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Investors’ Cash Balances Struggling to Swallow Smart Money Supply

There are near-record amounts of cash ready to be deployed into markets…and corporations are doing their best to drain it.Investors have a near-record amount of cash ready to invest in stocks (or whatever else), a bullish indication of “cash on the s…

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There are near-record amounts of cash ready to be deployed into markets...and corporations are doing their best to drain it.

Investors have a near-record amount of cash ready to invest in stocks (or whatever else), a bullish indication of "cash on the sidelines" as deceptive as that clichè is. According to the Investment Company Institute, investors hold more than $4.5 trillion (with a "t") in money market funds.

And yet corporations are issuing a record amount of stock, a bearish indication of supply and smart-money selling pressure. Bloomberg data shows that U.S. corporations have issued more than $450 billion in stock via IPOs, secondary, and additional offerings over the past 52 weeks.

Bullish investors will give more credence to the former; bearish investors the latter. There is little question that both are factual, and it's a relatively unusual situation. Usually, when corporations are issuing boatloads of stock, investors have small cash reserves and vice-versa; when corporations can't issue shares due to lack of demand, investors are usually hoarding cash at the time.

It's rare to see such high levels at the same time. If we look at a ratio of the two, then things become a bit clearer.

During the pandemic panic, the ratio neared 30 and was the highest in 30 years. In other words, there was 28 times more cash available than shares offered in supply. There are ways to quibble with the technicals, but it's simply meant as a reflection of sentiment.

Over the past year, the ratio has declined steadily as supply ramped up. Corporations are "feeding the ducks," as the saying goes. Even though money market assets haven't been drained much, the skyrocketing supply has caused the ratio to drop below 10 for the first time since the year 2000. 


What else we're looking at

  • A deeper look at money market assets and the ratio to corporate stock issuance
  • What it means when individual investors become bearish with stocks near their highs
  • A detailed look at the surge in natural gas prices and the futures curve
  • Small-cap stocks are entering a seasonal soft spot

Stat box

Natural gas futures prices have skyrocketed by 110% over the past 6 months. That's the most since 2004 and ranks as the 5th-largest 6-month return in 30 years.

Etcetera

Less shiny. The Optimism Index on the GLD gold fund plunged below 11.5% on Thursday, one of its lowest levels in a year. Our Backtest Engine shows that GLD rallied over the next week after 13 out of 16 prior signals.

gold gld sentiment optimism index

Go big or go home. Over the past 3 sessions, the IWM small-cap ETF has lost an average of more than $500 million in assets per day. That's the 2nd-largest amount since small-caps entered their trading range in February.

iwm small cap fund flow

A mostly pessimistic world. Our Optimism Index Geo-Map shows that investors in most parts of the world are showing pessimism (the deeper the green color, the more pessimism). Pockets of optimism are seen in Asia, including India and Japan.

optimism index geo map

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Stocks

Udemy IPO: EdTech Unicorn Filing Information for Investors

Paperwork for the Udemy IPO is now public. The online learning platform is going public on the Nasdaq under the ticker UDMY. Here’s the latest news…
The post Udemy IPO: EdTech Unicorn Filing Information for Investors appeared first on Investment U.

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Paperwork for the Udemy IPO is now public for investors. The online learning platform is going public on the Nasdaq under the ticket UDMY. Let’s look at the details…

Udemy IPO: About the Business

Eren Bali, Oktay Caglar and Gagan Biyani founded Udemy in 2010. The three partnered together to achieve a common goal: make quality education accessible to all. The solution was to develop an online learning platform targeted at students and professionals.

Udemy is a massive open online course provider today. The platform has a two-sided marketplace where instructors develop content to meet learner demand. The learning experience combines videos, notes and assessment tests into a series of modules.

The San Francisco-based company has a client base of over 44 million learners in more than 180 countries. Udemy offers over 183,000 courses in 75 languages. Over 73 million users have registered on Udemy since its launch.

Courses are available directly to consumers. The company also offers UDemy Business as its B2B (business to business) learning solution. Organizations can use it to train and develop their employees. 42% of Fortune 100 companies use Udemy Business, according to the filing.

