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She bought a $100 tail and turned her wonder into a "magical" mermaid career 2024-03-30 14:56:00+00:00 - More than 70% of Americans say a rewarding career or job is extremely important to live a fulfilling life — more important than family, friends or wealth. CBS News interviewed a broad array of workers who chose unique jobs, for a series we call: Unique jobs, extraordinary lives. A decade ago, Marielle Henault was living in Montreal and had just been laid off from her job at a large telecommunications company. A friend of the 24-year-old Canadian knew she liked to swim and thought a video of a mermaid school in Germany could cheer her up while she was in a rough spot. "I just fell in love," Henault said after watching the video of mermaids swimming. She said then and there "I decided I wanted to be a mermaid myself." Marielle Henault, a professional mermaid, poses on a rock. Marielle Henault At that time, Henault said, she didn't know of many mermaid schools in North America so she decided to open a school in Canada – for herself and others who wanted to learn the craft. There was very little information at the time and she didn't know how to become a mermaid. She bought a basic fabric tail with a mono fin and said she "paid about $100" to begin — entering a career and a community that has brought her around the world and more joy than she ever expected, Henault said. A mermaid's tale Known as a symbol of luck, fertility and beauty — but also as destructive as the nature of water — mermaid tales are told in cultures around the world with the earliest legend appearing in Syria around 1000 BC. Humans have always had a fascination with mermaids, writes University of Liverpool professor Sarah Peverley, a medieval historian, and mermaid expert on her blog. She writes that the "medieval church used mermaids and sirens to teach Christians about sin and salvation." Books, videos, and fairy tales including Hans Christian Andersen's beloved, "The Little Mermaid," which has been made into numerous movie versions and Disney iterations have kept the public's interest alive in these sea creatures. This fascination grew into today's mermaid economy which can range from teaching exercise classes to participating in mermaid competitions – allowing this quirky niche to become a full-time career for some. Mermaids can compete in competitions; the China Mermaid Open Championship drew 60 competitors from around the world in 2023, and the Miss Mermaid, King & Queen of the Seas competition was featured on the Netflix series, MerPeople. A mermaid competition in Hurghada, Egypt. Forty mermaids competed for prizes in this international competition. Marielle Henault There is no official directory of how many professional mermaids there are in the world, but Henault knows about 1,000 mermaids, she told CBS News in an interview from Krabi, Thailand. She met some of them joining mermaid competitions around the globe, and others while building her career. She called swimming in an aquarium "a mermaid's magical dream" and one of the most "desired positions" for the season. A decade ago when she was first starting, she used her immediate skills — swimming and a love for the water. "Water is my element," she said. She learned monofin and synchronized swimming and then launched her classes. Henault charged $60 a class for people who wanted to learn how to swim like a mermaid. "People want to be mermaids. I need to prepare mermaid lessons and stuff. But that's what's fun about it. Because what's a mermaid class? What's a mermaid? I decide. That's a magical world. It's my own discipline, I can do whatever I want," she said. Diversifying mermaid income streams After teaching classes for a while, Henault was ready to try new avenues to support herself as she was just breaking even. She says the most important thing for mermaids is to "diversify their income stream." Some can be hired for private parties (children's or adults) where one can earn $150- $250 an hour, or appear at corporate events, teach classes, or sell fins, she said. Mermaids can also work at waterparks, aquariums or other event sites. Henault said mermaids need a "passion" for the field because the work can be psychically demanding, sinus infections are typical and there is a lot of pressure on looks — which she said can bring some unsavory people known as "merverts" into their lives. Henault said their community has developed safeguards and communication skills, but for new mermaids, there can be many "ups and downs." Marielle Henault poses among lilypads in Thailand. Marielle Henault When she launched her mermaid company, Aqua Mermaid, all those years ago, Henault said she had no idea what she was doing. And while things were going well with her classes, party appearance and tail sales, all that came to a halt when the global pandemic hit and all in-person events stopped. During that period, she became a booking agent for mermaids looking to get jobs, while she takes a small percentage of their fee in return. "People call me for mermaids all over the place from Canada, U.S. and Dubai," Henault said, booking jobs for many mermaids she knows. Next up, she's planning to develop training courses and retreats for mermaids hoping to pass on what she's learned to the next generation. "We get to travel, make money, be beautiful and swim," Henault said. "Being a mermaid is just magical."
Sports Leagues Bet on Gambling. Now They’re Facing Its Risks. 2024-03-30 12:00:02.428000+00:00 - Major League Baseball held its season openers this week under the shadow of a gambling scandal. Reports surfaced that the National Basketball Association is investigating a player over irregular bets. And college basketball fans await results from a review into unusual betting on a men’s basketball game. The incidents have highlighted a trade-off that professional sports leagues made when they embraced gambling. Leagues have signed lucrative marketing deals with betting apps like FanDuel and DraftKings and use gambling to amp up fan engagement. But this new source of revenue has also opened the doors to a fundamental danger: that an explosion of sports betting could threaten the assumption of fairness at the core of athletic competitions. “The risk is that the game becomes like professional wrestling — which is rigged. And nobody bets on professional wrestling,” said Fay Vincent, the M.L.B. commissioner from 1989 to 1992. “And if baseball becomes professional entertainment the way wrestling is, it’s dead.”
MarketBeat Week in Review – 3/25-3/29 2024-03-30 11:00:00+00:00 - Key Points The bull market rolls on as investors continue to climb the wall of worry. The markets were closed on Friday, so investors will still have to digest Friday's reading on the PCE index. Here are some of our most popular stories from this week. 5 stocks we like better than NVIDIA Markets continue to move higher as investors remain resilient despite an unclear macroeconomic outlook. However, the wall of worry is growing as investors see an everything rally. That means stocks are up, but so is the price of oil, gold, and cryptocurrencies, particularly Bitcoin. What goes up frequently goes down – and sometimes sharply. Many analysts believe that a significant correction may be coming. But is that a sign of a new trend or just a pause to newer highs? The takeaway is to take the emotion out of it and invest in the market that exists, not in the market you think there should be. The goal of the MarketBeat team is to help you keep your focus on the stocks and sectors that are likely to move the market higher – and why. As you're enjoying your weekend, take some time to get familiar with some of our most popular stories from this week. Get NVIDIA alerts: Sign Up Articles by Jea Yu Many investors are becoming familiar with and adept at options trading. It's not for everyone, but if it's for you, Jea Yu explains what it means to roll options, why you may want to consider rolling your positions, and three ways to execute the strategy. As more companies look to Nvidia Corporation NASDAQ: NVDA to develop their AI applications, they're also considering adding to their memory and data storage needs. That's bullish for Micron Technology Inc. NASDAQ: MU, which is moving higher on expectations for higher demand in the memory chip market. Apple Inc. NASDAQ: AAPL is a laggard among technology stocks on a stream of bad news. However, the stock is starting to hint at how it intends to move into the AI space. That seems to be putting a floor on the stock, and Yu explains why AI may be a catalyst for pushing the stock higher. Articles by Thomas Hughes This week, Thomas Hughes asked the question on many investors' minds. That is, how low can Tesla, Inc. NASDAQ: TSLA stock go? As Hughes notes, Tesla is at the top of MarketBeat's Most Downgraded Stocks list. But beyond analyst sentiment, Hughes explains why technical indicators also suggest that TSLA stock could have another 25% move lower. Hughes also looked at another MarketBeat tool to highlight five high-yield dividend stocks on MarketBeat's Top-Rated Dividend Stocks list. Hughes analyzes the fundamental and technical indicators that explain why these stocks may deliver double-digit upside for investors. One MarketBeat feature that's drawing significant interest is our list of stocks that members of Congress are buying. This week, Hughes gave an update on the top 3 most popular stocks that members of Congress bought in the first quarter. Articles by Sam Quirke In investing, as in life, sometimes outlooks change when you've had a minute to think about something. As Sam Quirke writes, that may be the case with Foot Locker Inc. NYSE: FL. Quirke explains that FL stock is starting to move higher after getting wrecked following a disappointing earnings report earlier this month. At least one analyst has issued an upgrade, which may only be the beginning. Another company that is getting analyst upgrades is The Walt Disney Company NYSE: DIS. As Quirke writes, this continues the bullish momentum that's been building in DIS stock since it reported strong earnings in February. Articles by Ryan Hasson This week, Palantir Technologies Inc. NYSE: PLTR received a downgrade that caused the stock to tumble. But if you had read Ryan Hasson's article about the company, you wouldn't have been surprised. Hasson describes the contrast between bearish analyst sentiment and the bullish momentum that is supported by technical indicators. It's one to watch, for sure. Hasson also wrote about the sweet deal between Krispy Kreme Inc. NASDAQ: DNUT and McDonald's Corp. NYSE: MCD. In a move that will roll out over the course of the next three years, Krispy Kreme's signature doughnuts will be available at every McDonald's location in the United States. DNUT stock jumped 40% on the news, but investors may want to wait and see if this will change analyst sentiment or just a sugar high. In another article, Hasson reminded investors that although the overall market sentiment is bullish, some stocks are simply overbought. And Hasson gave you four well-known names that are ready for a pullback. Articles by Gabriel Osorio-Mazilli One way investors can find stocks to buy is to look for discrepancies. For example, if earnings growth drives stock prices, then when you find stocks that are beaten