Netflix stocks (NFLX)
Evercore ISI added the stock to its tactical outperform list on Thursday evening, and Mahaney said on Friday that the company is at the beginning of what should be a favorable shift in its business model.
“Online retail and online advertising complement each other.” For the last six quarters, online retail has been a rocket ship, and for the last four quarters, online advertising has been a rocket ship. “They’ve had huge tailwinds, but I think those will turn into a modest headwind,” Mahaney predicted. “So you want to play companies that are away from that and have a great narrative going into the back half of the year — Netflix stock and Uber are at the top of the list — for the next couple of quarters.”
The strength of “Squid Game” and returning shows over the next two quarters, according to Mahaney, are reasons to be bullish on the company.
“I think sub adds will be strong here,” he predicted.
Netflix has increased by approximately 11% since the end of August, outperforming many of its tech peers and the broader market in September, but Mahaney believes there is still room for growth.
In recent days, Netflix has faced criticism from both critics and employees for its comedy special with Dave Chappelle. Many people found the legendary comedian’s remarks about transgender people to be offensive.
However, Mahaney stated that the discussion would most likely have no impact on the company’s stock price.
“I don’t believe the Chapelle controversy is undermining Netflix’s momentum.” “It’s far too potent,” he said.
Microsoft stock (MSFT)
“We believe that companies’ inability to pass on pricing, supply chain risks, margin risk related to higher wages, and a reversion to trend in goods consumption poses a serious risk to companies’ earnings prospects,” the firm wrote in an investor note on Oct. 14.
Nonetheless, Morgan Stanley discovered that earnings news could lift certain stocks and create material upside.
Microsoft is one of the firm’s most well-known clients. Morgan Stanley has set a price target of $331 on the stock, anticipating stronger-than-expected revenue growth, higher long-term guidance, and growth in Cloud revenue. On Friday, the stock of the technology behemoth closed at $304.21.
Procter & Gamble, which reports quarterly results on Tuesday, was also mentioned by the bank. “We anticipate a solid topline/EPS beat for PG in FQ1, with FY EPS guidance unchanged,” analyst Dara Mohsenian wrote. Procter & Gamble, according to the bank, has “much higher near-term EPS visibility than its peers,” thanks to stronger relative pricing power and pronounced market share gains. The analyst set a price target of $161 for the stock, which closed at $144.42 on Friday.
Morgan described Lamar Advertising as the “most appealing” out-of-home stock to invest in to play the US ad market, and it anticipates near-record margins and an active M&A period in the second half of the year. It has a price target of $135 on the stock. The stock closed at $119.13 on Friday.
Energy Stocks
According to the American Clean Power Association, the United States lags behind Europe and Asia in offshore wind generation, with only 42 megawatts of operational capacity at the moment. This is distributed across two sites: 30 megawatts from the Block Island Wind Farm and 12 megawatts from the Coastal Virginia Offshore Wind.
According to Heather Zichal, CEO of American Clean Power, the 30 gigatonne goal is “ambitious but achievable.” Regulatory hurdles remain, and once the federal waters have been identified, there will be lengthy review processes to ensure they do not endanger wildlife or interfere with military operations. Finally, there is no guarantee that these wind farms will be constructed.
Nonetheless, the goal demonstrates the White House’s commitment to the development of renewable energy. There are numerous ways to play the trend for investors who can stomach the volatility of smaller segments of the market.
Wind exposure is extensive.
The Global X Wind Energy ETF and the First Trust Global Wind Energy ETF provide broad exposure to wind development, both onshore and offshore.
After launching on September 8, the Global X fund has only $2.39 million in assets under management. Northland Power, Vestas Wind Systems, Orsted, and China Longyuan are the largest shareholders.
The First Trust fund was established in 2008 and currently manages approximately $370 million in assets. According to the prospectus, 60 percent of the fund’s portfolio is devoted to pure-play wind companies, with the remaining 40 percent invested in companies that may also have other operations.
The top holdings are the same as in the Global X fund, but the weighting of each name varies between the two ETFs.
Vestas and General Electric are two companies involved in the production of turbine parts, and both are rated buy by Citi due to their exposure to the growing market.
“With GE highlighting a 50 percent+ market share in U.S. onshore wind, we believe the company’s strong market position and customer relationships should result in solid growth runway as domestic wind capacity additions build over the coming decade and beyond,” the firm wrote in a recent client note.
