partnerships with payment providers, regulatory scrutiny could become a factor.

Since the start of the year, the NFT space has seen a marked increase in illicit activity. Plagiarism, NFT hacks, wash trading, money laundering, and rug pulls are some of the many issues that the NFT space contends with today.

Allowing users to purchase NFTs with credit or debit cards will likely force regulators to introduce measures to protect investors. Such an outcome could initially hurt the NFT marketplace before demand returns.

This week, EU lawmakers voted in favor of KYC for ‘private crypto wallets’ that could extend to crypto exchanges. Regulators may well target the NFT space next.

Best Growth Stocks to Buy Now for March 2022

At MAPsignals, we follow the Big Money. Oftentimes, that can be institutional activity. We follow Big Money because it tends to produce outlier stocks and drive markets. As of late, Big Money is selling. In fact, March 7, 2022, was the biggest selling day since the pandemic lows:

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The best outlier stocks (regardless of market cap) have three common traits: strong fundamentals, great technicals, and a history of Big Money activity in the shares. At MAPsignals, we believe Big Money trading can alert you to the forward fundamental picture of a stock. And we want the odds on our side when looking for the highest quality stocks.

Focusing on quality is critical when markets are under pressure. Using the MAPsignals database, we’ve filtered for various quality metrics to identify five ideas for potential long-term investment: AMZN, ALGN, V, DPZ, & NVDA.

Up first is Amazon.com, Inc. (AMZN), the online retail and technology behemoth.

Even though great stocks can be volatile, like AMZN this year, these companies are worthy of attention, especially when they have huge growing business segments, like Amazon Web Services. Check out AMZN:

  • 1-month performance (-15.7%)
  • Historical Big Money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals AMZN has made over time in the chart below. Blue bars are showing it was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

Source: www.MAPsignals.com

But, what about fundamentals? As you can see, AMZN’s sales and earnings have been strong, and its earnings growth estimate is looking good:

  • 1-year sales growth rate (+21.7%)
  • 3-year EPS growth rate (+50.0%)
  • 2-year vs. 1-year EPS growth estimate (+47.9%)

Next up is Align Technology, Inc. (ALGN), the makers of the popular Invisalign tooth straightening system.

Check out these technicals for ALGN:

  • 1-month performance (-19.5%)
  • Historical Big Money signals

Let’s look long-term. These are the top buy signals Align Technology has made since 2016. The Big Money love is abundant, which makes this stock an outlier:

Source: www.MAPsignals.com

Now let’s dive deeper. As you can see, Align Technology has had double-digit growth in sales and earnings:

  • 3-year sales growth rate (+28.3%)
  • 3-year EPS growth rate (+86.4%)

The third growth stock idea is Visa Inc. (V), the credit card and payments technology company.

Strong candidates for growth usually have Big Money buying the shares. Visa has that. Also, the stock has fallen recently:

  • 1-month performance (-15.9%)
  • Historical Big Money signals

Below are the Big Money signals Visa has made since 2016. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s look under the hood. Visa’s sales growth is solid. And given its strong market presence, growth prospects, and profitability, I expect more growth in the coming years:

  • 1-year sales growth rate (+10.3%)
  • 2-year vs. 1-year EPS growth estimate (+18.3%)
  • Profit margin (+49.8%)

Number four on the list is a long-time Big Money favorite, Domino’s Pizza, Inc. (DPZ), which is the largest pizza company in the world.

Here are the technicals important to me:

  • YTD performance (-30.0%)
  • Historical Big Money signals

It’s one of the most successful stocks out there. Below are the Top 20 Big Money buy signals for DPZ since 2011:

Source: www.MAPsignals.com

Let’s examine a bit more. Domino’s has been growing earnings nicely and expects that to continue, likely due to its profit margin:

  • 3-year EPS growth rate (+16.9%)
  • 2-year vs. 1-year EPS growth estimate (+15.4%)
  • Profit margin (+11.7%)

Our last growth candidate is in the semiconductor industry, NVDIA Corporation (NVDA). Its chips focus on graphics and networking, both of which are resource-intensive activities.

Check out these technicals:

  • YTD performance (-27.0%)
  • Historical Big Money signals

NVDIA is more than 100 days from its 52-week high, but believe me, it’s still a high-quality stock. It’s made the MAPsignals Top 20 report many times since 2015:

Source: www.MAPsignals.com

Now look under the hood. NVDIA has been growing sales and earnings at big rates, and its profitability is quite good too:

  • 1-year sales growth rate (+61.4%)
  • 3-year EPS growth rate (+47.6%)
  • Profit margin (+36.2%)

The Bottom Line

AMZN, ALGN, V, DPZ, & NVDA represent top growth stocks to buy now for March 2022. Strong fundamentals and historical Big Money buy signals make these stocks worthy of extra attention for long-term investors, despite recent dips.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in V and DPZ in managed accounts.

Contact:

https://mapsignals.com/contact/

Best Stocks, Crypto, and ETFs to Watch – Visa, Dollar Tree, Bitcoin in Focus

Stocks

Visa Inc. (V) and Mastercard Inc. (MA) sold off last week, battered by projected revenue losses as a result of Russian sanctions. Both companies suspended operations in the rogue state over the weekend, setting the stage for additional losses when equity markets open on Monday. The stocks have lost more than 15% in recent weeks and are testing December 2021 lows that may not hold, given additional losses from reduced international travel, despite the pandemic’s retreat.

ABM Industries Inc. (ABM) is New York-based mid cap that provides cleaning and management services for large buildings in the United States and United Kingdom. That’s good news in a troubled world that’s punishing blue chips with exposure to mainland Europe and Russia. The stock broke out above 4-year resistance in early 2021 and posted an all-time high at 55.48 one year ago, ahead of a correction that bounced at breakout support in December. It’s now rallied into a trendline of lower highs, just in time for Thursday’s earnings report.

