Connect with us

Investment

Did You Participate In Any Of Caribbean Investment Holdings' (LON:CIHL) Incredible 853% Return? – Yahoo Finance

Published

 on


InvestorPlace

6 Tech Stocks Every Investor Should Watch

Hardware is becoming software, so investors are dumping hardware. At the same time, software is moving to the world of the cloud. These trends undeniably shape what tech stocks you should be buying.
Most computer chip companies today are “fab-less,” based not on manufacturing, but designs written in software. That is why Nvidia (NASDAQ:NVDA) today is worth more than Intel (NASDAQ:INTC).
At the same time, open-source software is replacing proprietary software, especially in the clouds, where the money is made. That is why Facebook (NASDAQ:FB) is worth more than Oracle (NYSE:ORCL).InvestorPlace – Stock Market News, Stock Advice & Trading Tips
What does this mean for companies in the business of making computer hardware? It means they need to find new paths to profit. And that also means software names are the best tech stocks to buy.
The biggest hardware makers are aware of this. The hope investors have for them is they can execute and return to prominence. Until they do, however, their growth and valuations will lag the market.

7 Airline Stocks to Buy on Pelosi Stimulus Hopes

For now, keep an eye on these six tech stocks as they pivot to the software world:
International Business Machines (NYSE:IBM)
Dell Technologies (NYSE:DELL)
Cisco Systems (NASDAQ:CSCO)
Nokia (NYSE:NOK)
Ericsson (NASDAQ:ERIC)
Workhorse (NASDAQ:WKHS)

Tech Stocks: International Business Machines (IBM)
Source: JHVEPhoto / Shutterstock.com

Former IBM CEO Virginia Rometty missed the cloud. Under her watch, IBM went from being the world’s unquestioned technology leader to a laggard. Facebook is now worth over six times more.
IBM has recognized its mistake. Rometty gave up the CEO chair in April to Arvind Krishna, who was running its cloud operations. He named Jim Whitehurst from Red Hat, the leading open source company in the world, as president.
Since Krishna took over, however IBM stock has barely budged. Despite the cloud experience of its new leaders, IBM remains a hardware company. Its primary profit center remains its Z Series mainframes, and the proprietary software that runs on them. After delivering new versions in the second quarter, systems sales jumped 69%, year over year, to $1.9 billion, and profits rose 4.3%.
But that profit center has been milked dry. Getting rid of older workers just drained its talent pool, and put the government’s eyes on it.
It will take tricky financial engineering for IBM to find the cash flow needed to compete. It could sell the hardware units to private equity, spin out Red Hat, or spin its cloud operations into a REIT, as companies like Equinix (NASDAQ:EQIX) have done.
For now, IBM says it’s focusing on “hybrid cloud.” Here, enterprises retain their own data centers built to cloud standards, then arbitrage larger public clouds like those of Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT). It’s also pushing its quantum computing efforts, although they won’t contribute to profit for years.

Dell Technologies (DELL)
Source: Jonathan Weiss / Shutterstock.com

Dell Technologies is even bigger than International Business Machines and even more undervalued.
The story starts in 2016, when Dell bought EMC, which controlled VMware (NYSE:VMW), for $67 billion. Four years later, $45 billion of the debt remains on Dell’s books. That means the “enterprise value” of Dell, including its debt, is $95 billion. The same calculation, applied to IBM, leads to an enterprise value of $165 billion, on revenue of $77 billion.
VMware and IBM’s Red Hat are valuable because they offer virtualization and other cloud infrastructure software. It’s the kind of franchise the market often values at 10 times revenue. VMware had sales of about $11 billion for its fiscal 2020.
Here is the problem. Because of the funky corporate structure, it is hard to value Dell. What is it really worth without its massive stake in VMware?
The answer is to break Dell up again. Analysts think both companies would be worth more separate. Dell had fiscal 2020 net income of $4.6 billion. VMware could be worth $15-$20 per share more, nearly $10 billion. VMware CEO Pat Gelsinger says VMware could tie up with more hardware vendors if it were independent.
Selling VMware would also bring Dell enough cash to retire its debt and compete more closely against Hewlett Packard Enterprise (NYSE:HPE). HPE is currently killing it  in “hyperconverged” hardware, a key data center market, and now matches it in server market share.
A spinoff is planned, with Dell and hedge fund partner Silver Lake maintaining a majority stake. The big issue? The move will not raise cash to pay down debt. Moreover, the split wouldn’t happen until September 2021.
Even so, analysts call this a big win that will unlock Dell’s value in hardware, where many of its products are considered leaders. Take it all together, and a patient investor should do well buying Dell here. But you’re buying financial engineering, not the real kind.

