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Gold Is Making Moves And Could Be Our Next Trade ⏤ Here’s The Level To Watch

– ETF Watchlist –
For those who are closely watching this market in case of a turn around or at the very least a pull back, we are getting close to the area where that has a higher probability of taking place. For example, the next big level to watch on the S&P 500 is 4300 and we just came up to that level before rejecting down, 4299.28 to be exact.
This zone has a lot of resistance overhead, which is something traders will want to look out for. While this doesn’t suggest the market will make a U-turn here, it does suggest that there will be more and more resistance ahead.
To find these levels and zones of resistance, we must first look back on history for when prices were in this area before. We can use history to show us where the pockets of supply and demand might be and then map out those zones in the process.
SPDR Gold Shares (GLD)
One trade idea we are on the look out to execute on is gold. With gold approaching that 2000 mark once again, we would like to see it overtake that level before establishing any long plays on it. With all the attention gold is attracting once again, we want to be mindful of the rise in price that purchasing could spur. Central banks and countries around the world have once again taken to stockpiling the shiny metal.
Whatever the reason, it isn’t much concern to us, but the fact that this buying is taking place is what we want to pay attention to. The big boys aren’t the only ones buying gold either. Even retail investors are adding gold to their portfolios in order to prepare for whatever economic turmoil may be heading this way.
Another positive development for those investing in gold, the recent meltdown of the crypto market following the SEC suing crypto companies Binance and Coinbase. Again, whether this is good or bad for crypto is not really a cause for concern, however, this event may push more people into the safe haven gold has traditionally been.
So, again, keep an eye on gold taking that 2000 level for another push higher.
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Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
Good Luck With Your Trading!
Christian Tharp, CMT

Stock News by TIFIN

Is Salesforce (CRM) A HOT Buy This Week?

Despite macroeconomic headwinds dampening the growth of the tech industry over the past year, the industry is witnessing rapid advancements that could propel its prospects in the long term. Following its solid first-quarter performance, let’s evaluate whether Salesforce, Inc. (CRM) could be worth investing in. The company shows remarkable prospects in its Artificial Intelligence (AI) …

Is Salesforce (CRM) A HOT Buy This Week? Read More »

Wealthpop

Is It Time Yet To Prepare For A Pullback?

– ETF Watchlist –
It is not out of the realm of possibility that we get a pull back soon. If we just look at SPY, we are just starting to break into another supply zone, a zone where big sell order were sitting in the past and unfilled sell orders could still be lying in wait.
This gives us a suspicion that soon could be a good time to look for put plays. Now, we could go the old fashioned route an find some levels to swing puts on ETFs like SPY and QQQ, but we can also buy equity on some bearish leveraged ETFs for a little more of a safer play, or buy calls on one of those ETFs. Let’s look at an example for when the time of a pullback comes.
ProShares UltraPro Short QQQ (SQQQ)
SQQQ is a great example of one of the leveraged ETFs we can look to in preparation for a pull back, which are always bound to happen at one point or another, the only question really becomes the severity and length of the pull back. Every hot market needs to blow off some steam. For more conservative types, going long equity on SQQQ can be a bit of a more relaxed way to get ahead of a little downside movement.
However, those looking for a more aggressive approach can buy call options on the ETF. That may sound counterintuitive, but since the ETFs price goes up if the market goes down, then you would want to go long this ETF, which means you’re really going short the market.
Of course, you can certainly go the old fashioned route and short SPY or QQQ, but we would be remiss if we didn’t at least give you some different options here. See what works for you and execute!
[embedded content]
Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
Good Luck With Your Trading!
Christian Tharp, CMT

Stock News by TIFIN

Is June the Time to Buy Microsoft (MSFT)?

Tech behemoth Microsoft Corporation (MSFT) pioneers the development, licensing, and support of software, services, devices, and solutions. It offers various products such as PCs, tablets, gaming and entertainment consoles, video games, and Search services, including Bing and Microsoft advertising. On April 17, MSFT and Epic announced the expansion of their strategic collaboration to integrate generative …

Is June the Time to Buy Microsoft (MSFT)? Read More »

