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Asian equities tread water

A decent US Non-Farm Payrolls number on Friday was balanced out by weaker ISM Manufacturing data and a sharp rise in short-dated US yields as rate hike…

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A decent US Non-Farm Payrolls number on Friday was balanced out by weaker ISM Manufacturing data and a sharp rise in short-dated US yields as rate hike expectations rose. NFP posted a lower than expected, but still very healthy, gain of 431,000 jobs. Notably, the previous month’s total was revised higher by 95,000 jobs. The headline employment number was enough to allow Wall Street to eke out modest, if unconvincing gains. The S&P 500 rose by 0.34%, the Nasdaq edged 0.29% higher, while the Dow Jones gained 0.40%. US futures in Asia are unchanged.

Asian markets calm at start of week

In Asia, equities are ranging around unchanged, with Covid-19 concerns in mainland China capping sentiment, with a mainland holiday also sapping trading volumes. The Nikkei 225 is 0.10% higher, while South Korea’s Kospi is up 0.25%. Mainland China markets are closed but Hong Kong’s Hang Seng has risen by 1.35% after Chinese authorities moved to ease audit inspection barriers for US-listed China companies.

 

Some positive news out of China this weekend, which could be mildly supportive for Wall Street later today, is that China appears to be loosening its audit restrictions, reducing the immediate threat of a mass delisting of US-listed Chinese companies. Many of those are listed in Hong Kong, which should also find reasons to cheer as a result.

 

In regional markets, Singapore is 0.10% higher, Kuala Lumpur has eased by 0.25%, while Jakarta is unchanged. Bangkok is 0.10% higher, with Manila falling 0.25%. Taiwan is also closed for a holiday. Australian markets are the day’s best performers, the ASX 200 rising by 0.40%, and the All Ordinaries by 0.58%, led by resources.

 

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Spread & Containment

How to Use Dividends to Find the Best Tech Stock

Investors Alley
How to Use Dividends to Find the Best Tech Stock
When we talk about tech stock investing, we hear discussions of all sorts about different…

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Investors Alley
How to Use Dividends to Find the Best Tech Stock

When we talk about tech stock investing, we hear discussions of all sorts about different measures used for picking stocks.

For example, some tech investors use year-over-year revenue growth. Others subscribe to a theory that has been floating around for many years, that the secret to picking tech stocks was looking at the percentage of cash flows spent on research and development.

All too often, tech stock analysis consists of storytelling and searching for ideas that will change the world, something I’ve heard thousands of times during my career. The number of companies that actually did change the world probably totals up to a few dozen over three decades.

Some of those beat the market. Others did not.

I have found a variable that can help tech investors spot promising opportunities to identify technology companies that have higher probabilities of providing market-beating returns: dividends.

Note a stock’s dividend yield: investors who want higher dividends with an overall total return would be smart to look into high-yield tech stocks as part of their income strategy. The key to using dividends to find market-beating tech stocks is to look at the rate of their dividend growth. It doesn’t matter how high the dividend is at any given time. We want to see companies that are consistently growing their dividends.

A tech company that pays a dividend is making a statement. It tells the world: “We are generating enough cash to pay the bills, hire great people, and fund our future growth plans as well as R&D. In fact, we are generating so much cash we have some left over to pay out to our investors.”

Ideally, we want to limit our universe of companies to those who are increasing their payout by at least 20% annually. Growing a dividend at that high a rate says that things are just continuing to get better.

Once we have a universe of tech companies that are growing their payouts at high levels, we want to make sure we only own those that really do have a wonderful business that just keeps getting better. We want to use a financial checklist to make sure our companies are in excellent financial shape and have what it takes to keep growing the business.

I prefer the nine-point checklist developed by Professor Joseph Piotroski when he was at the University of Chicago – known as the “Piotroski F-Score”. This is a list of nine criteria of profitability, leverage, and efficiency. On each criterion, a firm can either get one or zero points – pass or fail.

I limit my universe of tech stocks with paid dividend growth to just two to three with the highest scores on the Piotroski checklist.

Using this simple method for picking tech stock winners has crushed the S&P 500 over the past decade and even edged at the tech-heavy NASDAQ 100.

Texas Instruments (TXN) makes the current list of technology companies with high dividend growth and outstanding fundamentals and prospects. The company makes most of its revenues from semiconductors, but it does still have some revenues from its calculators and other business machines. (I have had one of these, a Texas BAII calculator, within arm’s reach for most of my career.)

Texas Instruments had a solid second quarter and increased its guidance for the third quarter. The company has not suffered the China slowdown problems that have plagued some of their competitors so far. The brightest spot in the recent report was semiconductors being sold to the automobile industry, which were up 20%.

