Coinbase and Apple supplier are listed by analysts as the best stocks to buy now

Coinbase stock (NASDAQ: COIN)

The crypto exchange’s stock has been under pressure in recent weeks, falling 6% since the end of August. In a note to clients on Tuesday, Piper Sandler analyst Richard Repetto stated that the bull case for Coinbase remains intact despite the stock’s recent struggles.

“Despite an 86 percent correlation to the price of bitcoin since the company’s IPO, COIN shares have fallen 4 percent year to date, while bitcoin and ether prices have risen 28 percent and 43 percent, respectively, year to date (through 9/13)…. “We believe the recent sell-off is overdone and reiterate our Overweight rating on COIN shares,” according to the note.

One of the reasons for Coinbase’s recent difficulties is the company’s announcement that the Securities and Exchange Commission had ordered it to postpone the launch of its lending product. The decision has been strongly resisted by Coinbase’s management.

However, according to Repetto’s note, the delay should not have a significant impact on Coinbase’s finances.

“We are not currently, and have never been, forecasting future revenues from Coinbase Lend. As a result, COIN’s decision to postpone the product launch until October has no effect on our forward estimates,” the note stated.

Piper Sandler maintained its $335 per share price target for Coinbase, implying a 38% increase in the stock from its current level.

Large-cap global stocks

As of this writing, the four equities that Hugh Young, the chairman of Aberdeen Standard Investments Asia, recommends may be found “if you do the research.”

Young, who has worked in finance since the 1980s, named two Asian large-caps that he particularly likes.

“Samsung is still a good buy,” he says. “TSMC [Taiwan Semiconductor Manufacturing Company] is a fantastic company, but it is more likely to be fairly valued than undervalued, as Samsung is.”

Young stated that finding value in larger stocks was “a lot harder.”

“Often, the large cap area is where you get the valuations extended on momentum; for example, where everyone is piling into or out of the same thing,” he explained, citing Chinese internet stocks as an example.

On TSMC, he stated that the company was benefiting from high demand, which was driving up chip prices, while also maintaining a competitive edge.

Young stated that when comparing TSMC to rival chip company UMC (United Microelectronics Corporation), “TSMC is clearly the better company and maintains its lead.”

“TSMC would definitely be our top pick of the [chip] companies, and it’s one of, if not our, largest holding in our large cap Asia-Pacific fund,” he added.

“It’s a tough industry, there’s always competition coming, China is trying to eat into the market, and of course, China will succeed,” Young explained. “However, TSMC [has] really managed to maintain its technological advantage; it’s certainly a head above others, which has been impressive, and we’ve held it now for well over 20 years.”

Stocks in mining

According to Young, there is also value to be found in the mining sector, which includes mining behemoths BHP and Rio Tinto.

He stated, “BHP is one of our top ten holdings in our Asian fund.” “They have first-rate assets, and there is no sign of a long-term decline in demand for them.” Yes, the price will fluctuate, but China, like other developing economies around the world, requires those goods.”

“Given such strong long-term demand, I think it’s a pretty good investment if you’re careful in commodities and get the real top end of the market like BHP,” Young said.

Young manages the Asia-Pacific Equity Fund, which is down 1% this year, and the Asia Focus Fund, which focuses on small caps and has gained around 40% in the last year.

Top Japanese bank stocks

Prime Minister Yoshihide Suga recently stepped down from the governing party’s leadership race, causing political upheaval in Japan. As the race to become Japan’s next Prime Minister heats up, noted contender Fumio Kishida is said to be calling for more fiscal stimulus.

“We believe that whoever wins, the new Prime Minister’s immediate job will be to support Japan’s economy as it normalizes and catches up with other markets, including more fiscal spending,” Jefferies analysts Hideyasu Ban and Hiro Nakakura wrote in a recent note.

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Ban and Nakakura predicted that this would result in a steeper yield curve bias in Japan, implying a wider spread between long- and short-term interest rates, albeit one that is range bound.

They emphasized three Japanese banks in particular: Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group.

Mitsubishi UFJ’s price target has been raised from 700 Japanese yen per share to 750 yen ($6.81). They also raised their price target on Mizuho from 1,680 Japanese yen to 1,800 yen (about $16.35) per share. Mitsubishi UFJ has a “buy” rating from Jefferies, while Mizuho has a “hold” rating.

