What does your bible morningstar say?Time to trim F. They don't make any profit! :)
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OT: Stock and Investment Talk
- Thread starter RU-05
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Morningstar report - 33 undervalued stocks for 2022. Some big/well-known names on the list:
www.morningstar.com
33 Undervalued Stocks for 2022
Here’s the new list of Morningstar’s top analyst picks for the fourth quarter.
FMV = $20
We are maintaining our Ford fair value estimate at $20. Our midcycle EBIT margin excluding equity income is about 5%. Operating margin excluding equity income is modeled over the five years to average 3.6%. We remain optimistic about new CEO Jim Farley longer term able to execute on cutting warranty costs and reducing vehicle design complexity to bring more scale. Leadership has often said that the company needs to be more physically fit. so Ford is in the midst of a multibillion restructuring program, mostly for Europe, India, and South America. We like that Ford is exiting or downsizing unprofitable businesses to focus on light trucks, off-road vehicles such as Bronco, and investing $30 billion on all-electric vehicles for 2020-25 with about half that amount in capital expenditures.
Headwinds include rising competition in China, higher commodity costs, foreign exchange pressures around the world, and the semiconductor shortage. Our midcycle total company operating margin including equity income and Ford Credit in 2025 is about 7%. Ford targets 8% on an adjusted basis in 2023, which we think it can beat if it improves warranty costs and is smart about not overproducing. We model nearly 9% for 2023. We model a more conservative number than 8% for the midcycle due to fierce, high-quality competition, threats of excess capacity, and the risk of cyclical downturns or other macroeconomic downturns negatively affecting profits in a capital-intensive industry, creating an inherent risk of management not meeting its target.
Our compound annual automotive revenue growth rate is about 9%, and we model North American market share holding steady in the low 13% range after 2021. We model capital expenditure at about 4.6% of automotive revenue on average and totaling $37 billion for 2021-25. We value Ford Credit at its most recent year-end book value. Our fair value estimate could change dramatically, given the extreme sensitivity of our discounted cash flow model to inputs such as North American light-vehicle sales, midcycle margins, and a WACC of 9.7%. We see uncertainty as to when improvement occurs as some variables such as steel and commodity costs and the semiconductor shortage are beyond management's control.
TSLA FMV = $700
Been on the bearish side for a while:
Raising Tesla FVE to $700 on Higher Near-Term Vehicle Volumes; Shares Remain Overvalued
Analyst Note | by Seth Goldstein Updated Jan 03, 2022
On Jan. 2, Tesla reported strong fourth-quarter and full-year vehicle delivery numbers. On the year, Tesla reported 936,172 vehicles delivered, which is up over 87% year on year versus 2020. We have updated our model to incorporate higher 2021 sales volumes and have raised our outlook for 2022. We forecast Tesla will deliver a little over 1.5 million vehicles in 2022, which represents over 60% year-on-year growth. Separately, we have decreased our 2022 gross margin forecast for Tesla as we expect increased production costs associated with the opening of the two new production plants in Austin, Texas, (U.S.) and in Berlin, Germany. Our long-term outlook is largely unchanged as we continue to expect Tesla's sales growth will slow.
Having updated our model to reflect these changes, we raise our Tesla fair value estimate to $700 per share from $680. Our narrow moat rating is unchanged. At current prices, we view Tesla shares as overvalued, with the stock trading in 2-star territory and more than 50% above our fair value estimate. The current stock price implies Tesla will become one of the top automakers globally in vehicles delivered by 2030. It also implies the company will expand profit margins through the reduction of unit production costs and widespread customer adoption of its high-margin autonomous driving software subscriptions. As such, we think much of the good news is already priced in as the stock trades closer to our bull case fair value estimate of $1,220 per share, versus our base case.
We also see potential downside catalysts for the stock. Falling profit margins from opening the new plants could weigh on market sentiment. Additionally, Tesla's Cybertruck delay will cause it to not be a first mover in the EV light truck market. Instead, the Cybertruck will immediately face competition from traditional automakers such as Ford and new entrants such as Rivian. As such, the Cybertruck could see slower initial sales, weighing on market sentiment.
Saw CRM on that list. CRM and ADBE downgraded to neutral by UBS recently. Price targets of 265 and 575 respectively.Morningstar report - 33 undervalued stocks for 2022. Some big/well-known names on the list:
33 Undervalued Stocks for 2022
Here’s the new list of Morningstar’s top analyst picks for the fourth quarter.
Don't understand that. Bad calls by UBS. Both companies are crushing it with earnings and growth.
Think the view is enterprise spending will be trimmed somewhat this year and their cloud growth will slow.
A couple blurbs from CNBC. I think PINS was brought up here too.
Adobe (ADBE) – The software maker slid 2.2% in the premarket after being downgraded to “neutral” from “buy” at UBS after the firm spoke with more than a dozen IT executives about their 2022 spending plans. UBS thinks more spending was pulled forward into 2020 and 2021 than is generally assumed.