General Electric also manufactures offshore blades, including the Haliade-X, the most powerful offshore turbine on the market today. According to Citi, the company intends to develop a $3 billion offshore wind business by 2024.
TPI Composites, based in Arizona, also manufactures wind blades. “Turbine blades are a key input within the wind industry’s value chain, and TPI is a top player in the blade outsourcing trend,” Raymond James said in a recent client note, though it warned that the company could face margin pressures.
Then there’s Arcosa, which makes wind turbines, and Prysmian, which makes cables that transport high-voltage electricity from wind turbines to the inland grid. Eiffage, based in France, is one of the foundation manufacturers.
According to Bernstein, the total addressable market for offshore wind could reach 4.7 terawatts by 2050. “Offshore wind prices have decreased significantly as a result of the transition to competitive auctions, improved turbine technology, and falling cost of capital,” the firm wrote in a client note.
“Valuations for renewable developers, wind OEMs, and green hydrogen players have all dropped in 2021.” “We believe the valuation drop represents an excellent entry point into a sector with long-term structural growth,” the firm added.
Orsted and Iberdrola are among the project’s developers. Utilities are also expanding offshore wind capacity, such as Dominion Energy, which developed the Coastal Virginia Offshore Wind project. Eversource Energy and Avangrid are two other utilities in the space.
“I see a large pool of assets in money market funds that are sitting on the sidelines,” Fink said.
“In the long run, I’m very optimistic… “However, I believe that this rotation, this consternation in the marketplace, may last longer than people anticipate,” he said. “At the back end, when we have a better understanding of how this will all play out, I truly believe we will see higher highs in the equity markets.”
BlackRock made $5.1 billion in revenue in the third quarter, a 16 percent increase year on year.
Stocks are struggling to reclaim their previous highs due to seasonal market volatility. Inflationary pressures, labor shortages, and supply chain bottlenecks have all weighed on investor confidence.
Fink believes that inflation is “definitely not transitory,” that wage growth will be higher than many predict, and that businesses will need to improve employee acquisition and retention strategies with better benefits. He went on to say that a shift away from consumerism and toward domestic job creation would result in a more inflationary environment, pushing wages even higher.
The “demographics of China” will also contribute to rising inflation, according to Fink, noting that US trade with China is at an all-time high this year and that the country has historically been a source of low to no inflation.
“They’re not going to have that workforce, so I don’t think we’ll see products out of China that are as low-priced as they were before,” he said.
Climate risk is another major contributor, and a “true transition in energy” is required, he added.
“Politics around the world have been more concerned with restricting supply than changing the demand curve, and we’re now seeing rising energy inflation,” he said. “If we continue to pursue our current policies, it will be unfair and unjust to the entire economy.”
Bitcoin reaches $60,000
“I own bitcoin because the United States government, and every government in the Western Hemisphere, is printing money from now until the end of time,” Sternlicht explained.
Over the last few years, cryptocurrency has gained more mainstream acceptance, helping to fuel a rise in bitcoin to more than $60,000 earlier this year. However, some influential figures remain skeptical, and JPMorgan CEO Jamie Dimon recently described bitcoin as “worthless.”
Sternlicht, in response to Dimon’s remarks, agreed but compared the largest cryptocurrency to gold, calling bitcoin “a dumb coin.” It serves no real purpose other than to serve as a store of value.”
The real estate investor also stated that he owns ether, which he refers to as a “programmable bitcoin.”
Since the start of the Covid-19 pandemic, cryptocurrency prices have risen dramatically, though trading has remained volatile. On Wednesday morning, bitcoin was trading around $55,000, while ether was trading slightly below $3,500.
The rise of digital coins has coincided with a surge in retail investor trading and unprecedented government spending. Government spending is likely to have contributed to higher inflation in the United States, but the dollar has strengthened this year, indicating that investors and businesses have not lost faith in the global reserve currency.
Sternlicht also stated that he is interested in blockchain and believes that the economic shift to the internet and digital is still in its early stages. In May, Sternlicht said that he sold some of his bitcoin holdings due to a potential capital gains tax change in Washington.
The billionaire investor’s main area of expertise is real estate, and hotels and office buildings in the United States make up a large portion of Starwood’s portfolio.