According to the analysts, Sumitomo Mitsui has the “largest upside potential” of the three. Jefferies currently rates the stock as a “buy,” with a price target of 4,900 Japanese yen ($44.49) per share.

Jefferies assigns a “buy” rating to securities that it believes will provide a total return of 15% or more over a 12-month period. A “hold” rating indicates that Jefferies expects the stock to perform between a 10% loss and a 15% gain over the next 12 months.

In the short term, Jefferies expects MUFG to outperform its other bank picks, which include SMFG and Mizuho.

“Our new estimate of banks’ ROE over the next three years is lower than their mid-term plan targets,” Ban and Nakakura said. “However, current valuations suggest that the market is much less optimistic or confident than we are.” “As a result, we believe bank stocks are at a point where they can outperform the market if the macro situation improves, or if they deliver a better recovery of ROE than the market believes.”

Apple supplier stocks

New iPhones, as well as new Apple Watch and AirPods models, are expected to be unveiled by the technology behemoth. The company, which launched AppleTV+ in 2019, could also provide updates on its streaming push.

New iPads and MacBook Pro laptops are also on the way this fall, though it’s unclear whether Apple will combine all of its fall launches into a single event.

Apple’s “California Streaming” event begins at 1 p.m. ET on Tuesday.

While Apple’s stock is likely to fluctuate during the event, other supplier stocks may rise or fall in response to specific product announcements.

FactSet ranks Apple’s top ten suppliers using a proprietary formula. Take a look at this list:

Jabil, the number one stock on the list, manufactures iPhone encasements. Jabil’s stock is closely related to Apple’s. Jabil’s return has a 0.79 correlation with Apple’s return over the last year. (A correlation of one would be ideal.)

Broadcom, Qualcomm, STMicroelectronics, Skyworks Solutions, and Amkor Technology are among Apple’s largest suppliers.

“While we have been bullish on QCOM, the main element of the bear case has revolved around the prospect of QCOM losing the Apple modem business, because Apple has been working on their own 5G modem since acquiring Intel’s modem team in 2009,” Raymond James analyst Chris Caso told clients.

Qualcomm, on the other hand, continues to benefit from Apple’s iPhone. According to Raymond James, the iPhone contributed $1.25 in annual earnings per share to Qualcomm, and the iPhone 13 may contribute up to $1.62 in annual profit per share.

“We believe it is still possible for QCOM to retain all or a portion of the Apple business, particularly given the complexity of mmWave, which is becoming increasingly important to the iPhone, and only QCOM currently has the ability to supply that technology,” Caso said.

Apple’s most powerful MacBook Pro laptop, the 16-inch model, hasn’t been updated since November 2019, and it still uses Intel processors, despite the company’s shift to its own chips in laptops and desktops.

However, Apple has not released new Mac computers at the same time as new iPhones in the last decade. If new Macs are in the works for the fall, there may be a separate event in October or November.

FactSet’s list also includes Amphenol, Alphabet, Qorvo, and Zynga.

Cirrus and Lumentum are two types of clouds.

Another Apple provider that analysts believe could be impacted by the “California Streaming” event is Cirrus Logic. Cirrus provides audio and voice components used in iPhones, tablets, and watches.

Cirrus was recently upgraded to overweight by Barclays, which sees a path to further content gains at Apple.

“The shift to power began with the power conversion/control socket at AAPL but now extends into the broader battery charging and voltage regulator market with the Lion Semi acquisition (July),” said Barclays analyst Blayne Curtis.

According to Barclays, Apple will build 227 million units this year, 226 million in 2022, and 215 million in 2023.

Face ID, the facial recognition system installed on newer iPhone models, is powered by Lumentum Holdings, a 3D sensing company.

According to the Wall Street firm, Lumentum could benefit if Apple’s iPhone product family includes a greater-than-expected mix of 3D Sensing functionality over time.

Competitors in streaming

Since the launch of AppleTV+, Apple has also been involved in the streaming wars.

Apple has never provided subscriber numbers for its service, as Disney and Netflix do; however, The Information reports that the tech giant is planning to spend more than $500 million this year on marketing Apple TV+.

If Apple decides to expand its content creation for AppleTV+, it could affect some of the biggest streaming companies, including Netflix, Disney, Amazon, and Roku.