Tech Stocks: Cisco (CSCO)
Source: Sundry Photography / Shutterstock.com

Cisco Systems has been adrift ever since Chuck Robbins became CEO in 2015
Robbins’ strategy has been to shift Cisco’s revenue from expensive networking gear to software subscriptions. It’s not working. The revenue today is the same as it was in 2016. Profits have been uneven. Still, the stock’s low price has analysts pounding the table for it, calling it cheap and undervalued.
But that’s not how tech stocks work. When a company stops growing, it starts dying. A small cut tells the sharks to feed.
Cisco has made a half-dozen security acquisitions since Robbins took over, and 11 acquisitions since the start of 2019. But it’s not solving the problem. The number of bugs hitting Cisco software is increasing. Some impact key products like its high-end switches.
BabbleLabs is one of these recent deals, bought to improve its videoconferencing experience. But that only serves to underline Cisco’s weakness. Cisco practically invented videoconferencing. But when the pandemic hit, Zoom Video (NASDAQ:ZM) became a verb. Cisco is now worth only 15% more than Zoom, which came public in April 2019 and covers just one of Cisco’s product niches.
Competitors can smell blood in the water. Hewlett Packard Enterprise finished its acquisition of Silver Peak, a software-defined networking company that will be part of its Aruba unit. The move accelerates the shift of networking from a product to a service. It increases the pressure on Cisco.

Nokia (NOK)
Source: RistoH / Shutterstock.com

The move of hardware to software, and of software becoming open source, has also hit the telecom equipment market hard.
Nokia lost its niche in cell phones, bought into the equipment market, and is now seeing its lead there threatened.
Part of the threat comes from China’s Huawei, which can make equipment for less and has been making inroads into the carrier market as a result. Nokia’s response is to support OpenRAN, a common set of interfaces for Radio Access Networks.
Nokia has been using OpenRAN support mainly to compete with Huawei and its Scandinavian rival, Ericsson. It says a complete set of OpenRAN interfaces will be available next year.
The hope now is that small, OpenRAN companies can be bought out, or parts of the emerging standards held back. That would let Nokia limit competition while still claiming openness. A short price war, initiated by the larger vendors, could quickly finish off the OpenRAN folks, analysts believe.
But there’s another threat.
Microsoft has already bought Affirmed Networks and Metaswitch, making its bid for an OpenRAN company look likely. Facebook is backing the Telecom Infra Project, the consortium that created OpenRAN. Open source, in other words, is coming.
Will Nokia be able to main relevance among tech stocks?

Tech Stocks: Ericsson (ERIC)
Source: rafapress / Shutterstock.com

While Nokia has been beating a drum for OpenRAN, rival Ericsson has been dismissing the threat.
Ericsson is copying the strategy of Qualcomm (NASDAQ:QCOM), which has patents, copyrights and trademarks for all modem buyers to take its licenses. Importantly, these licenses come at a cost that makes rivals uncompetitive. But Qualcomm fought a bitter five-year legal war on three continents to achieve its dominance. Ericsson lacks that time, and it lacks that money.
Ericsson insists that OpenRAN has security issues. It has already made its own equipment fully compliant with existing security and encryption standards. It has introduced an integrated packet core firewall to boost security further. This also increases its proprietary advantage.
What might settle the dispute between open source and proprietary would be for Ericsson to buy Nokia.
Rumors of such a deal were floated in February. President Donald Trump has been pushing for more control over the 5G equipment market, even suggesting Cisco Systems should buy one of the two Scandinavian companies.
All this is leading to a new technology, Cloud RAN. This idea should dominate the new market for managed services, which is growing rapidly. What is this? The idea is to run radio networks according to what are called “cloud principles.” Ericsson is already pushing its own proprietary framework for this “journey.”

