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China-linked group uses malware to try to spy on commercial shipping, new report says 2024-05-14 18:01:00+00:00 - The cyber espionage group known as Mustang Panda introduced malware over the past five months to gain remote access to “computer systems belonging to cargo shipping companies based in Norway, Greece, and the Netherlands, including some that appeared to be aboard the cargo ships themselves,” according to the Slovakia-based cyber security firm ESET. The report came as top U.K. and U.S. officials on Tuesday warned of a growing cybersecurity threat from China, particularly to critical infrastructure. According to the report, Mustang Panda, which has been accused of carrying out espionage against governments and other organizations across Asia and more recently in Europe, has used similar malware tools in previous spying campaigns. The “remote access trojan” type of malware allows an attacker to gain full access to a device and issue commands, after breaking in through an email, a malicious website, vulnerable software or an unprotected machine. It was the first time evidence had emerged that a China-linked cyber espionage group was focusing on commercial shipping, researchers said. “We haven’t seen this in the past,” said Robert Lipovsky, principal threat intelligence researcher at ESET. “It shows a clear interest in this sector. This was not a single occurrence. These were several distinct attacks at different, unrelated organizations,” he said. It was unclear if the cyber spying effort included the use of USB devices physically planted at the companies or on ships, he said. At a cybersecurity conference Tuesday in the United Kingdom, British and U.S. officials described a mounting danger from Chinese cyber espionage and hacking. “China is the single biggest area of focus right now,” a British cybersecurity official told reporters on the sidelines of the conference in Birmingham organized by the U.K. government. In a speech at the conference, the head of GCHQ, the U.K.’s cyber intelligence agency, said that although Russia and Iran posed immediate threats, China remains “the ‘epoch-defining’ challenge” and presented a risk for the security of the internet and the international order. “China has built an advanced set of cyber capabilities and is taking advantage of a growing commercial ecosystem of hacking outfits and data brokers at its disposal,” Anne Keast-Butler said. “China poses a genuine and increasing cyber risk to the U.K.” In a speech at the same conference, Harry Coker, White House national cyber director, said China’s cyber spying meant that Beijing had the ability to disrupt and damage America’s civilian infrastructure. “In a crisis or conflict scenario, China could use their pre-positioned cyber capabilities to wreak havoc in civilian infrastructure and deter U.S. military action,” Coker said. The Biden administration has accused China of carrying out a massive espionage effort known as “Volt Typhoon” that penetrated an array of critical infrastructure. China has rejected accusations from the U.S., Britain and other governments that it is carrying out cyber espionage, cyberattacks or intellectual property theft. On Tuesday, Chinese Foreign Ministry spokesperson Wang Wenbin said the U.K. has repeatedly hyped allegations about Chinese cyber activities. British and U.S. officials at the conference said China’s cyber tactics increasingly have shifted from trying to steal intellectual property or foreign intelligence to gaining stealthy access to critical utilities or other infrastructure organizations, using it as a potential leverage in a crisis. China has “moved on” from intellectual property theft, Natalie Pittore of the National Security Agency said at a conference panel discussion. “It’s increasingly what appears to be a pre-positioning (inside infrastructure) to have an effect,” said Pittore, the NSA’s cybersecurity liaison to the U.K. “They’re not in there actively stealing information the way you would with foreign intelligence access, or even IP theft,” she said. “Instead, what we observed from these Chinese APTs (advanced pervasive threats) is that they will get in, they will get a level of control and even more so the level of ability to control a network, and they go very quiet.”
Fed Chair Jerome Powell says inflation has been higher than thought and expects rates to hold steady 2024-05-14 17:39:00+00:00 - Federal Reserve Chair Jerome Powell reiterated Tuesday that inflation is falling more slowly than expected and will keep the central bank on hold for an extended period. Speaking to the annual general meeting of the Foreign Bankers’ Association in Amsterdam, the central bank leader noted that the rapid disinflation that happened in 2023 has slowed considerably this year and caused a rethink of where policy is headed. “We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected,” Powell said. “What that has told us is that we’ll need to be patient and let restrictive policy do its work.” While he expects inflation to come down through the year, he noted that hasn’t happened so far. “I do think it’s really a question of keeping policy at the current rate for longer than had been thought,” he said. However, Powell also repeated that he does not expect the Fed to be raising rates. The Fed has been holding its key overnight borrowing rate in a targeted range of 5.25%-5.5%. Though the rate has been there since July, it is the highest level in some 23 years. “I don’t think that it’s likely, based on the data that we have, that the next move that we make would be a rate hike,” he said. “I think it’s more likely that we’ll be at a place where we hold the policy rate where it is.” Markets vacillated as Powell spoke around 10 a.m. ET and major averages were near breakeven approaching noon ET. Treasury yields edged lower, and futures traders slightly raised the market-implied probability of the Fed’s first rate cut coming in September. Powell’s comments mirrored sentiments he expressed during his May 1 news conference after the most recent Federal Open Market Committee meeting. The committee unanimously voted to hold the line on rates while also expressing that it had seen a “lack of further progress” on getting inflation back to the Fed’s 2% target, despite a series of 11 interest rate increases. Tuesday brought a fresh round of discouraging inflation data, when the Labor Department’s producer price index, a proxy for wholesale costs, rose a higher-than-expected 0.5% in April on the back of a surge in services prices. Though the index on its surface indicated further price pressures, Powell called the report “mixed” as some of the components showed easing movement. “Is inflation going to be more persistent going forward? ... I don’t think we know that yet. I think we need more than a quarter’s worth of data to really make a judgement on that,” he said.
Jack in the Box Bottoms and the Rebound is on 2024-05-14 17:31:00+00:00 - Key Points Jack in the Box struggles in Q2, but re-franchising efforts are gaining traction. Guidance was maintained with weak comps but widening margins. Analysts view this stock as a deep value with a potential for a 50% upside. 5 stocks we like better than Jack in the Box Jack in the Box NASDAQ: JACK share prices tumbled over the last year as the Del Taco acquisition weighed on sentiment, but the rebound is on, and the upside looks tasty. The acquisition was questionable, and the rationalization of the business took longer to gain traction than expected, but it is gaining traction. The Q2 results aren’t stellar but reveal the impact of Del Taco's re-franchising efforts and point to a return to growth by fiscal year-end with accelerated bottom-line results. How high can the rebound go? It can go quite high, using the analysts as a gauge. Trading near $53, JACK shares were at the lowest level since the pandemic bottom and offered up a deep value opportunity relative to their outlook. At $53, even at $57.50, the stock is below the analysts’ lowest target, with a potential for a 50% upside at the consensus midpoint. Get Jack in the Box alerts: Sign Up Jack in the Box has Mixed Quarter: Positioning for Growth Jack in the Box Today JACK Jack in the Box $53.07 0.00 (0.00%) 52-Week Range $52.63 ▼ $99.56 Dividend Yield 3.32% P/E Ratio 9.33 Price Target $84.78 Add to Watchlist Jack in the Box had a mixed quarter . The $365.35 million in revenue is down 7.7% from last year and missed the consensus target by 100 basis points. Still, the weakness is primarily due to re-franchising compounded by soft market conditions. The core Jack in the Box brand saw sales contract by 1.6% on a -2.5% contraction in comps offset by a slightly higher store count. The smaller Del Taco segment contracted 1.3% on a 1.4% decline in comps. The strength is seen in the margin. Sales trends and re-franchising impacted the company’s margins, but lower SG&A helped offset this. The net result is a 6% decline in adjusted EBITDA compared to the 7.7% top-line decline and adjusted earnings that are roughly flat compared to last year. The adjusted $1.46 is a penny shy of last year’s adjusted result and aided by share repurchases. Jack in the Box repurchased 0.2 million shares in Q2 to bring the average count down by 5% compared to last year. The company has $210 million left under the current authorization, so it is expected to continue repurchasing as the year progresses. Jack in the Box Capital Returns Come With Risk Jack in the Box Dividend Payments Dividend Yield 3.24% Annual Dividend $1.76 Annualized 3-Year Dividend Growth 13.62% Dividend Payout Ratio 30.93% Recent Dividend Payment Mar. 27 See Full Details Jack in the Box has an attractive capital return with combined dividends and share repurchases of more than 8% in effective yield. The dividend is safe at face value with a payout ratio of less than 35%, but there are risks. The annualized outlook is solid, but Q2 results include negative cash flow and a sharp decrease in balance sheet cash that poses a threat. Cash flow should improve as the year progresses, with re-franchising leading to leaner operations and impairments falling off the books, but this detail should not be ignored. Meanwhile, Jack in the Box is growing. The company increased the store count for both segments during Q2 and expects to continue growing the footprint this year. Del Taco is expanding in Greensboro, NC and Atlanta, GA, while Jack in the Box added five new development agreements in Florida. The agreements are for restaurant locations in Tallahassee and Orlando, bringing the total of signed but not completed projects to 365, a 15% increase in the footprint. The Technical Outlook: Jack in the Box is at Rock Bottom Jack in the Box shares fell to rock bottom pricing ahead of the Q2 release and confirmed support at a critical level following. The market is up nearly 10% in a high-conviction move and is likely to continue higher. There is potential for resistance at the $60 level, but oversold stochastic and MACD and divergence in the MACD histogram suggests the rebound will not stop there. if it does, this stock could fall below $50 soon. However, a move above $60 (the lowest analyst price target tracked by Marketbeat) opens the door to $70 and $77, which may be reached soon. If the company can continue gaining traction, it could continue rallying to retest the high end of its trading range by the end of the year. → Revolutionizing the Green Energy Space and Building Shareholder Value Along the Way (From Small Cap Sniper) (Ad) Before you consider Jack in the Box, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Jack in the Box wasn't on the list. While Jack in the Box currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Feds urge people not to put decals on steering wheels after a driver is hurt by flying metal pieces 2024-05-14 17:17:48+00:00 - DETROIT (AP) — Federal auto safety regulators are warning people not to stick decals on their steering wheels because they can be hurled at drivers if the air bags inflate in a crash. The warning from the National Highway Traffic Safety Administration comes after another driver was severely hurt by a flying emblem during a crash. The air bag inflated and sent two pieces of metal from an aftermarket decal into the driver’s face and neck. The agency said it couldn’t say where or when the injury occurred. But it said the injury was the second it is aware of involving an aftermarket decal. In the previous case the driver lost sight in one eye after being hit by a rhinestone-adorned decal that hit them in the face, NHTSA said in a statement Tuesday. The decals usually have an adhesive on the back and cover the vehicle’s logo in the middle of the steering wheel. But the agency says any alterations to the air bag or its cover can cause malfunctions. The agency is urging people to avoid buying the decals and to remove them if they’re already on steering wheels.