In response to the pandemic, industries have needed to acquire new skills. And ongoing changes in the workplace could make the Udemy IPO an interesting prospect.

Pandemic Accelerates Industries’ Need for New Skills

Changing technologies and new working methods have impacted jobs across the board and made it difficult for workers to keep up. Adapting to rapidly changing conditions is an ongoing challenge for workers across all industries. The roles and activities of workers will have to adapt to new conditions.

The revolution goes far beyond remote working, AI and the use of automated systems. Many people have found a new normal in the workplace. And leaders will need to reskill their workers to deliver new business models in a post-pandemic era.

In a 2021 Workplace Learning Trends Report, Udemy revealed that industries have increased demand for data analysis and data science training.

Data shows companies increased their data modeling training by 466% between 2019 and 2020. In addition, there was an increase of 1,488% in data warehouse training.

This represents a major focus on skills development and continued learning in business. However, the pandemic has affected Udemy in far more ways than just its business platform.

COVID-19 is Reshaping Education Long-Term

A 2020 Udemy report revealed that online education demand increased across all segments as a result of COVID-19. Here are some of the key findings…

  • 425% increase in enrollments for consumers
  • 55% increase in course creation by instructors
  • 80% increase in usage from businesses

Udemy’s prospectus states…

Before the COVID-19 pandemic, the majority of corporate training occurred offline, and we believe that online education is well placed to address the scalability and affordability limitations of offline education. With the increase of internet connectivity, technological advances and interactive tools at a low cost, we expect a massive shift from offline to online.

A 2020 report showed that course enrollments across the Udemy platform grew more than 425% after the first shelter-in-place order took effect. Online learning trends emerged due to the pandemic.

Some of these changes may give a preview of more permanent changes in the way we learn and work in the post-pandemic era. And these trends reflect in Udemy’s revenue and cash flow. Let’s review the company’s finances…

Udemy IPO Financial Data

Udemy highlights some key financial information for investors. The company’s profit and loss statement and balance sheet data are summarized as follows…

Revenue: The filing revealed an upswing in revenue. Udemy recorded $276.3 million in revenue for the 2019 fiscal year. In 2020, Udemy’s revenue rose 56% to $429.9 million for the year. Revenue is on track to keep increasing this year. For the six months ended June 2021, the company reported $250.6 million in revenue.

Net Income (Loss): Udemy has reported consistent net losses. For the 2019 fiscal year, the company recorded $69.7 million in net losses. Udemy’s net losses rose to $77.6 million in 2020. For the six months ended July 2021, the company reported $29.4 million net losses. Udemy’s net losses for the half-year ended June 2020 were already $42.5 million, so 2021 should hopefully see declining losses.

Cash: Udemy recorded a massive increase in cash flow in 2020. The company recorded $49.1 million in cash as of December 2019. By the end of 2020, cash skyrocketed to over $175 million. However, the company’s cash decreased to $163.2 million as of June 2021.

Total Assets and Total Liabilities: Udemy’s total assets and total liabilities have grown. The company recorded $117.3 million in total assets and $187.2 million in total liabilities as of December 2019. As of June 30, Udemy’s total assets rose to $286.7 million and total liabilities rose to $279.2 million.

In 2020, a $50 million Series F funding round valued the unicorn at over $3.2 billion, according to data from Crunchbase. So how much money can the Udemy IPO raise?

Filing Details for UDMY Stock

Udemy filed confidentially on May 26. The paperwork became public for investors on October 5. However, the company hasn’t set terms for the offering yet. Check out this step-by-step guide to going public to learn more about the initial public offering process.

The company hasn’t announced the number of shares it plans to offer or an expected pricing range for the IPO. Udemy will trade on the Nasdaq exchange under the ticker symbol UDMY.

While the exact terms of the offering are unknown, the company has set a placeholder deal size of $100 million. As a matter of fact, the company is rumored to be targeting an initial valuation of between $6 billion and $8 billion.

Morgan Stanley and JP Morgan will be the lead underwriters for the offering.

Online education companies have raised a lot of money from external investors to capitalize on new growth. The Udemy IPO follows Duolingo and Coursera’s successful launches this year.

