Bitcoin soars after Tesla invests $1.5B February 8, 2021, 10:59 PM Oops!
Yahoo Finance’s Dan Roberts joined Yahoo FInance Live to break down how Elon Musk has impacted the valuation of Bitcoin. Video Transcript
SEANA SMITH: Tesla buying $1 and 1/2 billion worth of Bitcoin, sending the price of Bitcoin to a new record above 44,000 for the first time. We want to bring back in Dan Roberts for more on this. And Dan, we were talking last week. A lot of that, though, was more focused on Dogecoin when it came to Elon Musk, and there was lots of questions about how serious he was when it came to the crypto market. But this, of course, is a massive move not only for Tesla, but it’s huge for the crypto industry as well.
DAN ROBERTS: That’s right, Seana, and probably bigger for Bitcoin than it is for Tesla. You mentioned last week, when we were talking about Elon Musk tweeting about Dogecoin, the meme-based cryptocurrency, he cautioned in a live chat on Clubhouse that his tweets about Dogecoin are jokes.
But this is no joke. I mean, this is really Musk getting serious about crypto. This is the biggest single buy of Bitcoin from a public company ever. Of course, MicroStrategy, which is also publicly traded, holds more Bitcoin than Tesla, but has done it in recurring buys over the course of time. Tesla doing this $1.5 billion worth in one swoop.
It’s just so interesting. It also amounts to 10% of Tesla’s cash reserves. And just to put that in perspective, you guys, remember when we discussed back in October how notable it was when Square bought $50 million worth of Bitcoin. That was just 1% of Square’s cash reserves. So Tesla really going in here.
And I would add the fact that the SEC disclosure says that Tesla hopes to eventually accept Bitcoin as payment for its products. That could be the bigger news here. Now, of course, that being said, as Bitcoin’s price rises, I don’t think people want to spend it. So we talk about PayPal, which is also about to allow people to purchase in crypto, as the price goes up, no one actually wants to spend their Bitcoin. They want to buy it and hold it as an investment. But very interesting move, and I interpret this as, really, Musk getting serious, going from joking tweets to putting his money where his mouth is. Related Quotes Only one US stock has done better than Amazon in the Jeff Bezos era With Jeff Bezos stepping down as CEO of Amazon.com, let’s reflect on the company’s performance under his management. A $1,000 investment in Amazon’s stock at its IPO on May 15, 1997, would be worth $2.2 million today. 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In an environment like that, most stocks are going to show a growth trend. Now, we all know that past performance won’t guarantee future results. Still, the best place to start looking for tomorrow’s high-growth stocks is among yesterday’s winners. Bearing this in mind, we set out to find stocks flagged as exciting growth plays by Wall Street. Using TipRanks’ database, we locked in on three analyst-backed names that have already notched impressive gains and boast solid growth narratives for the long-term. Kaleyra (KLR) We will start with Kaleyra, a cloud computing company offering communications solutions. The company’s SaaS platform supports SMS, voice calls, and chatbots – a product with obvious applications and value in today’s office climate, with the strong push to telecommuting and remote work. Kaleyra boasts over 3,500 customers, who make 3 billion voice calls and sent 27 billion text messages in 2019 (the last year with full numbers available). Over the past 6 months, KLR shares have shown tremendous growth, appreciating 155%. Kaleyra’s revenues have grown along with the share value. The company’s 3Q20 results hit $38.3 million, the best since KLR went public. While Kaleyra still runs a net earnings loss each quarter, the Q3 EPS was the lowest such loss in the past four quarters. Maxim analyst Allen Klee is bullish on KLR, seeing recent growth and product offerings as indicative of future performance. “Over the past few years, Kaleyra has posted double-digit revenue growth and positive adjusted EBITDA. We forecast revenue growth of 9%, 22%, and 28% for 2020-2022. We project adjusted EBITDA declines in 2020 to reflect public company costs and COVID-19, but growth at over twice the rate of revenue for the following two years. We expect benefits from operating leverage, low-cost tech employees, cost volume discounts as the company expands, and margin improvement from new offerings and geographies. Over the longer term, we believe the company can grow revenue close to 30% with even faster bottom line growth,” Klee opined. With such growth, it’s no wonder Klee takes a bullish stance on KLR. To kick off his coverage, the analyst published a Buy rating and set a $22 price target. This figure implies a 45% for the coming year. (To watch Klee’s track record, click here) Overall, based on the 3 Buy ratings vs no Holds or Sells assigned in