Trump's vice presidential contenders show their support — and loyalty — in court 2024-05-14 17:17:00+00:00 - With his hush money trial still in full swing, former President Donald Trump’s vice presidential prospects have turned the lower Manhattan courthouse into a proving ground. Several of the most frequently mentioned contenders to join Trump’s ticket have started to show up at 100 Centre St. in support of Trump. The trial has practically become a de facto campaign stop in recent weeks, as the former president and his allies — many wearing signature Trump-red ties — have capitalized on breaks in the court’s proceedings to address the press, often deriding the legal thinking and the prosecutors behind the charges and attacking President Joe Biden. Sen. JD Vance of Ohio, the first serious vice presidential contender to visit the trial, described Trump on Monday as “in great spirits despite the circumstances,” echoing many of the president’s criticisms of the trial. From left, Rep. Byron Donalds, North Dakota Gov. Doug Burgum, House Speaker Mike Johnson and former presidential candidate Vivek Ramaswamy look on as Donald Trump talks at Manhattan criminal court on Tuesday. Curtis Means / Pool via AP “I think this trial is absolutely ridiculous. I think it’s a sham prosecution,” Vance told reporters outside the courthouse in an impromptu press conference, going on to attack Judge Juan Merchan and members of his family — a topic that is off-limits to Trump himself, due to a court-imposed gag order against the defendant. Inside the courtroom, Vance posted his observations from the trial on X. “I saw a media report a few days ago that Trump looked like he was falling asleep or bored or something. The obvious narrative they’re trying to sell is ‘yeah Biden is mentally unfit but this other guy is bad too,’” Vance wrote after describing the courtroom as “dingy.” “I’m 39 years old and I’ve been here for 26 minutes and I’m about to fall asleep,” Vance added. Trump arrived at court Tuesday with yet more potential running mates in tow. Trump was flanked by North Dakota Gov. Doug Burgum, Rep. Byron Donalds of Florida and former GOP presidential hopeful Vivek Ramaswamy, among others, as he delivered remarks before entering the courtroom. Hours later, in their own press conference in a park outside the courthouse, the trio of VP hopefuls painted a similar picture to the one Vance illustrated the day before: staunch defense of their party leader, punctuated by claims that the trial unfolding inside is a form of election interference. “The American people have already acquitted Donald Trump,” Burgum said, citing Trump’s lead over Biden in recent battleground-state polls. “The sooner that this scam trial can be concluded, the sooner that the president can get back to getting out campaigning and talking to the American people about the issues that matter to them,” he continued. Ramaswamy, in his own remarks, compared the trial to a “Kafka novel” and said the “prosecution’s main strategy appears to be to bore the jurors into submission.” As Trump spends the majority of his weeks inside the courtroom and his legal fees pile up, siphoning money from his political operation, fundraising has also proven a key vice-presidential test for those seeking to curry favor with Trump. Several potential running mates will attend a big-dollar fundraiser alongside the former president on Manhattan’s Upper East Side after court on Tuesday. And many of the people on Trump’s vice presidential long-list flexed their relationships with donors earlier this month at the Republican National Committee’s spring retreat in Palm Beach, Florida. Trump’s timeline for selecting his 2024 ticket-mate still remains mostly unclear. As of early May, Trump’s team had yet to move past the early stages of vetting prospective vice presidents, according to multiple sources familiar with the process. Trump himself often punts on the exact timing of an announcement, including as recently as last week, when he said that he may not broadcast his final pick until the Republican convention in mid-July. “I don’t think I’ll be announcing before the convention,” Trump said in an interview with Miami’s Telemundo 51. “I think we’ll be doing it around that time,” he added.
Silver lining for consumers: Food price growth has gone flat, and the prices of many other goods are falling 2024-05-14 17:07:00+00:00 - Price growth in many key consumer categories has slowed considerably or ceased altogether — but that has done little to dent consumer worries as the costs of housing and other services have continued to climb. Among the broadest categories tracked by the consumer price index, or CPI, two of the ones most acutely felt by consumers — food and energy prices — hit 2.2% and 2.1% on a 12-month basis in March, respectively. That's essentially in line with the Federal Reserve's 2% goal. Within those categories, food at home — essentially, groceries — climbed just 1.2%, while gasoline prices climbed 1.3%. "Food is a notable bright spot," said Neil Dutta, head of economic research at Renaissance Macro Research. In spite of the positive trends, progress in reducing overall CPI has stalled. Economists generally agree it’s mostly because the cost of rent has remained elevated, but there remains disagreement about how soon slowing rent growth will start to appear in the CPI. Even as the Fed and other economists have preached patience, the upshot has been a CPI that has remained stuck between 3% and 4%, above the Fed’s 2% target, for more than a year. On Wednesday, the Bureau of Labor Statistics will release CPI data for April, with 12-month expectations for a reading virtually unchanged from March’s 3.5%. Once again, rent growth is expected to keep the CPI elevated.
