Happy Monday — we're glad you're here to start the week with us in a new issue of TradeSmith Snippets.
With the constant bombardment of news, many investors are facing decision fatigue, not knowing how to act on what they are hearing.
In TradeSmith Snippets, we're here to tell you what really matters and help you overcome that analysis paralysis. We run these ideas through our proprietary trading tools as well as our experts' proprietary tools to give you actionable information, spotlighting places to make money and the potholes that can wipe out that money.
All while doing it in a format that maximizes your time.
Meta Platforms Inc. (META) launched a subscription service for Facebook and Instagram users to have a blue check mark next to their name that verifies their identity after they've provided a government ID.
The Breakdown
To have the blue check mark, it will cost $15 a month on iOS or $12 a month on the web. The feature will roll out first in Australia and New Zealand.
Meta CEO Mark Zuckerberg says that the move is about “increasing authenticity and security” by making it easier to spot fake accounts.
Making a similar move, Twitter has not found much success with its verification service ($8 a month), reportedly attracting less than 300,000 subscribers, or less than 1% of its total users.
The TradeSmith Takeaway
Verified subscriptions may help stop fake accounts from tricking people and spreading misinformation, but hauling in an extra $12 or $15 a month from a few hundred thousand people isn't going to move the needle for Meta Platforms Inc.
What's far more important to think about is the metaverse.
As of October 2022, Zuckerberg spent $36 billion building out virtual worlds, with many critics saying he has little to show for it.
But history has shown that Zuckerberg has been ahead of the curve in how people interact and spend their time; Bloomberg Professional Services projects that revenue from sports, music, films, and other live entertainment in the metaverse could reach $200 billion by 2024, while banking giant Citi believes that the entire metaverse could be worth up to $13 trillion by 2030.
Kraft Heinz Co. (KHC), the maker of Kraft Mac & Cheese, JELL-O, and plenty of other products in cupboards and refrigerators across the country, is pausing price hikes, saying that 90% of its planned price increases are already in effect.
The Breakdown
KHC raised prices 15% last year and just reported in its Q4 earnings report that net sales climbed 10%.
It also reported revenue of $7.38 billion, beating expectations of $7.27 billion, net income of $887 million, an easy bright spot compared to the loss of $255 million it reported a year earlier.
However, the company also saw a 4.8% decline in the amount of units sold in its last quarter, saying that it is still dealing with higher prices for goods and supply chain issues.
The TradeSmith Takeaway
Overall inflation may be “cooling,” but food prices jumped 0.5% from December 2022 to January 2023.
Kraft pausing price hikes suggests that consumers may be starting to reach their limit on how much they are willing to pay for their usual favorites.
If companies start to lose their pricing power, you'll see it reflected through less profitability.
Having said that, there are still moneymaking opportunities in the food sector. In a report published last summer, data firm Reach3 Insights found that 78% of Americans were purchasing more private-label products due to an increase in food costs. People were largely changing the brands they bought in frozen produce, salty snacks, and baby products. One of the companies that can benefit from this trend is the small-cap stock TreeHouse Foods Inc. (THS).
The business is straightforward: TreeHouse Foods provides everything from pretzels to cookies to in-store bakery items for grocery stores and food service companies.
And from a slide in TreeHouse's Q3 2022 presentation, it's easy to see just how significant those overall savings can be in an environment where people are trying to stretch each dollar as far as it can go.
THS is currently in our Green Zone, is considered a medium-risk investment, and is in an uptrend.
Coinbase Global Inc. (COIN) beat expectations in its last earnings report, totaling a $557 million loss on revenue of $629 million. Forecasts were for the company to lose $585 million on $588 million in revenue.
The Breakdown
When going public in 2021, Coinbase had previously stated it was just trying to break even through the up and down cycles of the crypto market.
Now the crypto exchange is changing that approach, saying it wants to turn a profit even in a down crypto market and is focusing on cash preservation.
Coinbase is also laying off roughly a fifth of its workforce, and it plans to reduce costs by 30% by trimming down expenses in technology and development, sales, marketing, and general and administrative expenses.
The TradeSmith Takeaway
It's an understatement to say that the crypto market is volatile.
In roughly two years, Bitcoin (BTC) has gone from $60,000 to its current price of $24,000. That volatility has scared people away, as evidenced by Coinbase's latest earnings report, which showed that transaction revenue fell 12%.
However, LikeFolio has been keeping close tabs on the fallout from rival crypto exchange FTX, noting in a November 2022 report that “Coinbase may end up being the biggest beneficiary of the near-term cryptocurrency distrust, as investors seek safer alternatives to transact with and hold their money.”
LikeFolio Co-Founder Landon Swan also recently said that he is seeing renewed interest in crypto investing through LikeFolio's proprietary data as well as an uptick in new users on the Coinbase platform, setting up an opportunity for those who know how to capitalize on this information.
You can hear more from Landon in the video below:
We'll see you tomorrow.
Take care, Team TradeSmith
P.S. As you can see from Meta, Kraft Heinz, and Coinbase, there is a lot to navigate when it comes to finding investable opportunities.
Quite frankly, investors are suffering from decision fatigue.
But just like we show you how to get past the noise and focus on what's important in TradeSmith Snippets, there's something else that's been happening in the background that we're excited to share.
To better understand market behavior, our team of data scientists has just finished mapping the “DNA” of nearly 50,000 stocks.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
Tidak ada komentar:
Posting Komentar