Dollar Tree Inc. (DLTR) incurred the wrath of the mainstream media after 400 stores were closed due to rat infestations. However, the stock has risen to the top of the Nasdaq-100 performance list at the same time, highlighting domestic exposure in a US economy that will suffer as a result of war in Europe. The stock rallied within a point of November 2021’s all-time high after a mixed earnings report on Wednesday and could breakout in coming weeks.

ETFs

iShares Dow Jones US Aerospace and Defensive Index ETF (ITA) broke out above an 8-month trendline of lower highs one week ago and reversed near the 2021 high at 113.13. A 19% surge in Lockheed Martin Corp (LMT) underpinned the uptick while Boeing Co.’s (BA) 18.53% weighting kept a lid on gains because it’s losing ground due to Russian exposure and the war’s economic impact. However, half of BA revenue is booked through defense applications that will generate windfall profits in coming years.

Crypto

Bitcoin (BTC) and other cryptocurrencies have disappointed long-side traders since the outbreak of the war, with a quick buying spike consumed by an immediate decline that now threatens to test and break January and February lows. The digital currency footprint hasn’t been heavy enough to mark an important funding source during the conflict while physical commodities, including gold and silver, have posted impressive gains.

Catch up on the latest price action with our new ETF performance breakdown.

 Disclosure: the author held Lockheed-Martin, Aerospace & Gold ETFs, Boeing, and Visa in family accounts at the time of publication. 

Who Will Be the Winners – and Losers – of a Digital Currency Revolution?

Key Insights

  • Some private-sector firms like Visa and Mastercard think they’ve prepared for CBDCs
  • Several Asia-based firms are already working on CBDC solutions with central banks
  • Commercial banks and crypto operators could feel the brunt of CBDC rollouts

Crypto and fintech are playing an increasingly large role in the lives of millions of people the world over – and central banks don’t like it one bit.

Their response to the fact that cryptocurrencies and digital payment solutions have exposed conventional remittance and cross-border transaction systems as slow, sluggish, expensive, and antiquated has been almost universal. It’s time, they have realized, to go digital.

The central bank digital currency (CBDC) paradigm is still something of a theoretical notion rather than a concrete reality in most parts of the world. But that picture is likely to change in the next few years, with central banks now looking to launch their own digital coins and bodies like the IMF championing their cause.

If China’s digital yuan rolls out – as expected – this year, the race could well be on to see which country is the first to follow Beijing’s lead.

Who would stand to benefit the most if CBDCs become commonplace in the future? And who would be in line to suffer the most from digital fiat issuance? It’s time to find out.

Potential Victors

Many companies have pinned their hopes on becoming early adopters in the new digital currency paradigm.

Some have invested small fortunes on CBDC technology – quite a leap of faith, considering nobody really knows quite what a CBDC would actually look like, what IT solutions it would make use of, and if it would really take off.

Few central banks in the world have fully committed to issuance, too – although the somewhat panicky speed of their pilot projects indicates that they have accepted that CBDC rollouts will one day become an inevitability.

Rather than lose more ground to crypto innovators, most are now either testing coins or exploring means of creating digital fiats with expert advisors.

In the private sector, this has been duly noted by the likes of Visa and Mastercard, who have already created CBDC platforms – and clearly have no intention of being bit-part players in the CBDC revolution.

Last month, Visa announced a partnership deal with Consensys that will allow Visa users to link their cards or digital wallets to CBDC networks and pay with a digital token anywhere Visa is accepted as a form of payment.

Visa’s biggest rival Mastercard has also been working on its own solutions, including a proprietary virtual testing platform for central banks to evaluate CBDC use cases and explore designs, as well as a card linked with one of the world’s only fully rolled out CBDC, the Bahamian sand dollar.

Both firms are continuing to invest and explore CBDC solutions, but they are not alone. Some private-sector firms are working directly with central banks on their pilots – and even issuances.

These include Japan’s Soramitsu, which worked directly with the Cambodian central bank on its own CBDC – and has since said it is “speaking with other” central banks elsewhere in the world about similar projects.

In South Korea, a consortium headed by the tech giant Kakao and comprising arms of the electronics behemoth Samsung is currently piloting the Bank of Korea (BOK)’s CBDC in tests that should be complete by the end of the first half of this year.

This should give them a huge head start in the CBDC game – although Kakao subsidiaries have been working on CBDC-related projects for many months in preparation.

Crucially, the BOK’s pilot CBDC runs on the Klaytn blockchain protocol, developed by the Kakao subsidiary GroundX. So if the BOK decides to use Klaytn, its CBDC’s destiny will be tied to that of the network.

Other South Korean tech titans are also closely linked. For instance, the Klaytn Governance Council comprises LG Electronics and another LG Group subsidiary. In addition, LG’s tech services arm LG CNS is also working on CBDC solutions – and last year launched a CBDC platform in conjunction with Shinhan, one of South Korea’s biggest commercial banks.

The BOK pilot is also significant in that it has seen the coin tested on Samsung mobile devices – with Apple edged out of the picture. This could give Samsung another edge, which is already trying to beef up its smartphone-based digital wallet solutions.

Some central banks, including the Bank of Israel, are looking to the Ethereum blockchain network for answers – which could mean that companies that work closely with Ethereum (such as the aforementioned Consensys) will likely play a key role in adoption drives.

As many crypto developers (think NFTs and many coin issuances, for example) seem to gravitate toward Ethereum naturally, there is cause to suspect that companies that manage to create a bridge between this protocol and CBDCs could well be on to a winner.

Ethereum developers, as well as the developers of rival protocols like Solana and Cardano, could be another group that ends up on the “winning side” of a fast-paced CBDC adoption revolution.

And Who Might Lose Out?

Who would stand to suffer the most in the event of an adoption drive? The obvious target is crypto and crypto firms. A quick look at China proves that central banks clearly do not like the idea of having to compete with decentralized competitors that they cannot bring to heel quickly. Outlawing crypto, mining, and exchanges would quickly ensure that the only horse in the race belongs to the central bank.

