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The Magnificent 7 stocks, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA, Tesla are overvalued by 30 %, 53 %, 10 %, 25 %, 27 %, 60 % and 87 % respectively, according to Wolfteam LTD.'s house view.
Tesla's intrinsic worth is 120 billion USD, according to Wolfteam LTD.'s projections and estimates.
The Magnificent 7 AI stocks are overvalued. As with all news technologies, artificial intelligence, AI is currently undergoing its bubble phase.
There was a dearth of Initial Public Offerings, IPOs in 2023. Respectively, the deal count in mergers and acquisitions, initial public offerings tanked and the overall volume fell also circa 30 %.
Initial Public Offerings function as a harbinger of good times. There are many IPOs generally when times are great and the mergers and acquisitions deal flow is strong.
2024 is expected to be much better in terms of Initial Public Offerings, with companies like Reddit soon, in March 2024, to stage IPOs, according to media reports.
Reddit had 800 million USD of revenue in 2023.
Reddit's IPO fair value is 10.7 billion USD, according to Wolfteam Ltd.'s projections and estimates. Media reports put a value of 5 billion USD on Reddit's market capitalization after the IPO. At 5 billion USD post IPO market capitalization Reddit will be undervalued, according to Wolfteam Ltd.'s view.
But Reddit is just what the IPO market in 2024 needs, according to many investors and Wall Street equity research analysts. A banter, flag name Initial Public Offering, IPO to move the whole deal train forward of Initial Public Offerings and mergers and acquisitions. IPOs usually set the 'animal spirits of the market' in motion and are quickly followed by strong, large and numerate mergers and acquisitions, debt capital markets, leveraged loan deals, which provide much needed fuel for the growth of small, medium and large scale enterprises.
So, the hope is Reddit and other high profile IPOs in 2024 would be the much needed harbingers, which will invoke the proverbial market growth in 2024.
Cryptocurrencies are now used by hedge funds, asset managers for investments diversification. Even some small number of pension funds and endowments distribute a small percentage of their assets under management into crypto. To diversify away some of the stock market risk.
Crypto has proven that it is not so much correlated with the stock market, even with small capitalization technology stocks.
Bitcoin, cryptocurrencies thus have proven as an efficient investment diversification tool. The crypto part of the hedge funds, asset management funds, pension funds and other institutional funds' portfolios is still minuscule, mainly because of the comparatively low liquidity of the cryptocurrencies asset class.
In addition, there is always the risk of a large drawn downward movement in Bitcoin, cryptocurrencies.
So, for now, the institutional money management's stance towards Bitcoin, cryptocurrencies seem prudent.
Yet, the Klondike that crypto is or is at least perceived to be, is a great temptation and soon larger investment flows will come into cryptocurrencies, according to Wolfteam Ltd.'s view.
Factset Research Systems Inc, the American financial data and valuation company is overvalued, according to Wolfteam Ltd.'s projections and estimates.
With 1.84 billion USD revenue, growing at 15.86 %, with net profit margin of 21.53 % for 2022, Factset's intrinsic value is 13.6 billion USD, compared to Factset's current market capitalization of 17.93 billion USD.
Here is an excerpt from Factset's fiscal Frist Quarter, 2024 results:
Bitcoin is trying to find its place as replacement of money.
One function it must fulfill to reach that goal is become a hedge for uncertainty.
In the Russia Ukraine Bitcoin to an extent filled that void.
In the last 4 years Bitcoin is down from its almost 70 000 USD peak to circa 40 000 USD currently.
So as a store of value, Bitcoin did not work so well.
But as a hedge for uncertainty in the last rolling year, Bitcoin fulfilled its purpose.
Eversource Energy, the American, Hartford, Connecticut based utility company is undervalued.
Eversource Energy, with 12.29 billion USD revenue, growing at 24.60 % with net profit margin of 11.43 % for the calendar 2022 has an intrinsic value of 26 billion USD compared with Eversource Energy's current market capitalization of 19.25 billion USD, according to Wolfteam Ltd.'s projections and estimates.
Lower interest rates will bring much desired innovation money, capital to the cryptocurrencies sector, which will increase public adoption of Bitcoin, cryptocurrencies.
Capital begets capital and soon institutional investors like hedge funds, endowments, asset managers and even pension funds will follow the Silicon Valley venture capital funds’ lead.
And soon, of course, news outlets will start reporting daily on Bitcoin, cryptocurrencies and the wheels will start turning for the cryptocurrencies asset class.
In short, Bitcoin, a Ethereum, Ripple, Dogecoin, Monero and other major cryptocurrencies and more obscure cryptocurrencies are undervalued.
BrightSpring is undervalued, according to Wolfteam Ltd.'s estimates and projections.
Here is an excerpt from a Morningstar write up on the BrightSpring Health Services IPO:
'BrightSpring reported a net loss of $149.63 million and revenue of $6.45 billion in the nine months ended Sept. 30, versus net income of $2.46 million and revenue of $5.75 billion in the year-ago period.
BrightSpring withdrew its IPO on November 23, 2022 after an earlier IPO filing in October of 2021.
The company is backed by private-equity firm KKR & Co. Inc. (KKR) as well as drug-store giant Walgreen Boost Alliance Inc. (WBA), according to its IPO prospectus.