Although we have seen some slowdown in semiconductors due to the supply chain issues created by the pandemic, Texas Instruments has powerful tailwinds from all the developments we see in technology over the next decade.

Every one of the hottest trends in the economy—from renewable energy to artificial intelligence and everything in between—is going to increase demand for semiconductor chips. There are thousands of semiconductors in every electric vehicle, which will be another massive source of demand for the industry.

Texas Instruments has a yield of 2.5% right now, and has been growing that payout by 20.5% annually.

Another semiconductor company, Broadcom (AVGO) has the fastest-growing payout on our list right now. The company makes chips for smartphones, networking, broadband, and wireless connectivity. Broadcom’s recent purchase of Symantec’s Enterprise Business also puts it in the cybersecurity business.

Broadcom’s shares currently yield 2.97% and the payment has risen by an average of 49% annually for the past five years.

Most investors will never think of using dividends as part of the stock selection process. Rigorous testing shows that dividend growth is actually an important part of identifying companies with the potential to be huge winners.

My favorite way to invest in those companies isn’t to buy their stock, though. Instead, I like to use a special, little-known investment that lets me invest in these companies for up to 18% less than what others pay…

While collecting twice or more the dividend yield!

All without any more risk. I’m tracking 5 opportunities like that right now, and I lay them all out right here.

Only 3% of investors even know these funds exist

But using them, I can beat the market 2-to-1 while collecting 2-10X MORE yield from regular dividend stocks.

I learned this trick while I was rubbing elbows with some of the biggest fund managers in US history.

They too are buying these little known funds, cashing in huge discounts and collecting income while they do it.

Click here to learn the secret yourself.

 

How to Use Dividends to Find the Best Tech Stock
Tim Melvin

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Stocks

Masa Is Down $4 Billion On His SoftBank Side Hustle Set Up To Boost His Compensation

Masa Is Down $4 Billion On His SoftBank Side Hustle Set Up To Boost His Compensation

It turns out it isn’t just Softbank that’s getting creamed…

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Masa Is Down $4 Billion On His SoftBank Side Hustle Set Up To Boost His Compensation

It turns out it isn't just Softbank that's getting creamed on its investments, billion head of the company Masayoshi Son is also personally feeling the  pain of the poor performance in the technology market. And, on a side note, we may have finally found an "investor" whose acumen rivals Cathie Wood!

He has lost more than $4 billion "on a series of side deals he set up at SoftBank Group Corp. to boost his compensation," according to a new Bloomberg report.

Son had established personal stakes in many of SoftBank's ventures over the last few years. The thought process was that when the investments outperformed, it would act as a compensation kicker for Son, who currently draws a salary of about $740,000 per year.

Personally, Son holds a 17.25% interest in a vehicle belonging to SoftBank's Vision Fund 2 for its unlisted holdings, and a 17.25% interest in part of its Latin America fund. He also has a 33% stake in a vehicle SoftBank set up to trade stocks and derivatives. 

From these interests, he has racked up losses of $2.1 billion, $205 million and $2 billion, respectively, the report says. The amount Son owes his own company from the Vision Fund 2 and the Latam fund was up about $1.9 billion over the last quarter, the report says. 

Marvin Lo, an analyst with Bloomberg Intelligence, said: “It is controversial for a business leader to mix his personal financial interests with corporate responsibilities. But Son explained before that he wanted to use co-investment to provide financial benefits to managers, similar to venture capital firm partners getting a 20% to 30% performance fees, but with a downside too."

Son has deposited 8.9 million of his own shares as collateral for the Vision Fund 2 and 2.2 million shares as collateral for the LatAm fund. 

Meanwhile SoftBank posted a glaring $23.4 billion loss for the June quarter last week. 

Son said in a press conference: “We really believed we could do it and we had our heads in the clouds. Of course, the market was bad, there was a war, and there was the coronavirus. We can point to a lot of reasons, but these are all excuses. We have to self-reflect about the fact that if we’d been more selective and had invested more properly, it wouldn’t come to this."

A SoftBank spokesperson said the money should be called a "net payable" instead of a loss by Son.

Because when it doubt, change the terminology or the definition - just ask the Biden administration!

Tyler Durden Sat, 08/13/2022 - 20:00

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Economics

How Inflation Impacts Penny Stocks and the Stock Market 

Use these tips for trading penny stocks with high inflation
The post How Inflation Impacts Penny Stocks and the Stock Market  appeared first on Penny…

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3 Ways That Inflation Impacts Investing in Penny Stocks

When it comes to trading penny stocks, investors need to know everything that is going on in the stock market. Inflation is a huge factor when it comes to penny stocks, especially in the past few months. When inflation rates are high, stocks become more expensive, and this can have a negative impact on the stock market. 