But some nations may not choose to take such a draconian course of action. And it could be the case that crypto and CBDCs find a way to co-exist.

Far more perilous, some might suggest, would be the situation for commercial banks, which could be cut out of the picture altogether by a CBDC or used as mere intermediaries for issuance.

In China, a central bank-run CBDC app is already in use, leaving commercial banks looking somewhat out of place in some cases.

Sure, many banks may suggest that lending and mortgages make up the core of their business anyway, but they will find it worrying if they don’t seem to have a clear role to play in the emerging CBDC picture.

Also potentially in the firing line are e-pay platforms, such as Apple Pay, Alipay, WeChat Pay, which are already being frozen out of the picture in Chinese pilots.

At the recent Winter Olympics, many athletes and journalists were stunned to discover that official Olympic venues did not accept any form of payment except Visa (the games’ official sponsor), the digital RMB, or (yuan) cash.

Alipay and WeChat Pay – which represent 15% of the entire Chinese payments market – have already had their wings clipped by Beijing in a number of other moves.

Again, this could be seen as a draconian measure by free market-loving democracies. But if the chips are really down for central banks and their CBDC projects, it’s worth ruling nothing out.

China Digital Yuan off to Rocky Start at Winter Olympics

The much anticipated digital yuan is finally available for foreigners at the Winter Olympics in Beijing. But there’s one issue, not everyone at the event is fascinated with the currency. 

According to Wall Street Journal reporter Liza Lin, she hasn’t seen anyone using the digital currency yet.

Foreigners are not Using Digital Yuan

The pilot of the digital yuan at the Winter Olympics is part of the Chinese government’s efforts to gauge foreign acceptance of the currency. 

But there have been issues with using this medium of payment by foreigners. A Nikkei reporter at the Winter Olympics confirms the difficulty of foreigners using the digital currency.

According to the reporter, an attempt to download the App for the digital yuan failed because he couldn’t find it on any mobile app store. 

He later discovered that only phones connected to the internet in China could install the App directly. The reporter further found it impossible to use the App without having an account with the bank of China.

However, overseas users can still use the digital token by getting the prepaid cards and other wallets loaded with the digital currency. But many foreigners aren’t taking advantage of these wallets. 

WeChat pay and Alipay are Unavailable at Main Media Centre

At least, not yet. Instead, Visa cards appear to be the number one payment option within the venue of the Winter Olympics.

Surprisingly enough, other common forms of payments in China, such as WeChat pay and Alibaba’s Alipay, aren’t available at the Main media centre. 

This leaves attendees with Visa, cash, or E-CNY (digital yuan) as the only options. While this might have been done to get more people to use the digital yuan, it doesn’t seem to be working well so far.

The digital yuan is China’s attempt at a central bank digital currency. The country, which banned crypto last year, has been working on the project for a while now. 

There have been several pilot projects already, with state media reporting that 261 million digital yuan wallets are now in existence. It further reported $17.4 billion in transactions last year.

While it’s already available in 12 cities and for the Winter Olympics, there’s no official date for the full launch of the digital currency. 

CBDC Research From Boston Fed and MIT Shows Promising Results

The world’s central banks actively explore the world of central bank digital currencies (CBDCs), and the U.S. financial authorities are also moving in this direction.

Boston Fed and MIT Work Together To Research CBDC Technology

The Federal Reserve Bank of Boston (Boston Fed) and Massachusetts Institute of Technology (MIT) have recently released the first results of their research on the topic.

Boston Fed and MIT are working on Project Hamilton, which is a multi-year research project on CBDCs. The published research is the result of Phase 1 research.

In Phase 1, researchers focused on the design of the transaction processing system, which was implemented using two architectures. Researchers stated that both architectures “met and exceeded our speed and throughput requirements”.

Importantly, researchers found that “existing database and distributed systems technology is sufficient to provide a more traditional payment architecture for CBDC […]”. There was another interesting finding:

“Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals”

In Phase 2, researchers will “explore new functionality and alternative technical designs”. The research is still in the early stages and the U.S. is not ready to release a CBDC anytime soon as it may have a major impact on the world’s financial markets, but traders must monitor this story closely.

Traders Ignore the Threat From CBDCs

At this point, financial markets do not pay too much attention to CBDCs which may threaten leading cryptocurrencies like Bitcoin and Ethereum, as well as established payment companies like Visa and Mastercard.

It should be noted that countries differ in their approach towards CBDCs. India expects to release a ‘digital rupee’ soon, while officials in Japan are worried about the potential negative impact on the economy.

The markets bet that authorities will not release anything that may deal significant damage to traditional banks and payment services, as it will crush the economy and lead to a financial crisis.

In this light, research is expected to proceed at a measured pace, and traders should not be worried about a CBDC from the U.S. in the foreseeable future.

Top 4 Things Traders Have to Know Today

What is happening with Meta, Paypal and Spotify?

Spotify didn’t actually issue annual guidance, which seems to have exacerbated worries about potential subscriber growth potential. All three were down by double-digits in after hours trading at one point last night.

Competition is clearly much more fierce as larger players are starting to dial it in and use the latest technology to gain better traction i.e. Visa, Mastercard, etc. I also read reports this week that Apple is diving deeper into the payment and banking space and will soon be able to offer all kinds of options via the smartphone.

In simple terms, I wonder if PayPal executives could see they had a “growth” problem and that’s why they took a look at Pinterest a few months back. I heard rumors yesterday perhaps they might be looking at Robinhood.

At the moment the stock market just doesn’t seem real forgiving to those who swing and miss. On a somewhat positive note, Facebook disclosed they purchased back +$20 billion of their own stock in the last quarter.

Bulls are hoping for solid results from Amazon and Snap today to help prevent sentiment in the tech sector from creating more fallout. I’m not holding my breath!