the last three months, Wall Street analysts agree that this ‘Strong Buy’ is a solid bet. It also doesn’t hurt that its $19 average price target implies ~26% upside potential. (See KLR stock analysis on TipRanks) Vista Outdoor (VSTO) Next up, Vista Outdoor, is a venerable company that saw its niche gain attractiveness in recent times. Vista is a sporting goods company, with 40 brands in two main divisions: outdoor products and shooting sports. Vista’s brands include well-known names as Bushnell Golf, CamelBak, and Remington. The company has found a burst of success in the ‘corona year’ as people have turned more and more to outdoor activities that can be practiced solo or in small groups – expanding the customer base. VSTO shares are up as a result, by 214% in the last 12 months. Vista’s earnings reflect the increase in consumer interest in outdoor sports. The company’s EPS grew in 2020, turning from a net loss to a $1.34 per share profit in the fiscal Q2 report (released in November). The fiscal Q3 report, released earlier this month, showed lower earnings, at $1.31 per share, but was still considered solid by the company, as it covered winter months when the company normally sees a revenue decline. Both quarters showed strong year-over-year EPS gains. Covering Vista for B. Riley, 5-star analyst Eric Wold sees several avenues for continued growth by Vista. He is impressed by the growth in firearm and ammunition sales, and by the price increase for products in both the outdoor goods and the shooting sports divisions. “Given our expectation that the increased industry participation numbers for both outdoor products and shooting sports during the pandemic will represent an incremental tailwind for VSTO in the coming years beyond the impressive production visibility that has been created by depleted channel inventory levels, we continue to see an attractive set-up for baseline growth,” Wold commented. Overall, Wold is bullish on the stock and rates it a Buy, with a $41 price target. This figure indicates room for 27% upside in the coming year. (To watch Wold’s track record, click here) Vista is another company with a unanimous Strong Buy consensus rating. That rating is based on 9 recent reviews, all to Buy. VSTO shares have an average price target of $36.78, which gives an upside of 14% from the trading price of $32.15. (See VSTO stock analysis on TipRanks) Textainer Group Holdings (TGH) You might not think about the ubiquitous cargo container, but these deceptively simple metal boxes have changed the face of bulk transport since their breakout proliferation in the 1960s. These containers make it easy to organize, load, ship, and track vast amounts of cargo, and are especially valuable for their ease of switching; containers can be quickly loaded on or switched between ships, trains, and trucks. Textainer is a billion-dollar company that buys, owns, and leases shipping containers for the cargo industry. The company has over 250 customers, and boasts a fleet of 3 million twenty-foot equivalent units (TEUs). Textainer is also a major reseller of used containers, and operates from 500 depots around the world. Even during the corona pandemic, when international trading routes and patterns were badly disrupted, and the quarterly revenues were down year-over-year, Textainer saw share gains. The company’s stock soared 110% over the past 12 months. The bulk of these gains have come in the past six months, as economies – and trading patterns – have begun to reopen. Looking at Textainer for B. Riley, analyst Daniel Day is deeply impressed. He sees this company as the lowest priced among its peer group, with a strong market share in a competitive industry. Day rates TGH a Buy, and his $31 price target suggests it has room for 57% growth ahead of it. In support of this bullish stance, Day writes, in part, “We believe that TGH is an underfollowed, misunderstood name that is ideal for the portfolio of a deep value investor looking for cash flow–generative names trading at a steep discount to intrinsic value. With new container prices at multiyear highs amid a resurgence in container shipping, we expect upcoming earnings results to be positive catalyst events for TGH…” Some stocks fly under the radar, and TGH is one of those. Day’s is the only recent analyst review of this company, and it is decidedly positive. (See TGH stock analysis on TipRanks) To find good ideas for growth stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. 