Law professor says Tesla threatened to fire law firm over Musk’s huge payout 2024-05-14 17:00:00+00:00 - A leading professor of corporate governance has accused Tesla of threatening to fire one of its law firms over his objections to Elon Musk’s claim to a massive $56bn compensation package. Retired professor Charles Elson of the University of Delaware alleged in a legal filing on Monday that Holland & Knight, a law firm that he has worked for over close to three decades, told him that Tesla threatened to end its relationship with the firm unless he dropped plans to submit a legal brief to a shareholder lawsuit opposing the controversial payout, the largest in US history. In the filing, Elson said Tesla’s efforts to stop his opinion from being included in the action based on claims of a conflict of interest were “extraordinary and appalling” and “a fig leaf for Musk, acting through Tesla, to try to bully a law professor by making a serious economic threat to a law firm with which the professor had a consulting relationship”. “This is not the first time that Tesla has threatened to fire a law firm for employing someone who annoyed Elon Musk by doing his job,” Elson added. He said he had resigned from the company after he learned of Tesla’s threat “to protect that firm from retaliation while upholding the important principle of academic freedom”. Holland & Knight denied that it was pressured by Tesla and said it had “determined that Charles Elson’s proposed course of action was inconsistent with the firm’s obligations to its client” and denied it had been coerced or threatened by Tesla. The legal dispute is the latest to hit Tesla and Musk’s efforts to push through his multi-billion pay package granted by Tesla’s board, which a judge in Delaware has called “an unfathomable sum” that was unfair to shareholders. Last month, Delaware chancellor Kathaleen McCormick found that certain Tesla directors had a “lack of independence” from Musk, that stockholders were “not fully informed”, the plan’s approval resulted from “unfair dealing” and the amount of compensation under the plan was an “unfair price”. Tesla then said it planned to hold a new shareholder vote to reinstitute Musk’s compensation, which Elson argues is not permitted under Delaware law. His proposal to file a second opinion to the court then triggered, he alleges in the court filing, the threat from Tesla to drop the firm. The claim of a conflict of interest, he said, was not valid because he is not a lawyer at Holland & Knight but a consultant and was acting as a friend of the court. Musk’s ongoing claim to $56bn Tesla payout comes as the EV maker is struggling to maintain sales. Tesla posted record deliveries of more than 1.8m cars worldwide in 2023 but faces increased competition from other carmakers and declining demand for purely electric cars. The company said it delivered 386,810 vehicles in the first three months of 2024, nearly 9% fewer than it sold over the same period last year. Musk has threatened to move Tesla’s corporate listing to Texas, where the company is now based, to get around the Delaware ruling, and threatened to build products outside Tesla unless the company comes up with a new compensation package. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Wedbush Securities analyst Dan Ives has said that threat is “the elephant in the room” and a “massive overhang” over Tesla’s stock price, which is down about one-third this year. Tesla chair Robyn Denholm wrote to shareholders last month saying that Musk had delivered on the growth and met stock value and operational targets outlined in Tesla’s shareholder-approved 2018 pay package agreement. Denholm said that the Delaware court had “second-guessed your decision” and that Musk has not been paid for any of his work for Tesla for the past six years. “That strikes us – and the many stockholders from whom we already have heard – as fundamentally unfair, and inconsistent with the will of the stockholders who voted for it,” she added.
Sony Group, The Container Store rise; Alibaba, Smart Sand fall, Tuesday, 5/14/2024 2024-05-14 16:13:14+00:00 - NEW YORK (AP) — Stocks that traded heavily or had substantial price changes on Tuesday: The Container Store Group Inc., up 2 cents to 90 cents. The storage products retailer beat analysts’ fiscal fourth-quarter earnings forecasts. Alibaba Group Holding Ltd., down $5.09 to $79.51. The online retailer’s fiscal fourth-quarter earnings fell short of Wall Street forecasts. Hudbay Minerals Inc., up $1.25 to $10.05. The mining company’s first-quarter earnings and revenue beat analysts’ forecasts. Sony Corp., up $5.08 to $81.23. The electronics and media company reported a surge in profit during its last quarter. Southland Holdings Inc., up 34 cents to $.4.95 The Texas-based builder of highways, bridges and tunnels beat analysts’ first-quarter earnings and revenue forecasts. Smart Sand Inc., down 10 cents to $2.20. The sand supply and services company’s first-quarter earnings fell short of analysts’ forecasts. Agilysys Inc., up $11.95 to $92.16. The software provider for the lodging and leisure sectors beat Wall Street’s fiscal fourth-quarter financial forecasts. On Holding AG, up $5.61 to $36.30. The Swiss athletic shoe brand’s sales forecast for the year surpassed analysts’ expectations.
A.I.’s ‘Her’ Era Has Arrived 2024-05-14 15:33:20+00:00 - A lifelike artificial intelligence with a smooth, alluring voice enchants and impresses its human users — flirting, telling jokes, fulfilling their desires and eventually winning them over. I’m summarizing the plot of the 2013 movie “Her,” in which a lonely introvert named Theodore, played by Joaquin Phoenix, is seduced by a virtual assistant named Samantha, voiced by Scarlett Johansson. But I might as well be describing the scene on Monday when OpenAI, the creator of ChatGPT, showed off an updated version of its A.I. voice assistant at an event in San Francisco. The company’s new model, called GPT-4o (the o stands for “omni”), will let ChatGPT talk to users in a much more lifelike way — detecting emotions in their voices, analyzing their facial expressions and changing its own tone and cadence depending on what a user wants. If you ask for a bedtime story, it can lower its voice to a whisper. If you need advice from a sassy friend, it can speak in a playful, sarcastic tone. It can even sing on command.
Fed Chair’s Confidence in Slowing Inflation Is ‘Not as High’ as Before 2024-05-14 15:32:18+00:00 - Jerome H. Powell, the Federal Reserve chair, reiterated Tuesday that policymakers were poised to hold interest rates steady at a high level as they waited for evidence that inflation is slowing further. Fed officials entered 2024 expecting to make interest rate cuts, having lifted borrowing costs sharply to a more than two-decade high of 5.3 percent between 2022 and the middle of last year. But stubbornly rapid inflation in recent months has upended that plan. Central bankers have been clear that rate cuts this year are still possible, but they have also signaled that they are planning to leave interest rates on hold for now as they wait to make sure that inflation is genuinely coming under control. Speaking during a panel discussion in Amsterdam, Mr. Powell said officials had been surprised by recent inflation readings. The Consumer Price Index inflation measure, which is set for release on Wednesday, came down rapidly in 2023 but has gotten stuck above 3 percent this year. The Fed’s preferred measure, the Personal Consumption Expenditures index, is slightly cooler, but it, too, remains well above the Fed’s 2 percent inflation goal.
What the F.A.A. Bill Means for Travelers 2024-05-14 14:57:22.677000+00:00 - Automatic refunds for significant flight disruptions, fee-free family seating and accessibility improvements. Those are among the benefits for travelers in the bill to reauthorize the Federal Aviation Administration for five more years, which Congress is expected to pass. After months of back and forth, and several short-term extensions, it will then head to President Biden’s desk to be signed into law. The F.A.A. oversees all plane traffic in the United States, and the bill, which Mr. Biden has signaled he will sign, grants $105 billion to the agency and $738 million to the National Transportation Safety Board. In addition to strengthening passenger protections, it will pay for airport infrastructure, salaries and safety programs, and take aim at the air traffic controller shortage. Geoff Freeman, the president and chief executive of the U.S. Travel Association, called the renewal “a big step toward vastly improving the travel experience.”
Comcast Plans Streaming Bundle With Netflix and Apple TV+ 2024-05-14 14:32:36+00:00 - Warner Bros. Discovery, Fox and Disney announced this year that they were teaming up to offer a streaming service with games from the National Basketball Association and the National Football League. Last week, Disney and Warner Bros. Discovery said they would bundle their streaming services, selling users a package that included Disney+, Hulu and Max. Comcast has long offered its users a menu of streaming services on Xfinity, its package of services that includes cable television and broadband internet. For years, the company has offered services like Netflix and Apple TV+ as add-ons to its existing television bundle, acting as a vendor for those companies. This is the first time that Comcast will offer both services as part of a discounted bundle. Comcast, which has millions of broadband and cable television customers across the United States, has different incentives to bundle streaming services than many of its competitors have. If Comcast can give its customers additional reasons to stick with the company, or persuade them to pay for more features through Xfinity, the effort to bundle services will have been worth it. Many other internet providers have sold bundles that include streaming services. When Disney+ launched, Verizon offered a promotional bundle with that service. When the short-lived, short-form streaming service Quibi launched, T-Mobile offered to bundle its wireless offering with that service. Comcast has been willing to spend big to gain a foothold in the competitive video streaming business. Peacock, which launched in 2020, lost $2.7 billion last year, Comcast said in a filing, but paying subscribers increased to 31 million. The company has said Peacock’s losses were narrowing as the service matured.
