Zacks Investment Ideas feature highlights: Meta Platforms, Alphabet, Snap, Oracle and Global Social Media ETF
For Immediate Release
Chicago, IL – January 30, 2023 – Today, Zacks Investment Ideas feature highlights Meta Platforms META, Alphabet GOOGL, Snap Inc SNAP, Oracle ORCL and Global Social Media ETF SOCL.
TikTok Ban Coming: 3 Stocks That Would Benefit
The Social Media Landscape Is Evolving
The social media landscape has changed dramatically over the past few years with the rapid ascent of the personalized video platform app TikTok. Despite TikTok’s rapid rise, Meta Platforms and Alphabet are still the dominant players. In terms of monthly active users, three Meta platforms make up the top four rankings globally: Facebook (#1), Whatsapp (#3), and Instagram (#4).
Alphabet holds the second spot with its video platform Youtube and TikTok is ranked #6. Even with the continued dominance of existing players like META and GOOGL, stock performance has been lackluster in recent years. The Global Social Media ETF is the most followed social media ETF (note that it does not include TikTok).
What has Led to the Underperformance of Existing Players?
For one, Meta CEO Mark Zuckerberg is paying less attention to his lucrative social media business and instead investing valuable resources in what he sees as the future – the metaverse. Approximately 20% of Meta’s current investments are aimed at this project. While the bold bet has not panned out for Zuckerberg and Meta yet, he plans to stay the course.
The other major factor leading to the underperformance in domestic social media platforms such as Instagram, Youtube, and Snap Inc’s Snap Chat platform is TikTok’s success.
Chinese-based ByteDance launched TikTok in the United States in 2016, and since then, the platform has dominated. The app, which allows users to create and modify short-form videos, has caught on, especially with the younger generation. TikTok’s competitors have noticed. To win eyes back, Instagram has launched “Reels” and Youtube has created “Shorts” –aimed at users who prefer short, customizable videos like Tik Tok.
SnapChat, already in the short video space, has suffered the most from TikTok’s rise.
National Security Concerns
Though TikTok is one of the dominant global social media players and shows little signs of slowing growth – other factors may play a significant role in the social media space moving forward. Concerns are growing that ByteDance is collecting unnecessary personal data on its users and possibly supplying it to the Chinese government (the biggest rival of the U.S.).
Former President Donald Trump attempted to ban TikTok in 2020, but ultimately the app was able to remain active. The Biden administration struck down the potential Trump ban on TikTok but ordered a national security investigation.
A Potential Catalyst for Domestic Social Media Platforms
Even with the failed TikTok bans of the past, momentum is growing for a new possible attempted ban. In the past year, FBI director Christopher Wray, FCC Commissioner Brendan Carr, and Senator Josh Hawley have called for a domestic TikTok ban. Meanwhile, several U.S. colleges have implemented their own bans (via WiFi) amid security concerns.
Tuesday, Josh Hawley announced he would introduce a bill to ban the app. Investors who follow the social media space should keep a close eye on how the efforts to ban the app play out. If the app is ultimately banned, SNAP will benefit the most, along with META and GOOGL. Software giant Oracle, which supports TikTok via its cloud platform, would stand to lose.
Why Haven’t You Looked at Zacks’ Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P’s +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Global X Social Media ETF (SOCL): ETF Research Reports
Snap Inc. (SNAP) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The First Investment I Ever Made – A Wealth of Common Sense
I was always a saver growing up.
Whenever I got money for birthdays, holidays, church stuff, my allowance, or summer jobs, I would sock it away. At first that was in a secret compartment in a wallet in the top drawer of my dresser.
In high school, I finally opened up my first bank account. My first job was as a bus boy. I probably saved a thousand dollars that summer. The next summer I delivered furniture and saved a little more.1
After 17 years or so of saving I had a few thousand dollars saved up so my dad and I went over some cash management options at the local bank where my money was just sitting in a checking account.
CD rates were higher than they were paying on a savings account so that made sense. I think it paid something like 5% over 12 months.
I put a few thousand bucks into that CD with the idea that it would mature as I was going away to college. A year later I collected my money along with a little bit of interest.