INO.com by TIFIN

GameStop (GME) Stock Could Soar on June 7: Here’s What to Watch

Video game retailer GameStop Corporation (GME), the signature meme stock, had previously been riding some short-term momentum. However, that has since leveled out, and the company has been making progress in right-sizing its business by slashing its inventory levels and reworking its cost structure.Moreover, the company is undergoing a transitional period by halting its e-commerce efforts and focusing on its brick-and-mortar locations. Furthermore, GME makes changes to its rewards program. Also, GME stock might get a significant boost if there is a ban on short selling.
GME is expected to release its fiscal 2023 first-quarter report on June 7. The quarterly report should show reflect the drastic measures the company has been undertaking to achieve considerable profitability this year.
Let’s discuss the catalysts that could send GME’s stock price to fresh heights:
Favorable Fourth-Quarter Earnings
For the last fiscal year’s fourth quarter, the video game retailer posted its first quarterly profit in two years and surpassed analysts’ expectations for revenue. Its aggressive cost-cutting measures and strong demand for video game hardware in the holiday quarter helped the company become profitable.
For the quarter that ended January 28, 2023, GME reported a profit of $48.20 million, or $0.16 per share, compared to a loss of $147.50 million, or $0.49 a share a year earlier. Adjusted earnings of $1.16 a share beat analysts’ projections of a loss of $0.13 per share.
For the fourth quarter, the company’s net sales dropped slightly to $2.23 billion from $2.25 billion in the year-ago quarter. However, the figure was higher than analysts’ estimates of $2.18 billion.
The video game company had been working vigorously to steer itself back to profitability and partially got there by slashing its inventory levels and costs. Its selling, general, and administrative expenses were $453.40 million for the quarter, or 20.4% of sales, compared to $538.90 million, or 23.9% of sales, in the year-ago period.
Like many retailers, GME struggled with supply chain delays that left the company with a backlog of inventory after it previously tried to meet strong demand. Based on its fourth-quarter balance sheet, the company had $682.90 million in inventory, down from $915 million a year ago.Furthermore, GME has been trying to improve its cash balance as a part of its revival strategy. The company’s cash and cash equivalents for the quarter were $1.39 billion.
“GameStop is a much healthier business today than it was at the start of 2021,” CEO Matt Furlong said on a call with analysts. “We have a path to full-year profitability.”
Shifted Focus from E-Commerce to Brick-And-Mortar Sales
Ryan Cohen took over GME in 2021, aiming to transform the struggling video game retailer into an e-commerce juggernaut. Unfortunately, the company’s e-commerce sales failed to take off. GME’s losses widened, and Cohen’s new online-sales executives resigned.As a result, GME began cutting costs. The company canceled plans to build additional warehouses, closed a new e-commerce customer-service center, and laid off many corporate employees hired under the management of Cohen. Also, according to former GME executives and analysts, Cohen miscalculated what customers were prepared to pay through its website and app.
“Quarter after quarter we were unsuccessful with new ventures,” commented Ted Biribin, GME’s former employee. “If something didn’t work, senior leadership would go onto something else very quickly.”
GME’s CEO, Matt Furlong, stated in an internal memo last year, “Our stores, in particular, are a differentiator that will help us maintain direct connectivity to customers and position us to have localized order fulfillment capabilities across more geographies. While we continue evolving our ecommerce and digital asset offerings, our store fleet will remain critical to GameStop’s value proposition.”
GameStop is poised for solid growth as the company has stopped focusing on e-commerce sales. Consequently, the company can now provide more support for its 4,400 brick-and-mortar stores. GME also introduced an initiative to motivate the company’s staff.
Last year, the company announced an “improved compensation” scheme for its brick-and-mortar video game store’s most senior employees. For Assistant Store Leaders and Senior Guest Advisers, the compensation comes as an undisclosed rise in their hourly pay. For Store Leaders, it comes in the form of $21,000 worth of GME stock (vested for three years) on top of their regular pay, coupled with “the opportunity to earn additional compensation every quarter by hitting goals for performance-based equity grants.”
GME’s focus on physical stores resulted in the company reporting a quarterly profit for the first time in two years. For the full fiscal year 2022, expenses were reduced by more than $100 million.
GME’s Membership Program Getting a Huge Makeover
GME offers incentives to members of its rewards program to secure customer loyalty. To that end, the company is seemingly making significant changes to its customer loyalty program. The existing PowerUp Rewards membership will have its name changed to GameStop Pro, with the price going up from $15 per year to $25.
GameStop Pro will access some special perks through this new program. Among other incentives, members will get bigger discounts on collectibles, pre-owned games, GameStop brand gear, clearance items, and more. GameStop Pro is expected to roll out on June 27, with existing memberships being phased out as they come up for renewal.
GME’s revised customer loyalty program could enhance profitability and growth for the company.
Prohibition on Short Selling Could Send GME To New Highs
The practice of short selling has come under increased scrutiny amid the recent banking turmoil. Short selling is a well-known strategy in which financial traders bet that the price of a stock will go down. Short sellers largely profited from the banking crisis by borrowing shares they expected to fall and repaying the loan for less later to pocket the difference.
In March 2023, Wachtell, Lipton, Rosen & Katz, a law firm known for representing large companies in mergers and against attacks from hedge funds, called on U.S. securities regulators to restrict short sales on financial institutions. Also, the calls from Capitol Hill and elsewhere to prohibit short-selling have gotten louder lately.
With more regulators and lawmakers ramping up their calls for an outright ban on short selling, investors should prepare for potential legal changes. As traders anticipate this possibility, GME stock could get squeezed higher quickly. The r/WallStreetBets crowd might start a massive short squeeze in anticipation of a potential short-selling ban.
How Should Investors Approach the Stock
The stock has risen 33.5% year-to-date, beating the 11.5% gain in the S&P 500 index. Moreover, shares of GME have gained 20.1% over the past month and 32.1% over the past three months.
As investors think the company can pull off a successful business turnaround, GME stock has risen recently. The video game retailer has essentially pivoted its focus to brick-and-mortar sales instead of e-commerce sales with an eye on improving profitability. The shift already resulted in its first quarterly profit in over two years.
Moreover, the revised customer loyalty program, GameStop Pro, is a smart move that could bolster the company’s top-line results in 2023. At the same time, a potential ban on short selling could prompt a massive final squeeze for GME stock. Now, all eyes are on GME’s first-quarter fiscal 2023 earnings, to be released on June 7, after the market close.
Over the past few years, stock traders and price chasers have targeted GME, but sensible investors should avoid emotional trades and monitor the company’s financial and operational progress.
Investors could also keep tabs on the buying activity of GME’s insiders. After all, if the company’s insiders express their confidence through share purchases, that is probably a positive sign for the stock. Director Larry Cheng recently purchased 5,000 shares of GME worth about $114,000. Following this purchase, Cheng now owns a total of 44,088 shares.
While many strong forces propel GME, investing in the stock still involves a high level of risk. Investors should continue to expect GME stock to remain volatile (with a 24-month beta of 1.90), and it is not appropriate to pour their entire account into this one stock.Though it is advisable to take a small position in GME stock, as it may be on the cusp of a breakout, and the share price is likely to shoot higher in the near future.

