What the New York City Index Tells about Economic Recovery

New York City’s economic recovery index can give you an idea regarding how the American economy is recovering from the Covid-19 pandemic. 

What the New York City Index Tells about Economic Recovery

New York City is the economic hub of the United States, and it clearly reflects the state of the country’s economy. It does help to monitor the economic situation of the city for successful online stock trading.  

The New York City Recovery Index for the October 31 week recently returned a 52.6 out of 100 score. As reported by Investopedia’s Caleb Silver, this is a slight improvement in the city’s recovery but there’s still a long way to go to get back to where it was before the pandemic. The past week has seen a lesser number of Covid-19 hospitalizations. Unemployment claims have also reduced, while real estate sales have picked up.

COVID-19 Hospitalizations Reduce

The most encouraging factors were the decrease in Covid-19 hospitalizations and unemployment.

  • The week’s 7-day average of daily hospitalization cases was 37.
  • This was a 27.5% drop from the past week’s figure of 51.
  • Reported cases, however, kept rising.
  • The city did report an infection rate of 2%, which is the highest percentage in the past 4 months.

Unemployment Improves

  • At 14.4%, New York City’s unemployment figures are among the highest in the country.
  • But the week posted the third consecutive week of decreasing unemployment claims.
  • The figure of 23,239 cases for New York City was lower than the week before by 5,212 cases.
  • Despite that improvement, claims have still quadrupled from last year.
  • Unemployment has been felt the most in hotels, restaurants and theaters.  

These figures show that there still is a long way to go for the economy to get back to how things were before the pandemic. This information can help you plan your trading decisions along with advanced trading platforms.

image of stocks coverage ratios header

What Is Coverage Ratio and How Calculating It Helps?

Company research is an essential element of making stock trading decisions. Helping in this research are calculations such as the coverage ratio.    

What Is Coverage Ratio and How Calculating It Helps? 

Coverage ratio is the measurement of a company’s capability to meet its financial obligations such as dividends and interest payments as well as its debt. It significantly helps in company research and is something you rely on along with advanced trading software.  

A higher coverage ratio makes it easier for the company to fulfil its financial obligations. Investors and analysts study the historical trend of a stock’s coverage ratios to detect whether the financial position of a company has changed.    

How Crucial Is the Coverage Ratio?

  • Coverage ratios help detect companies that could be heading for troubled financial waters. 

Calculating Coverage Ratio

  • Interest coverage ratio/Interest earned ratio

It measures a company’s ability to pay the interest of its debt.

It is calculated as: 

EBIT / Interest Expense

EBIT refers to earnings before interest and taxes. A satisfactory interest coverage ratio is usually 2 or more.  

  • Debt Service Coverage Ratio (DSCR)

It measures the ability of a company to pay all its near-term debt principal plus interest payments 

It is calculated as:

Net operating income / Total Debt Service

A figure of 1 or above indicates the company’s earnings are sufficient to cover all debt obligations

  • Asset Coverage Ratio

It measures a company’s balance sheet assets.

It is calculated as:

Total Assets – Short-term Liabilities / Total Debt

Total assets are buildings, machinery, inventory, land and other such tangible assets

A 1.5 ratio is satisfactory for utilities, while a ratio of 2 is satisfactory for industrials. The coverage ratio is one of the many indicators that can help stock traders gauge the worth of a business. It helps while trading stocks online.  

image of uncertainty dividend stocks

Dividend Stocks to Deal with the Market Uncertainty

A steady flow of income through some solid dividend stocks can help calm the mind of any investor agitated by the uncertainty doing the rounds.

Dividend Stocks to Deal with the Market Uncertainty

Covid-19 cases are rising again in Europe and the US, causing further gloom. European countries are thinking of imposing lockdown again, generating fears of another economic slowdown. These are concerns that dominate online trading now. But all is not lost, and there are some great opportunities out there particularly if your interest is for stocks providing reliable income.   

Investors seek dividend stocks if they’re looking for regular income. Sometimes, these stocks come really cheap. That raises your potential for profits. Motley Fool analyst David Jagielski particularly has a few stocks in mind. Whatever the circumstances have been, these stocks have paid shareholders regular income.  