Data to watch

Results are also due from Activision Blizzard, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, SnapOn, Wynn Resorts, and Xylem.

On the economic data front, Factory Orders, the ISM Non-Manufacturing Index, and Productivity and Costs are due today. Productivity and Costs has become a more closely watched report as worries about climbing wages have grown. In the third quarter, productivity fell -5.2% (the most since 1960) and labor costs rose +9.6%.

Obviously, weakening productivity and rising costs is a bad combo for corporate profits so reversing this trend is a high priority. It may be tough to find much relief in the near-term with the labor market expected to remain extremely tight.

The shortage of workers has also been exacerbated by the latest Covid wave. ADP’s private payrolls report yesterday showed a decline of -301,000 jobs for January versus the estimate for a +200,000 gain, the first reported net job less since December 2020 according ADP.

Covid issue

Most analysts blame last month’s Covid surge for the decline and expect it is just temporary. The official January Employment Report on Friday is expected to show a gain of around +150,000 jobs, though the government has warned that the data won’t be reliable due to Covid-related reporting problems. Hopefully we’ll soon stop hearing that excuse as the Omicron Covid wave does seem to be burning itself out in the U.S. Case numbers across the country are about half of what they were in mid-January.

Hospitalizations have finally started to come down, too, which experts say is a more reliable measure. I hate to mention it but health officials are currently monitoring a mutated strain of Omicron known as “BA.2″… when does it end?

The standoff between Ukraine and Russia

Also still on the radar is the standoff between Russia and Ukraine. The U.S. is now readying to send more than +3,000 troops to bases in Eastern Europe as new satellite images appeared to show an even further increase in Russian troop buildup on Ukraine’s borders. Whether or not war is a realistic threat or not, the climbing tensions continue to stoke the flames in the energy markets.

Brent crude futures are trading near $90 as OPEC struggles to meet production targets and global physical supplies continue to tighten. The 19 OPEC+ countries with quotas underperformed their production targets by -832,000 b/d in December. Russia is currently the top OPEC+ producer, so any disruption to those supplies runs the risk of shooting oil prices even higher. Take note the front-end of the natural gas market is up over +50% in the first month of the new year. It’s certainly going to be a wild ride in 2022!

 

Visa Stock Jumps After Q4 Earnings Beat; Target Price $263

Visa shares jumped over 5% in after-market trading on Thursday after the world’s largest card payment company reported better-than-expected earnings and revenue as spending volumes increased during the holiday quarter due to more international travel and e-commerce.

The global technology payment company reported quarterly adjusted earnings of $1.81​​ per share, beating the Wall Street consensus of $1.70 per share. The company’s revenue jumped over 24% to $7.06 billion from a year ago. That was above the market expectations of $6.80 billion.

Visa’s (V) F1Q results beat our above consensus estimates across the board, with key metrics improving sequentially. Internal company assumptions now contemplate high-end of high-teens revenue growth for FY22 (vs. high-end of mid-teens prior) and a 10 pt improvement in cross border travel volumes (now 90% of 2019 levels by YE). We remain bullish,” noted George Mihalos, equity analyst at Cowen.

Visa stock rose over 5% to $216.25 in after-market trading on Thursday. The stock rose slumped nearly 5% so far this year after falling about a per cent in 2021.

Analyst Comments

“Faster travel recovery and faster cross-border e-commerce growth combine to improve prospects for faster revenue and EPS growth post-normalization,” noted James Faucette, equity analyst at Morgan Stanley.

Visa (V) is one of our preferred stocks, as it is a key beneficiary of resilient global consumer spend growth, the ongoing shift from cash to electronic payments, and broadening merchant acceptance. Global Personal Consumption Expenditure and secular growth drivers should support low double-digit revenue growth in the near-to-medium term. We see an upside opportunity from the faster-than-expected recovery of travel and the sustained strength of cross-border e-commerce. Continued investment in longer-term initiatives (faster payments, P2P, B2B) and partnerships continue to increase its TAM and offer an opportunity for compounding double-digit earnings growth for the foreseeable future.”

Visa Stock Price Forecast

Twelve analysts who offered stock ratings for Visa in the last three months forecast the average price in 12 months of $263.58 with a high forecast of $305.00 and a low forecast of $210.00.

The average price target represents a 27.86% change from the last price of $206.15. Of those 12 analysts, 10 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $283 with a high of $342 under a bull scenario and $180 under the worst-case scenario. The investment bank gave an “Overweight” rating on the payment company’s stock.

Several other analysts have also updated their stock outlook. Wedbush raised the target price to $270 from $240. Evercore ISI lifted the target price to $312 from $308. Raymond James upped the target price to $281 from $265. Piper Sandler increased the target price to $283 from $275.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator signals a strong selling opportunity.

Check out FX Empire’s earnings calendar

Bitcoin and Ethereum Market Cap Could Surpass Gold: Report

Despite the many flash crashes, market dips, and long-drawn consolidation phases the market’s faith in Bitcoin remains intact.

In a new research report, American investment firm ARK Invest has shared an optimistic price prediction for BTC and Ethereum for the end of this decade, expecting Bitcoin to reach $1 million while Ethereum to value $180K. 

Long-term Optimism Remains

ARK Invest, the investment management firm led by Cathie Wood, has made a bold prediction claiming that the top two cryptocurrencies by market cap could gain further dominance in the remaining decade. As per the firm’s recently released Big Ideas (BIS) 2022 report, the price of Bitcoin could skyrocket to $1 million by 2030 while Ethereum could see its market capitalization at $20 trillion. 

FXempire, BTC, Crypto, ETH, Bitcoin, Ethereum
Source: ARK Invest

According to the research, Bitcoin’s market capitalization could scale more than 25-fold in the next decade, with each BTC exceeding $1 million in value by 2030. The heightened retail and institutional interest in the asset class and the increased narrative around Bitcoin as a store of value could strengthen the coin’s case. 