Investors Alley by TIFIN

The Tech Rally Shows You Need to Buy Stocks Others Hate – Like These

After watching large-cap tech stocks zoom higher over recent months, don’t you wish you could jump in your time machine and buy these stocks last year?

Or even a handful of months ago, as investors bailed out on tech stocks after values had fallen by 50%, 70%, or more.

Let’s use this as a lesson to buy stocks that investors currently hate…

It is hard to believe that 2022 was a bear market for tech stocks, with steep price declines. Let’s look at some numbers for a few stocks investors hated last year. Share prices peaked in late 2021 and bottomed in October 2022. Yes, the bear market lasted for almost a year.

The Invesco QQQ Trust (QQQ) lost 38%.

Microsoft Corp. (MSFT) dropped by 39%.

Alphabet Inc. (GOOG) fell by 45%.

Tesla Inc. (TSLA) lost 75%.

Meta Platforms Inc. (META) dropped by 75%.

NVIDIA Corp. (NVDA) fell by 69%.

And yet, these are the same large-cap stocks that investors love this year.

There are a couple of essential points to understand. Most of the 2022 bear market losses had occurred by May. Absolute lows were hit in October and November. Prices didn’t start a serious recovery until January. As a result, the stock market felt ugly for eight to nine long months.

Percentage changes can be funny. The most a stock can lose is 100%, but there is no upside for a stock that goes to zero. From a 50% loss, it takes a 100% gain to return to the previous high. It takes a 300% gain to recover from a 75% loss.

Here are the results for the listed stocks since the low prices set last year:

The Invesco QQQ Trust (QQQ) is up 38%.

Microsoft Corp. (MSFT) has gained 55%.

Alphabet Inc. (GOOG) has gained 45%.

Tesla Inc. (TSLA) has rocketed 85% higher.

Meta Platforms Inc. (META) is up 198%!

NVIDIA Corp. (NVDA) has ridden the AI craze for 273% appreciation.

To make these types of gains, you needed to invest when these stocks were not the ones everyone wanted to buy. Buying and owning these stocks when the market was selling off also required patience. As I noted above, these stock prices bounced along near the bottom before starting a sustained uptrend. There were several false starts to the tech sector bull market that began in earnest in March.