CVS Health ($CVS)

The company has been down 20% since the beginning of 2020, despite the S&P 500 climbing nearly 6%. Though the company experienced a decline, it has managed to adapt to the Covid-19 pandemic and has provided testing locations for patients all through the country as well as telehealth functionalities in almost every state. Sales have managed to be steady. 

The second-quarter results released by the company on August 5 actually revealed year over year sales up by 3% for the period till June-end, touching $65.3 billion. Its net income was reported to be $3 billion, a 54% rise. This improvement was significant enough for CVS to raise its cash and earnings guidance from its operating activities.     

What really makes the stock exciting is that it trades at a P/E (price-to-earnings) ratio much lower than any average healthcare stock listed on the Health Care Select Sector SPDR Fund. While a typical healthcare stock listed on the fund has a P/E ratio of 24 as well as a book value that’s over 4 times, the CVS stock trades at a P/E of only 9 as well as a book value of around 1.2. The quarterly dividend stock is currently at $0.5, a 3.3% yield. That’s higher than the average S&P 500 yield of around 2%.              

Pfizer ($PFE) 

Another healthcare stock in the attention of Jagielski is Pfizer. Pfizer is in the limelight for being in the race to get a Covid-19 vaccine developed. The stock is down 4% in 2020. Comparing it with CVS, Pfizer stock is actually performing better. Still, it isn’t anywhere close to the S&P 500. 

The great news about Pfizer is its BioNTech experimental coronavirus vaccine which is in phase 3 of trials. It has been making significant progress, which could eventually lead to the company applying for Emergency Use Authorization (EUA) by next month. With the vaccine coming through, the company could add $3.5 billion worth revenue in 2021, believes Jagielski. In 2022, that could add $1.4 billion to the company’s revenue. While those figures may not be significant for a company of the stature of Pfizer that earned a revenue of $51.8 billion in 2019, the stock is known for its consistency and the overall value it provides, even without the highlight of a Covid-19 vaccine. The company has earned profits margins exceeding 10% in every one of the previous 10 years.    

Moreover, Pfizer has a P/E of just 15, and its P/B is just 3.3. That’s way below the value of the average healthcare stock. Recently, the company has also been increasing its dividend payments every year. Its current quarterly dividend is $0.38, a yield of 4.1%.          These are just some of the stocks to consider if your strategy is to acquire a steady flow of income that could help tackle the uncertainty the market throws at you. Many trading strategies can be considered, including exchange traded funds (ETFs).

image of growth stocks

Standout Stocks with Immediate Growth Potential

For investors with immediate growth objectives, stocks that are poised to rise above their competitors could be what they need.  

Standout Stocks with Immediate Growth Potential 

Are you looking for great growth stocks? Whatever be your investing strategy, you can get started with commission free trading

For immediate growth opportunities, how about stocks that are just breaking away from the other stocks in their segment? These stocks appear to grow faster than the others and fill investors with confidence for the short term at least, says Motley Fool analyst Zhiyuan Sun. With immediate growth prospects, these stocks are for those who want to buy right now and sell when these companies fail to deliver great results.      

Stocks such as these have the potential to provide instant growth though they may not necessarily be long-term options. Make the right trading decisions based on your financial goals, and use advanced trading platforms online. 

image of markets slump

Should You Be Worried about the Slump for Major Indexes?

Tech stocks led the recent slump for the major indexes. That brought the market to correction territory, but the bull market could keep going.    

Should You Be Worried about the Slump for Major Indexes? 

Investors employing long-term trading don’t need to be worried about short-term glitches. That’s exactly what you learn while trading stocks online. But still, it is hard to ignore what happened at the beginning of the second week of September.     

The Recent Tech Slump 

We have been recently seeing a tech slump. On Tuesday, as the markets reopened after a three-day weekend, Dow Jones dropped 2.3%, 632.42 points, to 27,500.89. The S&P 500 dropped 2.8%, 95.12 points, to 3,331.84. Nasdaq too dropped 4.1%, 465.44 points, to hit 10,847.69. This continued from the drops of the previous week. In fact, the Nasdaq dropped 10% from its record close of 12,056.44 on September 2. 