Workhorse (WKHS)
Source: rblfmr / Shutterstock.com

Tesla (NASDAQ:TSLA) became the most valuable car company in the world by proving that cars represent technology, not manufacturing.
This has spurred interest in other electric car companies like Workhorse.
Since late June, WKHS stock has skyrocketed. Why? The reason is a U.S. Postal Service contract, which Workhorse has yet to win, for 140,000 electric mail trucks. Workhorse is one of three finalists. Its C1000 design features a light body with 1,000 cubic feet of storage, and a short range that recharges overnight.
There is more than hype involved here. Workhorse’s first vans have traveled 8.5 million miles. It’s been in this niche for a decade. The trouble is its batteries are not yet competitive with gasoline engines. At the present price of $300 per kilowatt hour, a battery-powered van costs $30,000 to make.
If Workhorse wins the postal contract, and if other last-mile companies follow suit, WKHS stock will be a big winner.
But that’s a lot of ifs. This makes Workhorse less an investment than a speculation. Don’t bet any money on this stock you can’t afford to lose.
There’s reason to speculate. It’s probable that, over the next decade, electric vehicles will take over the market. It’s likely that, in last-mile delivery, with a limited number of players, this can happen quickly. Contracts offered at scale are always valuable, and often profitable.
But there is a lot of wishful thinking going on here. If the niche Workhorse is focused on proves out, why won’t Tesla just take it?
At the time of publication, Dana Blankenhorn held long positions in AMZN, NVDA and MSFT.
Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. 
More From InvestorPlace

Why Everyone Is Investing in 5G All WRONG

Top Stock Picker Reveals His Next 1,000% Winner

Radical New Battery Could Dismantle Oil Markets

Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company

The post 6 Tech Stocks Every Investor Should Watch appeared first on InvestorPlace.

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Manulife Investment Management Announces Estimated Cash Distributions for Manulife Exchange Traded Funds – Canada NewsWire

Published

 on


C$ unless otherwise stated 

TSX/NYSE/PSE: MFC     SEHK: 945

TORONTO, Nov. 27, 2020 /CNW/ – Manulife Investment Management today announced the December 2020 cash distribution estimates for Manulife Exchange Traded Funds (ETFs) that distribute semi-annually. Please note that these are estimated amounts only as of October 9, 2020, and reflect forward-looking information which may cause these estimates to change.

Unitholders of record of the Manulife ETFs at the close of business on December 31, 2020 will receive cash distributions payable on January 13, 2021. The ex-dividend date for the cash distributions is December 30, 2020.

Details of the distribution per unit amounts are as follows:

ETF

Ticker

Distribution Amount
(per unit)

Manulife Multifactor Canadian Large Cap Index ETF

MCLC

$ 0.120424

Manulife Multifactor U.S. Large Cap Index ETF – Unhedged

MULC.B

$ 0.205903

Manulife Multifactor U.S. Large Cap Index ETF – Hedged

MULC

$ 0.192679

Manulife Multifactor U.S. Mid Cap Index ETF – Unhedged

MUMC.B

$ 0.068462

Manulife Multifactor U.S. Mid Cap Index ETF – Hedged

MUMC

$ 0.049585

Manulife Multifactor Developed International Index ETF – Unhedged

MINT.B

$ 0.133343

Manulife Multifactor Developed International Index ETF – Hedged

MINT

$ 0.140300

Manulife Multifactor Canadian SMID Cap Index ETF

MCSM

$ 0.017269

Manulife Multifactor U.S. Small Cap Index ETF – Unhedged

MUSC.B

Manulife Multifactor U.S. Small Cap Index ETF – Hedged

MUSC

$ 0.047103

Manulife Multifactor Emerging Markets Index ETF

MEME.B

$ 0.156765

Manulife ETFs are managed by Manulife Investment Management Limited (formerly named Manulife Asset Management Limited). Manulife Investment Management is a trade name of Manulife Investment Management Limited. Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Investment objectives, risks, fees, expenses and other important information are contained in the ETF Facts as well as the prospectus, please read before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.

About Manulife Investment Management

Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 17 countries and territories. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. 

As of September 30, 2020, Manulife Investment Management had CAD$923 billion (US$692 billion) in assets under management and administration. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

SOURCE Manulife Investment Management

For further information: Media Contact: Olivia Jones, Manulife, (438) 340-3416, [email protected]

Related Links

https://www.manulifeim.com/

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Bitcoin rally ends – Investment Executive

Published

 on


Markets move past election uncertainty

With Biden’s transition underway, investors have shifted their focus to Covid vaccines and economic recovery

Domestic RI assets increase amid rising investor demand: RIA

Canadian assets in responsible investments reached $3.2 trillion at the end of 2019

  • By: Katie Keir
  • November 26, 2020
    November 26, 2020
  • 12:20

Provinces push for delay in planned CPP premium bump

The details were in a letter sent to Finance Minister Chrystia Freeland two days ago

Court rejects class action against RBC fund dealer

Case claimed extra compensation for selling in-house funds harmed investors

Let’s block ads! (Why?)