As always, make sure to research before you invest. IPOs can be volatile for the first few months and share prices are constantly changing. Moreover, if IPO investing interests you, check out our top recent IPOs and our IPO calendar. We update the calendar daily to give you the latest news on upcoming and filed IPOs.

If you’re looking for the latest investment opportunities, consider signing up for Liberty Through Wealth. This free e-letter is full of market insights from leading experts. You’ll hear from bestselling author and investment expert Alexander Green. It’s one of the easiest ways to stay on top of market news out there. All you need to do is enter your email address in the box below to get started.

The post Udemy IPO: EdTech Unicorn Filing Information for Investors appeared first on Investment U.

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Stocks

Mark Mahaney reveals his top picks ahead of earnings

The U.S. stock market is likely to be eventful in the upcoming weeks as companies continue to report their quarterly results. Ahead of earnings, Mark Mahaney said Netflix Inc (NASDAQ: NFLX) and Uber Technologies Inc (NYSE: UBER) are set to “outperform”…

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The U.S. stock market is likely to be eventful in the upcoming weeks as companies continue to report their quarterly results. Ahead of earnings, Mark Mahaney said Netflix Inc (NASDAQ: NFLX) and Uber Technologies Inc (NYSE: UBER) are set to “outperform” in the fourth quarter.

Mahaney confirms his outperform rating on NFLX

On Friday, Mahaney rated Netflix at “outperform” with a price target of $695 that represents a 10% upside from here.

The Evercore ISI analyst expects a strong content slate to drive much of the growth for the media giant in the fourth quarter. He is convinced that content strength will sustain in 2022 as well.

In August, Netflix resorted to another price hike in Europe that Mahaney says would help boost the average revenue per user. The California-based company recently partnered with Walmart Inc to launch Netflix Hub – a new retail destination focused on Netflix merchandise.

Netflix is set to report its quarterly results on October 19th.

Mahaney sees a 45% upside in Uber Technologies

Also on Friday, Mahaney reiterated Uber at “outperform” with a price target of $70 a share that translates to a roughly 45% upside from here.

His bullish call is partially based on Uber Eats – the fastest-growing U.S. food delivery business. Demand for ride-sharing is also likely to gain traction in the upcoming months as COVID-19 restrictions continue to ease.

At current levels, Uber is a “very attractive” buy, Mahaney added in his research note. The California-based company will report its quarterly results on November 4th. Last month, CEO Dara Khosrowshahi said Uber will hit its profitability milestone ahead of schedule.

The post Mark Mahaney reveals his top picks ahead of earnings appeared first on Invezz.

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Economics

Best Entertainment Stocks To Invest In Today? 3 Making Headlines

Could entertainment stocks be a good play amidst rising retail sales figures now?
The post Best Entertainment Stocks To Invest In Today? 3 Making Headlines appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.co…

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3 Top Entertainment Stocks To Consider Buying [Or Selling] Right Now

The broader stock market today continues to gain as consumer spending power holds strong. Given September’s latest retail sales figures, investors may want to consider looking at the top entertainment stocks now. In brief, retail sales for September surged by 0.7%, according to the Census Bureau earlier today. For reference, Dow Jones economists were expecting a decline of 0.2%. Now, entertainment stocks cater to consumers in good times and bad. Given the current strength in consumer markets and the fast-approaching year-end holidays, we could be looking at exciting times for the industry.

All in all, some would argue that the current momentum in retail spending is rather surprising. This would be the case given fears of the reopening trade losing steam amidst rising consumer prices and the government pulling back its pandemic-era benefits. Moreover, investment banking giant Goldman Sachs (NYSE: GS) crushed analysts’ estimates in its third-quarter earnings call earlier today. The bank posted an earnings per share of $14.93 on revenue of $13.61 billion. Evidently, this is well above projections of $10.18 and $11.68 billion respectively.