The first week of September saw the Nasdaq Composite ending at 11,313.13 for the greatest weekly decline it has experienced since March. That week also saw the Dow Jones losing 1.8%, closing at 28,133.31. The S&P 500 had a 2.3% drop to finish at 3,426.96. All three indexes suffered there greatest weekly falls since June. Nasdaq thereby entered correction territory, which is a situation where stocks end 10% lower at least from their previous closing high. In fact, data reveals that this was the quickest correction for the index on record. It took just three sessions for Nasdaq to get there. 

Factors Contributing to the Slump 

With the Covid-19 pandemic slowing down economic recovery, high valuations being showered on technology companies, and Trump aggravating US-China trade by threatening to end the United States’ manufacturing reliance on China; it is unclear where are we heading due to these types of events occurring.  

Major Tech Stocks Led the Slump 

The prime contributors to Nasdaq’s reversal were falls by some of the major tech components making up the index – Alphabet ($GOOG, $GOOGL), Amazon ($AMZN), Microsoft ($MSFT), Facebook ($FB) and Apple ($AAPL). These were the stocks that had received extremely high valuations. Investors started worrying whether the sector gains brought about by the market momentum were leading valuations far beyond sustainable levels.    

But what investors need to watch out for is whether the major US indexes can grow apart from the tech giants. It’s important to remember that the world of the pandemic is dependent on these tech stocks for its existence. With these stocks dropping, what scope is there for these indexes? Peter Oppenheimer of Goldman Sachs, however, says that the bull market could still go some way though he believes a selloff in the region of 10% can’t be avoided. 

image of tech stocks header

Impressive Tech Stock Growth Opportunities Despite Covid-19 Pandemic

There are tech stocks that have not been touched by the Covid-19 crisis, and some have experienced impressive growth.  

Impressive Tech Stock Growth Opportunities Despite Covid-19 Pandemic

Growth and income are the two major goals of investing in the stock market. Whatever be your requirements, you need the services of online stock brokers to get started. 

There Is Growth Around, Just Find It

High-growth stocks would have been considered a luxury as the effect of the Covid-19 crisis sent the market into recession. But safe-haven stocks, the few stocks that aren’t likely to be affected by the Covid-19 pandemic, could offer tremendous growth. Among these are tech stocks that are in huge demand, because the contactless working atmosphere encouraged to prevent the spread of the pandemic has made technology providers such as videoconferencing services indispensable. Also, among these were cloud technology providers, an investment option considered by Motley Fool’s Leo Sun.

High-growth cloud stocks have been successfully shielded from the crisis. Sun particularly remembers CrowdStrike ($CRWD) and Adobe ($ADBE), which have also weathered the storms in the past year. They have managed to experience double-digit growth in revenue even through the tough times. CrowdStrike has experienced a 120% rally this year while Adobe has surged 40%. But they’re still some way from all-time highs.                                  

Growth in the Past and More Growth to Come

CrowdStrike’s revenue in fiscal 2020, ending on January 31, was $481 million – a 93% surge. As the company’s gross margin expanded, its adjusted net loss reduced to $63 million from $119 million. The first quarter saw the growth continue, with year over year revenue rising 85%. There was more than a doubling of its subscriber base, and for the first time since its IPO in 2019, the company posted adjusted profit.

And there’s more to come. CrowdStrike is expecting a 72% to 76% annual rise in revenue in Q2 as well as a 58% to 61% rise for the full year. The company expects a significant narrowing of the full-year adjusted net loss to somewhere in the region of $15.2 million though it doesn’t quite expect consistent profitability.

Impressive, to Say the Least

It’s also been an impressive journey for Adobe in the past few years. It recently had a 24% revenue rise in fiscal 2019 that ended last November. While adjusted earnings soared 16%, revenue stood at $11.2 billion. In the first half of this year, Adobe’s revenue had an annual growth of 16%. The prime contributor to the company’s growth has been its Digital Media unit, which helped compensate for the weakness of the cloud services of its Digital Experience unit that suffered as a result of the Covid-19 pandemic. The company also witnessed a 33% improvement in adjusted EPS as well as an expansion of its gross margin.                      

