Stocks valuations, analysis. Unbiased. Insightful. Property of Wolfteam Ltd., www.wolfteamedge.com If you find the blog useful, LINK TO www.posledovich.blogspot.com Stocks, Bitcoin, Cryptocurrencies, AI, analysis, insights. CLICK ADVERTISEMENTS, SHARE ON SOCIAL NETWORKS! Technology, Bitcoin, AI, company strategy, stocks analysis. Stocks, crypto involve high RISK! Nothing on this blog is meant or should be construed as investment recommendation to buy or sell securities or their derivatives!
In my opinion, Moderna Inc’s intrinsic worth is 300 billion USD in the next 7 years.
And Moderna’s worth in the long-term 12 + years is 550 billion USD.
The first estimate is 80 % influence by the current COVID 19, coronavirus infection eruption in China and 20 % by the promise of the messengerRNA cancer vaccine developed by Modena Inc.
The longer run estimate of 500 billion USD of Moderna Inc’s value is 70 % based in Moderna’s mRNA cancer vaccine promise and 30 % on various other factors.
I believe Snap Inc is worth 220 billion USD.
I know Snap Inc has barely turned a profitable reporting quarter.
However, Snap Inc, Snapchat’s owner is according to my humble opinion the only really viable competitor to Meta Inc, Facebook’s owner and Meta only one year ago had a market capitalisation of 1.1 trillion USD.
Snapchat is colourful, loved by young user demographic, still growing its user numbers and revenue and its fused with the smartphone camera and videos.
And videos are the mega trend of the future.
Apple’s intrinsic worth is 1.0 trillion USD, according to my estimates, compared to the current market capitalisation of Apple standing at 2.06 trillion USD currently.
My estimate of the 50 % lower market capitalisation for Apple is predicated on two assumptions:
1) The technology sector and technology companies ares still way overvalued as a whole.
2) There is a 62 % probability that China will invade Taiwan, which could annihilate much of Apple’s current worth.
The sooner Apple diversifies its production and innovation chain, the better.
Bitcoin’s intrinsic value is 170 billion USD according to my projections.
Blockchain is a nonlinear way to model dynamic systems and it is invaluable.
Bitcoin provides efficiency, scale, financial innovation and ultimately exponentially more production with fewer resources.
And yes, Bitcoin does have intrinsic value.
Tesla's stock price fell circa 11 % in yesterday's trading session on the Nasdaq bourse.
Tesla's market capitalisation currently sits at 341.86B USD, capitalisation which is sill close to more than the current market capitalisation of the remaining automobile manufacturing industry.
And Tesla was worth 1.24 trillion USD just one year ago.
According to my estimates, Tesla is worth 120 billion USD and in my personal view this reflects the value of the electrical vehicle production technology, mainly. The technology know-how, expertise, actually. And the highly educated and experienced, often brilliant Tesla workforce, especially in Artificial Intelligence, AI areas.
Because, outside carbon credits Tesla is still barely profitable. Tesla has some cash financing left, but without a huge cash injection or breakthrough in electric car production technology, which makes electric cars manufacturing actually profitable, Tesla could easily stop being a going concern or go out of business, to put it plainly.
The human factor with Elon Musk is huge driver for Tesla's value. If Musk's brilliance is employed fully for Tesla's benefit, Tesla could actually achieve its lofty aim of disrupting vehicle manufacturing and thus the world economy.
If China invades Taiwan, which probability I put at 62 % currently, the Nasdaq Coposite Index will simply be decimated.
Apple, which is one of the main drivers of the Nasdaq Composite stocks universe could fall 80 % in the space of two weeks or 10 trading days.
Warren Buffett controlled conglomerate Berkshire Hathaway conglomerate, which invests in Apple Inc. as around 43 % of its stock investments portfolio could be hurt directly as well. Although Berkshire Hathaway's major business is insurance, Berkshire Hathaway owns a diverse portfolio of many other businesses like energy, manufacturing, retail, furniture etc.
Trouble for Warren Buffett controlled Berkshire Hathaway could quickly spill to the rest of the US economy and also the global economy.
What is more part form Apple, many other chipmakers' stocks prices like AMD, NVIDIA, Taiwan Semiconductors will be hurt hurrendously if China invades Taiwan.
Taiwan produces 62 % of all computer microprocessing chips and 90 % of the most powerful computer chips.
Since computer chips are the brain of computers and computing is the bedrock of technology, technology stocks' market capitalisation can fall 60 % measure by the Nasdaq Composite.