1d ago Tesla’s $1.5B Bitcoin Investment ‘A Sign Of Desperation’ From Elon Musk, Says Analyst Tesla Inc’s (NASDAQ: TSLA) investment in Bitcoin (BTC) is a sign that the automaker has “run out of viable internal uses” of its capital, according to GLJ Research analyst Gordon Johnson. The Tesla Analyst: Johnson kept his Sell rating on Tesla’s stock and maintained his price target of $67 on the stock. The Tesla Thesis: Johnson, a long-term Tesla bear, came down heavily on the Elon Musk-led company for its .5 billion dollar investment in BTC. “TSLA took a large chunk of the cash (i.e., $1.5bn, or ~12.2% of the ~$12bn in equity raised in three offerings in 2020) generated from three secondary equity offerings in 2020, and invested it in a highly volatile and allegedly manipulated crypto currency,” wrote Johnson. The analyst said the company had run out of viable internal uses of capital as it did not invest it in research and development or capital expenditure. As per Johnson, the Bitcoin news was released at a time when the company is facing “negative business developments” and is a distraction. The GLJ Research note pointed to declining car sales in China, quality control issues, delay in the German factory, and the inability to obtain the full $1.2 billion in subsidies in that country as the negative factors. 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Latest Ratings for TSLA DateFirmActionFromTo Feb 2021Morgan StanleyMaintainsOverweight Feb 2021Piper SandlerMaintainsOverweight Jan 2021Deutsche BankMaintainsBuy View More Analyst Ratings for TSLA View the Latest Analyst Ratings See more from BenzingaClick here for options trades from BenzingaBitcoin At 0,000 Before The Year Is Out, Says NovogratzBitcoin May Have Shot Past ,000 But Tesla Euphoria Has Hit Smaller Altcoins Even Harder© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. 11h ago Federal tax bracket thresholds for income and cap gains are up for 2021 vs. 2020. See if you’ll owe the IRS less in 2021 than in 2020. 2h ago Investor’s Business Daily Canopy Growth reported a big Q3 loss but sees profits in a year. Tilray got a U.K. medical marijuana deal. 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When Applied UV first announced its intent to buy the Airocide System from Akida on Nov. 9, the stock rose 1.3% on volume of about 630,000 shares that day. The latest data show that short interest of 28,070 shares was about 1% of the public float. The stock, which started trading on Aug. 31, 2020, has now rallied 229.0% over the past three months while the S&P 500 has gained 10.2%. 4h ago 3 Big Dividend Stocks Yielding at Least 9%; BTIG Says ‘Buy’ How important are dividends to a stock investor’s profits? Speaking before the Financial Industry Regulatory Authority (FINRA) on October 15, 2007, investing guru John Bogle laid out the case: “Over the past 81 years… reinvested dividend income accounted for approximately 95 percent of the compound long-term return earned by the companies in the S&P 500. These stunning figures would seem to demand that mutual funds highlight the importance of dividend income.” So in other words, dividends are pretty important! Of course, right now the average stock on the S&P 500 is only paying about a 2% dividend yield, which isn’t a lot. If you want to do better than that, though, the REIT sector is a great place to begin your search for high-yield dividend stocks. REITs are companies that acquire, own, operate, and manage real estate portfolios, usually some combination of residential or commercial real properties, or their associated mortgage loans and mortgage-backed securities. Tax law requires that these companies return profits directly to shareholders, and most of them choose dividends as their vehicle of choice for compliance, resulting in frequent high dividend yields across the sector. The slowly ebbing COVID pandemic was hard on real estate managers, as tenants had trouble making rents and owners had trouble leasing vacant space. However, BTIG analyst Tim Hayes believes there are reasons to stay bullish on CRE properties specifically. “While we recognize the headwinds to commercial real estate (CRE) fundamentals and the potential risk to equity/earnings power, we believe there are several reasons to be constructive, especially with the sector trading at a discount to historical levels and offering attractive dividend yields at wide spreads to benchmark rates,” Hayes commented. Against this backdrop, we’ve opened up the TipRanks database to get the latest stats on Hayes’ CRE choices. These are stocks that the analyst initiated Buy ratings on, pointing out their high dividend yield. We are talking about at least 9% here. Ares Commercial Real Estate (ACRE) The first dividend pick we are looking at is Ares Commercial Real Estate, a company focused on the commercial real estate mortgage sector. Ares boasts a diversified portfolio – featuring office space, apartments, hotels, and mixed-use properties – mainly across the Southeast and West. The company has over $2 billion invested in 49 separate loans, 95% of which are senior mortgage loans. At the end of October, the company released 3Q20 earnings (the last reported quarter), showing $22.4 million in total revenue, for a 13% year-over-year gain. The 45-cents earnings per common share was up 40% since the prior year. Furthermore, Ares closed a $667 million commercial real estate collateralized loan obligation, with firmed up funding on 23 senior loans. On the dividend