down despite anticipated strong earnings growth, they belong on your watchlist. To help you with that, Gabriel Osorio-Mazilli wrote about three cheap stocks trading at a discount to their projected earnings. Another pro tip Osorio-Mazilli presents to investors is why stocks with high short interest can sometimes lead to outsized gains. That's the case with two stocks that the bears are stocking up on but could turn around quickly, leaving those investors scrambling to cover their positions. And even if options trading isn't your thing, Osorio-Mazilli explains to investors why paying attention to the level of call options (bullish) or put options (bearish) on stocks can give you a sense of stocks that are ready to make a move. Read his article for three stocks with above-average call option activity. Before you consider NVIDIA, 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 NVIDIA wasn't on the list. While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Work Is (Mostly) Work, Not Your Soapbox 2024-03-30 09:03:43+00:00 - Send questions about the office, money, careers and work-life balance to workfriend@nytimes.com. Include your name and location, or a request to remain anonymous. Letters may be edited. Generation Zeal I work for a health care nonprofit, and there have been some clashes among the five generations in our work force. For example, we have a Gen Z employee who holds passionately strong views in favor of antiracism, anticapitalism, anti-establishment and anti-colonialism. These views are not necessarily the issue, and in some cases are well aligned with organizational values. However, this person has been alienating colleagues because of how she communicates about these views. She sends strongly worded emails, shares unsolicited links to resources and posts signs in break areas that align with her views. She can come across as self-righteous, judgmental and at times naïve. Folks will sometimes walk away from interactions with her feeling uninformed or stupid. This is her first job post-higher education. When you’ve been in the work force for a bit, you tend to learn that not everyone in the workplace shares the same views and that is OK. How can we balance her desire for self-expression, advocacy and activism, and also stay focused on the tasks at hand, as well as maintain professional boundaries and a positive working environment for all? — Anonymous I’m not sure it’s only a generational issue that you’re facing with your Gen-Z employee. She is clearly passionate about social justice, and I am glad your organization is willing to create a space where she can bring her whole self to work. But she also needs guidance about how and when to bring her advocacy efforts into the workplace, how to meet her professional responsibilities and how to respect the boundaries of others. Sit down with her and share what you wrote in your letter. Tell her that you aren’t trying to change her, but that she is not sharing her views in a vacuum; if she wants people to be respectful of her beliefs, she has to also respect those of others. She also needs to recognize that not everyone shares her passion or wants to discuss these issues in the workplace. You are her colleagues, not her acolytes. While we can and should learn from one another, our every interaction need not be so intensely didactic. And finally, she was hired to do a job, and it’s important that she not lose sight of that. Remote Etiquette I lived in California for eight years until my brother was diagnosed with cancer and I decided to move to Arizona to help care for him. I had been working in a new role for about six months when my brother was diagnosed, but my company offered to let me work remotely. I return to California for work about four or five times a year. Recently, on a Zoom call with co-workers, there was discussion about happy hour and making sure to “have fun” with my co-workers outside work when I’m in California. I like to use these trips, in my non-working hours, to visit old friends and family. I don’t want to spend time with co-workers outside normal business hours, but I feel bad saying “no” since the company is paying for my flight. Am I more obligated to attend these social gatherings because my job is paying for travel? Is it OK to be honest and say I’d rather keep my co-worker time to office hours or should I just lie and say I’m busy every night? — Anonymous You are only obligated to do your job when you travel to California. They are paying for your flight because you are going there for work. They are not, in doing so, staking a claim on all your free time. I suspect your colleagues are trying to make you feel welcome and to offer you options for socializing in case you don’t know anyone in the area. You certainly could be honest and say you don’t want to hang out, but that might create unnecessary tension. Another version of the truth is that you already have evening plans while you are there but very much appreciate the generous invitation.
American Airlines revises its policy for bringing pets and bags on flights 2024-03-30 00:07:00+00:00 - American Airlines is relaxing part of its pet policy to let owners bring their animal companion and a full-size carry-on bag into the cabin. Until this week, people who carried a pet into the cabin, which involves paying a $150 fee, could only have one other small item that fit under the seat. Anything bigger, like a carry-on bag with wheels, needed to be checked for a $35 fee. Or they could put the pet in the cargo hold. Now American is letting passengers bring a pet in the cabin and also bring either a regular carry-on bag or a personal item — just not both bags. The old policy struck some pet owners as unfair, since they were already paying a pet fee. Passengers must still pay a fee, but their pet no longer counts as a carry-on. An American spokeswoman confirmed that the rules change took effect Thursday. She couldn't explain the reason because the airline's corporate offices were closed for Good Friday, and decision-makers were not available. Gary Leff, a travel blogger who first wrote about the change, recalled traveling years ago with a Yorkshire terrier. "It was always frustrating that the dog counted as the carry-on even though I was paying the extra (pet) fee that was sometimes more than the ticket for me," he said Friday. Leff said he thinks American Airlines' new policy will reduce the urge for travelers to falsely claim that their pet is a service animal that flies for free, enabling them to bring a carry-on as well. Even with the new policy, however, traveling with a pet takes a lot of planning and research ahead of time, and many factors could prohibit Fido or Felix from being allowed into the cabin. For one thing, there is a maximum total number of pets allowed per cabin, which varies depending on the type of aircraft. On United, the total maximum of four pets is allowed in Economy class on the Airbus 319, while Economy on the Airbus 319 allows a total maximum of six pets. In all instances, individual passengers are allowed to bring a maximum of pets in one single carrier. Other U.S. airlines that allow pets on board include Delta, American, Southwest, Alaska and Frontier. On most, pet carriers count as carry-ons, according to the American Kennel Club.
What U.S. consumers should know about the health supplement linked to 5 deaths in Japan 2024-03-29 23:25:00+00:00 - The recall of red yeast products linked to at least five deaths in Japan may have Americans questioning the safety of a range of dietary supplements containing the ingredient and readily found online and in stores. Billed as a natural means of lowering cholesterol, the products recalled by Kobayashi Pharmaceutical Co. contain benikoji, an ingredient derived from a species of mold. At a news conference on Friday, the company said it had found a chemical compound — puberulic acid — in the recalled products, and is looking into whether the substance might be linked to the fatalities, the Japan Times newspaper reported. Kobayashi also said its products were exported to other countries, including China and Taiwan. For now, no products containing benikoji have been recalled in the U.S. or linked to health issues. In Japan, meanwhile, the problem could stem from a quality control issue that allowed unwanted substances to enter Kobayashi's production line. "Buyer beware" Still, the scenario in Japan raises concerns for other markets, including the U.S., experts said. "I believe it is likely that this particular problem affects products outside Japan as well," said David Light, president and co-founder of Valisure, an independent lab that tests drugs for impurities and known for detecting carcinogens in products such as acne cream, sunscreen and the heartburn drug Zantec. He noted that supply chains for health and dietary supplements are similar to those for prescription drugs, with products manufactured in one country and then shipped to many geographic markets. According to Kobayashi's website, the company is working to increase sales of six brands including OTC pharmaceuticals in the U.S., China and Southeast Asia. Its U.S. subsidiary, Kobayashi Healthcare in Dalton, Ga., did not immediately return requests for comment. "There is a place for supplements, but it's a buyer beware situation," said Dr. Tod Cooperman, president and founder of ConsumerLab.com, which tests supplements to determine their contents. The Food and Drug Administration did not immediately respond to requests for comment. When made properly, yeast grown on rice produces various compounds, including lovastatin, which is known to lower cholesterol, the physician said. "But if something goes wrong in production, you instead get citrinin," a chemical linked to kidney toxicity in animals, Cooperman said. Many people purchase dietary supplements and herbal medicines online or over the counter, assuming they are regulated like drugs. But the FDA does not verify supplements' listed ingredients, and while federal law requires pharmaceuticals to meet specific standards, the rules are less stringent when it comes to supplements. ConsumerLab.com last tested red yeast rice supplements in 2022, finding citrinin in 30% of the products tested, Cooperman said. "One had 65 times the limit set in Europe," he added, noting that the U.S. has not set a limit on the chemical. Since lovastatin is classified as a drug, it is often left out as an ingredient by supplement makers looking to avoid the additional regulatory scrutiny. When red yeast supplements became available in the U.S. more than two decades ago, they offered a less expensive option to prescription statins that were available over the counter. But it is difficult for consumers to verify a supplement's ingredients, or determine if a product contains unlisted substances. Consumers would be "better off going to a doctor and using a prescription cholesterol lower-er because there is more certainty as to what you're getting," Cooperman said. "[S]ome of the older statins are generic now, so it's probably less expensive and safer to be buying a generic statin at this point." Meanwhile, he urges caution in taking supplements. "There are a lot of brands out there that are more fly-by-night," Cooperman said, "Our focus is on trying to find the best products. We're finding one out of five products fail."