The gains for the large-cap tech stocks listed above are in the past. You must look at out-of-favor sectors and industries to get in on the next sector-centric bull market. Here are three that may provide superior returns over the next couple of years…

Banking/finance is an obvious choice. Regional bank share prices have been hammered following a couple of high-profile bank failures. The iShares U.S. Regional Banks ETF (IAT) has lost 30% in the last few months and is down 50% from the late 2021 peak. IAT is an excellent way to play the regional banks. The fund also yields over 4%.

Business development companies (BDCs) offer a different type of investment in the finance sector. BDCs don’t have to worry about deposits, plus they use little debt and benefit from higher interest rates. Hercules Capital (HTGC) currently yields over 11%. And, the company pays supplemental dividends. The HTGC share price of $14.70 is 1.35 times the book value—and the book value is growing. Historically normal pricing would be at 1.5 times or higher.Real estate investment trust (REIT) share values participated in the 2022 bear market, and they have continued to fall in 2023. Specific REIT sectors (office, medical) do face challenges. However, well-run companies also have tremendous opportunities to take advantage of distressed property owners. Simon Property Group (SPG) trades for $103, yielding 7.2%. This was a $180 stock before the pandemic. Investors have not yet discovered that business is very good for Simon.

INO.com by TIFIN

Is Ford Motor (F) the New Tesla (TSLA)?

More than a year has passed since an announcement on April 26, 2022, by Ford Motor Company (F) CEO Jim Farley, regarding the company’s intent to challenge Tesla, Inc. (T) as the global EV leader.
Since then, the Detroit automaker has made huge strides in the electric mobility space. It has pipped TSLA to the pickup segment by beginning production of its F-150 Lightning and benchmarked the Model Y for its Mustang Mach-E crossover. While TSLA is still the runaway leader, F notched 61,575 fully-electric vehicle sales to emerge as the challenger in the U.S., something the legacy automaker planned to achieve by mid-decade.
Since both rivals are expected to battle it out for a greater share of the electric-mobility pie, it is understandable why an unexpected announcement by the CEO of both companies to join hands to enlarge the pie took the industry and markets by pleasant surprise.
On Thursday, May 25, during a live audio discussion on Twitter Spaces, Jim Farley and Elon Musk announced an agreement on charging initiatives for Ford’s current and future electric vehicles. Under the agreement, current Ford owners will be granted access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.
Moreover, the next generation of Ford EVs, expected by mid-decade, will include TSLA’s charging plug, enabling owners to charge their vehicles at Tesla Superchargers without an adapter while using Ford’s software.A separate Ford spokesman later added that pricing for charging “will be competitive in the marketplace.” The companies will disclose further details closer to a launch date, anticipated in 2024.
Following this announcement, which makes F among the first automakers to explicitly tie into the TSLA network, the former’s stock rose by 6.2% on May 26, closing at $12.09 per share, while the latter’s shares also climbed by 4.7%, ending the week at $193.17.In this article, we elaborate on why the optimism makes sense.
Firstly, as F is ramping up its production to double its EV capacity this year and looks on course to get to two million in a couple of years, with public charging of electric vehicles being a major concern for potential buyers, charging infrastructure is going to be critical for the company in order to ensure that it delivers a superior after-purchase experience to its customers.
TSLA is the only automaker that has successfully built out its own network of fast chargers, which gives the EV leader an edge over its competitors, whose partnerships with third-party companies have left much room for improvement in reliability and reach.However, with the announcement, F has managed to more than double its existing capacity of 10,000 fast chargers with 12,000 well-located TSLA Superchargers. Moreover, leveraging TSLA’s superior NACS charging technology is F’s attempt to ensure that it is on what Elon Musk has described as “equal footing” in its completion with the incumbent.
Secondly, opening up 12,000 Superchargers in its network of currently 45,000 connectors worldwide at 4,947 Supercharger Stations could benefit TSLA in multiple ways.
White House officials announced in February that TSLA has committed to open up 7,500 of its charging stations by the end of 2024 to non-Tesla EV drivers. The agreement with F would help the company make progress on that front.
By diversifying from being a competitor to doubling up as an infrastructure provider, the EV leader has hedged its bets to benefit from the increasing presence of legacy automakers in the electric mobility space.
While the company is expected to dominate EV sales in the foreseeable future, the revenue from its Supercharging stations, which is included under the “services and other” segment, is also expected to witness remarkable growth due to increased network utilization by non-Tesla EV drivers.
Lastly, but perhaps most importantly, this partnership could be the initiation of the strategic masterstroke that impacts the entire EV ecosystem. As discussed earlier, while TSLA uses NACS charging technology, the rest of the industry has adopted relatively-slower CCS charging.
With two-leading EV manufacturers joining hands and F being ‘totally committed’ to a single U.S. charging protocol that includes the Tesla plug port, EV strategies of other auto manufacturers, such as GM and STLA, could come under increased pressure.
According to Jim Farley, the others “are going to have a big choice to make. Do they want to have fast charging for customers? Or do they want to stick to their standard and have less charging?”
In this context, it wouldn’t be surprising if Musk’s statement, “Working with Ford, and perhaps others, can make it the North American standard, I think that consumers will be all better for it,” turns out to be the beginning of yet another victory lap for the illustrious CEO.