front, Ares declared in December its 4Q20 dividend. The payment, at 33 cents per common share, was paid out on January 15 – and is fully covered by current income levels. At current rates, the dividend annualizes to $1.32 and gives an impressive yield of 10.50%. Among the bulls is Hayes, who wrote: “We believe shares of ACRE are unfairly discounted relative to other commercial mREITs given strong Ares sponsorship, a very healthy balance sheet, and limited exposure to at-risk assets.” In his view, this leaves the company “well positioned to face the headwinds from COVID-19.” In line with these comments, Hayes rates ACRE a Buy, and his $13.50 price target implies a 10% upside from current levels. (To watch Hayes’ track record, click here) Only one other analyst has posted a recent ACRE review, also rating the stock a Buy, which makes the analyst consensus here a Moderate Buy. Shares are priced at $12.28, and their $12.75 average price target suggests room for modest ~4% growth. (See ACRE stock analysis on TipRanks) KKR Real Estate Finance Trust (KREF) Next up we have KKR, which operates in the commercial real estate sector, with almost half of its holdings in the states of New York, Illinois, Pennsylvania, and Massachusetts. The company both owns and finances commercial properties; 83% of its activities are with apartment dwellings and office spaces in desirable urban locations. KKR’s quality can be seen in the company’s quarterly results. The liquidity position was strong – KKR reported $700.6 million available at the end of 3Q20, the last quarter reported. The 56-cent EPS was up 7% sequentially, and 36% year-over-year. Further evidence of KKR’s sound position came at the beginning of January, when the announced it had closed 7 new commercial loans in Q4, totaling $565.4 million. This level of activity is a clear sign that KKR is recovering from the pandemic-related economic turndown. The solid foundation put the company in position to continue its dividend – which has been kept reliable for four years now. The most recent declaration, made in December, was for a 43-cent per common share dividend that was paid out in mid-January. That rate gives an annual payment of $1.72 per common share, and a robust yield of 9.7%. Covering KREF, Hayes is most impressed by the company’s move back toward proactive loan origination, saying, “We view 4Q20 origination activity to be in line with pre-pandemic production, and demonstrates a shift from “defense” to “offense” as transaction activity has picked up and the capital markets remain accommodative. We expect increased capital deployment to support earnings power and dividend coverage, and could potentially warrant an increase in the dividend as the macroeconomic outlook improves.” To this end, Hayes gives KREF a Buy and sets a $19.50 price target that indicates ~6% growth from current levels. (To watch Hayes’ track record, click here) Wall Street has been keeping quiet on all things KREF, and the only other recent review also recommends a Buy. Put together, the stock has a Moderate Buy consensus rating. Meanwhile, the average price target stands at 19.26 and implies a modest ~5% upside. (See KREF stock analysis on TipRanks) Starwood Property Trust (STWD) For the third stock on Hayes’ list of picks, we turn to Starwood, a commercial mortgage REIT with a varied portfolio of first mortgages and mezzanine loans, in the $50 million to $500 million range. The company operates in the US and Europe, boasts a $5.9 billion market cap, and has offices in New York, London, and San Francisco. Starwood’s high-end portfolio has brought it solid earnings, even during the ‘corona recession’ of 2020. The company recorded $152 million in GAAP earnings for 3Q20, coming out to 53 cents per share, for gains of 8% sequentially and 6% year-over-year. With that in the background, we can note the company’s dividend, which has been held steady at 48 cents per share for over two years. The last declaration was made in December, and the dividend was paid out on January 15. At the current rate, it annualizes to $1.92 and the yield is 9.23%. Once again, we’re looking at a stock that Hayes recommends to Buy. “We view STWD to be one of the few “blue chips” in the commercial mREIT sector given its size, liquidity, best-in-class management team, strong balance sheet, and diversified investment platform which has consistently generated stronger ROEs than peers. To that end, STWD is one of few commercial mREITs that neither restructured its liabilities with expensive rescue capital nor cut its dividend since the onset of COVID-19,” Hayes opined. Overall, there is little action on the Street heading STWD’s way right now, with only one other analyst chiming in with a view on the company’s prospects. An additional Buy rating means STWD qualifies as a Moderate Buy. However, the $21 average price target suggests shares will remain range bound for the foreseeable future. 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