California set to hike wages for fast-food workers to industry-leading $20 per hour 2024-03-29 22:33:00+00:00 - Fast food wage increase goes into effect next week Fast food wage increase goes into effect next week 02:30 Starting Monday, most California fast-food workers will earn at least $20 an hour — the highest minimum wage across the U.S. restaurant industry. Yet the pay hike is sparking furious debate, with some restaurant owners warning of job losses and higher prices for customers, while labor advocates tout the benefits of higher wages. The new law, signed by Governor Gavin Newsom last fall, takes effect on April 1, requiring that fast-food chains with at least 60 locations nationwide pay workers at least $20 an hour. The means the state's 553,000 fast-food workers will earn more than the state's $16 minimum wage for all other industries. The new baseline wage comes as the fast-food industry is seeing booming earnings, with big chains like McDonald's enjoying strong revenue growth and wider profit margins in recent years. That's partly due to menu prices that have far outpaced inflation, with fast-food costs surging 47% over the past decade, compared with an average of 29% for all other prices, according to a new analysis from the Roosevelt Institute, a nonpartisan think tank. "Prices have been so much higher than operating costs over the last decade that these companies could just absorb higher operating costs," Roosevelt Institute labor expert Alí Bustamante, a co-author of the analysis, told CBS MoneyWatch. "This is about raising the floor and making sure that $20 being the new minimum wage puts workers on a better economic footing to cover their household needs." Prior to the April 1 pay hike, the highest paid fast-food workers in the U.S. were in Washington State, which has a minimum wage of $16.28 per hour. What's on the menu — price hikes Some California restaurant owners say that higher labor costs will lead to higher prices for customers, and even curb hiring. One California franchisee told CBS MoneyWatch that while major fast-food chains might be able to absorb such costs, smaller operators will struggle. "We aren't these big corporations with deep pockets — we're not Wall Street, we are Main Street," said Alex Johnson, who owns 10 franchised restaurants in the San Francisco area, including Auntie Anne's and Cinnabons locations. Johnson's company is subject to the new wage law because the parent franchisors operate more than 60 restaurants across the U.S. Alex Johnson, who owns 10 chain locations in the San Francisco area, said he may need to raise prices this year to offset the new $20 minimum wage for fast-food workers. Alex Johnson Johnson said the wage hike comes at a time when his restaurants are already coping with softer sales, which he attributes to consumers sapped by two years of elevated inflation and the high cost of living in California. To offset the new $20 minimum wage, Johnson expects to increase prices about 10% this year, which he plans to do in two smaller increments. "You couldn't think of a worse time to raise prices," he said. The typical California restaurant is facing an additional expense of $250,000 annually to cover the April 1 wage hike, according to the Save Local Restaurants coalition, citing data from a McDonald's owner association. The group represents restaurant owners. "We know we have to take something at a significant increase when you talk about a 20%-ish increase in wages," Chipotle Chief Financial Officer Jack Hartung said on an earnings call last month about the California law. Chipotle's 3,400 locations across the U.S. could see a 1% increase in prices to compensate, he added. Starbucks told the Los Angeles Times it plans to offset the higher wages by boosting prices, among other measures. "There isn't a quick-service restaurant owner in California who can easily shoulder an immediate 25% wage increase for all their employees," Mike Whatley, vice president of state affairs and grassroots advocacy for the National Restaurant Association, a trade organization for the industry, told CBS MoneyWatch. He added, "Consumers are starting to see this in menu prices, and employees across the state are starting to feel it, too." Some critics of the wage law said the higher costs will lead to layoffs and curb hiring. Already, some Pizza Hut locations in California are planning to cut jobs, according to state labor filings. Pizza Hut didn't immediately return a request for comment. Johnson noted that he's not hiring at the moment and plans to introduce more automation, such as ordering kiosks, to reduce his need for human labor. He's also thinking about selling his franchise locations in California to focus on restaurants in Nevada, where costs are lower. "I work really hard to treat employees fairly, but there are consequences to these actions that increase costs — we're not hiring anymore, and I'm contemplating closing or selling my restaurants," Johnson added. "It's a sad time." "An economy that works for all" Labor advocates argue the new law will help fast-food workers, who earn an average of $16.60 an hour, or just over $34,000 per year, according to government data. That's below the poverty line for a family of four in California. The higher pay is "a transformational step toward an economy that works for all, not just billionaires," Tia Orr, executive director of the Service Employees International Union California, a labor group that pushed for the law, told the Associated Press. When Newsom signed the law last year, he dismissed the notion that fast-food jobs are primarily held by teenagers, underscoring that many households depend on the jobs for income. The average age of fast-food workers is about 26, according to Business Insider. Meanwhile, dozens of states and localities have hiked their minimum wages during the past several years, even as the federal baseline remains at $7.25 an hour — a rate that has remained frozen since 2009. Some economic research has found that higher wages don't lead to job losses, while having the upside of providing financial security to workers and boosting consumer spending, which stimulates broader economic growth. California businesses have had to digest multiple wage hikes during the past several years, yet continued to operate, experts point out. "You've experienced minimum wage hikes in California for over 10 years now," Bustamante said. "You don't open up a business in California without expecting minimum wage increases."
Ask Jordan: Did the Supreme Court not have the five votes needed to grant a full stay? 2024-03-29 20:21:00+00:00 - “The Supreme Court didn’t grant the stay in the federal election interference case but instructed the court of appeals not to issue its mandate until the Supreme Court had ended its consideration of the immunity issue. Could it be that the Supreme Court didn’t have the fifth vote needed to grant a stay, so with this sleight of hand, it grossly violated its own rules? Can we find out how many justices agreed to the order issued and who they were? While the others silently sat by and let it happen.” — George Nilson, Chestertown, Maryland Hi George, As your question suggests, the Supreme Court’s order granting review in the immunity appeal is somewhat mysterious — and, perhaps, a little shady. The court didn’t outright grant Trump a stay. But it effectively did, by telling the appeals court not to send the case back to Judge Tanya Chutkan for trial until the justices rule. You may be correct that there weren’t five votes to grant a stay. Doing so would have implied that a majority of the court thinks there’s merit to Trump’s claim. So, one way to look at it is for the court to have it both ways — being the final word on immunity, but without lending credence to Trump’s claim. Of course, there is, as you put it, some sleight of hand at play because he’s either entitled to a stay or he’s not. One way to look at it is for the court to have it both ways — being the final word on immunity, but without lending credence to Trump’s claim. To answer your other question, no dissents were noted in the order. And I wouldn’t expect them to be in an order granting review, as opposed to an order denying review. So that doesn’t mean that everyone agreed about every aspect of the order. Indeed, I sense that the overall action — including taking the case at all and hearing it in April, as opposed to sooner or even later than that — is the product of compromise. Whatever the motivation, it’s a win for Trump. Even if the court rules against him, its handling of the appeal may effectively grant him immunity by the further delay it yields in the federal election interference case. No matter what the court rules exactly, taking up the case and hearing it on this relatively leisurely schedule may let him retake the White House and crush the very case in which he’s seeking immunity. Have any questions or comments for me? I’d love to hear from you! Please email deadlinelegal@nbcuni.com for a chance to be featured in a future newsletter.
‘It’s very easy to steal someone’s voice’: how AI is affecting video game actors 2024-03-29 10:02:00+00:00 - When she discovered her voice had been uploaded to multiple websites without her consent, the actor Cissy Jones told them to take it down immediately. Some complied. “Others who have more money in their banks basically sent me the email equivalent of a digital middle finger and said: don’t care,” Jones recalls by phone. “That was the genesis for me to start talking to friends of mine about: listen, how do we do this the right way? How do we understand that the genie is out of the bottle and find a way to be a part of the conversation or we will get systematically annihilated? I know that sounds dramatic but, given how easy it is to steal a person’s voice, it’s not far off the mark.” Jones, 45, a voice artist with credits including Starfield and Baldur’s Gate III, was wrestling with the march of artificial intelligence (AI) into video games, increasingly recognised as less a niche pursuit for bedroom-dwelling teenagers than a storytelling platform with almost unlimited potential. Hollywood actors such as Jodie Comer, Idris Elba, Megan Fox, David Harbour and Keri Russell are contributing their likenesses and voices to the multibillion-dollar industry. Just as in film and TV, only more so, AI represents a gathering storm for video game actors. Some studios are experimenting with tools that can clone voices, alter voices and generate audio from text. In interactive, multi-choice games, this can generate a potentially endless number of characters and conversations – and is far more efficient than asking performers to record huge quantities of dialogue. The response from professional actors has been mixed. Some fear that games companies – sensing opportunity to cut costs and accelerate development – would use AI to reproduce their voices without permission or payment, pushing down the value of their work. Others have been willing to give it a try if they are fairly compensated and their voices are not misused. Jones, for her part, had a brainstorming session with colleagues for a few months and came up with a structure for an AI company that could coexist with actors. She is now co-founder and vice-president of strategic partnerships at Morpheme, a startup aiming to harness AI to reshape how vocal performances are used in everything from animated series to video games. Morpheme’s AI software records audio from actors and then creates a model of their voice that can be used to alter, expand and enliven future productions. It has been demonstrating the technology to several top gaming companies. View image in fullscreen Gamers play video games during the Gamescom LAN event. Photograph: Ina Fassbender/AFP/Getty Images “We’ve been going full steam ahead, creating contracts that work for actors, making sure that actors understand if they want to record with us, if they want to have a digital double, number one, we get their consent. You want to have a digital version of your voice? Fantastic. We pay them and then any time the voice is generated they also receive payment. In addition, if at any point they no longer feel comfortable having