INO.com by TIFIN

Is Marvell Technology Inc. (MRVL) a Buy with the Latest AI Projection?

Just before the shares of NVIDIA Corporation (NVDA)got their moonshot post its earnings release on May 24, we discussed how the race to dominate the AI domain is gaining pace. In this article, we will look at another bus to that to which investors are rushing to hop on board: Marvell Technology, Inc. (MRVL).
While NVDA has clearly stolen the thunder over the past week by becoming the first semiconductor company to reach a trillion-dollar valuation, MRVL’s stock also hogged headlines. It surged by 32% after it surpassed top and bottom line estimates in the first quarter of fiscal year 2023, according to its May 25 earnings release.
However, given that the supplier of data infrastructure semiconductor solutions also witnessed 8.7% and 41.1% year-over-year declines in its quarterly revenue and non-GAAP net income to $1.32 billion and $264.2 million, respectively, it was not past performance, but the company’s bullishness regarding its future prospects that got reflected in the stock’s remarkable price action.
While informing analysts that the company had begun to reassess the “tremendous” business potential of AI, MRVL’s CEO Matthew Murphy said, “In the past, we considered AI to be one of many applications within cloud, but its importance and therefore the opportunity has increased dramatically.”MRVL’s favorable position to capitalize on the tailwind of increasing investments in AI originates in two acquisitions, which, in hindsight, have turned out to be key.
The first of them was a 2019 acquisition of Avera Semi, a spinout of Global Foundries, which contributed to MRVL’s custom chip designing and large-scale Application-Specific Integrated Circuit (ASIC) computing capabilities.
This was followed by a 2020 acquisition of Inphi, which had built a leading high-speed data interconnect platform uniquely suited to meet the insatiable demand for increased bandwidth and low power for both AI Clusters and traditional cloud infrastructure.
However, what was already a growing market share took a quantum leap late last year with the release of ChatGPT, which marked an inflection point for generative Artificial Intelligence (AI) and Large Language Models (LLMs).
With AI, if it isn’t already there, becoming a ubiquitous force majeure that’s touching and shaping every aspect of our modern lives, the traditional ratio of conventional processing through CPUs to accelerated computing through GPUs of 95% to 5% is destined to get inverted with the former component finding greater usage for control than execution.
Moreover, with the ever-increasing adoption of AI, the demand for increased computing power would drive demand for high-speed networking technology and optical productivity, which has been MRVL’s forte.
With triple levers of accelerated computing, data center usage, and high-speed networking to bank on, MRVL was able to quantify its revenue from AI during its recent earnings call. According to a note from Citi’s Atif Malik, “In FY2023, MRVL estimated its AI revenue to be ~ $200 million, representing a strong uptick from FY22. The company expects AI sales to reach ~$400M+ in FY24 before doubling in FY25.”
Bottom Line
According to Bill Gates and a few notable others, we overestimate change in the short term and underestimate it in the long term.The company’s lack of meaningful share repurchases during the previous quarter, despite its clear visibility on stellar growth prospects, makes us wonder if the glowing outlook was a signal to investors or noise to mask top and bottom-line declines.
However, from the perspective of both the current business and the pipeline of opportunities, the substance behind the hype is undeniable.Hence, since we may be at the beginning of a 10-year cycle of AI-driven semiconductor growth, it could be wise for investors to load up on the stock once the current wave of excitement ebbs and there’s more valuation comfort to buy in for the long haul.

Investors Alley by TIFIN

The Truth About Why Companies are Beating Earnings

There’s a dirty game Wall Street plays.  It’s been going on for ages so this isn’t something new. But it’s something many investors may not know about.  As you’ve seen, many companies recently are handily beating earnings estimates even while consumer sentiment is hitting lows.  What’s going on here?  Well, in my Thursday video, I’ll …

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