In order to make money with penny stocks, investors need to be aware of how inflation impacts the stock market so they can make the necessary adjustments to their investment. Now, while inflation is always a factor, over the last year or so, this has been dramatized due to the effects of the pandemic. And more recently, we have begun to see some positivity regarding inflation. 

[Read More] Best Penny Stocks To Buy? 4 EV Stocks To Watch Thanks To TSLA Stock

So, while we are in no way out of the woods yet, we have seen that inflation is the main contributor to market movement in the past couple of months. As a result, stocks have become more expensive, but we are seeing some relief from the inflation rates.

This is good news for investors, and it is something to keep an eye on in the coming months as we continue to see the effects of the pandemic play out. Considering all of this, let’s take a closer look at how inflation could continue to impact penny stocks moving forward.

3 Ways That Inflation Could Impact Penny Stocks

  1. Higher Volatility Than Usual
  2. Cheaper Penny Stocks to Buy
  3. Long Term Value

Higher Volatility Than Usual

We all know that volatility with penny stocks and blue chips has been higher than usual in the past few months. And, when we look at the reasons behind it, inflation is one of the key drivers.

What is inflation? It’s simply a sustained increase in the price level of goods and services in an economy. And while a little bit of inflation is actually good for stocks (it boosts company profits), too much inflation can lead to problems.

Why does inflation cause more volatility in stocks? Well, when inflation is higher than expected, it can lead to concerns about future economic growth. This can cause investors to sell stocks and move into investments that are perceived as being safer. This selling can lead to increased volatility in the stock market. In addition, we have movement due to panic selling and buying, which can exacerbate the problem.

[Read More] Best Penny Stocks to Buy As Inflation Drops, 3 to Watch 

So what can investors do to protect themselves from inflation-induced volatility? First, it’s important to keep a close eye on inflation data. If inflation is rising faster than expected, it may be time to take a closer look at your portfolio and make sure that you’re not too exposed to stocks.

Second, don’t forget that stocks are not the only investment option out there. There are plenty of other options, such as bonds and real estate, that can provide diversification and help protect your portfolio from inflation-induced volatility.

Cheaper Penny Stocks to Buy

When it comes to finding penny stocks to buy, inflation can lead to losses in the stock market. This means that many penny stocks can be bought up for less money, but they may not be worth as much when it comes to future earnings. Inflation can also make stocks harder to sell, since their prices are lower than what they were purchased for.

This can be frustrating for investors who are trying to make a profit in the stock market. Now, in the short term, these low values mean that stocks may be a good investment. However, over the long term, it is critical to see what happens with this value and whether or not it can be maintained. So, while finding cheap penny stocks to buy is more than doable, always remember the length of your investment goal.

Long Term Value

With many penny stocks trading at low prices, inflation can cause the stocks to go up in value over the long term. Inflation is often thought of as something that devalues money, and in a sense, it does. But inflation can also have a positive effect on stocks and other investments.

penny stocks value

For example, let’s say you buy a stock for $1 per share. Inflation rises, and the next year, the same stock is selling for $2 per share. The purchasing power of your dollar has decreased, but the value of your stocks has doubled. In this way, inflation can create long-term value in the stock market.

Of course, inflation is not the only factor that affects stocks. The overall performance of the stock market is also influenced by economic conditions, company earnings, and many other factors. However, over the long term, inflation can have a positive effect on penny stocks if you understand where that value is.

3 Penny Stocks to Watch This Coming Week

  1. Aquestive Therapeutics Inc. (NASDAQ: AQST)
  2. Edgio Inc. (NASDAQ: EGIO)
  3. Comstock Inc. (NYSE: LODE)

Which Penny Stocks Are You Watching Right Now?

If you’re looking for penny stocks to buy, there are hundreds to choose from. But how do you know which penny stocks are worth your investment? There are a few things to look for when considering penny stocks. The first thing to consider is what your trading strategy is and how to take advantage of penny stocks. 

[Read More] 5 Top Penny Stocks To Watch Today With High Short Interest

Are you looking for stocks that are undervalued and have the potential to make a quick profit? Or are you looking to hold onto stocks for the long haul? While it is not easy to trade penny stocks, it can be much simpler with the right information on hand. Considering that, which penny stocks are you watching right now?

If you enjoyed this article and you’re interested in learning how to trade so you can have the best chance to profit consistently then you need to checkout this YouTube channel. CLICK HERE RIGHT NOW!!

The post How Inflation Impacts Penny Stocks and the Stock Market  appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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