their voice be a part of our offering, we will delete it.” Unlike their counterparts in film or TV, voice actors for video games do not receive residual payments after their recording sessions. Some gaming actors are looking at the emerging AI technology as an opportunity to potentially collect extra payments down the road on top of a base minimum. Under Morpheme’s contract, actors who are unavailable or unable to work on a new project can put their “digital twin” to work, and, in exchange, receive additional money. But not everyone is ready and willing to play by the same rules. Jones was recently offered a job for a one-off fee but then found, buried in an 11-page contract, an option for the employer to create a digital version of her voice for use in perpetuity without any additional payment. Unauthorised uses of AI technology are already proliferating, as illustrated by a recent hoax Joe Biden robocall and deepfake recordings of the actor Emma Watson reading Adolf Hitler’s Mein Kampf. Jones, who is based in Los Angeles and has worked on about 300 games, notes: “It is very easy to steal a person’s voice. At the beginning of 2022 it took six hours. At the beginning of 2023 it took three hours. Do you want to guess what it takes right now? Three seconds. Anything you have on Instagram, TikTok, any YouTube videos, anybody can create a digital version of your voice from just that. Is it perfect? No but the technology is not getting worse.” She adds: “The danger is that people can take all of these billions of voices that are available online, scrape the internet for them, mush them together and create a new voice that does not ‘belong’ to anybody, thereby creating a ‘new’ voice. However, they are still profiting off of my voice. “We’re working on active fingerprinting technology that could parse that out but, as quickly as we’re working on developing that companies are working to erase that. It’s the old network security versus hacker problem. As soon as network security figures out a lock, hackers figure out a way through it.” Jones also sits on the board of the National Association of Voice Actors (Nava), a non-profit which has a mantra of “consent, compensation and control” around the use of AI and has been in talks with with members of Congress on upcoming AI legislation. “We’ve been working with the Office of Copyright because right now you can copyright your name, image and likeness – you cannot copyright your voice.” There are concerns that AI voices could replace all but the most famous human actors and eliminate entire job categories, such as quality-assurance testers or the entry-level positions that allow young performers to get a foot in the door. Some actors worry that they might already have signed their voice away years ago and have no way of claiming it back. Tim Friedlander, an award-winning voice actor who is founder and president of Nava, says: “There is fear. There is uncertainty. There is kind of a helplessness: how do we, as independent voice actors who are in the union or not in the union, push back against multibillion-dollar companies who have the ability to outspend us and out-lawyer us and potentially – through predatory behaviour or predatory contracts – take advantage of voice actors? “If you’re under a union contract, you still have to read your contracts, make sure that there’s no addendum or added language that is in there. As voice actors we’re not lawyers, we’re not contract specialists. It is potentially the fear of many people that they’ve given away their voices years ago through contracts, that the damage has been done already and we’re just now going to start to see the results of those predatory contracts from years ago.” The rise of AI seems ominous to Jared Butler, who specialises in imitating celebrity voices and is an “audio double” for Johnny Depp, having vocally portrayed Captain Jack Sparrow in Pirates of the Caribbean: At World’s End, Pirates of the Caribbean Online and other media. He says: “I’m kind of the canary in the coalmine for this and this canary is smelling a gas leak. “There’s no version of this that doesn’t affect how much work I get in my future career. Voice actors are rightly concerned about this technology and how it’s going to impact them. There’s no version this where it doesn’t impact us in some way, and mostly negatively.” Butler adds: “I don’t do just voice matching but, as one of the people where that’s my speciality, this affects me directly. The technology has gotten so good so fast that they can and have already replaced a lot of what voice actors do, especially when it comes to imitating the voice. They can just feed the algorithm a bunch of recordings of any voice and imitate it fairly well. “People think that it all sounds like these bad customer service robots. It’s not like that: I’ve heard the good stuff. As someone who has a critical ear, I’ve spent a career listening to voices intently and trying to match every nuance, and I gotta tell you this technology is scary how accurate it is.” But for some actors, AI has represented opportunity. Andy Magee grew up in Northern Ireland and has previously worked as a craft brewery manager, delivery driver and farmer. He started his voiceover career with AI characters, recording about 7,000 words in distinct emotions to generate an audio dataset. The voice is cloned and can be made to say pretty much anything – within set guidelines. The 38-year-old says from Vancouver, Canada: “All the work that I’ve done, my contracts were always very specific and I felt very safe and protected with the usage it’s going to have. But I also see that there are some concerns about consent in the industry and there’s a lack of rules in place because it is such a fresh technology. They’re still trying to catch up with the rules and the dos and don’ts.” Magee tries to retain a balanced view. “I don’t preach AI voices as the new thing that we should all be excited about. Nor do I say it’s the worst thing to happen in the industry because I know personally I’ve seen benefits for new games developers, for example. It’s a source for them to actually be more creative and have more freedom to work. Like most topics, there are two sides to it.” Some of Magee’s work has been for Replica Studios, an AI voice technology company which in January struck a deal with the Screen Actors Guild-American Federation of Television and Radio Artists (Sag-Aftra). The agreement – which the Sag-Aftra president, Fran Drescher, described as “a great example of AI being done right” — enables major studios to work with unionised actors to create and license a digital replica of their voice. It sets terms that also allow performers to opt out of having their voices used in perpetuity. Sag-Aftra represents about 2,600 video games performers – people whose voices, facial expressions, physical movement or stunt abilities require union protection. The last contract expired in November 2022 and is still under negotiation; last year members of Sag-Aftra voted overwhelmingly to authorise a strike against 10 of the biggest video game studios including Activision Productions, Disney Character Voices and Electronic Arts Productions. The union could call a strike in the coming weeks but, for now, talks are ongoing. Chief negotiator Duncan Crabtree-Ireland says: “Our core concerns are that any performer who’s going to have their performance, their image, their voice, their body replicated through AI technology has a right of informed consent over any of that type of application and that there would be provisions for fair compensation when that’s done. “Then with respect to generative AI, so with AI tools that can actually create performances by people who don’t really exist, that there be appropriate guardrails around that to ensure that it does not result in the wholesale elimination of human participation in the creative process.” Last year the union tackled AI concerns with Hollywood studios and streamers during a 118-day strike and, just a month and a half ago, negotiated similar provisions in a TV animation agreement without the need to strike. Crabtree-Ireland adds: “I feel like the industries that we work in have gotten comfortable with the idea that there do need to be AI guardrails and, as more and more of those deals get worked out, the video game companies become more and more of an outlier in that regard.” Voice work is not the stumbling block with video games companies. “The area where there’s been disagreement thus far is on camera performances and stunts and performance capture work, which in a way is ironic because you would think that would be the easier piece to nail down in the negotiations. But for whatever reasons, these companies have been unwilling to extend the same protections to those performers that they do to voice performers. “We should not have to go on strike in this contract. There is absolutely a deal to be made. The question is, will the companies be able to get there?” The current AI craze also brings perils for video game developers who embrace too much too soon and could face backlash from fans. Mihaela Mihailova, an assistant professor in the School of Cinema at San Francisco State University, predicts that the immediate impact of AI will have on the video game industry is likely to be negative. “Most of this tech is still not nearly as artistically capable or error-free as its coverage would have us believe, so we are about to see some truly bizarre/blatantly inferior creations,” she writes over email. “The rush to use AI and capitalise on its novelty and hype means that both quality control and creative thinking will be sacrificed by studios attempting to look cutting-edge while simultaneously cutting costs. The misguided belief that AI tools, in their current form, are already capable of fully replacing and/or automating skilled human labor is emboldening studios to okay mass layoffs. This is already catastrophic for the video game workforce, but it will soon prove catastrophic for the quality of video games produced in this climate.” Olcun Tan, a German-born visual effects supervisor who works with AI, adds by phone from Los Angeles: “Voiceover actors now say, oh my God, I’m going to lose my job because of AI, which they have a right to be fearful about. But then who says that the game company will not go out of business because an AI will create games with input from you as a user who says, hey, can you create me a game about this and this and this and with this game topic? “It’s not going to happen today, but it might happen and then the person who’s saying, oh my God, I’m to lose my voiceover job, it’s now the company who would hire that person wouldn’t even exist. It’s a multi-dimensional problem. It’s not just affecting the visual worker. It’s affecting everything.” Tan concludes: “A lot of people can’t even envision the extent of disruption there will be in the near future. It’s scary but at the same time you can look at it differently and you say hey, I’m not going to swim against the stream like in a river where I’ll drown; I’m going to swim with it and try to make sure that I understand how this technology can be useful for me.”
San Francisco’s ‘Twitter Menace’ or True Believer? He Might Be Both. 2024-03-29 09:01:04+00:00 - Under cathedral ceilings and soaring stained glass windows, Garry Tan clutched a microphone as he greeted a crowd of political centrists, including San Francisco’s mayor, local prosecutors and police brass. “Welcome to the church of turning San Francisco around!” said Mr. Tan at a fund-raiser he was hosting for local Asian American female political candidates just days before the Super Tuesday elections this month. For a man evangelizing for change in San Francisco, owning a condo that used to be part of a church comes in handy. Last year, he scooped up the $3.95 million space near the city’s palm-tree-studded Dolores Park to hold events like this one — events he hopes will shift San Francisco from its idealistic progressivism toward nuts-and-bolts centrism. Mr. Tan’s day job is chief executive of Y Combinator, the accelerator for tech start-ups that has helped create household names including Airbnb, DoorDash, Dropbox, Instacart and Reddit.