On Shares Move Higher in Race to a New All-Time High 2024-05-14 14:05:00+00:00 - Key Points On exceeded the analysts' consensus and raised guidance. Guidance is cautious. The company is gaining traction in its core market and expanding into new verticals. Analysts favor the stock and have been lifting their targets, a trend that should continue. 5 stocks we like better than ON On’s NYSE: ONON Q1 results prove it is gaining traction with athletes and is on track to dethrone Nike NYSE: NKE as the god of running shoes. The company’s results exceeded expectations on strength in all channels, segments, and geographical regions and are expected to accelerate as the year progresses. Evidence the shoes are more than a fad includes the latest Boston Marathon win. Helen Obiri of Kenya became the 6th woman to repeat back-to-back wins, the first since 2005, wearing a pair of On running shoes both times. The takeaway is that winners who care about comfort and quality are turning to On and On is expanding into new verticals, growing its addressable market. Get ON alerts: Sign Up On Has Robust, Record-Setting Quarter, Gives Cautious Guidance ON Today ONON ON $36.30 +5.61 (+18.28%) 52-Week Range $23.41 ▼ $37.31 P/E Ratio 134.44 Price Target $37.53 Add to Watchlist On had a solid quarter with revenue of $640.36 million, exceeding the Marketbeat.com consensus by a significant margin. The top line exceeded consensus by 1650 basis points to set a new all-time record and provide leverage to the bottom line. Revenue is up 20.9% compared to last year, led by the DTC channel. DTC sales, the higher margin channel, grew by 39%as-reported, and 49% on an FXN basis and are now 37.5% of the mix. Wholesales grew by 12%. Segmentally, Accessories grew fastest at 36%, but the core shoe segment also grew robustly at 21%. Margin news is good. The company widened its gross and operating margins on strength in DTC, sales leverage, and cost controls. Adjusted EBITDA increased by 27% on a 15.2% margin, up 70 bps YOY, to leave earnings at $0.36. This is more than double last year, suggesting that guidance is very cautious. On raised its guidance, providing another catalyst for the market. The takeaway for investors is that guidance expects quarterly growth to accelerate above 30% by year-end and for the margin to expand. The $2.52 billion in revenue aligns with the consensus estimate but is likely cautious given the Q1 strength and brand momentum. On’s Balance Sheet is a Fortress; Can Invest in Growth On’s balance sheet is a fortress with no long-term debt and a growing cash position. The cash is up nearly 19% compared to last year, nearly $650 million, setting the company up to invest in growth and return capital to shareholders. The company does not currently pay dividends or repurchase shares but could begin doing so soon. Until then, investors might expect to see On’s growth continue robustly for years due to its lean into new verticals. Shoe lines targeting tennis and training are gaining traction and improving the total addressable market; competitor Nike stands to lose share. Analysts favor On and will likely lead this market higher. The seventeen tracked by Marketbeat.com rate the stock at a consensus Moderate Buy, and they have been revising their price targets to be higher. The consensus going into the report is $37.50, up 25% compared to last year and 10% above the pre-release price action. On Surges 20%: New Highs are in Sight On’s stock price surged 20% at the open, exceeding the analysts' consensus target. The market shows a solid trend-following signal that should take it to a fresh high, but there is risk. Signs of resistance at the top of a trading range may cap gains near $37. A move above that level would be bullish; failing to do so would leave the market range bound at current levels. In the event new highs are reached and held, the market could advance another $10 with or without the aid of the analysts. If the analysts raise their targets, the upside potential increases. Before you consider ON, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and ON wasn't on the list. While ON currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
What Wall Street Doesn’t Want You to Know About Alibaba Stock 2024-05-14 13:55:00+00:00 - Key Points After disappointing earnings, Alibaba's shares were down 5% in the pre-market session. Wall Street is hiding the facts, as the company's cash flow remains as strong as ever, as seen in a dividend payment and $25 billion in buybacks. Citigroup's analysts see over 50% upside in the stock; a Chinese economic comeback could push it even higher. 5 stocks we like better than Amazon.com Shares of Alibaba Group NYSE: BABA fell by as much as 5% in the pre-market session of May 14th; the reaction came after a wild first quarter 2024 earnings result, which is arguably the most critical report of the year as it sets the tone for what may come in the following months. Without digging deeper into the company’s financials, any retail investor would be wrongly scared away. After a massive decline in net income, the stock should have made new all-time lows, yet it remains within the tight range it has traded under for the past three years. This means some are out there providing enough buying pressure to keep the stock from plummeting. Today, investors will get an insight into why Wall Street isn’t telling the world the whole story. Get Amazon.com alerts: Sign Up Behind Alibaba’s negative earnings release lies a simple – yet powerful - fundamental fact that will have the opposite effect in the following quarters, particularly as the Chinese economy shows signs of a potential comeback shortly. Taken as a proxy, the iShares MSCI China ETF NASDAQ: MCHI outperformed the S&P 500 by more than 20% in the past quarter; investors could assume that momentum – and sentiment – has improved for Chinese stocks. Turning One of The World’s Biggest Ships Alibaba Group Today BABA Alibaba Group $79.51 -5.09 (-6.02%) 52-Week Range $66.63 ▼ $102.50 Dividend Yield 1.23% P/E Ratio 14.67 Price Target $112.49 Add to Watchlist China is the second-largest economy in the world and plays a crucial role in global markets. Specifically, Alibaba is one of the largest business-to-business (B2B) players in the technology sector , capturing nearly twice the global e-commerce market share thatdid. The Chinese government, noticing its stock market value decline to near decade-lows, decided to react and push future prospects back up. Among the many stimulus measures applied to the economy, the latest round came through a $138 billion bond sale. Considering that there is enough demand for Chinese bonds for the government to consider selling them, investors can see the growing interest from international investors in entering China. However, don’t follow this thread until all the facts are in. One of these facts is the green light from Ray Dalio, who—since the third quarter of 2023—has been buying into the China ETF. Michael Burry (yes, the guy who called the 2008 financial crisis) reports his largest positions in both Alibaba and JD.com Inc. NASDAQ: JD, betting that China’s comeback will be led by consumer discretionary stocks first. After posting mostly negative inflation data, China has achieved three consecutive months (a whole quarter) of positive inflation, which signals the potential return of consumer demand. More than that, the Caixin Composite PMI, a reading on overall business activity, has expanded since November 2023, increasing the odds of corporate profits ahead. However, not all profits are made equal. Here’s why Alibaba’s net income decline is a trick to keep Main Street outside this valued gem. An 86% Drop, But Not Really That’s right, net income plummeted by 86% over the year, which should have been enough to send the stock in the opposite direction of GameStop Corp. NYSE: GME, which rose in the opposite direction on what could be the revival of meme stocks. However, following the potential Chinese economic recovery, Alibaba shows all the right signs. According to Alibaba’s press release, revenue increased by 4% in the company’s largest segment (Taobao & Tmall Group). The most exciting business found in Alibaba’s cloud computing segment, which competes against Amazon’s AWS, also posted 3% revenue growth. All others posted double-digit growth in the digital commerce and logistics networks business. As these mainly serve the Greater China region, results show investors that the Chinese economy could be on the right track to stage a comeback this year. Here’s where investors can justify Citigroup’s $124 price target for Alibaba, calling for a 55% upside from where the stock fell recently. According to management and the company’s financials, the significant contraction in net income came from a net loss of roughly $1.4 billion in equity investments. Alibaba Group Holding Limited (BABA) Price Chart for Tuesday, May, 14, 2024 Remember that the government had to act due to the dangerously low stock market? Alibaba was on that boat as well. However, these results do not reflect the company’s true earning power, which can be appreciated through the posted $3.2 billion in operating cash flow. Alibaba’s cash flow has expanded since the COVID-19 pandemic, making this behemoth a total cash cow today. The company’s current $205 billion market cap comprises $34.4 billion in cash. What do companies do when they have more money than they know what to do with? They pay dividends, as Alibaba announced a $1 a share dividend for the year. While that isn’t much of a reward, investors are getting the bulk of appreciation through a $25 billion share repurchase program, which took over a million shares in the past quarter alone. Conversely, if the Chinese stock market recovers along with the economy, Alibaba’s equity investments could significantly boost reported net income. Still, investors could – and should – while this comes along, lean on Alibaba’s cash flow to gauge where the company is headed. → Revolutionizing the Green Energy Space and Building Shareholder Value Along the Way (From Small Cap Sniper) (Ad) Before you consider Amazon.com, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Amazon.com wasn't on the list. While Amazon.com currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Dutch