The report further stated that Bitcoin’s institutional holder base appears to be broadening after the launch of more regulated products and adoption by corporations and nation-states such as El Salvador. Notably, Bitcoin’s cumulative transfer volume increased by 463% in 2021 while BTC surpassed Visa’s payments volume in annual settlement volume. 

Source: ARK Invest

Furthermore, even though the prediction might seem ambitious, ARK Invest’s believe they could exceed these expectations since those values for Bitcoin and Ethereum would still represent just a fraction of global assets value.

The same can be noted by comparing BTC’s predictions against the global real estate market and global bonds market having market caps of $220 trillion and $124 trillion respectively.

Furthermore, according to the analysis, Bitcoin and Ethereum market caps could also surpass the $10 trillion gold market cap by 2030.

Price Still Needs a Push

Despite the ambitious long-term predictions given by ARK Investment, Bitcoin and Ethereum’s short-term trajectory still looked shaky. While Bitcoin seemed to recover from the recent weekend losses charting close to 15% price gains in the last three days, BTC’s price was still below $40K. 

FXempire, BTC, Crypto, Bitcoin
Source: FXEMPIRE

That said, on the back of the minor BTC gains, Ethereum too was up by 12% in just one day and traded at $2,490.24 at press time. 

FXempire, ETH, Crypto, Ethereum
Source: FXEMPIRE

For now, Bitcoin’s one-year forecast as per Wallet Investor was $64,414 which was lower than BTC’s last all-time high of above $69,000 while the king coin’s five-year forecast was $179,383.

With the larger market still looking volatile Bitcoin’s short-term future in terms of price appreciation still looked shaky. However, once BTC’s price establishes above $50K the coin could gain quick momentum in the mid-short term.

Blockchain.com Adds a Former Walmart Director to its Board

The cryptocurrency and blockchain industry has seen an influx of experts from traditional financial institutions over the past few years, and the trend could continue.

Horton Joins the Blockchain.com Team

Cryptocurrency startup Blockchain.com has announced the addition of Tom Horton to its board. Horton is an independent director from Walmart and has become the latest executive from a traditional company to join a crypto startup.

The Walmart director now joins a host of other executives on Blockchain.com’s board. The company recently added Marcie Vu, former head of consumer Internet banking at Morgan Stanley, to its board.

Other financial backers of the company include Google Ventures, Sir Richard Branson, and Lightspeed Commerce Inc.

Blockchain.com is one of the leading cryptocurrency companies planning to conduct an initial public offering (IPO) in the near to medium term. However, there is no set date regarding the company’s planned public listing.

Horton’s addition to the Blockchain.com board highlights a growing trend in the cryptocurrency and blockchain industry. The past few years have seen numerous mainstream financial institutions and businesses enter the blockchain space.

Visa, one of the leading payment facilitators in the world, launched a cryptocurrency advisory forum towards the end of last year. BlackRock is another traditional financial institution that is currently involved in the crypto space.

MasterCard, PayPal, MoneyGram, Morgan Stanley, Goldman Sachs, and several other traditional financial institutions are currently involved in various crypto-related activities.

The Crypto Market is Slowly Recovering

The cryptocurrency market suffered huge losses over the weekend, but it is now slowly recovering. The total cryptocurrency market cap has climbed above $1.6 trillion again after dropping towards $1.5 trillion yesterday.

Bitcoin declined towards the $33k level but has added more than 8% to its value in the last 24 hours and is now trading at $36,402 per coin. Ether is currently targeting the $2,500 psychological level after rallying by more than 7% in the past 24 hours.

Monstrous Earnings Ahead: IBM, Microsoft, Intel, Tesla, Apple, Visa in Focus, Along With The Fed

Investors will focus on Q4 earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could also hit the stock market hard next week, making the big tech earnings that much more critical. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant in order to see how it impacts earnings in 2022. The following is a list of earnings slated for release January 24-28, along with a few previews.

Earnings Calendar For The Week Of January 24

Monday (January 24)

IN THE SPOTLIGHT: IBM

The Armonk, New York-based technology company, International Business Machines, is expected to report its fourth-quarter earnings of $3.39 per share, which represents year-over-year growth of over 60% from $2.07 per share seen in the same period a year ago.

The world’s largest computer firm’s revenue would decline over 21% to $1.96 billion from $20.37 billion a year earlier. It is worth noting that the technology company has beaten earnings in most of the quarters in the last two years, at least.

International Business Machines (IBM) 4Q earnings will be focused on standalone model mechanics and whether Software revenue can re-accelerate while Consulting demand sustains. However, we believe the setup becomes more attractive in 2H21. We update our estimates to reflect IBM standalone post-KD spin,” noted Katy Huberty, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 24

TICKER COMPANY EPS FORECAST
BRO Brown & Brown $0.38
BOH Bank of Hawaii $1.39
BMRC Bank of Marin Bancorp $0.57
CR Crane $1.12
HAL Halliburton $0.34
HMST HomeStreet $1.3
IBM International Business Machines $3.39
PETS PetMed Express $0.3
SMBK SmartFinancial $0.48
STLD Steel Dynamics $5.66
TRST Trustco Bank $0.74
ZION Zions Bancorp $1.33

 

Tuesday (January 25)

IN THE SPOTLIGHT: MICROSOFT

The Redmond, Washington-based global technology giant, Microsoft, is expected to post its fiscal second-quarter earnings of $2.28 per share, which represents year-over-year growth of over 12% from $2.03 per share seen in the same period a year ago.

The world’s largest software maker would post revenue growth of nearly 17% to around $50.3 billion. It is worth noting that with a track record of always beating earnings per share estimates in the last five years, Microsoft is one of the best FAANG stocks in terms of earnings surprises.