Source link

Continue Reading

Investment

Gold Is a Dull Investment – Morningstar.ca

Published

 on


I’ve never been a big fan of gold. It’s not a productive asset, so it doesn’t generate any cash flows, and it’s only worth what someone else is willing to pay for it. Yet there’s evidence that gold can serve as a hedge against a market meltdown and inflation, so it may serve a purpose as a small position in a diversi­fied portfolio. The opportunity cost of holding gold is currently low, as real interest rates are negative.

Yet insurance doesn’t boost expected returns. Rather, it tends to reduce them. There is no compelling economic reason to expect gold to provide strong real (inflation-adjusted) returns over the long term. Gold is far from a perfect hedge against inflation and market tail risk. But then again, nothing is.

Investors willing to accept the cost of this imperfect insurance might consider a low-cost physical gold exchange-traded fund like SPDR Gold MiniShares (GLDM). It owns gold bars in a vault in London, so it should closely hew to gold spot prices.

An Imperfect Hedge
Gold is a strange metal. It is a commodity that behaves as a safe-haven asset, largely because of its universal role as a store of value for thousands of years. Sam Lee, a former editor of this newsletter, articulated it well when he said, “The best way to think of gold is as a nonyielding currency with a special trait: The only way to ‘print’ it is to pull it out of the earth at great cost.” Like any foreign currency, the price of gold tends to move in the opposite direc­tion of the strength of the U.S. dollar.

Predicting the movement of any currency or commodity is very difficult, and gold is no different. The best reason to own it is as a hedge against a market meltdown and inflation, rather than as a spec­ulative bet that gold prices will be higher in the future. Over short periods, gold has been uncorrelated with stocks, but over longer holding periods the two assets have been negatively correlated, as Exhibit 1 shows. In other words, gold has tended to do well in stretches when stocks have fared poorly, and vice versa. For example, during the global financial crisis from Oct. 9, 2007, through March 9, 2009, gold cumu­latively gained 25.9%, while the S&P 500 lost 54.9%.

There is no law that this relationship must always hold, and there are no economic drivers to enforce it. It exists because investors perceive gold as a safe-haven asset and use it accordingly. While there isn’t a compelling reason to expect that perception to change, the hedge is only as strong as that perception.

In this way, gold is similar to fiat currencies like the U.S. dollar. Its value depends on others’ faith in it, as there are limited practical applications for it aside from jewelry. The difference is the supply of gold is fairly stable, while central banks can change their money supply at will. This underpins the second reason for owning gold: to hedge against inflation.

Like most commodities, gold prices have been positively correlated with inflation, as Exhibit 1 shows. But they don’t move in lockstep with inflation. Gold can and has lost purchasing power over decade-long spans, as it did between August 1993 and December 2005. Investors who bought gold at its record high real price in January 1980 are still waiting to be made whole on an inflation-adjusted basis. Gold is clearly not a perfect inflation hedge, though it can help boost returns in inflationary periods.

Exhibit 1 - Gold correlation with stocks and inflation

Cryptocurrency has emerged as a competing asset with gold for investors who don’t trust government-issued currency. While this could reduce investment demand for gold, it still has a couple of things in its favor: | It has proven staying power and is more likely to be around 50 years from now than any cryptocurrency; and | gold still behaves like a safe-haven asset, while most cryptocurrencies are highly speculative.

Opportunity Cost
Gold doesn’t yield anything, so there’s an opportunity cost to own it. The lower interest rates are, the lower that opportunity cost is. Consequently, there has been a strong inverse relationship between real (inflation-adjusted) interest rates and the real price of gold, like most bonds. Because current prices and future returns move in opposite directions, the expected returns on gold are positively correlated with real interest rates, even though gold yields nothing. Exhibit 2 shows this relationship. Low interest rates inflate gold prices but depress future returns.

Exhibit 2: Relationship between real 10-year interest rate and subsequent 1-year real gold return

Rising interest rates hurt gold prices by increasing the opportunity cost of holding it. So a bet on gold is also a bet that real interest rates will remain low.

Because real interest rates are near record lows, it’s not surprising that real gold prices in U.S. dollars are near record highs, as shown in Exhibit 3. Viewed in this light, gold is far from a screaming buy. Although its long-term real returns will likely be lower going forward, gold may still be worth considering. It’s not perfect, but it can still serve as a hedge against tail risk and inflation.

Exhibit 3: Gold-Consumer Price Index

Let’s block ads! (Why?)



Source link

Continue Reading

Trending