Bros Gives Investors More Bang for the Buck than Starbucks 2024-05-14 13:42:00+00:00 - Key Points Dutch Bros is a fast growing quick service drive-through coffee chain giving Starbucks a real run for the money. Dutch Bros Q1 2024 EPS beat by 8 cents as revenues surged 40% YoY in contrast to Starbucks EPS miss of 12 cents and a 1.8% YoY revenue decline. Dutch Bros has a longer growth runway as average unit volumes (AUV) hit $2 million per location, which averages just 950 square feet. 5 stocks we like better than Dutch Bros Dutch Bros. Inc. NYSE: BROS is a growing quick-service coffee and beverage chain. The company primarily offers drive-through coffee service with limited walk-up locations. In fact, 90% of the business for this consumer staples sector company comes from the drive-thru. The model emphasizes speed, value and convenience. The average Dutch Bros Coffee location measures only 950 squeeze feet. Here’s why investors and customers are getting more bang for the buck with Dutch Bros over Starbucks Co. NASDAQ: SBUX. Get Dutch Bros alerts: Sign Up Budget Friendly and Convenient Dutch Bros Today BROS Dutch Bros $36.07 +0.89 (+2.53%) 52-Week Range $22.67 ▼ $36.32 P/E Ratio 200.40 Price Target $36.67 Add to Watchlist The Quick and the Dead Dutch Bros beverages are considerably cheaper than Starbucks, costing $3.00 to $4.50 for a large. They also sold their brand of Rebel energy drinks and added Shine, which are swirls that can be added to any iced drink. During inflationary times, the Dutch Bros has the edge when it comes to appealing to the wallet. The words quick, speedy, convenient, and Starbucks don't belong in the same sentence. Anyone who has ever ordered at Starbucks understands there is always a wait. There will always be a wait, even when ordering through the mobile app. Mornings are the most brutal wait. Starbucks attributes the waiting period to be a problem caused by its own success. That may be one way to spin it; the other is that the inefficiency is structurally and even culturally embedded into the process, and it's starting to seriously impact the bottom line as customers opt to forgo the wait. With drive-thru and walk-up service, Dutch Bros is structurally faster than parking the car and walking into a Starbucks to pick up a mobile order. Slow is a No Bueno, Anymore Starbucks Today SBUX Starbucks $75.63 -0.55 (-0.72%) 52-Week Range $71.80 ▼ $107.66 Dividend Yield 3.01% P/E Ratio 20.83 Price Target $96.43 Add to Watchlist This was evidenced in its recent quarter when Starbucks missed its Q1 2024 EPS estimates by 12 cents as comparable store sales declined 4% and transactions declined 6%. Revenues fell 1.8% YoY to $8.56 billion, missing the $9.12 billion consensus estimates. Starbuck's CEO Laxman Narasimhan pointed out the completion rate of orders through its mobile app had declined. This means customers were starting their orders on the Starbucks app but then abandoned them due to the long wait times. The frustratingly long wait time when customers need to get into the office, avoid a parking ticket and fight traffic can almost be a sign of hubris and arrogance to many. Starbucks CEO Sees Long Wait Times as “Opportunity” The morning rush is generally half of Starbucks's business. Over 60% of its morning business comes from Starbucks Rewards members who order with the Starbucks app. Starbucks CEO Laxman Narasimhan pointed out in its earnings conference call, “What's interesting though, despite strong Mobile Order & Pay sales, we saw a mid-teens percent order in completion rate within the order channel this past quarter. In other words, customers using MOP put items into their cart and sometimes chose not to complete their order, citing long wait times of product and availability, here lies opportunity.” Hitting Up Toyota to Speed the Barista Process? Narasimhan has been actively working on improving the process with tools like an equipment-driven siren system. For the past 6 months, they've been working with the Toyota Production System Support Center to find ways to unlock additional capacity at peak demand times. They will be rolling it out in North American stores in the coming months. Did the market buy this? Not quite. The markets responded to the Q1 earnings miss by selling off shares by 15.88% the following morning. Dutch Bros Shares Jump 30% On the flipside, Dutch Bros Q1 2024 earnings resulted in an 11% gap the following morning and a 30% run-up in the following three days. Dutch Bros beat EPS by 8 cents as revenues surged 40% YoY to $275.9 million, beating $255.56 million. Additionally, Dutch Bros raised full-year 2024 revenue guidance to $1.20 to $1.214 billion, up from the $1.19 to $1.205 billion previous guidance, vs $1.2 billion consensus estimates. Innovating New Beverages The company also rolled out its high-protein coffee, which delivers 20 grams of milk protein per medium-sized serving. Dutch Bros also rolled out a boba beverage, which is resonating with Gen-Z-ers. Dutch Bros CEO Christine Barone commented, “Beyond driving traffic, boba boosted average ticket and drove what we believe was an increase in group buying behavior. Based on the strong customer and crew response, I am pleased to announce that we will continue to offer strawberry boba as a premium add-on to our regular menu going forward.” Expansion in Locations and AUV Dutch Bros plans to open 120 to 125 more stores in 2024 on its way towards 4,000 locations in the next 10 to 15 years. The company opened a record 45 shops in Q1 2024. Dutch Bros is also an asset-light business, with nearly half its stores being franchised. Its Dutch Rewards program hit 66% of all transactions through the app. Same-store sales surged in ticket and traffic. Dutch Bros hit a record average unit volume (AUV) of $2 million. The company is also looking at expansion in China. Upside Potential Goes to Dutch Bros Starbucks spills more coffee than Dutch Bros sells. However, it can also be argued that Starbucks has grown too large to be considered a growth stock anymore. Dutch Bros has more room to grow as a business and with its stock price. With over 700 stores on their way to 4,000 locations, this could be considered a ground-floor entry opportunity for investors looking for growth. Double Top Breakout BROS is attempting a double top breakout at the $36.17 resistance after accelerating from its Q1 2024 earnings gap at $30.14. The daily relative strength index (RSI) has risen to the 75-band. Pullback support levels are at $32.88, $30.14, $28.50 and $26.91. BROS has an 11.51% short float. Dutch Bros analyst ratings and price targets are at MarketBeat. Before you consider Dutch Bros, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Dutch Bros wasn't on the list. While Dutch Bros currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Home Depot: Earnings Mixed, Wait to Buy the Dip 2024-05-14 12:45:00+00:00 - Key Points Home Depot provided a better-than-feared Q1 report but gave no reason for the market to rally. Growth will be hard to achieve this year, but cash flow and capital return will remain solid. Analysts capped the upside ahead of the release and may lower their price targets now. 5 stocks we like better than Home Depot Home Depot NYSE: HD issued a mixed Q1 report offering little reason to buy or sell the stock. On the one hand, weaker-than-expected revenue and tepid guidance suggest growth will be hard to come by this year. Conversely, better-than-expected profitability and an outlook for normalized operations suggest that capital returns will continue to flow. Because HD analysts cap gains, upward movement will be limited for the foreseeable future. Because the stock yields a healthy 2.65% while trading at fair value relative to the S&P 500, support should be solid at the bottom of the range. The takeaway for investors is that Home Depot is a solid discretionary stock to hold while it trades within a long-term consolidation range and one to target for buying on the dips. Get Home Depot alerts: Sign Up Home Depot has Mixed Quarter, Reaffirms Guidance Home Depot Today HD Home Depot $340.50 -0.46 (-0.13%) 52-Week Range $274.26 ▼ $396.87 Dividend Yield 2.64% P/E Ratio 22.55 Price Target $375.19 Add to Watchlist Home Depot had a mixed quarter , with top and bottom line results diverging from consensus. The company reported $36.4 billion in net revenue, a decline of 2.4% compared to last year. The top line missed consensus by a slim 70 basis points, but a better-than-expected bottom line offsets the weakness. As a point of reference, Home Depot’s Q1 revenue is up 28% compared to Q1 2020, when sales were up 7% on budding pandemic-driven demand. Revenue weakness is due to poor comps; comparable store sales are down 2.8% and compounded by weakness across the network. Customer transactions are down 1% YOY despite an increased store count; the ticket average is down 1.3%, with sales per square foot falling 3.4%. Management attributes the weakness to a slower start to the spring season than anticipated and cautious consumers. In their view, consumers can spend but aren’t because of high interest rates. The margin news is mixed. The company’s margins contracted compared to last year but less than expected. The gross profit fell by 1%, while operating income fell by 8.5%. Operating income was impacted by deleveraging sales per square foot and increased costs. The net result is $3.63 in diluted GAAP earnings, down 5% compared to last year but a nickel above the Marketbeat.com analysts’ consensus forecast. Guidance is another mixed bag. The company reaffirmed its full-year outlook despite the mixed Q1 results. The company expects growth to return by year’s end and drive a 1% increase versus last year. The caveat is that 2024 results include an extra week, and 1% aligns with the consensus outlook; no catalyst for a rally. However, the guidance expects margins to improve, aiding the capital return outlook. The guidance doesn’t include the impact of a recent acquisition expected to close this quarter. The company is leaning into its Professional services segment with the acquisition of SRS Distribution Inc. The purchase will impact the balance sheet but also increase sales and earnings and potentially widen margins. Home Depot has Solid Cash Flow, Capital Returns to Continue Home Depot has solid cash flow and was able to build its cash balance sequentially and compared to last year. Leverage is still high, with long-term debt at 23X equity, but equity is rising, and capital returns are reliable. The dividend payout is about 60% of earnings, allowing for distribution growth in the coming years, although the pace of growth may slow. The dividend is compounded by share repurchases, which reduced the count by 2.1% on average in Q1. Analysts are unlikely to raise their ratings or targets on this news. The more likely scenario is that recent price target reductions will turn into a trend that weighs on the market over the summer and into Q4. As it is, the consensus price target implies about 10% upside from the pre-release price points, down on a month-to-month basis, and insufficient for a new high. Assuming the price targets continue to fall, investors should expect solid resistance at $375, if not lower. Shares of HD stock are up in premarket trading but show evidence of resistance at $350. If the market can’t get above that level soon, a move to the bottom of the long-term range, near $280, is likely. A move to that level would align with the long-term trend and present an attractive entry for income investors. Before you consider Home Depot, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Home Depot wasn't on the list. While Home Depot currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Is GameStop’s 80% Rally a Sign of Small Caps Returning? 