KKR owns 69% of the company and Walgreen has about 34.9%.
The two shareholders will continue to own about 67.9% of the company after it goes public.
The company traces its roots back to 1974. In 2017, it was incorporated as Phoenix Parent Holdings Inc. as part of an acquisition of PharMerica Corp. in 2017 by Walgreen and KKR. In 2021, the company changed its name to BrightSpring Health Services.
The IPO comes after the successful liftoff of Smith Douglas Homes Corp. (SDHC) on Jan. 11 at a price of $21 a share. The stock closed at $23.94 on Wednesday, down 0.9%'
BrightSpring Health Services' intrinsic worth is 8.2 billion USD, compared to BrightSpring Health Services's IPO valuation of 2.2, according to Wolfteam Ltd.'s estimates.
Alphabet Inc, the owner of the Google search engine is undervalued on AI.
Alphabet is using artificial intelligence, AI as we speak to power its Google search engine.
Alphabet's intrinsic worth is 4.5 trillion USD market capitalization compared to Alphabet's current market capitalization of 1.87 trillion USD.
Basically, most Google search engine results are the result of artificial intelligence, AI at use.
The stock market seems to under appreciate this phenomenon at work at Alphabet, the owner of Google.
The stock market is focused more on generative large language models chat bots like OpenAI's ChatGPT, but a generative large language model is also at use at the Google search engine to power search results.
Ilya Sutzkever, one of Alphabet's premier research scientists, who worked on Google, transferred to OpenAI and by working on OpenAI's ChatGPT chat bot, Microsoft due to its 49 % share in OpenAI is now at circa 3 trillion USD market capitalization vying with Apple for the world's most valuable company.
Alphabet with its search engine Google has a structural advantage, because of the millions of terabytes, huge treasure trove of data on its customer usage of Google products like GMail, AdSense, AdWords, Google Calendar, Google Meet it possesses.
Microsoft also has gathered a lot of user data with its search engine Bing, Outlook and the cloud versions of Excel, Word, PowerPoint and the Microsoft Office suit altogether. Apple has also gathered huge amount of information via its iPhones, iPads, Macintosh, Apple Watch and Apple App Store products.
But Google's data quantity is far superior than both Apple and Microsoft's, according to Wolfteam Ltd.'s view.
That is why, there is non-negligible probability that Alphabet, the owner of Google could be worth around 4.5 trillion USD in the near future.
Alphabet, Google owner's usage of artificial intelligence, AI really seems to be underappreciated by investors, hence Alphabet is undervalued.
There is a video on the internet in which Warren Buffett in 2022 says that if all the Bitcoin, cryptocurrencies in the world were offered to him for 25 USD, he would not take it.
In the same time, Warren Buffett has invested now 1 billion USD + in Nu Holdings, a Bitcoin, cryptocurrencies active neo bank in Brazil.
It is not the first time Warren Buffett has reneged on his words. Earlier, he said he would never invest in airlines stocks and yet he did invest in airlines stocks several years ago again. Warren Buffett has said financial derivatives are weapons of mass destruction and yet Berkshire Hathaway, the investment conglomerate controlled by Buffett has several billion of USD invested in derivatives via its insurance subsidiaries.
Bitcoin, cryptocurrencies are the financial technology, fintech of the future, according to Wolfteam Ltd.'s house view.
And Warren Buffett seems to have realized that. Regarding Bitcoin and cryptocurrencies there is a statement by Lloyd Blankfein, the former Chief Executive Officer of Goldman Sachs, where he reminds people were skeptical of mobile telephones at first, stating that 'no one would want to carry them around'.
Many new technologies have been greeted with a great deal of skepticism at first. But later, as the technology has developed and grown, the new technologies became mainstream. A case in point is when Steve Jobs introduced the iPhone one user complained he kept making typos on the screen. Stephen Jobs said 'Your fingers will adjust'. And the rest is history.
Warren Buffett has been long enough to witness the introduction and blossoming of many new technologies. Warren Buffett used a flip phone long after the introduction of smartphones and yet now he is an avid user of Apple's iPad.
Warren Buffett knows the ebbs and flows, the booms and bust of technology. Warren Buffett stayed out of the dot com boom and bust and thus built out his reputation of savvy investor, but now he has more than 1 billion USD in Amazon, Nu Holdings and Snowflake, the cloud management company each. In addition, Warren Buffett holds more than 150 billion USD of Apple stock, more than 5 % of the entire market capitalization of Apple.
No wonder Warren Buffett is taking an indirect position in Bitcoin, cryptocurrencies via its 1 billion USD Nu Bank Holdings stake. And the more than 140 billion USD in cash reserves at Berkshire Hathaway ensure Warren Buffett has more than ample move to maneuver and invest again in Bitcoin, cryptocurrencies.
With the years, Warren Buffett's investment style has evolved from pure value investing in 'dirt cheap' stocks like Burlington Santa Fe, industrial companies into GARP or Growth At a Reasonable Price Investing with his large stake in Coca Cola, stakes in Heinz, Gilette, Wrigley's, Moody's, American Express, JPMorgan Chase, Wells Fargo, Bank of America etc.