Want $3,000 in Annual Dividends? Invest $15,000 in Each of These 3 High-Yielding Stocks 2024-03-28 17:45:00+00:00 - Dividend income is a great way to boost your financial situation in the short and the long term. The extra income can add stability and make it easier for you to work less today and potentially retire early. There are many great high-yielding stocks to help you generate significant dividend income. By investing $15,000 each into Realty Income (NYSE: O), Verizon Communications (NYSE: VZ), and Enbridge (NYSE: ENB), you can generate $3,000 per year in dividends. And over time, that income could grow even higher. Here's a look at each stock and it's recent dividend yield. Realty Income: 5.9% Realty Income is a real estate investment trust (REIT) that has a diverse set of properties in its portfolio. For long-term investors, that's of key importance because not only does that add long-term stability, but it also means there are many opportunities for growth. The company has 1,326 clients spanning 86 industries. And with its portfolio totaling 272 million square feet, it's one of the largest REITs in the world. In 2023, the company wrapped up another strong year with revenue of $4.1 billion, rising by 22%. And funds from operations (FFO) per share of $4.07 were slightly higher than the $4.04 it reported in the previous year. FFO per share is effectively what REITs use instead of net income to assess the safety of their payouts since it gives a better indication of profitability when excluding noncash items such as depreciation and amortization. The stock pays a monthly dividend of $0.2570, which totals $3.08 a year, well below its FFO per share, suggesting that the dividend is safe. Realty Income has increased its dividend annually for 29 straight years, and with its strong numbers, it's likely that trend will continue for the foreseeable future. Investing $15,000 into the stock would generate approximately $890 in annual dividends for your portfolio. Verizon Communications: 6.6% The telecom sector can be a great place for long-term dividend income. But with interest rates on the rise in recent years, investors have pulled out of telecoms and transitioned more into bonds and other assets. Story continues The big drawback for telecoms is that capital spending can be a drain, especially when the cost of borrowing is high. But Verizon is one of the top telecom companies in the country, and its results suggest that the business is still in excellent shape. It finished 2023 with $134 billion in operating revenue, which was down 2.1% year over year. But with consumers fighting higher costs and looking to cut their bills, a modest decline in revenue might not be a huge surprise. It's certainly no reason to be worried about Verizon's long-term prospects. Last year, its free cash flow totaled $18.7 billion, which was up considerably from the $14.1 billion it brought in a year earlier. Free cash flow is an important consideration for dividend investors since payments are made in cash. Annually, Verizon pays out approximately $11 billion in cash dividends, and its recent results show that even in a challenging economy, there is plenty of room for the company to continue paying and increasing its dividend. In 2023, Verizon increased its dividend for a 17th consecutive year, which is the longest streak among U.S. telecom companies. Investing $15,000 into this stock would bring you around $990 in dividends per year. Enbridge: 7.6% The highest yield on this list belongs to the pipeline company Enbridge. This has long been one of the safest options for dividend investors in the oil and gas industry. Since it's not drilling for oil or gas, Enbridge's business doesn't depend on high commodity prices. Its infrastructure, however, is crucial for the industry because it helps transport 30% of the crude oil that's produced in North America and close to 20% of the natural gas that's used in the U.S. The Canadian company had a strong year in 2023 with its adjusted earnings of 5.7 billion Canadian dollars ($4.2 billion) being unchanged from the previous year. Distributable cash flow, which is what dividend investors will want to focus on, grew by CA$300 million to CA$11.3 billion. The company has been a stalwart in the industry, hitting its financial guidance for the 18th straight year. The business is also known for consistently raising its dividend each year. Its streak currently sits at 29 years, and with lots of predictability in its operations thanks to long-term agreements and continued growth, this can also be an excellent dividend play. A $15,000 investment in this stock would result in $1,140 in annual dividends. When combined with the other investments on this list, that would put your total investment at $45,000, with expected annual dividend income around $3,020. Should you invest $1,000 in Realty Income right now? Before you buy stock in Realty Income, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of March 25, 2024 David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge and Realty Income. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy. Want $3,000 in Annual Dividends? Invest $15,000 in Each of These 3 High-Yielding Stocks was originally published by The Motley Fool
2 Energy Stocks You Can Buy Right Now Before They Surge Even Higher 2024-03-28 17:15:00+00:00 - Energy stocks have gotten off to a hot start this year. The average energy stock is up more than 10% as measured by the Energy Select Sector SPDR ETF. Some have surged even higher. ExxonMobil (NYSE: XOM) and Energy Transfer (NYSE: ET) stand out for their surges to start this year, with both outperforming the Energy Select Sector SPDR ETF. These energy stocks could have further to run. Here's why investors might want to buy them now before they rally even more. Catalysts galore ExxonMobil has rallied more than 10% this year, fueled largely by a double-digit surge in crude oil prices. Higher oil prices will enable Exxon to generate even more earnings and free cash flow. However, Exxon doesn't need higher oil prices to boost its profitability. The company's current corporate plan has it on track to increase its annual earnings by $14 billion through 2027, assuming oil averages $60 a barrel; it's currently in the $80s. The company is investing heavily in high-return capital projects, primarily in its four growth pillars of the Permian Basin, LNG, Guyana, and Brazil, while delivering meaningful structural cost savings. Exxon is working to enhance its already strong growth plan by acquiring Pioneer Natural Resources (NYSE: PXD). The company agreed to buy the oil and gas producer in a $64.5 billion deal last fall, which it expects to close this year. Acquiring Pioneer will significantly enhance Exxon's operations in the Permian Basin. Upon closing the acquisition of Pioneer, Exxon will more than double its production rate in the Permian Basin to 1.3 million barrels of oil equivalent per day (BOE/d). The company expects the deal will enable it to grow its output in the region to 2 million BOE/d by 2027. That growing high-margin production will drive increased earnings and free cash flow for the oil giant. On top of that, Exxon is looking into potentially capitalizing on rival Chevron's proposed acquisition of Hess, one of its partners in Guyana. Exxon believes the transaction triggered a clause in the joint operating agreement that could give it the right to acquire Hess' assets in the oil-rich region. While Exxon doesn't want to buy Hess, it would be interested in buying its stake in Guyana. A deal for those assets would be a real coup, further enhancing its long-term earnings growth profile. Story continues Its strategy is paying dividends Energy Transfer has also rallied more than 10% this year. On one hand, higher oil prices don't have as much of an impact on the master limited partnership's (MLP) cash flow since more than 90% of its earnings are fee-based and, therefore, insulated from commodity price volatility. However, higher oil prices can drive volume growth and provide new expansion opportunities. Oil prices aside, the primary catalyst driving Energy Transfer's rally seems to be the execution of its strategy. The company has focused on strengthening its financial profile in recent years. That's starting to pay dividends. Its leverage ratio is trending toward the low end of its 4.0 to 4.5 target range. That recently won it a credit rating upgrade, which helps reduce borrowing costs. The MLP has also enhanced its capital structure by repurchasing several series of its outstanding preferred units. The company is also benefiting from its consolidation strategy. Last year, it made two notable acquisitions, including acquiring fellow MLP Crestwood Equity Partners in a $7.1 billion deal. Those deals will help drive 7% earnings growth for Energy Transfer this year. The Crestwood acquisition is outperforming its expectations. It now expects to capture $80 million of cost savings by 2026, including $65 million this year, double its initial estimate. Energy Transfer's improving financial profile and growing earnings are helping lift its valuation, which still trades near the bottom of its peer group even after its rally. That low valuation is why the MLP offers such a high yield of over 8%. The company plans to capitalize on this disconnect by repurchasing its dirt cheap units with some of its growing excess free cash flow. Those repurchases could give its rally even more fuel. The fuel to continue rising ExxonMobil and Energy Transfer have already rallied 10% this year. However, the energy companies have plenty of catalysts to continue rising. Investors might want to buy now before they head even higher. Should you invest $1,000 in ExxonMobil right now? Before you buy stock in ExxonMobil, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ExxonMobil wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of March 25, 2024 Matt DiLallo has positions in Chevron and Energy Transfer. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Pioneer Natural Resources. The Motley Fool has a disclosure policy. 2 Energy Stocks You Can Buy Right Now Before They Surge Even Higher was originally published by The Motley Fool