Is this the most boring first investment story in history? Probably. Too practical for a teenager? Most certainly.2
But I had no knowledge whatsoever of the stock market at that point and my time horizon was so short that a boring old certificate of deposit made the most sense for my risk profile.
This was back in the late-1990s so CD rates were much higher than they’ve been for the majority of this century.
JP Morgan has a chart that compares average 6-month CD rates by decade along with some different measures of inflation:
It’s hard to believe average CD rates in the 1980s were higher than the inflation rate. It was a stairstep down from there with average rates near the ground floor level by the 2010s. Average rates for the 2020s aren’t any better but the rates today have finally reached the respectable levels I was getting when I made my first CD purchase.
Savers have taken notice.
The Wall Street Journal had a piece out recently detailing the huge flow of capital in CDs:
High inflation, rising interest rates, and economic anxiety are making CDs cool again, with yields rising as high as 5.25% recently at some banks. Balances in CDs rocketed from $36.5 billion in April 2022 to $418.4 billion in January, according to the Federal Reserve.
The average yield on a 12 month CD is still just 1.6% but if you know where to look (just search some of the online banks) you can get something in the range of 4% to 5% right now.
The rate depends on the provider and your time horizon.
I pulled up the CD rates for Ally Bank this morning. A 12-month CD was quoted at 4.5% but go out to 18 months and it was 5%. However, 3 and 5 year rates were 4.25%. Go shorter and rates were lower (2% annualized for 3 months).
There are pros and cons to CDs.
On the positive side of things, locking in 5% short-term rates takes some of the interest rate volatility out of the equation if the Fed is forced to cut rates if they help cause more pain in the economy or banking system (or both).
It’s also nice to have an end date in mind if you’re planning on using the money at a certain point in the future.
One of the biggest downsides of CDs is you give up liquidity to lock in those yields. Most banks will let you pull your money early but there is typically a penalty in the form of lost interest.
On the other hand, locking up your money does take some of the temptation away from constantly tinkering with your cash.
I’m not sure how long today’s CD rates will last. Short-term bond yields have come down quite a bit in recent weeks so that could be a precursor to lower rates in the future. Or maybe the bond market is just as confused as everyone else right now.
I don’t know the future path of interest rates from here so I’m not going to pretend I do.
But I would enjoy the yields we have on CDs right now because they might not last very long.
Michael and I talked about the first investments we ever made and much more on this week’s Animal Spirits video:
Subscribe to The Compound so you never miss an episode.
More Money Doesn’t Make Make You Better at Managing Your Finances
Now here’s what I’ve been reading lately:
1Not a fun job at all but lifting all those heavy sleeper sofas, dressers and sectionals did help keep me in shape.
2My investment style is so boring my second investment was an IRA contribution into a targetdate fund. Sorry not sorry.
Opinion | Peterborough letter: Arts offer city a return on investment – The Peterborough Examiner
Peterborough is proudly a hockey town. We love our Petes. Hockey fans have successfully lobbied the City for a new twin-pad arena. Competition for hockey ice-time is intense. In Peterborough, hockey rules.
But at what cost? The city subsidizes hockey in many ways, as it should. Money well spent, or so we would like to believe. But what do we get back from this financial support?
It might shock many of us to realize that compared to sports, the arts generate a far better dollars-in vs. earnings-out ratio. Considering the relatively meagre support arts groups get from the city, the earnings are far more impressive than those generated by sports. Why?
Arts facilities are smaller and less expensive to operate. Hockey players need an arena. Actors need an empty stage. Artists are paid pitifully little. Yet audiences pay for tickets, buy meals, and for some, accommodation. In short, for a much smaller investment, the arts generate a surprising volume of revenue for our town.
According to Hill Strategies Research Inc., Canadian performing arts organizations generated $2.70 for every $1.00 of government investment.
From a business standpoint, why doesn’t the city increase its investment in the arts? Instead, arts funding is shrinking. Why?
One of Peterborough’s local gems, The Theatre on King or TTOK, has had its grant from the city slashed to zero. This small downtown theatre has a record of brilliant productions that have employed dozens of local performers, artists, dancers and musicians.
TTOK is a success story that has, over its 10-year history, grown to become a cornerstone of the local theatre community. Many local actors get their first onstage exposure at TTOK. Think of TTOK as a successful farm team for larger theatre companies.
