Cathie Wood’s Ark Invest had a good 2023. Its flagship Ark Innovation ETF soared 68%, easily outpacing the three major U.S. financial indexes. In positioning itself for 2024, the firm has 12.8% of its portfolio allocated to just two stocks: Tesla(NASDAQ: TSLA) accounts for 6.2% of invested assets, and Coinbase Global(NASDAQ: COIN) accounts for 6.6%.
Here’s what investors should know about these growth stocks.
1. Tesla
The investment thesis for Tesla centers on its strong market presence in battery electric vehicles and its opportunities with adjacent artificial intelligence (AI) software and services. Tesla accounted for an industry-leading 19.2% of battery electric vehicle sales through November 2023. Price cuts have crushed its once industry-leading operating margin, but profitability should rebound as interest rates decline, Cybertruck production scales, and Tesla leans into software and services.
Specifically, management believes full self-driving (FSD) software will become the primary source of profitability over time. Tesla already sells FSD beta subscriptions in North America, and the product could launch in Europe by next summer. The company also plans to license its FSD software to third-party manufacturers. Numerous automakers have agreed to standardize around Tesla’s charging network, and a similar outcome is plausible with its FSD software.
Additionally, Tesla will monetize FSD by providing robotaxi services, meaning it will launch an autonomous ride-hailing business at some point in the future. Management has not provided specific details, but the company is targeting volume production of a robotaxi this year. More information should be forthcoming during the next AI day event, presumably sometime in mid-2024.
In any case, Tesla is well positioned to be a leader in autonomous vehicle technology. Data is critical to training machine learning models, and the company has far more autonomous driving data than its peers. CEO Elon Musk believes Tesla’s gross margin could trend toward 70%, up from about 20% today, as the company evolves toward software and services.
On that note, Ark Invest believes the robotaxi market could reach $9 trillion by 2030, but Wood and her team are not alone in making bold predictions. Morgan Stanley analyst Adam Jonas believes software and services could push Tesla’s addressable market to $10 trillion by 2030, and he expects the company to grow sales at 22% annually over the next eight years.
Shares of Tesla currently trade at 7.7 times sales, a discount to the three-year average of 14.7 times sales. That price looks reasonable if Tesla can indeed grow software and services revenue fast enough to meet Morgan Stanley’s forecast, but valuing the stock based on that assumption is risky. Investors who believe Tesla could disrupt the mobility industry should consider buying a small position in the stock today. Investors who see Tesla as little more than a glorified automaker should avoid the stock.
2. Coinbase Global
The investment thesis for Coinbase centers on its position as the largest U.S. cryptocurrency exchange, international expansion efforts, and ability to diversify revenue beyond transaction fees and interest income.
Coinbase has a reputation for security and reliability that has become more pronounced amid turmoil like the collapse of FTX. That brand authority allows the company to charge higher fees than many peers, and it has led to market share gains. Coinbase accounted for 6.8% of global cryptocurrency trading volume in September 2023, up from 4.9% in September 2022, making it the fourth-largest cryptocurrency exchange in the world.
Coinbase primarily earns revenue through volume-based transaction fees and interest income on fiat currency held in reserve for stablecoin USDC. As such, the company depends heavily on trading volume and interest rates. In fact, those sources accounted for more than 85% of total revenue in the third quarter. Revenue from staking services is also climbing, but dependence on volume and interest rates is unlikely to change.
With that in mind, Coinbase continued to expand into new markets last year. The company launched its exchange in Brazil, Singapore, and Canada, and it obtained key licenses in Spain. Coinbase should continue to gain global market share as it moves into new geographies, and that should support growth in transaction revenue and interest income.
Another potential catalyst is the recent approval of spot Bitcoin ETFs. The Securities and Exchange Commission requires cash creations and redemptions, meaning the issuer must trade Bitcoin when shares are added or redeemed. Additionally, Coinbase is the custodian for eight of the 11 approved spot Bitcoin ETFs, meaning it will earn storage fees.
Going forward, Ark Invest believes the cryptocurrency market will be worth $20 trillion by 2030, implying more than 1,100% upside in the interim. Coinbase would undoubtedly benefit from that explosive growth, but investors should view that estimate skeptically. Cryptocurrency is a volatile asset class fraught with regulatory uncertainty.
Wall Street is less bullish. The consensus calls for Coinbase to grow revenue at about 2% annually over the next five years. That makes its current valuation of 10.4 times sales seem quite expensive. Personally, I would wait for a cheaper multiple before buying shares.
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Trevor Jennewine has positions in Tesla. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Tesla. The Motley Fool has a disclosure policy.
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