2 Reasons to Buy Nvidia Stock Like There's No Tomorrow 2024-03-28 17:10:00+00:00 - Nvidia (NASDAQ: NVDA) has been on top of the world over the last year as it has cornered the market on artificial intelligence (AI) chips, with its stock up more than 247% since last March. As demand for AI services soared, so has the need for graphics processing units (GPUs) -- the chips necessary for training and running AI models. Meanwhile, Nvidia has held a leading market share in GPUs for years, perfectly positioning it to immediately begin supplying its chips to AI developers everywhere. Consequently, Nvidia's earnings have skyrocketed as it achieved a majority market share in the AI GPU market while competitors like Advanced Micro Devices and Intel have scrambled to catch up. Nvidia's meteoric rise has some analysts questioning how much room the company has left to run. However, its stock keeps defying expectations, rising 20% in the last month alone. Given the massive potential of AI and Nvidia's position in the market, I wouldn't bet against it over the long term. So, here are two reasons to buy Nvidia stock like there's no tomorrow. 1. Getting a head start in artificial intelligence (AI) The launch of OpenAI's ChatGPT in November 2022 reignited interest in AI and highlighted just how far the technology had come. Companies from countless industries began pivoting their businesses toward the budding arena as it became clear that AI could bolster a wide variety of businesses, from consumer tech to autonomous vehicles, e-commerce, cloud computing, and more. Data from Grand View Research shows the AI market hit close to $200 billion last year and is expected to expand at a compound annual growth rate of 37% until at least 2030. For reference, that projection would see the industry reach nearly $2 trillion by the end of the decade. As a result, there seems to be no end in sight to the soaring demand for AI GPUs. Meanwhile, last year, Nvidia's head start in the market saw it achieve an estimated 90% market share in AI chips, leading to soaring earnings. Story continues In its most recent quarter (the fourth quarter of fiscal 2024, which ended in January), the company's revenue increased by 265% year over year to $22 billion. Operating income jumped 983% to nearly $14 billion. This monster growth was primarily thanks to a 409% increase in data center revenue, reflecting a spike in AI GPU sales. Additionally, Nvidia's free cash flow is up 430% in the last year to more than $27 billion, significantly higher than AMD's $1 billion and Intel's negative $14 billion. So, despite new GPU releases from both competitors, Nvidia's head start in AI potentially pushed the company further ahead, providing it with more significant cash reserves to continue investing in technology and retain market supremacy. 2. Nvidia's stock is trading at its best value in months Last year, Nvidia became the first chipmaker to achieve a market cap above $1 trillion. In fact, its market cap is currently more than $2 trillion, with Nvidia the world's third most valuable company, only after Microsoft and Apple. Nvidia has come a long way in a short time. Yet its stock has actually increased in value over the last 12 months. NVDA Price to Free Cash Flow Chart The chart above shows that Nvidia's price-to-free-cash-flow and price-to-earnings ratios plunged in the last year, indicating its stock is at one of its best-valued positions in 12 months. P/E is calculated by dividing a company's stock price by its earnings per share. Meanwhile, the price-to-free-cash-flow ratio divides its market cap by free cash flow. These are helpful valuation metrics as they take into account a company's financial health. For both, the lower the figure, the better the value. This, in addition to Nvidia's potent position in a burgeoning industry and significant cash reserves, makes the company's stock worth considering right now for a long-term investment. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of March 25, 2024 Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy. 2 Reasons to Buy Nvidia Stock Like There's No Tomorrow was originally published by The Motley Fool
3 Value Stocks Too Small For Buffett’s Portfolio 2024-03-28 16:16:00+00:00 - Key Points Investment giants like Warren Buffett often pass on value stocks too small for their multi-billion portfolios. Three stocks stand out in their financial strength and Wall Street support, though these mega investors don't consider them. Analysts and institutions like them enough to boost and buy them; will they be right now? 5 stocks we like better than Amazon.com When investment giants like Warren Buffett spot the rare opportunity to buy a value stock, they more than often pass on the chance. Because they manage such large amounts of capital, investing less than a few billion in companies isn't big enough to bring them returns. Because of this, these behemoths overlook plenty of worthy stocks. The retail investor has an advantage in stocks like Best Buy Co. NYSE: BBY, Crocs Inc. NASDAQ: CROX, and even Mueller Industries Inc. NYSE: MLI. These companies share some of the characteristics these value investors look for. Still, they are all under the $20 billion capitalization yardstick. Get Amazon.com alerts: Sign Up Each of these stocks has the sort of profitability around them that would otherwise earn them a place in Berkshire Hathaway Inc. NYSE: BRK.A. However, due to their size, they are companies that the significant funds would need to pass on. Some people on Wall Street don't have that problem, particularly analysts. Mueller Industries: Steel Profiting The Federal Reserve (the Fed) is looking to cut interest rates this year. However, the magnitude and timing of these cuts is still uncertain. Investors can follow the FedWatch tool at the CME Group Inc. NASDAQ: CME, where traders have priced in these cuts as soon as May or June 2024. Analysts at The Goldman Sachs Group Inc. NYSE: GS think that the U.S. manufacturing sector could see a breakout his year. Of course, that belief – laid out in their 2024 macro outlook report -is backed by the same potential for interest rate cuts to boost economic activity. Regarding the ISM manufacturing PMI, the primary metals and fabricated metals industry saw their first expansion reading in February after contracting for two previous months. Goldman is right so far in this manufacturing expansion, but why Mueller? The stock's return on invested capital (ROIC) is something that Buffett stocks all have. Over the past five years, Mueller's financials show an average ROIC rate of over 22%. This compares to another one of Buffett's holdings, Visa Inc. NYSE: V, which also has an average ROIC of 23% over the past five years. While the stock's $6 billion market capitalization makes it hard for Buffett to buy, other institutions like PNC Financial Services Group Inc. NYSE: PNC and the Vanguard Group purchased the stock in the past quarter. Crocs Is Still in Fashion Gross margins can tell investors much about a business, such as Crocs' 55% and above gross margins in its financials. When a company can achieve this high rate of profitability, it typically means the underlying product or service has pricing power attached to it. Crocs has always had good brand penetration, which may be the source of these high gross margins and pricing power. More than that, the company generates an average ROIC of 20% when financials are looked at over the past five years. Despite trading at 95% of its 52-week high price, Crocs is still trading at a 74% discount to the footwear industry. Investors can follow this discount in the stock's 11x P/E valuation versus the industry's average 43x valuation multiple. Knowing that the stock is discounted and its financials may help investors keep compounding their investment capital, analysts at Bank of America Co. NYSE: BAC boosted their price targets on Crocs stock to $150 a share. The stock must rally by 5% from where it trades today to prove these predictions correct. Goldman Sachs thinks it could go a bit higher, though, as the group increased its position in the stock by 46.7% in the past quarter. This transaction would represent a $33.6 million purchase. Best Buy Alive and Kicking Analysts at J.P. Morgan Chase & Co. NYSE: JPM think that Best Buy stock could go as high as $101 a share, as they assigned an 'overweight' rating in March 2024; their current valuations say the stock could rally by as much as 22% from today's prices. Some investors argue Best Buy has no added value compared to Amazon.com Inc. NASDAQ: AMZN. While Best Buy does not have Amazon's intensive network and size, it does have niche expertise in consumer electronics. Management's efficiency in turning the ship around, in plans such as store redesign for distribution hubs, inventory management, and optimization in their mergers and acquisitions (M&A) departments, can be measured in ROIC. Over the past five years, Best Buy's financials show an average ROIC of 17%, above Amazon's 5% average. A 22% gross margin suggests that Best Buy's business model is still alive today, and trading at 95% of its 52-week high shows how investors are comfortable filling the name with momentum. 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
Old Xi Speech on China’s Monetary Tools Catches Trader Eyes 2024-03-28 16:03:00+00:00 - (Bloomberg) -- A line from a 172-page book citing President Xi Jinping’s comments on the nation’s monetary tools became a hot talking point among stock and bond traders Thursday. Most Read from Bloomberg China should enrich its toolbox of monetary policies and the central bank should gradually increase the buying and selling of government bonds in its open-market operations, Xi was cited as saying in a book published this month. The snippet was taken from his speech — which was previously not fully released — during a twice-a-decade financial policy meeting in October. The remarks, though vague and dated, were first highlighted in a South China Morning Post article which caught traders’ attention. A small group of market participants argued this may mean Beijing is considering quantitative easing, which involves a monetary authority buying a country’s government bonds, and that speculation helped to fuel gains in local stocks on Thursday. However, most commentators said it wasn’t a green light for QE and focused their debate on whether the People’s Bank of China should go as far as buying bonds directly from the market. That’s a move that could boost the supply of cash in the financial system and support an economy challenged by weak demand and a property downturn, though not without consequences. “More trades by the PBOC in the secondary bond market would add to rate market volatility given the PBOC’s huge trading sizes,” said Serena Zhou, economist at Mizuho Securities. “I’m not sure if this is what Xi suggested. I don’t think this is an implication of QE.” For Morgan Stanley economists including Robin Xing, the comments were just about improving the open-market operations, a tool Beijing uses to smooth liquidity imbalances in the financial system. The standard approach among global central banks is increasing the use of government bond trading to control financial conditions, they wrote in a note Thursday. Story continues “In fact, in the same speech, Beijing made hawkish comments that the deleveraging process requires a tighter grip on money and credit supply, which we believe indicates continued preference for austerity to prevent misallocations,” the economists said. QE Opposition The People’s Bank of China has long opposed an aggressive stimulus policy and has pledged to keep a “normal” monetary stance for as long as possible. In recent history, Beijing has never used QE like its global peers such as Bank of Japan and Federal Reserve and its holding of sovereign bonds has been largely stable over the past decade. On the same page in the book where PBOC bond trading was mentioned, Xi also said the nation needs to keep money supply in check, otherwise all efforts to reduce debt in the economy will be futile. He stressed that China should always maintain a prudent monetary policy. Former Governor Yi Gang, whose tenure ended in July, said central banks should try their best to avoid asset purchases because in the long run they’ll “damage market functions, monetize fiscal deficits, harm central banks’ reputation, blur the boundary of monetary policy and create moral hazard.” His predecessor, Zhou Xiaochuan, warned in 2010 that QE in the US could spur negative effects for the world. Stimulus Speculation Despite the PBOC’s reluctance, speculation about additional monetary easing has climbed of late, with the nation planning to sell ultra-long special government bonds, starting with sales of 1 trillion yuan ($138 billion) this year. On Thursday, the Hang Seng China Enterprises Index gained the most in two weeks, while a gauge tracking Chinese tech shares rose as much as 4.4%. The yield on China’s 10-year government bonds was little changed at 2.29%. Chinese Stocks Gain as Report Spurs Policy Easing Speculation Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group, said it was possible for the PBOC to buy sovereign notes and officials need to explore different forms of monetary stimulus. “We expect the PBOC to try trading Chinese government bonds in open-market operations soon,” he said. “The PBOC lacks policy tools to drain excess liquidity. Selling government bonds will be a good option.” (Updates throughout.) Most Read from Bloomberg Businessweek ©2024 Bloomberg L.P.