2024-05-14 12:00:00+00:00 - Key Points GameStop is looking to make a comeback after Twitter (now X) user "Roaring Kitty" boosted the company's future online. Sticking to the fundamentals, this 80% rally could be short-lived, as analysts see just as much downside from today. There are other better ways to play this "risk on" attitude given by markets. 5 stocks we like better than CleanSpark The meme stock mania could be back underway, as shares of GameStop Corp. NYSE: GME have been halted after rallying by as much as 80% on Monday’s trading session. As it turns out, ‘Roaring Kitty,’ the Twitter (now X) user who started the first GameStop saga in 2021, has come back on Twitter to pump the gas on the stock’s future. Those who feel like history could repeat itself and bring a more than 90% plummet after the recent hype, just like in 2021. However, there is a more significant trend underneath the fact that this $9 billion company is rallying so quickly, and it has to do with a market-wide rotation at hand. Get CleanSpark alerts: Sign Up Expectations that the Federal Reserve (the Fed) could cut interest rates later this year have shifted investor interest into small-cap to mid-cap companies. These companies tend to outperform all others during periods of easy financing and a ‘risk on’ mentality. GameStop could provide investors with a wild ride, though other small companies may offer a safer ride based on this rally’s influence. Is There Substance to GameStop’s Rally? Analysts think this chapter two of the 2021 fad, as a consensus price target of $5.6 a share, set by Wedbush as of March 2024, represents a net downside of 80.7% from where the stock has risen today. Fundamentally speaking, here’s why analyst sentiment hasn’t changed. Following the company’s latest quarterly earnings release, covering up to the fourth quarter of 2023, analysts have good reason to believe the stock shouldn’t be this high. Starting with revenue, $1.8 billion represents a decline of 18% from the previous year’s $2.2 billion… Yikes. Here’s where unsuspecting investors may get tricked by marketing stunts and creative accounting. The company reported a net income of $6.7 million, compared to a net loss of $313 million in the prior year. However, breaking down the quarterly financials, this income never came from business activities. A net interest income of $49.5 million significantly skewed the bottom line. Investors can compare this to the company’s cash flow statement to really get to the actual business results. Cash flow from operating activities was an actual outflow of $11 million. Adding capital expenditures of $7.7 million brings the company’s free cash flow to negative $18.7 million. If the company made a profit, there would be no need to dilute investors to fund further operations. Well, GameStop issued 1 million shares during the quarter. Now that the stock is becoming expensive again, further dilution could be expected, just as in 2021. Investors could be better positioned by taking profits after this rally, avoiding GameStop altogether, or keeping it on the bearish watchlist for entertainment. Now, as markets are based on perception and influence, here’s how GameStop’s rally gives more opportunities elsewhere. The Return of The Mid Caps Above-average growth at discounts is how to play the market’s changing perception of risk. As buyers flooded a risky consumer discretionary business like GameStop, other sound companies could see the same buying pressure shortly as the Fed could start heating up the economy again. The driver? U.S. gross domestic product (GDP) growth peaked at only 1.6% in the past quarter. At the same time, inflation remained nearly twice the rate, bringing on what’s called stagflation (low economic growth with high inflation). To get out of this, the Fed may consider bringing these rate cuts sooner rather than later. Based on these expectations, analysts at Sanford C. Bernstein see a valuation of SentinelOne inc. NYSE: S up to $37 a share, calling for a 70.5% upside from its current price. This target comes from the stock trading at only 70% of its 52-week high and projecting earnings per share (EPS) growth of more than 20% in the next 12 months. The company’s $6.7 billion size could push for more aggressive EPS growth. CleanSpark Today CLSK CleanSpark $15.36 -0.19 (-1.22%) 52-Week Range $3.38 ▼ $24.72 Price Target $19.22 Add to Watchlist according to analysts, stocks likecould see more than 200% EPS growth this year. The reason? When markets take on a ‘risk on’ mentality, alternative assets like Bitcoin could surge as they did during 2020-2022. Because CleanSpark makes most of its money by mining and selling Bitcoin, investors may flood into the stock now that it trades at only 65% of its 52-week high. In addition, analysts at Chardan Capital see CleanSpark going as high as $26 a share. The stock must rally 60.5% from where it trades today to prove these predictions right. Bitcoin's recent rally, which reached a five-year high, is another sign of mid-caps returning. CleanSpark could be a leader among them. Before you consider CleanSpark, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and CleanSpark wasn't on the list. While CleanSpark currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Crypto Miners Strike Gold in AI: Stocks to Watch 2024-05-14 12:00:00+00:00 - Key Points Cryptocurrency miners are pivoting to artificial intelligence to offset declining profitability in their core business. This shift leverages existing high-performance computing infrastructure, creating new revenue streams. Leading mining companies like Riot Platforms are pioneering this transition, with others poised to follow. 5 stocks we like better than Riot Platforms The cryptocurrency mining sector was once a symbol of booming growth and rapid innovation, but it now faces a series of daunting challenges. Rising energy costs are squeezing profit margins, and recently, the Bitcoin halving event cut the rewards to mining companies in half. These headwinds are forcing many miners to reevaluate their business models and seek new avenues for sustainable growth. Despite this industry shakeup, a powerful new business model is emerging, poised to redefine the future of crypto mining. Get Riot Platforms alerts: Sign Up The Rise of the Thinking Machines Cryptocurrency miners hold a valuable asset within their networks: high-performance computing (HPC) infrastructure. Initially intended for validating blockchain transactions, this infrastructure is recognized for its potential in a wide range of computational tasks, with a significant focus on artificial intelligence (AI). The unique asset cryptocurrency miners possess offers a new frontier for utilizing HPC infrastructure beyond its traditional purpose. AI algorithms require immense processing power to perform machine learning, deep learning, and natural language processing tasks. With their readily available HPC infrastructure, crypto miners are ideally suited to meet this growing demand. By allocating a portion of their computing power to AI workloads, miners can unlock several significant benefits: Diversification: Reducing reliance on volatile cryptocurrency markets by creating alternative revenue streams from AI projects. Reducing reliance on cryptocurrency markets by creating alternative revenue streams from AI projects. Efficiency Optimization: Utilizing AI algorithms to optimize energy consumption and resource allocation within data centers, leading to improved profitability and reduced operational costs. Utilizing AI algorithms to optimize energy consumption and resource allocation within data centers, leading to improved and reduced operational costs. Market Growth: Tapping into the rapidly expanding AI sector, which is projected to experience substantial growth over the coming years, presents new revenue generation and expansion avenues. This convergence of crypto mining and AI is not a theoretical possibility. The shift in the business model is rapidly becoming a reality, as evidenced by the strategic moves of several leading mining companies. Riot Platforms: Pioneering the Mining-AI Convergence Riot Platforms Today RIOT Riot Platforms $9.78 +0.28 (+2.95%) 52-Week Range $7.80 ▼ $20.65 P/E Ratio 11.24 Price Target $18.33 Add to Watchlist is a prominent Bitcoin mining company spearheading the industry's embrace of AI. They have publicly announced plans to allocate a significant portion of their hash rate towards AI applications, demonstrating a proactive approach to diversifying their business model. Hashrate is a universal measure of a cryptocurrency miner's computational power to process and secure a blockchain network transaction. This strategic decision follows impressive financial results, indicating that Riot is well-positioned to invest in and capitalize on the burgeoning