Adobe expects a year over year growth of 11% and 17% in revenue and earnings in Q3. The full-year expectations are a 14% revenue growth and 24% earnings growth. 

Make use of high-tech platforms for advanced online stock trading. These technological advances can help you make the right decisions.  

image of unpredictable markets

How to Invest in the Stock Market When Unpredictability Is Around

Unpredictability is something you need to accept in the stock market arena. Having a long-term objective can help you tackle the volatility.    

How to Invest in the Stock Market When Unpredictability Is Around

One of the greatest quality stock traders may need is the ability to come out of dilemmas with the right decision made. Even with all the tools at hand, including advanced trading software, you ultimately need to make a decision. And that’s easier said than done. Just take the current situation; the economy is staging a spectacular recovery from the recession inflicted by the Covid-19 pandemic in March. 

But there is also the question of whether this momentum can be maintained.  Is there a crash for the market around the corner? Would stock prices suddenly start swinging back and forth? If so, what decisions can you make as a stock trader? If such volatile and unpredictable situations persist, most investors and market analysts suggest buying stocks that have long-term potential.   

Ask Yourself Before Asking the Stock Market

Motley Fool analyst Daniel B. Kline presented other criteria; which involved questions to ask one’s self before making decisions. First, you need to decide what your investing duration should be. Do you wish to invest for 30 years or 5 years? Are you investing to plan for retirement, saving for your child’s university education, or for buying a house? How much risk-tolerant are you? How much volatility can you bear?

Ensure Diversity of Your Investment Portfolio 

Having a diverse portfolio of companies can help your portfolio grow over a period of time, particularly if those companies are strong ones. With a varied portfolio, you won’t be significantly affected by negative events affecting a particular industry. And you won’t be at the receiving end of drops or market crashes. However, remember that the stock market is an uncertain environment and that the unexpected can happen. Strong companies may not always remain strong, as they too can see their share prices dwindle. 

Have a Strong Investment Thesis 

But apart from what goes on in the markets and the economy, you also need to consider a stock on the basis of what its underlying worth is – what the mission of the company is, how efficient its business model is, and how much you are convinced of the company’s business and its future prospects. That would keep you from selling stocks just on the basis of short-term events such as a quarter’s missed revenue projections. You should only sell if you have totally lost faith in the company’s core aspects which we’ve just discussed. It’s what makes up your investment thesis.  

Go Long-term and Seek Expert Advice

The problem with short-term goals and investment objectives are that you can get easily shaken by volatility and disruptions such as the current Covid-19 pandemic that can plunge markets into a state of recession. So, what’s important is doing adequate research, having a long-term objective, fixing clear investment goals, and taking advice from genuine and reputable investing experts. The stock market will take over everything else and help you get to your financial goals over time.    

If you meet the above-mentioned criteria, then you don’t need to worry about whether a market crash is on its way or whether the current economic recovery and market momentum can be trusted. You can start trading now.  

And with zero commission trading and demo trading services offered by experienced broker-dealers online, you don’t need to worry about the technicalities of the stock market or the complexities of market jargon.   

An Industry & Stock with Huge Potential for the Next 50 Years

In the present situation, where the economy is in a remarkable rebound while there is also the fear of a crash, a really long-term outlook can be helpful. 

An Industry & Stock with Huge Potential for the Next 50 Years

In unpredictable situations, it is important to think long term. That’s a lesson to learn in online stock trading. It can help you prepare for life after retirement, or you could pass your savings on to the next generation.

Investing for the Future? Think Tech Innovation

When you think in terms of 50 years, you need to give room for significant advances in technology. If you just think about the past 50 years, you could realize how technologies such as smartphones and the Internet were born. You can expect the same level, or even greater innovation, to shape the world in the next 50 years. That means when dealing with stocks you can think in terms of these innovations when you consider investing options.

But Motley Fool analyst Dave Kovaleski also points out that there are some major companies that could, in all probability, still exist 50 years from now. So, buying and holding those stocks could help you earn significantly in the next 50 years.            

Cashless Payment – a Trend That’s Increasing

Kovaleski turns to a stock in the cashless payment industry – a technology that’s been around for some time but could see total adoption by the world in the years and decades to come. We’re talking of credit and debit cards. Visa ($V) is one of those companies that has been increasingly benefiting from the gravitation of the consumer towards electronic payment, digital transactions, and the overall fintech advancements.