Alphabet and Amazon Stocks Surge to All-Time Highs: Buy These "Magnificent Seven" Stars Now or Regret It Later 2024-03-28 15:41:00+00:00 - The inflation panic took the wind out of Wall Street's sails, especially where it crosses Silicon Valley in a proverbial sense. The stocks of tech titans Amazon.com (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) took a beating as investors backed away from growth-oriented ideas. Amazon's shares fell as much as 57% from its pre-panic record price. The Google parent's price drop stopped at 46%. Only now, more than two years later, are they sniffing at fresh all-time highs again. I don't think this is the last hurrah from two tired comeback stories. Instead, I see Alphabet and Amazon as the two best buys in the "Magnificent Seven" group right now, with tremendous returns on the long-term horizon. You should consider grabbing some of these top-quality stocks while they're still relatively affordable. Amazon and Alphabet's big AI bets First, I'd like to point out that Amazon and Alphabet have plenty of irons in the artificial intelligence (AI) fires. They may not be as deeply and directly involved in the frenzy for generative AI and large language models (LLMs) as Nvidia (NASDAQ: NVDA), but you're looking at two of the leading providers of cloud-based computing services. Google Cloud and Amazon Web Services play significant roles in the back-end of everyone else's AI ambitions, crunching the required numbers in their global data center networks. They also offer their own AI tools, led by the ChatGPT-like Google Gemini platform and the Amazon Lex chatbot. You may not be familiar with Lex, but it's basically the same technology that powers Amazon Alexa, made available for any developer in need of a conversationsl natural language system. How committed to AI innovation are Google and Amazon? Well, both companies use the latest and greatest AI acceleration hardware from Nvidia and Advanced Micro Devices (NASDAQ: AMD), but that's not all. The Cloud TPU and AWS Inferentia chips are proprietary AI accelerator chips designed by Google's and Amazon's own engineers, respectively. Story continues And they are heavy users of AI tools in their daily work, too. You'll find AI behind the scenes of many consumer-facing services, from travel routes in Google Maps and Amazon's automated warehouse management to YouTube's video recommendation engine and Alexa's helpful chatter. These stocks aren't expensive, even at all-time highs So I'm not saying that Amazon's and Alphabet's stocks should have tripled over the last year, like Nvidia. But their rebound from the rock-bottom pricing of the inflation crisis was slower than they deserved. I can't believe it took this long just to get back to prices last seen in November 2021. And they're priced to keep on moving, too. Shares of Amazon are changing hands at the bargain-bin valuation of 3.2 times sales. Alphabet's price-to-sales ratio (P/S) clocks in at 6.1. In a world where Microsoft (NASDAQ: MSFT) commands a double-digit P/S ratio and Nvidia has soared to 39 times sales, these figures strike me as big market-maker mistakes. Why Amazon and Alphabet aren't skyrocketing (yet) Of course, Wall Street had its reasons to keep Alphabet and Amazon under wraps while most of their "Magnificent Seven" peers soared. The digital advertising market fell into a deep recession in 2022. Inflationary pressure is no joke -- consumers held on to their wallets with both hands while everybody's cost of doing business rose. That's not a great environment for launching extravagant marketing campaigns. The economic pressure has subsided in recent quarters but I'm still not talking about a full-fledged return to optimal health. So Alphabet's ad-based business has seen slower growth than usual, and the stock arguably deserves a bit of a discount under these circumstances. The same market reality also held back Amazon's retail sales. The inflation crunch started knee-deep in the all-important holiday season of 2021. The e-commerce veteran had to cut costs, slow down its spending on the delivery infrastructure, and absorb two years of low-grade growth. Again, I see why risk-averse investors would stay away from Amazon against that backdrop. Amazon and Alphabet should soar soon enough Amazon and Alphabet, with their undaunted investments in AI and cloud computing, are not just surviving the storm but blazing their own paths through it. The key takeaway? Investors should try to tune out the market noise and focus on the fundamentals. These tech giants look undervalued today, but that doesn't mean you should consider selling your shares to find better alternatives. On the contrary, the modest pricing is an open invitation to grab fistfuls of Alphabet and Amazon shares at a reasonable price. In the end, no downturn lasts forever. This pair of "Magnificent Seven" beasts is prepared to truly soar when the American and global economy gets back on its feet. The companies that drive tomorrow's innovations will deliver the most enduring returns. That's what Amazon and Alphabet do, and I can't wait to see how they will fare in the current bull market. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. See the 10 stocks *Stock Advisor returns as of March 25, 2024 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Alphabet and Amazon Stocks Surge to All-Time Highs: Buy These "Magnificent Seven" Stars Now or Regret It Later was originally published by The Motley Fool
Foot Locker Builds Up Another Head of Steam; Gains Imminent 2024-03-28 14:58:00+00:00 - Key Points Foot Locker shares are marching north again after their post-earnings slip earlier this month. This week's fresh upgrade suggests we could be looking at even more gains in the short term. It remains a volatile stock, but there's a strong argument to be made that most of the downside is already baked in. 5 stocks we like better than Foot Locker Sometimes, you just can't keep a good stock down. Foot Locker, Inc. NYSE: FL, whose investors often feel like they're on a non-stop rollercoaster, is once again starting to rally. It had been having a solid couple of months up until the start of March, gaining 140% since last August's multi-year low. For context, at the time, Footlocker stock, which had briefly fallen below $16, was back trading at 2010 levels — so it's clearly still in recovery mode. But with a triple-digit gain under its belt, it makes sense that investors could think that 2024 might be the year of some consistent gains, uncheckered by sudden drops. Get Foot Locker alerts: Sign Up Post-Earnings Slide It was not to be. Just two weeks ago, Foot Locker's Q4 results sent shares down more than 30% in a single session. This was a bitter pill for investors to swallow, as the company managed to deliver a solid beat on analyst expectations for earnings and revenue. And from a macro perspective, equities, in general, continued to set high after high. But weaker-than-anticipated forward guidance from management spooked investors. This was understandable given how hard the company has had to work to convince them a comeback is underway. However, it's starting to look like the post-earnings drop might have been an overreaction, and the 30% gain from the past two weeks is the start of yet another rally. Fresh Analyst Upgrade This was the thinking, at least, by the team over at Evercore ISI, who earlier this week upped their rating on Foot Locker shares from In Line to Outperform. The team ran an analysis, the results of which suggested the negative effects caused by the substantial liquidation inventories on the company's operations throughout last year had been initially underestimated. However, following an aggressive clearance during the final quarter of 2023, Foot Locker is once again striving to meet demand. Furthermore, Evercore has also seen its confidence increase in regards to a second-half same-store sales upturn embedded within guidance for the current fiscal year. This, in turn, had them upping their full-year 2024 EPS estimate from $1.70 to $1.75 and full-year 2025 estimate from $2.35 to $2.40. Their new price target of $32 is now targeting around 12% in further gains, with the potential for a lot more if this quarter's numbers can impress. As always with Foot Locker, investors should exercise a fair degree of caution as this one tends to whip around considerably more than its peers. But for investors with the appropriate level of risk tolerance, that's probably what makes it interesting. Getting Involved Beyond Evercore's upgrade, the team at Citi felt momentum shifting to the bulls and upgraded their rating on Foot Locker shares at the end of last week. While they stopped short of moving the stock to a full Buy rating, they were confident enough that most of the downside was already baked into the share price to remove their Sell rating. With the stock continuing to gain throughout the week so far, investors should look for more bullish updates in the coming weeks. Technically, the stock needs to close above last month's high of $35 to reconfirm the uptrend is intact, and that will require further gains in the region of 25%. The ongoing disappointment in Nike Inc. NYSE: NKE and Lululemon Athletica Inc. NASDAQ: LULU won't help, as sentiment towards the athletic retail industry as a whole is weak. But if any stock can cover that kind of ground in a short time, it's Foot Locker. Before you consider Foot Locker, 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 Foot Locker wasn't on the list. While Foot Locker currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Disney Stock Catches 3 Upgrades In a Single Week 2024-03-28 14:27:00+00:00 - Key Points Disney shares have continued to gather momentum since last quarter's low. This week saw several upgrades to ratings and price targets. A fresh street-high price target of $140 points to a further upside of at least 15%. 