AI market. In the first quarter of 2024, Riot Platform's earnings report showed record-high net income of $211.8 million and adjusted EBITDA of $245.7 million, demonstrating robust financial health. Their total revenue for the quarter reached $79.3 million, driven by higher average Bitcoin prices and their Bitcoin mining capacity expansion at the Rockdale Facility. Despite a decrease in Bitcoin production due to the increased network difficulty, Riot's proactive AI strategy suggests they are not solely reliant on Bitcoin's performance for future growth. Riot's ambitious growth plans further solidify its commitment to the AI pivot. It is currently expanding its Corsicana Facility, which, upon completion, is anticipated to be the largest Bitcoin mining facility globally. When fully developed, this massive undertaking will provide Riot with up to 1 GW of total capacity, establishing a robust infrastructure foundation for Bitcoin mining and AI workloads. Riot's strategic partnerships also play a crucial role in its AI expansion. They have a long-term master purchase agreement with MicroBT for immersion miners to enhance mining efficiency and performance. Additionally, they have placed a substantial order for 31,500 air-cooled miners for their Rockdale Facility, further expanding their Bitcoin mining capacity and creating a potential pool of computational resources for future AI projects. Riot Platforms exemplifies how crypto mining companies can successfully navigate the industry's evolving landscape by embracing AI. Their strong financial performance, aggressive expansion plans, and strategic partnerships demonstrate a commitment to leveraging their existing infrastructure for diversified growth and capitalizing on AI's transformative potential. Hive Blockchain: Adapting for a Hybrid Future HIVE Blockchain Technologies Today HIV HIVE Blockchain Technologies Add to Watchlist is a globally diversified crypto mining company that takes a different approach to navigating the industry's challenges. While it hasn't explicitly announced any AI-specific initiatives, its strategic focus on adaptability and diversification suggests it is well-positioned to integrate AI into its operations in the future. Hive's earnings report highlights its resilience in a volatile market. In the third quarter of 2024, they reported a total revenue of $31.2 million, driven primarily by Bitcoin mining. Their gross operating margin reached $11.3 million, demonstrating efficient operational management. While they reported a net loss of $6.9 million for the quarter, their focus on strategic expansion and upgrading their mining fleet indicates a long-term vision for sustainable growth. One of Hive's key strengths is its geographical diversification. It operates data centers in Canada, Sweden, and Iceland, which provides it with strategic flexibility in managing energy costs and navigating regulatory risks. This global reach could prove advantageous for securing AI projects in various markets, leveraging its existing infrastructure across multiple jurisdictions. Hive is also actively pursuing growth opportunities beyond traditional Bitcoin mining. They are expanding their high-performance computing (HPC) business, utilizing their inventory of over 38,000 GPUs. This move demonstrates their recognition of the growing demand for HPC services in sectors like AI, machine learning, and advanced data analytics. While less focused on AI at present, Hive's strategic approach reveals that the company is building the foundational infrastructure and operational expertise necessary for seamless AI integration in the future. Their commitment to diversification, efficiency, and global expansion suggests that they are preparing to capitalize on the convergence of crypto mining and AI as the industry evolves. Canaan: Enabling AI-Powered Mining Canaan Today CAN Canaan $0.94 +0.03 (+2.75%) 52-Week Range $0.75 ▼ $3.50 Price Target $4.25 Add to Watchlist is a leading Bitcoin mining hardware manufacturer that offers a unique perspective on the industry's AI pivot. They are adapting their operations and developing the essential hardware that will enable other mining companies to embrace AI. This strategic positioning places them at the heart of the industry's transformation, shaping the technological landscape of AI-powered mining. Canaan's earnings report demonstrated its success in capitalizing on the growing demand for AI-ready mining hardware. In the fourth quarter of 2023, they reported a 45.7% quarter-over-quarter increase in total computing power sold, reaching 5.5 million Thash/s. This growth drove their revenue up 47.3% quarter-over-quarter, reaching $49.1 million. While their mining revenue remained relatively small at $3.7 million, their focus on hardware development suggests they see their primary role in enabling other miners to integrate AI into their operations. Canaan’s financial report for the first quarter of 2024 is due on May 17th, and Canaan’s analyst community is looking forward to the updated financial data and strategic plan. Canaan's strategic initiatives center around fortifying its operational and financial foundations for future growth. It is actively securing contracts with public company clients, leveraging its multifaceted sales system and prioritizing product quality and delivery capabilities. This focus on establishing solid customer relationships and providing reliable hardware solutions will be crucial for Canaan's success as the demand for AI-ready mining infrastructure increases. Bitfarms: The Wild Card Bitfarms Today BITF Bitfarms $1.61 +0.02 (+1.26%) 52-Week Range $0.92 ▼ $3.91 Price Target $4.20 Add to Watchlist is a rapidly growing crypto mining company presenting a more complex story marked by ambition and uncertainty. They are aggressively pursuing expansion plans to triple their hash rate to 21 EH/s by the end of 2024. However, their recent leadership transition and upcoming earnings call, delayed to May 15th due to CEO-related issues, create a sense of anticipation and raise questions about their future strategic direction. Bitfarms' growth strategy is centered around their operations in Paraguay, where they are developing two new facilities: Paso Pe (70 MW) and Yguazu (100 MW). This ambitious expansion will significantly increase their mining capacity and provide them with the infrastructure required for future AI integration. They are also exploring opportunities through miner redeployment, acquisitions, and further farm development, indicating a willingness to pursue diverse avenues for growth. However, the recent termination of their CEO and the subsequent lawsuit create a cloud of uncertainty over Bitfarms’ financial future. The company's statement regarding its intention to vigorously defend itself against the lawsuit suggests a potential distraction for management and a possible strain on financial resources. Bitfarms’ earnings call will be a crucial time for the company to address these concerns, provide a clear roadmap for the future, and instill confidence in investors. While Bitfarms' current focus is on expanding their Bitcoin mining operations, the industry's shift towards AI presents a compelling opportunity for their new CEO. An industry veteran will likely recognize the strategic importance of AI integration, especially given Bitfarms' substantial infrastructure investments. The upcoming earnings call could reveal whether they plan to capitalize on this trend, potentially leveraging their growing capacity for AI workloads and positioning themselves as players in the evolving sector. The Future of Crypto Mining The cryptocurrency mining industry is at a crossroads. As traditional challenges threaten profitability, the integration of AI emerges as a compelling solution, offering miners a path toward diversification, efficiency optimization, and long-term growth. Companies like Riot Platforms lead the charge, actively embracing AI and demonstrating its transformative potential. Others, like Hive Blockchain and Canaan, are strategically positioning themselves to capitalize on this convergence, building the infrastructure and expertise necessary for a future where blockchain and AI go hand in hand. The crypto mining sector's evolution is far from complete. As the industry adapts to new realities and embraces technological advancements, investors seeking growth opportunities should closely monitor those companies at the forefront of this exciting transformation. The convergence of blockchain and AI is rewriting the rules of the game, and those who understand and capitalize on this shift stand to reap significant rewards. Before you consider Riot Platforms, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Riot Platforms wasn't on the list. While Riot Platforms currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