Hockey players need ice-time to develop. Theatre artists need time on stage to develop. Peterborough is indeed a hockey town. But it seems that council has forgotten that Peterborough is also an arts town. City council needs to reinstate the city’s grant for The Theatre on King to its 2022 level of $15,000.
Here’s how much money you’d have if you invested $1,000 in Nike 10 years ago
Nike continues to draw in sneaker fans and activewear lovers.
The retailer reported revenue of $12.4 billion for its third fiscal quarter of 2023, beating analysts’ predictions of $11.47 billion, according to Refinitiv consensus estimates. The company also reported earnings per share (EPS) of $0.79, compared with the $0.55 analysts expected.
Additionally, the company reported that revenue rose 14% compared with the year-earlier period.
For several years, Nike has worked to expand its ability to sell directly to consumers rather than through other retailers. This has included increasing its digital sales, building experiential stores and bolstering its loyalty program.
Nike Direct, the company’s direct-to-consumer brand, sales rose by 17% during the holiday quarter to $5.3 billion, according to its quarterly report. Nike Brand Digital sales were up 20%.
But you’ll still be able to find Nike products outside of the company’s own stores and website.
In January, Nike CEO John Donahoe told CNBC that wholesalers remain “very, very important” to the company.
“Consumers in this day and age want to get what they want, when they want it, how they want it, and in our industry, they’ve been very clear they want a premium and consistent shopping experience regardless of channel,” he said.
To that point, Foot Locker touted a “revitalized” relationship with Nike during its “2023 Investor Day” presentation on March 20, saying the partnership is complementary to Nike’s direct-to-consumer strategy.
What this means for investors
Nike reported its fiscal third-quarter results after the bell on March 21. The following day, shares declined slightly by almost 5% and ended the trading session at $119.50 per share.
Here’s how much money you’d have as of March 22 if you had invested $1,000 into the company one, five and 10 years ago.
If you had invested $1,000 into Nike a year ago, your investment would be worth about $908 as of March 22, according to CNBC’s calculations.
If you had invested $1,000 into Nike five years ago, your investment would have nearly doubled to $1,937 as of March 22, according to CNBC’s calculations.
And if you had put $1,000 into Nike a decade ago, it would have more than quadrupled to $4,293 as of March 22, according to CNBC’s calculations.
Investors should do their research
Remember, there isn’t an infallible way to predict how the stock market may behave in the future. Just because a stock is performing well currently doesn’t necessarily mean it will continue to do so going forward.
Instead of picking stocks to invest in one-by-one, a more hands-off investment strategy tends to make sense for most investors. A popular way to start is by investing in low-cost index funds such as the S&P 500, which is a market index that tracks the stock performance of the 500 largest, publicly-traded companies in the U.S.
Experts typically recommend this strategy because it can diversify your portfolio by adding exposure to a wide array of companies.
As of March 22, the S&P 500 declined slightly by close to 13% over 12 months, according to CNBC’s calculations. However, the index has risen by about 49% since 2018 and grown by about 153% since 2013.
DON’T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter
Get CNBC’s free Warren Buffett Guide to Investing, which distills the billionaire’s No. 1 best piece of advice for regular investors, do’s and don’ts, and three key investing principles into a clear and simple guidebook.
China's Mysteriously Resilient Real Estate Prices: New Economy Saturday – Bloomberg – Bloomberg
Bothwell woman gets experience of a lifetime witnessing natural wonder – BlackburnNews.com
The First Investment I Ever Made – A Wealth of Common Sense
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Real eState23 hours ago
Macomb County real estate developer accused of illegally destroying 18.4 acres of wetlands
Health23 hours ago
Thousands of students in the northeast are behind on routine immunizations, say health units
Art14 hours ago
Gagosian’s DALL-E–Enabled Art Exhibition Throws Us Headfirst into the Uncanny Valley
Business21 hours ago
Stock market today: Stocks open lower as further bank-related fears percolate
Investment15 hours ago
Here’s how much money you’d have if you invested $1,000 in Nike 10 years ago
Media21 hours ago
4 ways to use social media to advance your career
News18 hours ago
What can I give on Mother’s Day?
News23 hours ago
U.S., Canada may end Safe Third Country Agreement loophole