“We model Azure growth of 45% cc & see 2-3% of upside, translating to steady growth vs. 48% last qtr. We see potential for strong M365 demand ahead of price hikes, as well as continued execution from LNKD, PowerApps & Dynamics ERP. Although tougher PC/Server dynamics, we expect strengthening trends for C22. Expect Mar Q guide slightly above Street,” noted Derrick Wood, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 25

TICKER COMPANY EPS FORECAST
MMM 3M $2.07
AGYS Agilysys $0.13
AXP American Express $1.75
ADM Archer Daniels Midland $1.19
BXP Boston Properties $1.51
CNI Canadian National Railway $1.25
COF Capital One Financial $5.15
FFIV F5 $1.97
GE General Electric $0.84
JNJ Johnson & Johnson $2.12
LMT Lockheed Martin $8.04
LOGI Logitech International $1.23
NAVI Navient $0.81
NEE NextEra Energy $0.41
VZ Verizon Communications $1.28
WSBC WesBanco $0.67

 

Wednesday (January 26)

IN THE SPOTLIGHT: FOMC MEETING CONCLUDES, INTEL, TESLA

Tuesday and Wednesday will mark the first meeting of the Fed’s policymaking arm in 2022. At around 7:30 pm GMT on Wednesday, Jerome Powell will conduct a press conference. This is expected to be the biggest market event since investors expect more details about the central bank’s plan to raise interest rates.

INTEL: The California-based multinational corporation and technology company is expected to report its fourth-quarter earnings of $0.9 per share, which represents a year-over-year decline of about 40% from $1.52 per share seen in the same period a year ago. The company’s revenue would fall nearly 8% to $18.39 billion.

Intel remains controversial. Long-term skepticism remains and share losses will continue until products ramp on the Intel 4 node (old 7nm), but with a new CFO, improving PC and server market outlooks, cash inflows from the US Govt, Mobileye on the horizon, and a February analyst day now reconfirmed, we are cautiously optimistic sentiment can continue to gradually improve. Still LOTS to prove,” noted Matthew D. Ramsay, equity analyst at Cowen.

TESLA: The California-based electric vehicle and clean energy company is expected to report its fourth-quarter earnings of $2.31 per share, which represents year-over-year growth of 180% from $0.80 per share seen in the same period a year ago.

“Q4 results on 26 Jan are critical to validate (or not) the Q3 profit dynamics that could see Tesla 1) carve out meaningful share from legacy OEMs busy protecting their own share by ramping up BEVs and 2) claim a disproportionate share of the industry profit pool. We raise 2021-23 EBIT and FCF 10%, mostly on higher volume,” noted Philippe Houchois, equity analyst at Jefferies.

The high-performance electric vehicle manufacturer would post revenue growth of over 50% to $16.65 billion. The electric vehicle producer has beaten earnings estimates only twice in the last four quarters.

Tesla 4Q deliveries were 20% above our forecast, annualizing to over 1.2mm units, which is already above our prior FY22 forecast. We raise our forecasts and target to $1,300 on this ‘opening act’ and look for more in FY22,” noted Adam Jonas, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 26

TICKER COMPANY EPS FORECAST
ABT Abbott Laboratories $1.16
ANTM Anthem $5.11
AZPN Aspen Technology $1.41
T AT&T $0.76
KMB Kimberly-Clark $1.29
LRCX Lam Research $8.46
RJF Raymond James Financial $1.77
STX Seagate Technology $2.21
NOW ServiceNow $0.22
SIMO Silicon Motion Technology $1.56
SLG SL Green Realty $1.56
URI United Rentals $6.97
VRTX Vertex Pharmaceuticals $2.92
WHR Whirlpool $5.84

 

Thursday (January 27)

IN THE SPOTLIGHT: APPLE, VISA

APPLE: The consumer electronics giant would post its fiscal first-quarter earnings of $1.88 per share, which represents year-over-year growth of nearly 12% from $1.68 per share seen in the same period a year ago.

The iPhone manufacturer would post revenue growth of 6% to $118.13 billion. It is worth noting that with a track record of always beating earnings per share estimates in the recent five years, Apple is the best FAANG stock in terms of earnings surprises.

Apple is expected to report 1QFY22 earnings after market on Thursday, January 27th and host a call with investors at 5:00 PM ET. In our view, the recent strength in shares is a reflection of investors’ willingness to reward Apple for entering new markets, including electronic vehicles (EV) and the metaverse (with an augmented reality/virtual reality product). Now, we look for comments from management on its future product roadmap to justify the increase in share price,” noted Tom Forte, Senior Research Analyst at D.A. DAVIDSON.

“We are reiterating our BUY rating for Apple (AAPL) and putting our price target of $175 under review ahead of the company reporting 1QFY22 earnings.”

VISA: The world’s largest card payment company is expected to report its fiscal firth-quarter earnings of $1.70 per share, which represents a year-over-year decline of about 20% from $1.42 per share seen in the same period a year ago.

The global technology payment company would post revenue growth of nearly 19% to $6.8 billion. It is worth noting that the company has beaten earnings in most of the quarters in the last two years, at least.

Visa (V) is one of our preferred stocks, as it is a key beneficiary of resilient global consumer spend growth, the ongoing shift from cash to electronic payments, and broadening merchant acceptance. Global Personal Consumption Expenditure and secular growth drivers should support low double-digit revenue growth in the near-to-medium term,” noted James Faucette, equity analyst at Morgan Stanley.

“While Covid-19 headwinds are likely to persist, we see upside opportunity from the faster-than-expected recovery of travel. Continued investment in longer-term initiatives (faster payments, P2P, B2B) and partnerships continue to increase its TAM and offer an opportunity for compounding double-digit earnings growth for the foreseeable future.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE JANUARY 27

TICKER COMPANY EPS FORECAST
AOS A.O. Smith $0.77
ALK Alaska Air Group $0.21
BX Blackstone $1.3
CNX CNX Resources $0.5
CMCSA Comcast $0.73
DOW Dow $2.16
EMN Eastman Chemical $1.88
HCA HCA Healthcare $4.57
IP International Paper $1.02
JBLU JetBlue Airways $-0.39
MA Mastercard $2.2
MCD McDonald’s $2.32
LUV Southwest Airlines $-0.39
X U.S. Steel $5.12
V Visa $1.7

 

Friday (January 28)

TICKER COMPANY EPS FORECAST
ALV Autoliv $1.18
BAH Booz Allen Hamilton $0.97
CAT Caterpillar $2.23
CHD Church & Dwight $0.59
CL Colgate-Palmolive $0.79
RDY Dr. Reddy’s Laboratories $0.64
GNTX Gentex $0.33

 

Can Crypto Really Beat Inflation?