What is more, now Warren Buffett's controlled Berkshire Hathaway invests large part of its cash reserves into High Growth At Reasonable Price using for vehicles technology companies like Apple, Amazon, Snowflake, the Bitcoin, cryptocurrencies Nu Holdings neo Bank. Which shows that Warren Buffett is evolving with the times.
And the times now go definitely in favor of Bitcoin, cryptocurrencies, according to Wolfteam Ltd.
And Warren Buffett could soon follow.
Insulet, the insulin pump to treat diabetes, production company is undervalued, according to Wolfteam Ltd.'s projections and estimates.
Insulet, with 1.31 billion USD revenue, growing at 18.79 % and net profit margin of 0.35 % for 2022 has an intrinsic worth of 26 billion USD, compared with Insulet's market capitalization of 14.27 billion USD.
Raised Full Year Revenue Guidance to a Range of 26% to 27%, including Total Omnipod of 29% to 30%
ACTON, Mass.--(BUSINESS WIRE)-- Insulet Corporation (NASDAQ: PODD) (Insulet or the Company), the global leader in tubeless insulin pump technology with its Omnipod® brand of products, today announced financial results for the three months ended September 30, 2023.
Third Quarter Financial Highlights:
Recent Strategic Highlights:
“Our third quarter financial and operational results marked another strong quarter for Insulet, and as a result of continued high demand for Omnipod 5 – both in the U.S. and globally – we are pleased to again raise guidance for the full year,” said Jim Hollingshead, President and Chief Executive Officer. “We are the leader in growing the large U.S. type 1 and type 2 diabetes markets, and we are only in the early innings of capitalizing on strong and increasing global demand. We are confident we are taking the right steps to unlock Insulet’s full potential while successfully advancing our mission to improve the lives of people with diabetes.”
In theory, both Bitcoin and Gold should thrive in times of geopolitical conflicts. Like exactly the ones we are having with the Russia Ukraine encounter and Israel Hamas conflict.
Because both Bitcoin and Gold to a large extent, 40 % in the case of Bitcoin and 75 % in the case of gold, according to Wolfteam Ltd.'s view, act as safe haven and store of wealth. And both safe havens and store of wealth are sought after in times of geopolitical tensions.
Unfortunately, Bitcoin and Gold's price are not going up as much as expected.
Mainly because of government intervention. The US Department of Justice and Securities and Exchange Commission, SEC pending lawsuits are exerting downward pressure on Bitcoin, while there are rumors and newspaper articles, even convictions that some banks are trying to manipulate the precious metals markets. In addition, the Federal Reserve has raised its key rate target to 5-1/2 %, which is exerting downward pressure on gold and Bitcoin, cryptocurrencies' prices. Wall Street banks are also partly to blame for the low Bitcoin price due to slow cryptocurrencies adoption.
The law must be upheld, so the Department of Justice and the SECs lawsuits must serve their purpose to clean the system out of bad actors. Once we have a cleaner and a leveler playing field and interest rates start coming down again, gold and Bitcoin, cryptocurrencies will shoot up in price, according to Wolfteam Ltd.'s projections and estimates.
But for now, even with geopolitical encounters, Bitcoin and Gold's prices remain stagnant, mainly because of the Federal Reserve targeting relatively higher interest rates which sap financing due to prohibitive cost from riskier technology and mining projects.
Apple's market capitalization was ovetaken recently by Microsoft's mainly on the promise of artificial intelligence, AI, which in Microsoft's case is driven by the 49 % stake of Microsoft in OpenAI, the developer of the ChatGPT chat bot.
According to Wolfteam Ltd., ChatGPT's search results are far inferior to the Google's search engine results. Ilya Sutzkever, a prominent Google software engineer was basically 'taken' from Google, quarreling Larry Page and Elon Musk in the process, to develop OpenAI's ChatGPT, apparently much to the tune's of Alphabet Inc's Google AI technology, according to media reports. Or at least some AI technological transfer was evident, at least again according to media reports.
That said, OpenAI ChatGPT's results are still of much less quality than Google's search results.
Apple's AI opportunity lies in the Apple iCloud data. Billions of users globally use Apple's iPhones, iPads, Macintosh computers and Apple watches. These users' data can be harvested for deep, insightful breakthroughs with which to build artificial intelligence applications, be it chat bots, search engines, financial or health applications, etc.
Apple has publicly stated it does not mine users' data and this is in fact Apple's main competitive advantage, according to Wolfteam Ltd. Apple is hesitant to break that promise, because it drives its consumer electronics hardware business.
Apple could find other ways. Slice the data into pieces so it cannot be used by malicious users. Firmly not provide back doors to users' data, distribute, multiply the data so it cannot be misinterpreted.
In short, Microsoft is overvalued on AI, while Apple is undervalued on AI.
Occidental Petroleum Corporation is undervalued, according to Wolfteam Ltd.'s projections and estimates.
With 36.63 billion USD in revenue, growing at 41.14 % and net profit margin of 36.32 % for 2022, Occidental's intrinsic worth is 104 billion USD, compared with Occidental's current market capitalization of 49.51 billion USD.
In addition, Warrent Buffett has a circa 28 % stake in Occidental Petroleum Corporation, which makes Occidental an acquisition target.
Here you can find Occidental's 2022 yearly report.
Here is an excerpt from Occidental's third quarter, 2023 report:
Occidental Announces 3rd Quarter 2023 Results
• Strong operational performance drove operating cash flow of $3.1 billion and cash flow from
operations before working capital of $3.3 billion
• Capital spending of $1.6 billion, resulting in quarterly free cash flow before working capital of $1.7
billion
• Production of 1,220 Mboed exceeded the mid-point of guidance by 34 Mboed; full-year production
guidance raised 11 Mboed
• OxyChem exceeded guidance with pre-tax income of $373 million
• Repurchased $600 million of common stock, with year-to-date purchases accounting for
approximately 60% of the $3.0 billion repurchase program
• Triggered the redemption of $342 million of preferred stock, bringing year-to-date redemptions to
over $1.5 billion or 15% of preferred equity
• Secured joint venture partner for first Direct Air Capture plant
• Earnings per diluted share of $1.20 and adjusted earnings per diluted share of $1.18
In addition, Occidental distributes 1.28 % annual dividend yield.
Cryptocurrencies and cryptocurrencies stocks are to be valued the same way as other companies’ common stocks are valued: using discounted cash flows, comparables, precedent transactions and asset base methods, according to Wolfteam Ltd.’s view.
Many investors and research analysts claim that cryptocurrencies are not susceptible to discounted cash flows valuations, since they do not yield dividends. Meta, Alphabet and Amazon and many other technology and non technology stocks have also never distributed dividends and yet the textbook discounted cash flows, comparables, precedent transactions and asset base methods are used to value them.
Bitcoin, cryptocurrencies and cryptocurrencies related stocks will sooner or later distribute cash flows and dividends, according to Wolfteam Ltd.’s projections and estimates.
So the classic valuation methods should be applied also to cryptocurrencies and cryptocurrencies related stocks like Coinbase, Microstrategy, Block, Robinhood markets and Nu Holdings Ltd., for example in Wolfteam Ltd.’s view.
www.wolfteamedge.com
There is a Securities And Exchange Commission, SEC against Coinbase, Inc, the cryptocurrencies exchange lawsuit decision pending soon.
If the SEC wins the lawsuit Coinbase's stock price could go down to 82 USD. If the Securities And Exchange Commission achieves a partial win against Coinbase, Coinbase's stock could fall to 97 USD.
If Coinbase wins the lawsuit against the Securities And Exchange Commission, Coinbase's stock price could shoot up to 180 USD from the current 124.75 USD Coinbase stock price.
The lawsuit Securities And Exchange Commission, SEC against Coinbase, Inc is a coin toss, with slightly higher probability of the Securities And Exchange Commission winning, according to leading law firms.
The lawsuit is very important for the cryptocurrencies market. If Coinbase wins, Bitcoin cryptocurrencies trading could become much more active on Coinbase's exchange platform. A Coinbase win will be one way of endorsement of the Bitcoin, cryptocurrencies market by law authorities.
Even a partial loss for Coinbase could increase dramatically Bitcoin, cryptocurrencies adoption, let alone an outright win for Coinbase against the Securities And Exchange Commission, SEC lawsuit.
In short, the Bitcoin, cryptocurrencies market is set to thrive, according to Wolfteam Ltd.'s house view.
Welltower Inc is a real estate investment trust that invests in healthcare infrastructure.
At 5.78 billion USD revenue, growing at 22.65 %, with 2.44 % net profit margin for 2022 Welltower is overvalued, according to Wolfteam Ltd.'s projections and estimates.
Welltower's intrinsic value is 27 billion USD compared to Welltower's current market capitalization of 49.73 billion USD.
This is excerpt from Welltower's third quarter, 2023 earnings report:
FOR IMMEDIATE RELEASE
October 30, 2023
For more information contact:
Tim McHugh (419) 247-2800
Welltower Reports Third Quarter 2023 Results
Toledo, Ohio, October 30, 2023…..Welltower Inc. (NYSE:WELL) today announced results for the quarter ended September 30,
2023.
Recent Highlights
• Reported net income attributable to common stockholders of $0.24 per diluted share
• Reported normalized funds from operations ("FFO") attributable to common stockholders of $0.92 per diluted share
• Reported total portfolio year-over-year same store NOI ("SSNOI") growth of 14.1%, driven by SSNOI growth in our Seniors
Housing Operating ("SHO") portfolio of 26.1%
• SHO portfolio year-over-year same store ("SS") revenue increased 9.8% in the third quarter, driven by 220 basis points
("bps") of year-over-year average occupancy growth and Revenue Per Occupied Room ("RevPOR") growth of 6.9%
• SHO portfolio year-over-year SSNOI margin expanded by 330 bps driven primarily by strong RevPOR growth which
continued to meaningfully outpace Expense per Occupied Room ("ExpPOR") growth
• During the third quarter, we completed $1.4 billion of pro rata acquisitions and loan funding. Year to date as of October 30,
2023, we have completed $3.0 billion of pro rata gross investments exclusive of development funding
• As of September 30, 2023, we had approximately $6.7 billion of available liquidity inclusive of $2.7 billion of available cash
and restricted cash and full capacity under our $4.0 billion line of credit
• Improved net debt to Adjusted EBITDA to 5.14x at September 30, 2023 from 6.93x at September 30, 2022
• Revised full year 2023 net income attributable to common stockholders outlook to a range of $0.91 to $0.95 per diluted share
as compared to previous guidance of $0.75 to $0.84 per diluted share. Full year normalized FFO attributable to common
stockholders guidance has been revised to a range of $3.59 to $3.63 per diluted share as compared to previous guidance of
$3.51 to $3.60 per diluted share
Global trading routes are disrupted due to the Houthi's attacks in the Suez strait, which makes food, oil and metals cargo ships take the long route around Africa to get to Europe and Asia.
This makes the commodities transport three times more expensive and drives commodities inflation.
Food, softs, agriculture, wheat, corn, oil, gas, base and precious metals producers' stocks are likely to benefit from trading routed becoming more insecure and expensive.
This could be the long awaited strong year of oil, gas, soft, corn, wheat, gold, silver, iron ore, copper and essentially commodities stocks, which together with industrial companies and financials, banks, insurance companies could be deemed value investing stocks currently, according to Wolfteam Ltd.'s projections and estimates.
Inflation will turn out stronger than expected in 2024, according to Wolfteam Ltd.'s house forecast
The Federal Reserve will still do 4 decreases of the Federal Funds Rate Target. Already strong monetary tightening and coming elections are the main arguments.
Possible turmoil in the financial sector concerning both money center banks and regional banks could also exert pressure on the Federal Reserve not to decrease interest rates too much.
Nonetheless, the Federal Reserve will decrease the target for the Federal Funds Rate four times, each time by 0.25 %, for 1.00 % decrease altogether.
Microsoft's market capitalization overhauled recently Apple's market capitalization. Mainly on the artificial intelligence, AI hype.
It is true that Microsoft has made large strides forward with its stake in OpenAI and OpenAI's ChatGPT large language models based chat bot. But Apple still possesses much more data on its users, according to Wolfteam Ltd.
Microsoft is circa 23 % overvalued on a relative basis compared to Apple. Apple has millions of terabytes of data on its users via its App Store, which is carried by iPhones, iPads and Macintosh computers. Apple just touts its lack of surveillance on its users as one of its core competitive advantages. And not tracking users is a huge advantage for Apple.
This, of course, hurts the artificial intelligence, AI capabilities of Apple, because AI relies on huge amounts of data to train artificial intelligence, AI models and provide insights. Microsoft circumvents this user surveillance by holding a non majority stake in OpenAI. Nonetheless, Microsoft's stake of 49 % in OpenAI does give it operational control as the abrupt firing and swift return back of OpenAI's CEO Sam Altman, supported outright by Microsoft, clearly showed. Microsoft has huge operational leverage in OpenAI, so Microsoft in effect is tracking users, surveilling them, which sooner or later could diminish Microsoft's high market capitalization.
Apple, on the other hand, has Siri, another artificial intelligence, AI chat bot based on large language models. It is a matter of time before Apple plows more resources into artificial intelligence, AI and comes up with an exciting artificial intelligence, AI innovation that relates to consumer electronics, as well.
Ralph Lauren Corporation, the fashion company is undervalued according to Wolfteam Ltd.'s estimates.
Ralph Lauren's intrinsic worth is 18.5 billion USD compared with Ralph Lauren's current market capitalization of 8.84 billion EUR.
Here is an excerpt from Ralph Lauren's Second Fiscal Quarter 2024 results:
Coinbase Global, Inc or Coinbase's market capitalization could triple from current levels on the Securities And Exchange Commission approving Bitcoin ETFs.
Coinbase's market capitalization could rise from 32.03 billion USD currently to 100 billion USD in 2024 alone.
Although The Securities And Exchange Commission officially denied endorsing or approving Bitcoin, allowing Bitcoin tightly related products like Bitcoin Exchange Traded Funds, Bitcoin ETFs is a great boost for the fintech, Bitcoin cryptocurrencies ecosystem.
And Bitcoin stocks like Robinhood markets, Microstrategy, Block, Coinbase, Nu Holdings Ltd. are set to flourish.
A common yearly seasonality observation is that as January goes, so goes the year.
According to Wolfteam Ltd.'s estimates, this year will be different. US Stocks will most probably finish 2024 higher by between 12 % and 17 % mainly on the back of the Federal Reserve targeting lower interest rates levels.
Advancements and developments in AI could also propel US stocks higher. Mainly, however, undervalued sectors of the economy like energy, base metals, precious metals and industrial stocks will outperform both on value investing basis and global military encounters, which increase the demand for oil, gas, base metals and precious metals.
Lowering interest rates propelling gold, oil and the associated stocks higher could be the main US stocks theme of 2024.
Gold stocks are undervalued on the Federal Reserve signalling it could target lower interest rates levels in 2024 on possibly subdued inflation.
Small capitalisation gold miners’ stocks could double, mid capitalisation gold producers can rise by 50-60 %, while large capitalisation gold miners’ stocks could rise by 30 % on gold’s price rising between 12 % and 18 % in 2024, according to Wolfteam Ltd.’s house view.
Small gold miners have more leverage and their stocks’ prices tend to react with more volatility on the changes of the price of gold. Because they develop riskier mines that require more deep drilling and are generally more profitable on higher gold prices.
Large gold miners provide for stability.
There will be four cuts of the Federal Funds Rate in 2024 by the Federal Reserve, according to Wolfteam Ltd.’s house view.
70 % because inflation will be more subdued and 30 %, because US presidential elections are coming.
American International Group, Inc or AIG for short is undervalued, according to Wolfteam Ltd.'s projections and estimates.
With 56.42 billion USD in revenue, growing at 8.39 % with net profit margin of 18.21 %, for 2022 AIG is grossly undervalued. American International Group, Inc or AIG's intrinsic value is 142 billion USD compared to AIG's current market capitalization of 47.39 billion USD.
This is excerpt from AIG's third quarter 2023 financial report:
AIG Reports Third Quarter 2023 Results
❖ Net income per diluted share was $2.81, and adjusted after-tax income* (AATI) per diluted
share was $1.61, an increase of 92% from the prior year quarter
❖ General Insurance combined ratio was 90.5%, an improvement of 680 basis points from
the prior year quarter, including 6.9 points of catastrophe losses and 2.7 points of
favorable prior year development (PYD), net of reinsurance and prior year premiums
❖ General Insurance accident year combined ratio, as adjusted* (AYCR) was 86.3%, an
improvement of 210 basis points from the prior year quarter, driven by the outstanding
performance of the Commercial Lines AYCR of 81.7%
❖ General Insurance net premiums written (NPW) increased 1% year-over-year, or 9% on a
comparable basis*†, driven by 16% growth in Personal Insurance and 6% growth in
Commercial Lines
❖ Life and Retirement adjusted pre-tax income (APTI) was $971 million, up 24% from the
prior year quarter, benefiting from continued growth in net investment spread
❖ Returned over $1 billion to shareholders through $785 million of common stock
repurchases and $261 million of dividends in the third quarter
❖ On November 1, AIG announced the successful closing of the sale of Validus Re to
RenaissanceRe, simplifying our portfolio and allowing us to accelerate capital
management plans
❖ On October 31, Corebridge announced the closing of the sale of Laya Healthcare Limited
to AXA for €650 million, the net proceeds from which will be distributed by a special
dividend of approximately $730 million to Corebridge shareholders
Coinbase and other cryptocurrencies stocks like Microstrategy, Robinhood markets, Nu Holdings Ltd. are undervalued long-term after the Securities And Exchange Commission, SEC approved Bitcoin ETFs.
SEC approving Bitcoin Exchange Traded Funds, ETFs is a seal of approval for the cryptocurrencies space by the main US securities regulator. Soon, the proverbial 'animal spirits' can be unleashed and Bitcoin, cryptocurrencies could thrive.
Bitcoin's price could surpass 72 000 USD in 2024, according to Wolfteam Ltd.'s estimates.
AutoZone, Inc., the American aftermarket automotive parts and accessories is undervalued, according to Wolfteam Ltd.'s projections and estimates.
With 17.46 billion USD in revenue, growing at 7.41 % with net profit margin of 14.48 % for the fiscal 2023, AutoZone is undervalued.
AutoZone's intrinsic value is 52 billion USD compared with AutoZone's current market capitalization of 44.42 billion USD, according to Wolfteam Ltd.'s estimates.
Excerpt from AutoZone's 1st Fiscal Quarter 2024:
MEMPHIS, Tenn., Dec. 05, 2023 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $4.2 billion for its first quarter (12 weeks) ended November 18, 2023,
an increase of 5.1% from the first quarter of fiscal 2023 (12 weeks).
Same store sales, or sales for our domestic and international stores
open at least one year, are as follows:
| Constant Currency | ||||||
| 12 Weeks | 12 Weeks* | |||||
| Domestic | 1.2 | % | 1.2 | % | ||
| International | 25.1 | % | 10.9 | % | ||
| Total Company | 3.4 | % | 2.1 | % | ||
| * Excludes impacts from fluctuations of foreign exchange rates. | ||||||
For the quarter, gross profit, as a percentage of sales, was 52.8%, an increase of 279 basis points versus the prior year. The increase in gross margin was driven by 208 basis point ($83 million net) non-cash LIFO favorability, with the remaining leverage primarily from favorable supply chain costs and higher merchandise margins. Operating expenses, as a percentage of sales, were 32.6% versus last year at 31.9%. Deleverage was primarily driven by domestic store payroll and investment in technology related initiatives.
Operating profit increased 17.4% to $848.6 million. Net income for the quarter increased 10.0% over the same period last year to $593.5 million, while diluted earnings per share increased 18.6% to $32.55.
McDonald's is overvalued, according to Wolfteam Ltd. , the firm I own and run, projections and estimates.
I am a frequent visitor of McDonalds, but McDonalds has raised the prices for its menus too high, in Wolfteam Ltd.'s house view. I now, there are price promotions, but they are not enough in numbers and scope and I am sure the customers numbers traffic in McDonald's restaurants has decreased since several years ago. Apparently McDonald's is counting on everyone else's high prices to raise their own and get them close to high end restaurants.
Unfortunately, some McDonald's menu prices rival mid level restaurants and the surroundings, furnishing and service in McDonald's has visibly not changed so much as compared to McDonalds' prices from 5 years ago.
At 212.87 billion USD current market capitalization, McDonald's is grossly overvalued, according to Wolfteam Ltd.'s projections and estimates.
McDonald's intrinsic value is 151 billion USD, according to Wolfteam Ltd.
Bitcoin Exchange Traded Funds, ETFs started trading on public markets yesterday after being approved by the Securities And Exchange Commission, SEC.
Bitcoin's intrinsic value got a huge boost from yesterday's SEC Bitcoin ETFs approval. Bitcoin's intrinsic long-term value is 290 000 USD, according to Wolfteam Ltd.'s analysis and estimates. And this is without any major regulatory decisions that support Bitcoin.
Bitcoin's value could surpass 72 800 USD in 2024.
The approved by the Securities and Exchange Commission Bitcoin ETFs started trading on public markets today.
This is a huge milestone for Bitcoin, cryptocurrencies, a huge stamp of approval on the cryptocurrencies space by the Securities and Exchange Commission. This puts Bitcoin, cryptocurrencies on a new growth trajectory.
Lawfulness was and still is a huge problem for Bitcoin, cryptocurrencies. The Securities and Exchange Commission approving Bitcoin related instruments means to a large extent that Bitcoin is legal and such a development reduces greatly the probability of Bitcoin being all of a sudden outlawed by leading global governments.
In short, both the short term and mid term future of Bitcoin and cryptocurrencies is bright, according to Wolfteam Ltd.’s analysis and estimates.
There was a false leak today about a possible Bitcoin exchange traded fund, ETF approval.
The leak was false, but Bitcoin’s price was volatile intraday.
There could be a classic ‘Buy The Rumour, Sell The News' development before and after the Securities and Exchange's decision on the Bitcoin ETF is announced, according to Wolfteam Ltd.'s corporate view.
A Bitcoin ETF will most probably ensure much needed liquidity by transferring money to and fro from the New York Stock Exchange or Nasdaq and over the counter cryptocurrencies trading markets, where the Bitcoin ETF will be listed.
This liquidity will find its way into Bitcoin, Ethereum, Ripple, Dogecoin other cryptocurrencies trading. The new found cryptocurrencies liquidity will attract new investment flows from established, institutional asset managers, hedge funds and even endowments and pension funds.
Asset managers, endowments and pension funds will be attracted by the regulation cover public trading on either the New York Stock Exchange or Nasdaq provides for a probable Bitcoin ETF. This newfound regulatory stability will bring in even more investment flows into cryptocurrencies and thus possibly raise the prices of Bitcoin, Ethereum, Ripple, Dogecoin and other more obscure cryptocurrencies and thus benefit the whole cryptocurrencies asset class.
Oil is currently undervalued, so are oil and gas producers' stocks, according to Wolfteam Ltd.'s estimates and projections.
Oil will have an average price of 104 USD in 2024, according to Wolfteam Ltd.'s house view.
Most stand to gain mid-sized oil and gas producers like Devon Energy, Chesapeake Energy and Marathon Oil Corporation.
The stock market is a buzz about the possible pending introduction of Bitcoin physical delivery exchange traded fund ETFs
Bitcoin's price is declining now as 'buy the rumor, sell the news' sets in before the possible Securities And Exchange Commission 10th of January 2024 self imposed deadline to approve a Bitcoin ETF.
Bitcoin's price could still fall 26 % more from current levels before staging a rally of more than 150 %, to 71 000 USD in 2024, that is, according to Wolfteam Ltd.'s estimate.
Energy, commodities and technology will be the best performing US stock market sectors in 2024, according to Wolfteam Ltd.'s projections and estimates.
The two super regional wars in Ukraine Russia and in Israel, the Middle East will keep the demand high for oil, base metals to produce weapons, grains and softs to feed the armies and population and precious metals prices will also most probably increase due to the demand for safe heaven assets.
Technology on the other hand is strategic for future warfare and the large and mid-sized technology US companies already possess millions of terabytes of information, which gives them a significant edge and eases their growth potential in the future. What is more, with the advent of artificial intelligence, AI all the information gathered by the magnificent 7 technology stocks Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla and many small and mid-sized technology companies will be analyzed, researched more efficiently and valuable insights will be extracted, which later could be turned into revenue and ultimately profit via harvesting user visits and engagement.
Energy will be the top performing US stock market sector in 2024, according to Wolfteam Ltd.'s estimates.
Alphabet, the Google search engine parent is overvalued, according to Wolfteam Ltd.' base case scenario.
Alphabet Inc's intrinsic worth is 1.2 trillion USD on a base case scenario. This compares to Alphabet's current market capitalization of 1.71 trillion USD.
In a very optimistic case, where artificial intelligence, AI's full promise comes to fruition, Alphabet could have an intrinsic worth of 4.5 trillion USD. Alphabet, via Google and its other properties has a treasure trove of millions of terabytes of information, which if modeled correctly and fruitfully via artificial intelligence, AI could substantiate a 4.5 trillion USD Alphabet valuation.
But currently, as far as Wolfteam Ltd.'s is concerned, Alphabet Inc, owner of Google is worth 1.2 trillion USD.
Paccar, the American large commercial trucks manufacturer is undervalued, according to Wolfteam Ltd.