The current Covid-19 situation has been extremely beneficial for companies banking on this trend. Contactless transactions are being encouraged everywhere to prevent the spread of infection. But even before Covid-19, back in 2019, around $3.5 trillion worth of global sales were accounted for by e-commerce, as per research by Global Data. A study conducted by Visa rival Mastercard, and quoted by Kovaleski reveals that France, Sweden, the Netherlands, and Singapore already have cashless purchases accounting for around 60% of their transactions. The US has 45% of its transactions as cashless.

Investing in the Market Leader

As you probably know, Visa leads the market in payment processing. The industry anyway has just a few major players, which makes it easier for the existing ones to expand. Visa recently made a crucial acquisition of the fintech company, Plaid. The company operates an important service that provides app-based mobile payments. It’s a rival to Venmo. As if Visa wasn’t already a major player in the payment processing industry specifically, and the fintech industry generally, this major acquisition gives the company a chance to attain a major foothold in the mobile payments market.

Despite Visa’s existence since 1958, it went public only in 2008 and currently trades in the region of $200 per share. Through the past 10 years, it has attained a 26.6% annualized return. Kovaleski reckons the company could keep expanding and continue its market-leading stint in the coming decades.  

With advanced free stock trading offered by experienced online broker-dealers, you know what to do to get started in the stock market. 

image of gold miners

Taking a Look into the Investing Safe Haven of Gold

Gold has been perceived as a safe haven for investors and we’ve seen why, with its impressive performance thus far in 2020. 

Taking a Look into the Investing Safe Haven of Gold  

Looking for investing safe havens isn’t anything new, particularly in the present situation where the economy is staging a recovery. But the Covid-19 pandemic situation is far from over and there still is unpredictability. Is a crash around the corner? Safe haven investments can shield you from the risk present and tide you through the rough waters. To avoid the uncertainty of getting started in stock trading, you can look to direct access trading platforms by experienced online broker-dealers.     

The Attraction of Gold as an Investment Haven

Gold has broken through the threshold of $2000. Despite the spiking of Covid-19 cases and the high rate of unemployment, gold’s unaffected march seems to make it really attractive for investors. They believe gold could rise even higher, making the commodity as a kind of hedge against any downturn. The hunt continues for attractive gold stocks. Realizing this, Motley Fool analyst Scott Levine suggests 3 great gold stocks – Pretium Resources ($PVG), Eldorado Gold ($EGO), and Royal Gold ($RGLD).  

Gold Stock Operating an Attractive Asset 

Pretium Resources operates Brucejack that has helped it to attain a free cash flow of $82.7 million in Q2, which was a record for the company. Brucejack didn’t quite have to suspend its operations in the last quarter as a result of Covid-19 and could produce 90,419 ounces. Its production forecast for 2020 has been reaffirmed by the management and stays at 325,000 to 365,000 ounces. 

The Pretium management also plans to continue carrying out exploratory activities around Brucejack for the rest of the year. Despite the stock rising 30% in the past few days, and with the possibility to raise more, Levine finds it attractive because of the immense future potential of the company.       

Gold Stock with Significant Growth Potential 

Eldorado Gold trades at 7.8 times the operating cash flow. With shares on the discount, bargain hunters would find this attractive. The stock has an average five-year cash flow multiple of 26.1. Levine reckons that growth investors would also find this stock attractive because of the company stating its goal to invest strategically in “underexplored” areas but those with significant “organic growth potential” and having accessibility to “high-quality assets”.

Among these assets are the Kassandra mines in Greece that are now seeing paused activity as a result of government issues. But the company did confirm back in Q1 that momentum is building on that project. Recently, Eldorado also confirmed a 100% acquisition of Hellas Gold’s outstanding shares. That gives Eldorado total ownership of the assets of Kassandra. It also gives the company more flexibility to get into further joint venture partnerships.  