Crypto has been vaunted variously as an inflation-proof asset and a digital answer to gold. But just how accurate are these descriptions? With inflation on the rise, the answer could well be around the corner.

The Problem of Inflation

Everyone with fiat savings fears the dreaded “i” word. But after years of low or almost no inflation in many parts of the world, it suddenly seems we cannot escape talk of a coming inflationary storm.

Much of the economic talk in 2021 centered on inflationary hotspots in Turkey, Argentina, Venezuela and the like.

Source: https://dolartoday.com/indicadores/; http://www.bcv.org.ve/estadisticas/tipo-de-cambio
Graphic: Nicolas Perrault III

But while these were once seen as outliers, nations that have been living without inflation for decades are now posting worrying figures. In countries like the UK and the United States, central banks are now finding themselves under increasing pressure to raise interest rates to fight back.

However, the problem cannot be so easily swept under the carpet. Wages in the West are on the rise, food prices are shooting up worldwide and energy price hikes are becoming commonplace.

If inflation is now a given, it is only logical to expect fiat currency holders to respond. Pressures like these naturally push investors toward “safe assets” – traditionally blue-chip stocks and gold. But more recently, the “safe asset” category has a new member: crypto.

Does Crypto Work as a Store of Value?

Many major economists say they think so, with some calling Bitcoin and the like “digital gold.”

One notable example is the Visa CEO Alfred Kelly, who last year said: “We see all [cryptoassets] as digital gold. They are predominantly held as assets that are not used as a form of payment in a significant way at this point.”

Just as gold or “safe-bet” stocks often experience price volatility, they are simply too valuable to bottom out. They are also a safe distance from currency markets, meaning that they might get dragged into periods of fiat-related volatility, but can never (or so the theory goes) experience the same kind of hyperinflationary pressures that can cause a currency to collapse, à la Germany in the 1920s.

While the Turkish Lira and the Argentine Peso are not quite at the same level, they too are edging ever closer to inescapable currency chaos.

In both nations, crypto adoption is flying up. Turks make a million crypto transactions a day, Reuters reported last month. In Argentina, even the President has called crypto a “hard currency, somewhat,” with the power to “nullify inflation.”

Bitcoin prices over the past five years

Is There Really Any Truth to All This?

This month, Rio de Janeiro’s Mayor said that he intends for the Brazilian city to keep 1% of its treasury reserves in crypto. Other cities have taken a similar tack, while there is now no shortage of mainstream financial advisors speaking to media outlets like CNBC and Time about the benefits of buying crypto. Most now advise investors to keep at least a small portion of crypto (10% or less, mostly) in their portfolios.

It looks like global politicians are starting to take this advice to heart.

Could Crypto Actually Replace Fiat?

Most critics think that crypto’s weak point is its use as a form of payment. Visa’s Kelly is just one of those who have pointed out that people seem happy to buy, trade and hold crypto, but seem unwilling to spend their coins on goods or services.

High gas fees, slow and transaction prices are often cited as prohibitive factors, while crypto pay incentives have thus far failed to blossom. But micro-payment-friendly solutions have been mooted, including the Bitcoin Lightning Network, which has been championed by the Bitcoin-keen government of El Salvador’s President Nayib Bukele.

Bukele’s government last year adopted BTC as legal tender, and has since snapped up hundreds of tokens using public funds. That means that crypto is now being put to the test in the Central American nation as not only as a treasury reserve asset (a store of value), but also as a means of payment.

As these are perhaps the two key properties an asset needs to possess if aspires to be called a currency, perhaps we will find out very soon if crypto really has what it takes to go toe-to-toe with fiat!

Visa Eyes CBDC Tech With new ConsenSys Partnership

In anticipation of the launch of several central bank digital currency (CBDC), Visa and ConsenSys have announced a partnership. 

The payments giants and the Ethereum infrastructure builder will work together to help CBDC networks bridge the gap with traditional financial institutions.

Visa and ConsenSys Announces Partnership

The partnership will allow Visa users to link their Visa card or digital wallet to the CBDC and use it anywhere Visa is accepted. The news was made public in a blog post by the head of CBDC at Visa, Catherine Gu. 

A successful CBDC project will provide better access to financial services and make government disbursements more secure and efficient. Gu described this as “an attractive proposition for policymakers.”

The partnership with ConsenSys is a big move for Visa to expand its crypto services. ConsenSys is one of the biggest names in crypto when it comes to developing blockchain infrastructure. 

Developing a CBDC sandbox shouldn’t be any problem with both company’s expertise. Central banks can pilot their digital currencies and test their distributing technology within this framework.

Governments are Increasingly Interested in CBDCs

CBDCs have become a major policy focus for central banks worldwide as they struggle to contain the rate of crypto adoption. Several countries, including China, Russia, Nigeria, South Korea, and Sweden, are running pilot projects or have even launched a national digital currency

Others, such as the European Union and the US, are seriously considering it.

Many stakeholders believe that the digital tokens issued by central banks will get more adoption due to the regulations and trust they would enjoy. This is because, unlike the popular crypto assets, CBDCs will be regulated and permissioned. 

But several crypto enthusiasts are skeptical that these government-controlled solutions will have more harm than good. Risks of privacy issues, abuse of control over financial access, and further inflation have been raised.

Can CBDCs Replace Crypto?