5 stocks we like better than Walt Disney Despite a shortened trading week due to the long weekend, it's already been a great one for Walt Disney Co. NYSE: DIS. As shares continue to rally from last October's lows, it's starting to look like the multi-month downtrend has been broken, and the stock is in an uptrend. Shares started this week up more than 45% from last quarter's low point but have added almost 5% to that since Monday. Much of the extra momentum has come in the form of bullish upgrades and comments from analysts, which can be among the best kinds of tailwinds a stock can get. And for those on the sidelines thinking they've missed the boat on Disney, the company gives us several reasons to think this rally is just getting started. Get Walt Disney alerts: Sign Up Bullish Momentum Remains Intact Take Monday's update from Barclays, for example. The team there upped their rating on Disney shares from Equal-Weight to Overweight on the back of what they called the "recent narrative reset." Having weathered the worst of the storm of the past two years, Disney has emerged better and stronger, and the Barclays team expects this to soon be reflected in positive earnings revisions. They also took note of the ongoing boardroom drama between Disney's leadership and investor Trian Fund Management. There's a key vote due to take place next week, but amidst the relentless stream of Disney-related updates leading up to the proxy vote, Barclays analyst Kannan Venkateshwar said that investor focus remains steadfast. Notwithstanding the negativity in the headlines, the sustained attention is expected to bolster the stock's performance in the short and medium term, driven mostly by positive indicators such as surpassing free cash flow and EPS projections for the full fiscal year. The consistent flow of announcements since February's bullish earnings report, coupled with investor confidence in future earnings estimates, is likely to help keep Disney's stock outpacing the broader market for the rest of the year. Price Targets Increased Barclays' revised price target of $135 is not only more than 40% higher than the $95 they were previously targeting, but it's pointing to further gains of more than 10% from where shares closed on Wednesday. Were Disney shares able to trend up towards that level in the coming weeks, they'd be at fresh 52-week highs and well above the $126 level where the stock's previous best attempt to break the downtrend failed. Given that Disney still has so much ground to cover to undo the selloff that started back in 2021, it's a strong stance to take, but Barclays is far from alone. On Tuesday, the team at Raymond James reiterated their Outperform rating on Disney shares, and UBS Group did the same thing on Wednesday. Both teams upped their price targets on Disney shares at the same time, with UBS' $140 now a street-high target that's pointing to a further upside of more than 15%. Considering a Position Despite the challenges encountered during the tenure of Disney CEO Bob Iger, you can't help but get the feeling that the Disney narrative has indeed been reset. Several bullish catalysts lie ahead, including strategic partnerships for ESPN streaming and consolidation of the Hulu business. A renewed focus on operational efficiencies and succession planning has clearly boosted investor confidence, and there's every reason to think the bullish momentum seen in shares so far this year should continue. With the stock's relative strength index (RSI) currently at 78, there are some signs that Disney shares are a little overheated, so investors should factor that into their planning. But taking the updates from this past week alone, any dip could be considered an entry opportunity as Disney gets back to doing what Disney does best: rallying. Before you consider Walt Disney, 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 Walt Disney wasn't on the list. While Walt Disney currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Analysis-With Cainiao buyback, Alibaba takes aim at rivals' overseas advance 2024-03-28 13:30:00+00:00 - By Casey Hall SHANGHAI (Reuters) - Alibaba's plan to buy full control of its logistics subsidiary rather than spinning it off could signal the Chinese giant is taking competition from e-commerce rivals Shein and Temu more seriously in overseas markets, analysts said. The company on Tuesday said it has decided against listing Cainiao - a year after announcing its intention to list - citing reasons such as a "depressed" share market in Hong Kong. At the same time, it outlined further investment in Cainiao's global network to reduce delivery times to three days from five for markets including the U.S. The sprawling technology firm has returned focus to its core business against a sputtering macroeconomic backdrop at home and booming e-commerce market abroad. While it has solidified its number one rank in China, it is far from dominant overseas. "We see a lot of players in the market being very aggressive but in the future this is going to be an even bigger market and we want to participate in that," Chairman Joe Tsai told analysts during a conference call on Tuesday. Alibaba has been grappling with how to make its global marketplaces such as AliExpress and Lazada more competitive. The advantages of an early head start have faded in recent years, with sales and growth outshone by Chinese-founded peers Temu from NASDAQ-listed PDD and Shein. Investing in Cainiao's global infrastructure and leveraging that might be one way to reel in rivals, said Brian Wong, a former Alibaba employee and author of "The Tao of Alibaba". Cainiao is the logistics backbone of founder and now 67% owner Alibaba - a figure which would have dropped to somewhere above 50% after listing. It operates warehouses as far afield as Indonesia and Belgium, and provides supply management solutions to other logistics firms. "It's quite strategic for international market development. Temu and Shein don't own their own logistics infrastructure so this will be a differentiator and it could give Alibaba a leg-up when it comes to this overseas battle," Wong said. Story continues Convenient returns processes as well as customer data that Alibaba could keep in-house are potential pluses, on top of improved delivery times, Wong said. At present, standard delivery times to the U.S. are six to 22 days for Temu, its website showed. Shein's website said 75% of U.S. orders arrive in fewer than 10 days. SYNERGY Alibaba announced its Cainiao spin-off as part of broader restructuring that included turning its international e-commerce unit into a standalone business headed by Jiang Fan, previously president of Alibaba's domestic Taobao and Tmall marketplaces. The business, dubbed Alibaba International Digital Commerce, is much smaller than the domestic marketplaces but has been one of Alibaba's brightest growth areas. Earnings grew 44% in October-December versus the same period a year prior, with order volume growing 60% at AliExpress Choice, which uses Cainiao. On Tuesday, Tsai said Alibaba wanted to "win" in e-commerce by regaining market share, with Cainiao playing a central role. "It is crucial that we achieve deep integration between Cainiao's operations and our e-commerce businesses," Tsai said. This will involve "patient" investment, he said, for which Alibaba has sufficient funds, with $60.5 billion in net cash at December-end. Making Cainiao private will allow management to "focus on the business rather than be distracted" by a listing, Tsai said. "We will focus on developing key businesses, expanding our global logistics network, building global competitiveness, and Alibaba will provide strong support for Cainiao's global expansion plan," Cainiao CEO Wan Lin told Reuters. Alibaba has set the domestic e-commerce agenda for years. When it comes to overseas, said emerging markets senior analyst Saurav Sen at Gimme Credit, its decision to buy out Cainiao instead of reducing its stake is a u-turn that demonstrates the degree to which it is at the mercy of market conditions. (Reporting by Casey Hall; Editing by Brenda Goh and Christopher Cushing)
Walgreens Boots Alliance: Deep Value With Nowhere to Go But Up 2024-03-28 13:25:00+00:00 - Key Points Walgreens Boots Alliance had a better-than-expected quarter but narrowed guidance on sluggish US consumer retail. Non-cash impairments cut deeply into the GAAP results but the adjusted show growth. Walgreens is trading at a deep value and pays a high yield that can be sustained in 2024. 5 stocks we like better than Walgreens Boots Alliance Walgreens Boots Alliance's NASDAQ: WBA efforts are paying off, although they still have work to do. The company's leaning toward efficiency and efforts to reinvigorate growth, sustain growth and improve profitability will drive shareholder value over the long term. The question today is how much lower the stock price can move, and the question is likely not far. The stock is trading above a critical support level that coincides with the low end of the analyst's range, suggesting a floor is in place. Because the company is growing and on track to return to GAAP profitability, the 6X P/E valuation and 4.75% yield are more than attractive at this technical level. Get WBA alerts: Sign Up Walgreens Has A Solid 2ns Quarter, Narrows Guidance Walgreens had a solid quarter, with strength in all segments driving 6.3% top-line growth. Revenue of $37.05 million outpaced the Marketbeat.com consensus by 340 basis points, led by strength in US Healthcare. US Healthcare grew more than 33% yearly and is quickly approaching profitability. International grew by 6.6%, and US Retail Pharma by 4.6%. The margin news is mixed. The GAAP margin contracted considerably due to a non-cash impairment, leaving a loss nearing $6 billion. The non-cash impairment is due to a reduced valuation of VillageMD's goodwill, which had little impact on the underlying business. The adjusted margin contracted but was less than expected, leaving the net income up 3% and the adjusted earnings 3.4%, which outpaced the consensus by 4600 basis points. Given the company's strengths in Q2, guidance is a negative factor, but it may be cautious. The company narrowed the range for earnings by lowering the top end because of weakness in US retail sales and less sale-leaseback activity. However, the mid-point remains above the analysts' consensus, aligning with the idea there is a floor in the market for this healthcare stock. Walgreens Dividend Is Safe For 2024 Walgreens' cash flow and free cash flow turned negative in Q2, raising the fear of another dividend cut, but it is premature to assume that one is coming. The cash burn is due primarily to legal matters that are not expected to recur; if it had been adjusted for that, FCF would have been positive. The net result to the balance sheet is a $142 million or 16.5% reduction in cash and securities, leaving the balance solid at $715 million. Regarding the dividend, Walgreens cut its payment at the end of F2023 but can sustain the $1.00 payout this year, with dividend health expected to improve by the end of the year. The payout is worth about 4.75%, with the stock trading at rock-bottom and is 30% of this year's earnings guidance and 28% of the following. Institutions Are Buying Walgreens At Long-Term Lows The institutional activity in Walgreens has been hot in the last few quarters, with both selling and buying gaining steam. However, the net result is bullish, with buyers outpacing sellers for four consecutive quarters. This activity coincides with the bottom in the price action; if it continues to be bullish on balance, it will help lift the market over time. Analysts' revisions recently reduced Walgreens' sentiment to Reduce but may have reached the bottom. The latest price target revisions are lower, but most are above the low and range near the consensus, which is 20% above the price action. A change in sentiment marked by upgrades or upward price target revisions would catalyze the market. Walgreens Technical Action is at a Bottom Walgreens Boots Alliance shares hit bottom late in 2023 and are retesting the level now. If the market confirms support at this level, WBA stock could rebound to $26 or higher. In that scenario, the critical resistance would be near $26.80. If not, WBA may fall through support in search of firmer support levels, but that is not expected. Before you consider Walgreens Boots Alliance, 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 Walgreens Boots Alliance wasn't on the list. While Walgreens Boots Alliance currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here