And since technology is an integral engine of almost every business, the S&P 500 index can fall 45 % from the current level, while the Dow Jones Industrial Average can dive 30 % from its current point level.
Basically, all stocks globally can sell off initially, if China invades Taiwan.
Afterwards, defence industry stocks like
I estimate oil's intrinsic worth to to be 140 USD a barrel in the next 7 years.
The only reason the price of oil has not exploded to above 140 USD so far is the appreciation of the United Stated Dollar.
I agree partially with JPMorgan's forecast that the price of a barrel of oil could reach 180 USD.
If Russia, which supplies around 16 % of the world's oil output suddenly decreases its oil production or stops producing oil altogether the price of oil could easily top 250 USD per barrel.
Plunging the world into a recession.
Goldman Sachs could prove right that we are in another commodities super cycle.
And the Russia - Ukraine conflict could easily escalate further. Countries like Poland, Turkey, Azerbaijan, Serbia, Bulgaria, China etc. have long gritted their teeth, harbouring ambitions for currently foreign territories they consider their own or at least part of their people, cultural heritage.
Goldman Sachs and JP Morgan could prove spot on.
Wall Street research could actually prove quite good! 😀
Actually, there are quite good, even brilliant people working in Wall Street research departments, who if left in an unbiased environment could produce actually brilliant/genius research forecasts.
It seems Chinese authorities are letting COVID run freely in China and the results are obvious.
If COVID 19 in China gets out of control the global economy will go in to a deep and prolonged recession -> something like 3 % to 5 % yearly declines in GDP for several years.
Or simply put, the coronavirus running rampant in China could trigger an economic depression.
Moderna and BiONTech will benefit immensely from the current COVID 19 outbreak in China, in my opinion.
The Chinese COVID 19, coronavirus vaccines made by Chinese companies are not deemed as effective as Moderna and BiONTech COVID 19 shots, according to many sources.
Moderna, especially, due to the fact that it is the pioneer in messengerRNA technology and producer of arguably the most effective COVID 19, coronavirus vaccines could see huge, extraordinary increases in revenue and profits and by extension of its market capitalisation.
Moderna is currently valued at circa 77 billion USD by public markets.
In my opinion, the intrinsic value of Moderna, also predicted on the current COVID 19 outbreak in China is around 300 billion USD.
MessengerRNA is the technological future of medicine and Moderna is the proven pioneer in mRNA.
Many tout Ethereum as the de facto cryptocurrencies' ecosystem, since ETH provides software environment for building crypto applications.
Actually, I think Bitcoin is more the sort of ecosystem, the crypto world needs. Bitcoin acts as means of exchange, unit of account and store of value or electronic money of sort.
Via Bitcoin's store and increase of value many other cryptocurrencies are issued and priced off Bitcoin and thus many young nascent companies can finance their projects efficiently with crypto.
Ethereum, on the other hand provides an App Store version of application environment for the crypto world, which is also extremely valuable. Via Ethereum crypto programmers can cooperate, talk, discuss and ultimately build world change crypto applications.
In short, Bitcoin is the jet engine and Ethereum is the ocean for cryptocurrencies's growth.
Crypto has a bright future, as far as I am concerned.
Circa 77 % Berkshire Hathaway, the conglomerate run by Warren Buffett stocks portfolio is concentrated in just 6 stocks.
And Apple Inc stands out with a 38.5 % share.
In my humble opinion, this lack of diversification is imprudent.
If China invades Taiwan, the probability of which happening I would rate at more than 50 % currently, Apple's market capitalisation could go down by 70 % or more in the space of several weeks. This is due to the fact that much of the components for Apple's iPhones, Macs, iPads are manufactured in Taiwan and China.
Yes, I can see what Warren Buffett is doing. He thinks Apple, Bank of America, Chevron and Coca Cola are well run, have inertia, very high profit margins, very good production processes supported by hundreds of thousands of competent, hardworking people employed by these companies.
In short, the aforementioned companies are too big to fail.
Not in war times, in my opinion! In war times some of these companies could become too big to bail.
Apple - large, institutional type of stock. Buffett uses it, I estimate also to extract information of the habits, fin-tech and financial services consumption of millennials.
Bak of America - a play on the US large corporations, midsize corporations and Wall Street.
Chevron - a US, but also global energy consumption play.
Coca Cola - an emerging markets low-priced high calories intake play.
American Express - a US credit card credit play.
In short, Warren Buffett is betting heavily on the United States of America or he is betting heavily that there will be no catastrophic event literally destroying America's economy.