Not to mention, notable names in the current entertainment trade continue to break new ground. For example, we could look at the likes of Fubo (NYSE: FUBO) and Roku (NASDAQ: ROKU) this week. Firstly, Fubo is now an authorized gaming operator for NASCAR. Thanks to this partnership, Fubo can now provide racing fans with premium wagering experiences on all their favorite NASCAR races. At the same time, Needham analyst Laura Martin recently hit ROKU stock with a Buy rating. Safe to say, there is no shortage of excitement amongst entertainment stocks in the stock market now. Could one of these names be worth watching now?

Top Entertainment Stocks To Watch This Month

Canopy Growth Corporation

To begin, we have Canopy Growth Corporation, a world-leading diversified cannabis, and cannabinoid-based consumer company. With its ground-breaking innovation and strategic investments, the company offers a wide product variety in high-quality dried flowers, oil, infused beverages, and edibles. The company also has a global medical brand called Spectrum Therapeutics which is a leader in both Canadian and German markets.

On Thursday, the company announced that it will be acquiring Wana Brands, the No. 1 edible cannabis brand in North America. Wana manufactures and sells gummies in the U.S. state of Colorado and licenses its intellectual property to its partners, who manufacture and distribute Wana-branded gummies across the U.S. and Canada. Canopy cited that the strategic benefits of this acquisition would be to strengthen its U.S. ecosystem and also give it market leadership in the edibles product category throughout North America.

Furthermore, Wana also has a profitable and highly scalable business model, with a good track record of generating strong revenue growth and category-leading gross and EBITDA margins. Wana’s proven licensing model also provides the opportunity to scale the brand ahead of U.S. permissibility. Given this strategic play by the company, should you be paying close attention to CGC stock right now?

entertainment stocks (CGC stock)
Source: TD Ameritrade TOS

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Walt Disney Company

Disney is a multinational entertainment company with headquarters in Burbank, California. The company is a leader in the animation industry before diversifying into live-action film production, television, and theme parks. DIS stock currently has enjoyed gains of over 35% in the past year alone. Recently, the company unveiled a new plethora of content for its Disney+ streaming service.

This would include 20 new APAC content titles including 18 originals in collaboration with award-winning and aspiring content creators from the region. Furthermore, this would include star-studded scripted live-action tent-pole series in drama, comedy, fantasy to variety shows, documentaries, and anime. Ultimately, this would be part of the company’s aspirations to greenlight over 50 APAC originals by 2023.

The company says that it is making another commitment by combining its global resources with the best content creators from the Asia Pacific to develop and produce original stories for Disney+. With over-the-top services going mainstream, the emergence of world-class content from the Asia Pacific, and rising consumer sophistication, Disney believes that this is the right time for it to deepen its collaboration with the region’s content creators to deliver unparalleled storytelling to global audiences. With this being said, will you consider adding DIS stock to your portfolio?

DIS stock chart
Source: TD Ameritrade TOS

[Read More] 4 Robotics Stocks To Watch Amid Rising Shifts To Automation

Roblox Corporation

Another top name to know among entertainment stocks now would be the Roblox Corporation. In essence, the California-based company is a video game developer. Through its proprietary sandbox open-world game of the same name, it continues to make waves across the globe. Through its “human co-experience platform”, millions of players worldwide interact with each other in a vast variety of ways. This ranges from user-built interactive games to pop culture-related content and even live streamable music events in-game.

To date, the company currently boasts an average daily active user count of over 43 million. In its latest fiscal quarter report back in August, the company saw its total revenue skyrocket by 127% year-over-year. Additionally, Roblox also ended the quarter with $1.78 billion in cash on hand, a 186% year-over-year surge. As such, I could see investors eyeing RBLX stock ahead of the company’s upcoming quarterly earnings call on November 8.

Furthermore, Roblox does not seem to be slowing down anytime soon. Just yesterday, the company announced plans to further refine the player experience while monetizing its content. Namely, this will come in the form of more realistic player avatars and new in-game monetization streams. Among the notable additions would be the introduction of limited edition items. The likes of which players can exchange for Robux, a premium in-game currency, which can then be exchanged for actual cash, suggesting an NFT-like system. All things considered, would RBLX stock be a buy for you now?

RBLX stock chart
Source: TD Ameritrade TOS

The post Best Entertainment Stocks To Invest In Today? 3 Making Headlines appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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