In the second quarter, Eldorado experienced quite a strong production of 137,782 ounces, which was a 50% year-over-year increase. This came along with a reduction of all-in sustaining costs per gold ounce – $859 in Q2 this year from Q2 2019’s figure of $917. As a result, the management has further confirmed its outlook for 2020 – with 520,000 to 550,000 ounces of gold production and AISC figure of $850 to $950 per ounce.      

No Direct Gold Mining, but Benefiting from the Metal 

Royal Gold does not actually mine gold but provides capital upfront to the mining companies. It obtains the rights for buying gold at a discounted price already agreed upon or for receiving a percentage of a mine’s mineral production. This enables Royal Gold to benefit from the high gold price, without having to operate the assets.   

This year, Royal Gold set many records. The company reported $499 million in revenue, which is an increase of 18% over its 2019 reporting of $423 million. With operating cash flow at $341 million and earnings per share at $3.03, Royal Gold set a record in each of these fronts. As far as its balance sheet goes, Royal Gold had $18.7 million net cash position in 2020, after paying down debt worth $115 million. Levine considers this impressive, particularly since the market was reeling under the Covid-19 crisis and the pandemic isn’t over yet. 

Pretium Resources and Eldorado Gold boast significant growth opportunities, albeit with a certain amount of risk. Royal Gold is for those who are less risk-prepared. There probably is something for every kind of investor in gold stocks. With a commission-free broker at your service, you can get started in stock trading without too much of a hesitation.

image of stock market bull

A Day of Gains on the Road to Record Highs for the Market

The major indexes pushed through for further gains, as quarterly earnings boosted investor confidence despite poor jobs data.

A Day of Gains on the Road to Record Highs for the Market

The ebb and flow of the stock market may not always concern long-term investors. But during challenging economic situations where there is a great deal of unpredictability, such as the present situation created by the coronavirus pandemic, you need to study the daily moves of the market, the stocks that matter and the various economic events and reports that could influence the performance of stocks and the movement of the market.

Quarterly Earnings Lift Stocks Despite Gloomy Jobs Report

The jobs report may have been gloomy, but the earnings from various companies have been so encouraging that it is helping push stocks higher. Wednesday, August 5 was when the Dow Jones gained around 353 points as a result of Disney ($DIS) shares soaring. There were also positive reports stating that there could be a new Covid-19 relief package. That also gave the bulls more juice for their optimism. The jobs report from ADP was disappointing though.

The S&P 500 rose by 22 points while the Nasdaq Composite gained 36 points. Reports by late Tuesday revealed that congressional Democratic leaders and the Trump administration had reached an agreement to get working on an aid bill by the week’s end. Even any differences in views would not stand in the way of a new aid deal.  

Earnings Better than Expected for Disney, Despite Loss

Quarterly results were better than expected for Walt Disney Co. despite reporting a loss of $3.5 billion. This was one of the main factors bringing about bullishness in the markets. Disney’s streaming platforms reported 100 million subscribers. This was to be expected, considering the pandemic has forced people to remain indoors. It still is remarkable because Disney faces stiff competition from other providers, particularly Netflix ($NFLX). Disney also announced that it would soon release the live-action version of its “Mulan” for $29.99 on Disney+. This is considered a novel approach to video streaming.

Shifting Between Two Sides Set to Continue

Delos Capital Advisors’ chief investment strategist Andrew Smith believes that the “choppy” action in the market we saw in the past few sessions is an indication that the market is looking to gravitate to the names associated with cyclical economic recovery. He believes that the shift between stocks benefiting from the pandemic, such as Amazon ($AMZN), and those at the opposite end of the spectrum is set to continue. It is actually a struggle between the major economic indicators and the ones that lag.

A Big Merger in the Healthcare Sector

The other big headline was from the healthcare sector. The merger between Teladoc Health ($TDOC) and Livongo Health ($LVGO) made the news on Wednesday. The $18.5 billion deal would create a company dealing with virtual care and a range of healthcare services.It would be interesting to see how the market continues on its recovery path in the days and weeks to come. The course of the pandemic would be something to closely observe. Meanwhile, direct access trading platforms and zero commission trading by experienced online broker-dealers would make it easier to get started in stock trading.

powered by MTBPRO
powered by MTB Pro
powered by MTB Pro
powered by MTB Pro