Yes, this "trick" has worked, because since 1933 the world had not experienced a Great Economic Depression.
The above betting on a "lack of catastrophic US economic risk" I have to credit Professor Aswath Damodaran, who mentioned it, I read it first by him, analysed it and here I mentioned it above.
Actually, a nuclear war is a catastrophe. And I would estimate the probability of a nuclear war occurring currently at something like 12 %.
To be positive and constructive, though, even if an economic catastrophe befalls USA, the above stocks, which comprise the largest part of Warren Buffet run Berkshire Hathaway's portfolio should be able to withstand and outperform even.
The risk of Bitcoin and other major cryptocurrencies is considered high.
And yes, if measured by standard deviation or volatility Bitcoin is riskier than the major stocks and even smaller capitalisation stocks.
However, Bitcoin exhibits jump like upward optionality. Translation - even when risk taken into account, Bitcoin and other major cryptocurrencies seem undervalued.
The main reason for the higher risk of Bitcoin and other crypto is the lower liquidity in the cryptocurrencies market compared to US common stocks.
However, higher risk is usually associated with higher opportunity.
Petroleo Brasileiro or Petrobras is the largest oil company in Brazil and one of the largest oil producing companies in the world.
Petrobras is currently valued at 63.4 billion USD. According to my estimates, the intrinsic value of Petroleo Brasileiro or Petrobras is 300 billion USD.
Petroleo Brasileiro or Petrobras is a deep sea oil driller. At around 57 USD or more price of oil Petrobras is profitble.
I think the price of oil could easily surpass 140 USD in 3 years time on oil supply disruptions due to the military confrontation between Russia and Ukraine.
In addition, the dividends yield on Petroleo Brasileiro or Petrobras currently stands at 63 %.
Petroleo Brasileiro or Petrobras is a classic Benjamin Graham value, undervalued stock. I think Petrobras would also fit Warren Buffett's investment criteria.
In general, I think oil and hydrocarbon's demise and decline in general, if not premature is exaggerated.
Green energy is simply not ready.
Petroleo Brasileiro or Petrobras carries a political risk, of course, with the socialist inclination of the current government in Brazil.
In short, however Petroleo Brasileiro or Petrobras is a classic, undervalued, huge recurring revenue and profitability company.
I estimate Tesla is worth 120 billion USD.
However, Tesla could go bankrupt now that Elon Musk is busy with Twitter.
Actually, Twitter's implied political influence could be of use for Tesla.
I personally think Tesla is a binary outcome:
1) Tesla's engineers figure a way out to produce electric vehicles with profit. If this happens, Tesla's value could go to 1.2 trillion USD
2) Tesla stays largely unprofitable without subsidies and goes bankrupt.
GitLab the online code repository that is quickly gaining traction among developers worldwide is valued at 4.23 billion USD by public markets currently. GitLab is undervalued, I think.
According to my estimates, GitLab's intrinsic value is around 25 billion USD for the next 5-7 years.
I write up until 7 years because the prospects of technology companies change very quickly nowadays.
Companies like Siemens, Goldman Sachs and organisations like NASA use GitLab for software development.
And due to the efficiency of GitLab's product offering many small and medium enterprises mainly in technology and many other industries also are paying for and using GitLab's product.
Now that GitHub is owned by Microsoft, many techies regard GitHub as bureaucratic since it is part of a big, slow-moving bureaucratic technology behemoth of a company like Microsoft.
Actually, the market for code repository, which includes team collaboration, code production, review and testing is not saturated in my humble opinion. GitHub and GitLab are the main players.
Personally, I think there is hundreds of billions of USD waiting to be unlocked and triggered in the software production market. Because code repository in practice assembles the world technologists' knowledge and structures and organises it in an accessible and efficient way.
Code collaboration sites like GitLab are actually Infrastructure as a Service, IaaS offering, which is the largest part of the cloud computing market.
Cloud computing market size is currently estimate at 414.23 billion USD, Infrastructure as a Service, IaaS cloud at 117.30 billion USD and projected to rise to 881.90 billion USD, Infrastructure as a Service, IaaS cloud at 327.50 billion USD in 2027.
Although cloud computing market growth rates will be undoubtedly affected by the current economic crisis, the figures above represent a huge opportunity for GitLab.
One of the counterarguments against investing in Bitcoin and other cryptocurrencies is that cryptocurrencies do not distribute dividends.