While central banks appear to be more focused on curbing crypto adoption, the likelihood of CBDCs replacing crypto is low. The stability of CBDCs means they might be able to replace stablecoins like USDT, BUSD and others. 

But for crypto investors who thrive on volatility, investing in CBDCs doesn’t have that much appeal as investing in projects like Bitcoin, Ethereum, Dogecoin, Shiba Inu, and others.

However, there’s the possibility of more crypto regulations on a global scale this year. As the industry appeal continues to grow, governments around the world would want to stamp their authority on the space to phase out the illegal use of these assets.

IPAY: An ETF to Profit From International Air Travel Recovery in 2022, With Some Risk Protection

More than one and a half years after closing its borders with most of Europe including the U.K., South Africa, Brazil, India, and China due to the pandemic, the U.S. opened them to fully vaccinated passengers from November 2021, thus paving the way for families and friends to be reunited, businessmen to finally have a face to face meeting with colleagues and travelers to explore new destinations.

Despite some pandemic uncertainty persisting whereby some U.S. airlines and other businesses reported a pullback in October, the travel sector is bouncing back from 2020 lows with the number of international flight departures steeply inching back up to 2019 levels as shown by the green chart below.

https://static.seekingalpha.com/uploads/2022/1/11/49663886-1641889722922848.png

Source: Bureau of Transportation statistics

Now, to profit from more international business travel, you can invest in airlines or in payment processors like American Express (AXP) whose revenues were severely impacted from mid-2020 after the cancellation of trans-Atlantic flights (as shown in the pale blue chart below) and has still not yet recovered from its pre-pandemic highs.

Using the ETF option instead of investing individually

Easing restrictions on international travelers should also be beneficial to Discover Financial (DFS), another company that has not regained its 2019 revenue levels, as well as MasterCard (MA) and Visa (V). These two companies, whose share prices have been rising since December, underwent a faster recovery by taking advantage of the move to cashless payment, a secular trend accelerated by the pandemic. This consists of effecting electronic payments instead of using paper notes and has been accelerated by the availability of smartphones using QR (Quick Response) codes. Supported by smartphone devices, the value of global mobile payments is forecast to climb from $1.5 trillion in 2020 to $5.4 trillion by 2026, according to data by Mordor Intelligence.

https://static.seekingalpha.com/uploads/2022/1/11/49663886-16418897230331607.png

Source: ycharts.com

Now, instead of individually investing in all the companies I have mentioned, there is the ETFMG Prime Mobile Payments ETF (IPAY) option. Incepted in 2015, it provides exposure to 55 stocks in the payments industry, which, through companies like Block (SQ) and PayPal (PYPL), is experiencing a shift from credit card and cash transactions to digital and electronic methods. As shown in the chart above, these two companies have enjoyed the largest quarterly revenue growth at 192% and 24.6% for Block and PayPal respectively.

Going deeper, the fund tracks the Prime Mobile Payments Index and the top ten holdings in its portfolio adding up to 53.29%, up from 48.62% in mid-2019. With its top ten holdings constituting more than 50%, this means that IPAY is subject to more concentration risks, which the fund managers have mitigated to some extent by adding 15 holdings to the 40 the fund included back in 2019.

The volatility impacting IPAY

Still, this has not prevented IPAY to be highly volatile in the last six months as shown in the green chart below with the ETF losing 19.99% of its value. Some analysts tend to associate this fall with the Nasdaq as payment processors that make use of financial technology are also referred to as FinTechs. However, this is not true as the woes of the NASDAQ date back to more recently, or November. The real reasons for IPAY’s fall seem to be related to two of its main holdings: PayPal and Square which both lost over 37% since August, thus dragging IPAY.

https://static.seekingalpha.com/uploads/2022/1/11/49663886-164188972338948.png

Source: Trading View

The market correction impacting these two stocks seems to have been due to their rich valuations, which were 161 (Block) and 61 (PayPal) in August as investors, increasingly aware of the growth-value rationale, have discarded high-valued stocks. Additionally, there are also fears that due to their advanced venture into blockchain technology and cryptocurrencies, these two stocks may be in the sights of regulators who have shown some signs of increasingly wanting to reign in the crypto world.

Lower valuations and timely portfolio adjustment

As per MorningStar, these two stocks are currently at half their August valuations. Furthermore, IPAY’s price-to-earnings ratio is currently at 20.47, which is below the category average value of 25.76.

Additionally, the fund managers who charge an expense ratio of 0.75% for this actively managed ETF have proceeded to a portfolio adjustment from August 25, 2021, to January 8, 2022, which I find to be appropriate. This consisted of increasing the relative percentage of MasterCard, American Express, and Visa shares held as part of total assets, at the expense of Block. These three companies should profit the most from the recovery in international travel as cross-border payments tend to be more lucrative than domestic payments for their payment processing businesses. Furthermore, after having been travel-constrained for the last one and half years and with a lot of savings at their disposal, both tourists and businessmen are likely to spend more.

https://static.seekingalpha.com/uploads/2022/1/11/49663886-16418897231171749.png

Source: etfmg.com

Pursuing on a cautionary note, there may be some headwind in case there are some interruptions in the momentum for digital payment adoption as seen in parts of Europe last year and in the event that consumer spending growth stalls in 2022 as a result of product prices increasing because of inflation. Hence, volatility may persist and investors may have to hold to the ETF for a longer time. Thus, scanning the industry, I came across the Tortoise Digital Payments Infrastructure Fund (TPAY) offering the same payment processing stocks, but with a lower expense ratio of only 0.4%. However, its three-year, one-year, and one-month price performances have been worse than IPAY.

Consequently, with a better track record, IPAY should profit from international air travel recovery in 2022, while at the same time, its fund managers should partially mitigate any uncertainty due to the emergence of a new and more dangerous Covid variant through holdings which already play key roles in digital transformation of the payment industry.

Disclosure: This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing.