Sunday, April 18

Stocks

DoorDash won’t deliver for investors. Here’s how to short it

DoorDash won’t deliver for investors. Here’s how to short it

Stocks
However, as I’ve pointed out in the past, initial public offerings that soar on their first few days have a habit of doing very badly subsequently, and DoorDash is unlikely to prove an exception to the rule. Perhaps the biggest problem is that food delivery is an extremely competitive market with a huge array of firms all vying for the same customers. While DoorDash is currently the largest food-delivery company in the US, with just under 30% of the market, it faces stiff competition in the form of Uber Eats and Grubhub. One tech stock that has done very well from this boom is the food-delivery app DoorDash ( NYSE: DASH ) . It nearly doubled on its first day of trading in early December, rising to $190 from its initial price of $102. Even today it is trading at $156, a jump of 50%, giving...
US open: ‘Better and more is coming’, stocks slip

US open: ‘Better and more is coming’, stocks slip

Stocks
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views. (Sharecast News) - "Better, and more better is coming next month and beyond." That was the reaction from Ian Shepherdson at Pantheon Macroeconomics to the better-than-expected non-farm payrolls report for February. According to the Department of Labor, the US jobs market created 379,000 new jobs last month (consensus: 200,000) and the unemployment ticked lower by a tenth of a percentage point to 6.2% (consensus: 6.3%). Against that backdrop, as of 1624 GMT all of the main Wall Street indices had surrendered early gains, with the Dow Jones trading down by 0.19% to 30,863.95, while the S&P 500 was off by 0.67% at 3,743.12 and the Nasdaq Composite w...
EXPLAINER: Why rising rates are unsettling Wall Street

EXPLAINER: Why rising rates are unsettling Wall Street

Stocks
FILE - In this Tuesday, Feb. 16, 2021, file photo, American flags hang outside of the New York Stock Exchange in New York. Optimism for an economic revival is surging following a year of coronavirus-induced misery. But expectations for stronger growth, plus the higher inflation that could accompany it, are pushing interest rates higher, which is forcing investors to re-examine how they value every other investment. (AP Photo/Frank Franklin II, File) FILE - In this Tuesday, Feb. 16, 2021, file photo, American flags hang outside of the New York Stock Exchange in New York. Optimism for an economic revival is surging following a year of coronavirus-induced misery. But expectations for stronger growth, plus the higher inflation that could accompany it, are pushing interest rates higher, which ...
Take a punt on housebuilder Bellway’s solid foundations

Take a punt on housebuilder Bellway’s solid foundations

Stocks
Lockdown restrictions hurt developers such as Bellway by both slowing construction and freezing demand, which is why revenue is expected to fall by about a third this year. However, the construction industry is now back to normal, while all the signs suggest demand is also bouncing back. While the reason for this poor performance is obvious in some cases, in others low valuations are harder to explain. One company that falls into the latter category is the homebuilding firm Bellway ( LSE:BWY ) , which is still down by more than 40% from the level at which we closed our long position just before the crisis. It has slid by 45% from its peak this year. Unlike the US stockmarket, the FTSE All-Share has only partly recovered from its March collapse. It is still in bear market territory (defin...
Tech rebound pulls stocks out of a slump and to weekly gain

Tech rebound pulls stocks out of a slump and to weekly gain

Stocks
A late-day rebound in technology companies pulled the stock market out of a slump and helped give the S&P 500 its first weekly gain in three weeks NEW YORK -- Wall Street capped a volatile day of trading Friday with a broad rally that snapped the market's three-day losing streak. The S&P 500 gained 2% after clawing back from a 1% skid that followed a 1% surge at the start of trading. Other stock indexes went through similar zigzags, but finished with solid gains. The late-afternoon turnaround made up for some of the losses that the market began racking up after kicking off the week with the S&P 500's biggest gain since June. The index, which briefly slipped into the red for the year on Thursday, managed to end the week 0.8% higher, its first weekly gain in three weeks. The market's lat...
DR Horton: US housebuilder that’s piling up profits

DR Horton: US housebuilder that’s piling up profits

Stocks
Despite the ongoing pandemic the US stockmarket continues to boom. As a result, valuations are at record levels, with the benchmark S&P 500 index now trading on a trailing price/earnings (p/e) ratio of 30. While this is partly due to the fact that earnings have been depressed by the pandemic, even if you compare it with predicted profits the market still looks pricey. Edward Yardeni of Yardeni Research estimates that it is on a forward p/e of 22, the highest level since 2001 and nearly double the earnings multiple it was trading at a decade ago. It is, in short, very difficult to find shares that look priced at bargain levels. One of the few stocks that looks very reasonably priced, however, is housebuilder DR Horton (NYSE: DHI), which trades at just 10.7 times trailing earnings and 8.8 ti...
Cash rich and bored? Be careful what you do with your money

Cash rich and bored? Be careful what you do with your money

Stocks
Back in 2016 I suggested that you consider buying a small stake in the Iranian stock market. I don’t suppose anyone did. It wasn’t exactly easy to get in at the time and my optimism about the economy was pretty misplaced. But if you found a way, you would have bought in with the index on about 50,000. You could then have sold on 8 August with it at 2,000,000. You’d have run into a little bother with the currency, of course. The rial has been in inflation-driven collapse since 2017. But perhaps you were clever enough to hedge that a little. I’m not going to worry about you. I am, however, going to worry about the many inexperienced savers who poured their money into the market a bit too late in the day. Some three million of them have put more than 40 trillion rials (£740m) into stocks this...
Has the tech bubble burst? The week ahead could be critical

Has the tech bubble burst? The week ahead could be critical

Stocks
Since March, selling tech stocks short – that is to say, betting that they will fall – has been about as quick a way to the poor house as has ever been invented. Tech stocks, in the form of the US Nasdaq index, have been in a runaway bull market. The index has, in less than six months, as near as dammit doubled, going from 6,600 to a September high of 12,450. This is an astonishing performance for an index of this market cap. But is its epic run finally over? The trend higher in the Nasdaq is still intact – but only just The might of big tech is quite astonishing. At more than $2trn, Apple now has a market cap bigger than the GDP of Brazil, Italy and Canada. With all of the coronavirus-related shrinking of GDP, it will probably have a bigger market cap than the UK when the 2020 figures com...
Our trade of the decade came good – what’s next?

Our trade of the decade came good – what’s next?

Stocks
So what should be the trade of the decade this time (I know we’ve missed the beginning of the year, but the decade is still young)? The answer could be the market that is as unloved, unfashionable, under-owned and relatively cheap as Japan was ten years ago. Yes it is the FTSE 100, or more precisely, UK large-cap value stocks. As a team at US asset manager Research Affiliates points out, after years of outperformance from growth stocks, value stocks now trade at “extremely deep discounts” globally – whichever valuation method you use. But nowhere is this more pronounced than in the UK, which was not only the worst-performing major stock market overall last year, but where value stocks specifically (as measured by those with the lowest p/b ratio) fell by 15%. At the beginning of 2010 we of...
How to invest in tin: a crucial metal whose price is set to soar

How to invest in tin: a crucial metal whose price is set to soar

Stocks
Meanwhile the supply side has been hit. A ten-year bear market has discouraged investment in new mines and existing facilities. The largest tin producer is China, but many of its smelters and plants have seen production cuts or closure. Myanmar was another large producer, but thanks to all its political problems exports have fallen. Latin American supply has faced the twin demons of Covid-19 and depleting resources. Supply from Indonesia has fallen by around 40% thanks to Covid-19 and environmental issues. CRU, a consultancy, says supply lagged behind demand by 8,000 tonnes in 2020, making three consecutive years of deficits. The 350,000-tonne market will see a deficit of 2,700 tonnes in 2021, according to the International Tin Association. It is a key ingredient of the substance that bin...