Pinterest (PINS) – The image-sharing site’s stock added 1.7% in premarket trading after Piper Sandler upgraded it to “overweight” from “neutral”. Piper said the recent sell-off in the stock presents a good buying opportunity, with user trends improving and a stable mobile user base.
Not my wheelhouse but I think the analyst from Piper Sandler put a 53 price target on it and 60% upside.
If the sell off of the high flyers continue, they will all eventually become interesting.
Still think there is more selling to be done, just like the run up was overdone, expect the selloff to be overdone as well. Especially as interest rates rise.
TDOC looked to be the cheapest of the previous high flyers that I had found.
Edit: I take it back. PINS looks very good. Actually makes money. High P/E, but if they meet expectations fo the 4th qtr even that will look reasonable. P/R at 8ish isn't bad either(actually around where TDOC is, except they are not profitable). Growth projected to be strong.
Nice one.
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Went through the 50DMA easier than I thought but now I think there's much greater resistance and the 200DMA above. If it gets through that convincingly and holds that will be impressive.
It had an almost identical move last Feb, but then gave it all back by Dec. I have some fresh cash burning a hole in my brokerage account! Trying to stay patient on a few stocks.....SOFI, MTTR, PTRA, etc.
PINS and TDOC are interesting as well. Price to sales have come down a ton. What high fliers are you tracking?
V too about a 20% move. V, MA are my favorites in that space being the more conservative type.
I added some PINS at the open. May look at MTTR given current levels.
PINS fwd P/E looks to be 25ish. 30ish % earnings growth. PEG ratio looks to be around 1ish. They beat just about every qtr.
Pick of the week award goes to @RUAldo.
Edit: Damn, right at precovid highs from 2019 as well. 2019 revs were around $1.2B. 2021 revs around $2.6B. I'm in.
Pick of the week award goes to @RUAldo.
Edit: Damn, right at precovid highs from 2019 as well. 2019 revs were around $1.2B. 2021 revs around $2.6B. I'm in.
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MTTR under $18. The tech seems to have many applications.....real estate, construction.....and dare I say, metaverse! :)
I don't know what I don't know, but everything I'm looking at says PINS looks great here. SOFI has support here, but has failed to maintain a rally off that support including last weeks rally which it has now given all back. No earnings. More expensive on P/R.
Would love to hear from the more experienced investors on this. But PINS looks really good on the basic stuff I look at.
I own them both. I’ve been adding to SOFI on dips. I’m not sure it will rebound until 2H but I’m willing to wait. I think HD needs to buy PINS or do a major strategic deal like Lowes did with Houzz.
The numbers/rev certainly look better for PINS. Once the latest tech rotation ends, it may quickly 2x due to the overselling.
Aside from Chamath selling out of SOFI, I’ve read that Biden’s extension of the federal student loan repayment moratorium until May 1, 2022 adversely impacted SOFI given their student loan line of business.
I saw you say this the other day and I was scratching my head on who HD was. Home Depot buying PINS didn't make sense, so figured there most be another HD, but wasn't aware of the Lowes deal.
I wouldn't buy it off that possibility, but it's a potential sweetener to what already looks like a good buy.
I’m just spit-balling on the HD/PINS idea. Probably little to no chance of that happening and I have no idea how the Lowes/Houzz deal has worked out. I bought PINS today mainly because at these levels it was hard to pass up. But I def don’t have the same conviction like I did with T at $22.
T was at historic lows so that looked safe. I see that as a trade of sorts.
PINS could be a better buy and hold.
I had the same reaction as you and thought to myself I'm probably just too dumb to see the vision and kept my mouth shut lol.
It’s all about the vision…LOL…although HD/PINS is def a stretch, unlike my prediction that in the next two years Apple (or Amazon) buys the WM/Disc spin-off. Apple would dominate the streaming and movie industry with that deal.
Should have bought back my NKLA Jan 7th calls yesterday when they were $2. Could have sold next weeks at a nice premium based off todays price jump.
I'm down a bit on my NKLA holdings but selling calls has been easy money. Just need to do a better job managing it.
I'm down a bit on my NKLA holdings but selling calls has been easy money. Just need to do a better job managing it.
I was thinking to myself your Apple WM/Disc tie up has a better chance of happening than HD/PINS lol. I wouldn't rule out an Amazon though. I find that to be somewhat realistic given their MGM acquisition and other forays into content. Apple could use WM/Disc and have the cash but I just don't see their management being so bold given their history of deals.
VIAC is another domino to fall in the next two years. I can see M&A generally picking up in 2Q. I think the content ownership buzz will start up again soon. My strongest argument for the Apple/WM/Disc deal is Apple would instantly have the deepest and highest quality content library in the industry. HBOMax blew past 70M subs. Plus, the WBros movie studio is a stone throw away from Apple HQ and consolidate production there.
Apple is sitting on $200B in cash and management’s biggest deal to date was Beats (I think). I would like to see Apple either buy WM/Disc…or perhaps grab an EV maker to make it interesting? At some point phones and wearables will level off.
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