Square stock (NYSE: SQ)
“We believe Cash App is on its way to becoming the ultimate neo-bank and money center bank of the future. Investing in SQ could be compared to investing in J.P. Morgan in 1871, according to the note.
The main businesses of the company are the money-sharing Cash App and payment services for retail businesses.
According to Mizuho, Square should be able to add a variety of new products to Cash App in the future, such as tax services and insurance.
The stock has a buy rating and a $380 price target, which is 59 percent higher than where it closed on Wednesday.
J.P. Morgan co-founded Drexel, Morgan & Co., the predecessor firm to today’s largest U.S. bank, in 1871. According to FactSet, JPMorgan shares have returned 9.9 percent per year over the last 20 years, outperforming the S&P 500. The shares have returned 14,000 percent since the early 1970s.
After skyrocketing earlier this year, the price of lumber has dropped dramatically, falling 40% in June and continuing to fall in July.
In a note Thursday, Goldman analyst Susan Maklari stated that the market was establishing a “new normal” for lumber prices, but she still initiated Weyerhaeuser at a buy, citing the company’s business mix as a defensive play for the industry.
“We estimate that Weyerhaeuser’s 11 [million] acres of timberlands account for 75 percent of its enterprise value, with the South accounting for 65 percent. According to the note, “this, combined with the lack of correlation between Southern log and lumber prices, should result in peer relative outperformance, even as wood products adjust to lower commodity prices.”
This year, the stock has also lagged the broader market, making it an appealing play even as the lumber industry resets.
“Although its wood products operations will likely face near-term pressure,” the Goldman note said, “with the stock up 4 percent year to date and a 2 percent dividend yield, we believe the current valuation is an attractive long-term entry point.”
The firm set a price target of $40 per share, which is 15% higher than the stock’s closing price on Wednesday.
Goldman is less enthusiastic about other lumber stocks, with Maklari initiating sell coverage of Boise Cascade and Louisiana-Pacific.
“We do believe China is tightening up,” Wood said. “I’m not sure if it’s capital controls. I am aware that there is some retaliation against the Biden administration’s policies, which were continuations of the Trump administration’s policies. That, I believe, has been the biggest surprise for both China and most investors. We expected the saber rattling between the United States and China to lessen.”
China has begun to crack down on its largest corporations and has promised to update rules for companies listed on US exchanges. Earlier this month, the Chinese government fined technology behemoths Tencent, Alibaba, and the newly public Didi for anti-monopoly behavior. Didi, the maker of a ride-hailing app, saw its stock plummet after China announced that new users in the country would be unable to download the app while the company undergoes a cybersecurity review.
“What you will not see us do with Chinese stocks is pull out of names that are more endemic to China,” Wood said. “China wants to be a leader in innovation and is very supportive of its companies scaling up as quickly as possible internally.”
Ark has not recently sold shares in Chinese companies Baidu, NIU Technologies, or Kanzhun. Wood has been investing in Kanzhun, a Tencent-backed operator of an online recruitment platform that connects job seekers and enterprise users via a mobile app called Boss Zhipin, which went public on June 11.
Meanwhile, Ark Invest unloaded 203,847 shares of JD.com on Tuesday, citing concerns about China in a webinar. On Tuesday, the firm also sold 357,583 shares of Tencent. Wood sold 340,453 Tencent shares last week and 352,991 shares on Monday. Furthermore, Wood sold 341,190 shares of JD.com last week, followed by another 66,600 shares on Monday.
“What I feel will hurt at the margin is any company…with more than 1 million users…they’re going to be under tougher regulatory scrutiny, so I do think that’s a valuation downgrade,” she added.
JD.com, Baidu, Tencent, and Alibaba remain among the top holdings in the ARK Autonomous Technology & Robotics ETF, and Wood stated that the majority of the selling has occurred in her flagship fund, ARK Innovation.
“When we see an assault, and I would say it is on the valuation of many of these names,” she said of ARK Innovation, “we will pull out and consolidate towards our highest conviction names.” “We haven’t done much, except on the margins, with companies we believe need to expand outside of the rest of the world to sustain their growth rates.”