The WNBA season is getting underway featuring Caitlin Clark's debut and more. Here's what you need to know. 2024-05-14 10:26:00+00:00 - The WNBA is poised to blow the whistle on its 28th season Tuesday night. From the juggernaut Las Vegas Aces and New York Liberty to new marquee talent like Caitlin Clark taking the floor, the league is growing faster than ever. Here's what you need to know. What to watch opening night There will be four games played Tuesday night: The New York Liberty vs. the Washington Mystics The Indiana Fever vs. the Connecticut Sun The Phoenix Mercury vs. the Las Vegas Aces The Minnesota Lynx vs. the Seattle Storm 2023 MVP Breanna Stewart joined the Liberty in free agency last February after playing her first seven years in Seattle. Joining a core cast of Sabrina Ionescu, Jonquel Jones, Betnijah Laney and Courtney Vandersloot, Stewart led the Liberty to the finals, where they fell to the Las Vegas Aces. The Fever are bringing rookie phenom Caitlin Clark to Connecticut, where tickets have already sold out at the Mohegan Sun Arena – the first home opener to sell out in over 20 years, the team said in a press release. Clark became college basketball's all-time NCAA Division I scoring leader in March and, after being selected at the top of the 2024 draft, has big expectations heading into her first season. While Clark is the new kid in town, the Las Vegas Aces are the big kids. The team won its second championship in a row last year, beating the Liberty 70-69 in Game 4 of the series despite missing multiple starting players. Even with hoop legend Candace Parker's retirement, the Aces still have stars in spades, returning two-time MVP A'ja Wilson, Kelsey Plum, Jackie Young, and Chelsea Gray. The Phoenix Mercury will be without star Brittney Griner, the team announced Monday, after the center fractured a toe on her left foot. Griner missed all of the 2022 season due to her months-long detainment in a Russian prison on drug charges. The Storm have passed on from the Breanna Stewart era, clocking in third on CBS Sports' power rankings (Behind the Aces and Liberty). The team acquired forward Nneka Ogwumike and guard Skylar Diggins-Smith in free agency to assist the league's leading scorer, Jewell Lloyd. The opening night slate will be available to watch on ESPN networks, with select games streaming on ESPN+, Disney+, and the WNBA League Pass. The rest of the season will be televised across CBS, ESPN, ABC, ION, Prime Video, and NBATV. Regular season play continues until late September, with the All-Star game scheduled for July 20 in Phoenix. The WNBA will pause play after the All-Star game until August 15 this year so the athletes can compete with their respective national teams in the Summer Olympics. Growing the game With the groundwork laid by the WNBA's previous stars and the addition of exciting new talent like Caitlin Clark, Angel Reese, Kamilla Cardoso, Cameron Brink and Rickea Jackson, more eyes are on the league than ever before. This year has seen a significant uptick in investment in the women's league. The WNBA consists of only 12 teams, with 12 roster spots per team – it isn't uncommon for a drafted player to get cut from the final roster just weeks later. The Los Angeles Sparks, who drafted Brink and Jackson with top five picks, waived the 28th overall pick McKenzie Forbes on Sunday. Luckily for players on the bubble, the WNBA is expanding for the first time since 2008. League Commissioner Cathy Englebert announced in October that the Golden State Warriors were awarded a WNBA team for 2025 — the Golden State Valkyries. On Friday, CBC Sports reported that Toronto would be next, receiving an expansion team for 2026. "It's complex because you need arena and practice facility and player housing and all the things, you need committed long-term ownership groups. The nice thing is we're getting a lot of calls," Englebert said during a pre-draft press conference last month, adding that she was confident the league could grow to 16 teams by 2028. Along with expanded job opportunities, WNBA players will be receiving expanded benefits previously reserved for their male counterparts. The league announced a charter flight partnership with Delta Air Lines last week so players will no longer have to fly to games on commercial airlines. "I express my appreciation and support for a bold move by the commissioner and team governors that in turn shows that they understand and value the health and safety of the players. It is time to be transformational. It's time to bet on women," WNBPA President Nneka Ogwumike said in a press release. While Clark and the Fever were seen enjoying themselves on a charter flight to Connecticut Monday, personnel from multiple teams told ESPN they had not heard from the league about when they would be permitted to charter. The increasing investment in the WNBA isn't just internal - the rising profile of the league has brought sponsorship opportunities to athletes as well. Clark reportedly signed a $28 million endorsement deal with Nike, which announced a forthcoming signature shoe with A'Ja Wilson – the first Black woman to headline a signature shoe with the company since Sheryl Swoopes in 2002. Kim Kardashian's shapewear brand SKIMS unveiled an underwear campaign Monday to celebrate its blockbuster partnership with the league featuring Candace Parker, Cameron Brink, Dijonai Carrington, Kelsey Plum and Skylar Diggins-Smith. The collaboration is SKIMS' first to feature female players. The company, valued at $4 billion by Forbes, also has partnerships with the NBA and Team USA.
Buffett And Gates Continue Holding This Dividend Stock, But Is It Still A Buy? 2024-05-14 05:41:00+00:00 - Buffett And Gates Continue Holding This Dividend Stock, But Is It Still A Buy? Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Endorsements from financial heavyweights like Warren Buffett and Bill Gates can often signal a golden opportunity for investors. Both titans have advocated investing in stable industry stalwarts, which offer the benefits of capital appreciation as well as reliable dividend payouts. Kraft Heinz Company (NASDAQ:KHC), a global food and beverage powerhouse, has garnered the approval of both Buffett and Gates. Warren Buffett, often regarded as one of the most successful investors of all time, has long held a substantial stake in Kraft Heinz. Through his company Berkshire Hathaway, Warren Buffett holds over 325 million shares of KHC, valued at $12.04 billion, as of May 2, 2024. Notably, Buffett's stake in Kraft Heinz accounts for 3.47% of his total equity portfolio. With billions of dollars invested, Buffett’s confidence in Kraft Heinz may reassure some investors despite its recent struggles. Bill Gates, on the other hand, holds approximately 2.62 million shares of KHC, valued at $96.9 million, through the Bill & Melinda Gates Foundation Trust (as of February 14, 2024). While Gates’ stake in Kraft Heinz is comparatively smaller than Buffett’s, his recent activity suggests continued interest. The renowned philanthropist and investor made a significant addition to his portfolio by acquiring 2.62 million shares of Kraft Heinz, valued at $93.7 million, back in the third quarter of 2022. Moreover, the Microsoft co-founder has never sold any shares of KHC to date. This move indicates that Gates sees potential value in Kraft Heinz, aligning with Buffett’s long-term investment approach. Kraft Heinz Dividend Allure and Growth Prospects The Kraft Heinz Company has remained consistent with its dividend payouts since its formation via merger in 2015. The consumer goods company currently pays $1.60 in dividends annually, yielding 4.48% on the current stock price. In addition, the company's four-year average dividend yield stands at 4.39%. While endorsements from renowned investors like Buffett and Gates undoubtedly carry weight, Kraft Heinz's recent performance trends, coupled with ongoing challenges in the food and beverage industry, warrant careful consideration. Shares of KHC have dropped by over 10% over the past year and by just 2% year-to-date. The company's net sales fell by 1.2% year-over-year to $6.4 billion in the fiscal first quarter of 2024, which ended March 30. Nonetheless, Kraft Heinz's adjusted EPS amounted to $0.69 in the last quarter, indicating a 1.5% rise from the same period last year. Story continues Analysts are bullish on Kraft Heinz's growth prospects in the near term. The consensus revenue estimate of $26.69 billion for fiscal 2024 indicates a 7.9% improvement from the same period last year. Furthermore, Wall Street estimates the company's bottom line to improve by 9.4% year-over-year to $3.03. Deutsche Bank currently has a "Buy" rating on KHC stock with a price target of $43, indicating a potential upside of over 18%. Bank of America Securities also has a similar "Buy" rating on the staple consumer goods company, with a price target of $42, indicating a potential upside of over 15%. Preparing for a Market Downturn? This Emerging Asset Class Could Offer The Protection You're Looking for Institutional investors have recently discovered a new strategy to hedge against market volatility and enhance portfolio stability – home equity investments (HEIs). HEIs allow investors to gain exposure to residential real estate by purchasing a portion of a homeowner’s equity in their property. In exchange for a lump sum payment, investors receive a share of the future appreciation of the home’s value. According to Morningstar DBRS Senior Vice President Derek Moran, “Interest in this market is high and can be expected to continue growing, especially if interest rates remain high, and homeowner equity stays strong.” HEIs offer compelling benefits for investors, including: Diversification: HEIs provide exposure to the residential real estate market, helping to diversify portfolios heavily allocated to stocks and bonds. Attractive returns: HEIs have the potential to generate strong returns, particularly in an environment of rising home prices. Originators often secure HEIs at a discount to market value, providing immediate upside potential. Downside protection: HEI contracts typically include protective provisions that mitigate losses in the event of declining property values. Uncorrelated returns: HEI performance is primarily driven by home price appreciation rather than interest rates or stock market fluctuations. Now, with the emergence of innovative platforms like Cityfunds, retail investors can access this institutional-grade asset class with as little as $500. Cityfunds allows you to invest in the equity of carefully selected properties in prime locations, targeting potential appreciation while mitigating risk. Investors can choose to invest in specific cities through Cityfunds’ offerings, such as Miami, Austin and Los Angeles, gaining exposure to some of the strongest real estate markets in the country. These Cityfunds have demonstrated impressive appreciation, with shares of the Miami Cityfund up 14.7% already and up 10.9% for the Austin Cityfund. You can easily get started by signing up on the Cityfunds website and choosing which cities you want to invest in. Read Next: Elon Musk has reportedly bought 6,000 acres of land just outside of Austin. Here’s how to invest in the city’s growth before he floods it with new tech workers. Collecting passive income from real estate just got a whole lot simpler. A new real estate fund backed by Jeff Bezos gives you instant access to a diversified portfolio of rental properties, and you only need $100 to get started. Warren Buffett and Bill Gates spending time together. Photo by BorsheimsJewelry on Flickr This article Buffett And Gates Continue Holding This Dividend Stock, But Is It Still A Buy? originally appeared on Benzinga.com