With 28.82 billion USD revenue, growing at 22.52 % and net profit margin of 10.45 % for the calendar 2022, Paccar's intrinsic worth is 63 billion USD, according to Wolfteam Ltd.'s projections and estimates.
An excerpt from Paccar's third quarter 2023 report:
PACCAR achieved net income of $1.23 billion ($2.34 per diluted share) in the third quarter of this year, 60% higher than the $769 million ($1.47 per diluted share) earned in the same period last year. Third quarter revenues were $8.70 billion, 23% higher than the $7.06 billion reported in the third quarter of 2022.
PACCAR reported net income of $3.18 billion ($6.07 per diluted share) for the first nine months of 2023, including a $446.4 million after-tax, non-recurring charge related to civil litigation in Europe, compared to $2.09 billion ($3.99 per diluted share) earned in same period last year. Excluding the non-recurring charge, the company earned adjusted net income (non-GAAP)1 of $3.63 billion ($6.92 per diluted share) in the first nine months of 2023. Net sales and financial services revenues for the first nine months of 2023 were $26.05 billion, compared to $20.69 billion achieved last year.
Quarterly Dividend
PACCAR’s Board of Directors declared a regular quarterly cash dividend of twenty-seven cents ($.27) per share, payable on December 6, 2023, to stockholders of record at the close of business on November 15, 2023. PACCAR has delivered annual dividends, including regular quarterly and extra cash dividends, totaling approximately 50% of net income for many years.
Financial Highlights – Third Quarter 2023
Highlights of PACCAR’s financial results for the third quarter of 2023 include:
All in all, Paccar is undervalued, according to Wolfteam Ltd.'s corporate view.
The magnificent seven technology stocks or Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla have ridden high on the current artificial intelligence, AI boom and their market capitalization are all at circa or above 1 trillion USD.
Year to date 2024 the magnificent 7 stocks have sagged on a partial reset of the expectations that the Federal Reserve will target lower interest rate levels in 2024. Artificial intelligence, AI as any emerging technology sector is very innovation driven and requires huge amounts of capital, which only interest rate sensitive venture capital funds can provide. Interest rates sensitive, because venture capital funds provide an alternative to US treasuries, be it a minor one. Venture capital funds and the artificial intelligence, AI startups they finance are very sensitive to higher interest rates, because they deprive them of cheaper way of financing their business and lesser risk-reward ratio in comparison with utilities, commodities, industrial stocks and US treasury bonds.
The magnificent seven technology stocks or Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla are all overvalued by 30 %, 50 %, 11%, 20 %, 14%, 42 % and 84 %, according to Wolfteam Ltd.
In the long run, if artificial intelligence proves to be the "new internet" the magnificent seven technology stocks or Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla may well prove undervalued, but Wolfteam Ltd.'s house view is that it is doubtful that artificial intelligence, AI will prove as powerful as the internet. Artificial intelligence, AI is just an application of the data gathered from the internet and offline.
Apple's current market capitalization is 2.87 trillion USD. Microsoft's current market capitalization is 2.754 trillion USD.
Apple is currently the most valuable company. In the world. Microsoft, driven by the promise of artificial intelligence, AI and its OpenAI's share of 49 % is gaining ground on Apple.
In short, Microsoft on comparables basis is overvalued in comparison with Apple, according to Wolfteam Ltd.'s view. OpenAI's ChatGPT cannot substantiate almost 3 trillion USD market capitalization for Microsoft. Microsoft's Price/Earnings ratio of circa 36 is higher than Apple's Price/Earnings ratio of 30.04. Market participants forecast too high a growth rate of both revenue and net income of Apple and Microsoft.
Both Apple and Microsoft are overvalued by 30 % and 50 % currently. If the information gathered by both Apple and Microsoft is modeled via artificial intelligence, AI for valuable insights, on an exponential scale, than such developments could substantiate Apple and Microsoft's market capitalization's in the long-term.
Gitlab Inc, the code collaboration and repository service is grossly undervalued, according to Wolfteam Ltd.'s projections and estimates.
Gitlab, with its code production collaboration git type like software tools system is at the forefront of Infrastructure as a Service, by far the largest part of cloud computing. Cloud computing in 4 years is expected to have 700 billion USD recurring annual revenue globally, according to many Wall Street and technology analysts is the new computing.
Cloud computing makes cheap, efficient use of computing resources by offering computer resources in the cloud, on the servers premises of leading technology companies like Amazon, Microsoft, Google which can be safely relied upon for stable computer infrastructure is taking the world over,
Gitlab Inc's intrinsic worth is 37 billion USD, according to Wolfteam Ltd's house view. Git type cloud production and collaboration is of utmost importance for software production overall. And Gitlab and Github have the git code repository market in an oligopoly grasp. Gitlab's current market capitalization is 9.35 billion USD.
Gitlab has circa 500 million USD annual revenue, but its overall cloud computing revenue grows by more than 50 % on an yearly basis. In 2023, the last reported fiscal year, Gitlab's negative net profit margin was - 40.61 %. Once Gitlab manages to report annual profit its value will explode.
It is true that the Software as a Service or SaaS market has slowed down abruptly. But git code software team production is very valuable and Gitlab is at the forefront of the cloud computing, Infrastructure as a Service git wave.