I have not seen Amazon, Meta, formerly Facebook or Alphabet, named previously Google distribute dividends, but that does not prevent Amazon, Alphabet or Meta being valued only until recently at + 1 trillion USD each and around 5 trillion USD altogether.
Even Warren Buffett who is a fan of dividend distributing companies has bought more than 1 billion USD shares in Nubank, a Brazilian crypto bank.
Valuations or value in the end is all about human perspectives. And humans perceive something as valuable when it actually brings value, cost savings, wealth increase or pleasure to them. Yes, I know the tulip bulb mania, the dot-com bust, the 2008 housing bubble etc. Many of the companies therein ended up worth zero and they bankrupted.
I doubt Bitcoin will have the same fate, since the package of efficiencies or cost savings Bitcoin and crypto create is simply too large and broad.
And since cryptocurrencies outside Bitcoin are actually tokens on a company's project, companies issuing cryptocurrencies could easily have their crypto tokens distribute dividend payments.
The Nasdaq Composite is falling in the last two trading days.
Nasdaq Composite could fall as low as 7 000 points form the current more than 11 000.
Cloud stocks are still 40 % overvalued.
Most cloud stocks were and are still are unprofitable and 80 % of the publicly listed cloud stocks could soon run out of cash, encounter difficulties raising new money and ultimately face the threat of going out of business.
The cloud computing companies that make money or have taken measures to become profitable or have a plan how to achieve net profit margin will be the ones that can raise new funds, be able to finance their business and ultimately survive the current dot-com bust and the economic and financial storm that is just only around 30 % completed, according to my humble opinion.
Numerous studies have shown that day to day stock market prices have a memory of one day.
Or they are a so called martingale. A mathematical notion.
But many financial market participants study intently the past, believing there is some long-term causal relationship.
Actually, I think there is a bit of both. When there is no great event, like an economic catastrophe, war or large scale money creation by the Federal Reserve, markets do tend, nonlinearly to exhibit some memory longer than a day.
But when a structural break comes, then the inter temporal price relationship falls apart and there are jumps.
Example. When Elon Musk turned his attention almost entirely to acquiring Twitter Inc, it was quite logical that the fact that Elon now pays less attention to Tesla could lead to underperformance of Tesla's stock price. An easy comparison between Tesla's stock price and the general market easily shows there is genuine case for the above.
I estimate Tesla's intrinsic value is only 120 billion USD, mainly comprised by the electric vehicle production technology and Tesla's staff.
However, if Tesla achieves a scientific breakthrough and starts producing electric cars with a high profit margin, Tesla's value could well surpass 1 trillion USD. The proverbial structure break or jump process or quantum leap.
The obvious durable competitive advantage of Apple is the quality of Apple's hardware.
The Mac, iPhone and iPad all have excellent battery lives, the hardware is very well integrated with the software which provides for superior performance.
All this is due to the vertical integration of the design of Apple products hardware and software.
Yes, Apple products's hardware is manufactured outside the US in various countries, predominantly in China and Taiwan and is later assembled in China. However, the most important part of the production - the engineering design is done by the best design, manufacturing and software engineers in the world in California.
When the hardware and software of Apple's products is combined with the Apple's App Store offering of software applications, this makes for a powerful package of value adding in both hardware and services, which even when relatively dearly priced sill leaves a lot of consumer surplus for people in 2 years or more of usage.
Apple's current market capitalisation is 2.35 trillion USD on the Nasdaq bourse.
In my opinion, Apple's intrinsic worth is 1.0 trillion USD.
In short, a huge financial crisis is coming and Apple is producing luxury, discretionary goods, which are not essential to consumers and in hard times people tend to abstain from buying Macs, iPhones, iPads.
As far as I am concerned, currently almost all commodities stocks are still deeply undervalued. while technology stocks are still gross overvalued.
By extrapolation emerging stock markets like Brazil, South Africa, China, Russia even offer great value, while the US stock market is still significantly overvalued due to the higher relative weight and influence of technology stocks.
In 2001 there was a stock market dot-com boom and bust, in 2008 there was a boom and bust in commodities and emerging markets, in 2022 we are experiencing another, even bigger cloud computing stocks lead stock market technology boom and bust.
And contrary to general wisdom, raising the interest rate levels in the economy could prove beneficial to emerging markets and commodities stocks and commodities producing countries like Brazil, Argentina, South Africa, Russia, UAE, Saudi Arabia, etc.
British Petroleum, Occidental Petroleum, China Petroleum and Capital Corp, gold and silver mining companies and other commodities producing companies are undervalued, according to my opinion.