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S&P 500 flat after hitting new yearly low, Nasdaq in the red

2022-09-28 13:50:07 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how markets opened on Wednesday.


QQQ ETF Risks and Rewards

2022-09-28 08:36:29 by Investopedia

The QQQ ETF attracts traders who want exposure to the tech sector. But are the risks and rewards worth it? We answer your QQQ questions here.


10 Best ETFs to Diversify Your Portfolio and Avoid Risks

2022-09-23 17:37:33 by Hamna Asim from Insider Monkey

In this article, we discuss 10 best ETFs to diversify your portfolio and avoid risks. If you want to see more exchange traded funds in this list, click 5 Best ETFs to Diversify Your Portfolio and Avoid Risks

The importance of ETFs has redoubled in 2022 as the stock market takes a beating amid volatility, inflation and rate hikes. ETFs are managed by professionals who closely monitor changes at the stock market, and adjust the underlying portfolios and asset weights accordingly. Most ETFs also offer attractive distribution yields, as well as exposure to the biggest names in the market like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), at relatively affordable prices.

A Bloomberg report dated September 9 reveals that Neuberger Berman, a private investment management firm, is planning to convert its only US commodity mutual fund into an exchange traded fund. Neuberger is the latest asset manager to jump on this ETF trend, and will likely pour around $1 trillion into the ETF universe with this move. The Neuberger Berman Commodity Strategy Fund, with $233 million in net assets, will be converted to an actively managed ETF in the fourth quarter of 2022. One of the primary reasons for the conversion is the lower-cost and more tax-efficient nature of ETFs. 

Money managers have been exiting emerging market ETFs rapidly, fearing a strong US dollar. Investors withdrew $1.21 billion from US-listed ETFs that invest in developing economies and emerging countries in the week ended September 2, and this was the highest pull back since May 2020, according to data presented by Bloomberg. This is why it is important to assess new market dynamics frequently and invest accordingly when one wants to diversify portfolios and avoid risks. 

10 Best ETFs to Diversify Your Portfolio and Avoid Risks Photo by Adam Nowakowski on Unsplash

Our Methodology 

We explored ETFs that offer exposure to multiple sectors of the economy, both value and growth plays, large and small-cap equities, and dividend stocks for a well-rounded outlook of some of the top funds listed on US exchanges. We have also discussed the top holdings of the ETFs to offer better insight to potential investors. 

Best ETFs to Diversify Your Portfolio and Avoid Risks 

10. Vanguard Real Estate Index Fund (NYSE:VNQ)

Vanguard Real Estate Index Fund (NYSE:VNQ) invests primarily in real estate investment trusts (REITs) that own and operate office buildings, hotels, residential properties, and other real estate. The ETF tracks the total returns of the MSCI US Investable Market Real Estate 25/50 Index. As of May 27, Vanguard Real Estate Index Fund (NYSE:VNQ) offers an expense ratio of 0.12%, while the average expense ratio of similar funds is 1.05%. The ETF holds 167 stocks in its portfolio, and as of August 31, the median market cap stands at $26.6 billion. Vanguard Real Estate Index Fund (NYSE:VNQ)’s total net assets were $72 billion as of late August. 

A top holding of Vanguard Real Estate Index Fund (NYSE:VNQ) is American Tower Corporation (NYSE:AMT), one of the largest global REITs that operates multi-tenant communications real estate. JPMorgan analyst Philip Cusick on September 8 reiterated an Overweight rating on American Tower Corporation (NYSE:AMT) with a $305 price target after meeting with CFO Rod Smith. The analyst had "incrementally positive views" on the U.S., Europe, and Asia-Pacific businesses of American Tower Corporation (NYSE:AMT), and he was "encouraged" by trends in Latin America and Africa as well. The U.S. services business appears "poised to remain strong" in the next year with the carriers benefiting from American Tower Corporation (NYSE:AMT)’s "value-added offerings," the analyst tells investors in a bullish thesis.

According to Insider Monkey’s data, 52 hedge funds were long American Tower Corporation (NYSE:AMT) at the end of Q2 2022, compared to 50 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with approximately 7 million shares worth $1.78 billion. 

Like Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), elite hedge funds are bullish on American Tower Corporation (NYSE:AMT). 

Here is what Baron Real Estate Fund has to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:

“American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”).

In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.”

9. Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD)

Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) tracks the performance of the S&P 500 Low Volatility High Dividend Index. The fund invests at least 90% of its total assets in the 50 securities in the benchmark index that have historically offered high dividend yields and low volatility. As of September 21, the SEC 30 day yield of Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD) is 4.58%, and the fund offers a total expense ratio of 0.30%. The ETF has an average market cap of $75.5 billion. The portfolio comprises stocks from the utilities, real estate, consumer staples, financials, materials, energy, and communications services sectors, among others. It is one of the best ETFs to diversify a portfolio, as investors are seeking refuge in low volatility yet high income stocks. 

Altria Group, Inc. (NYSE:MO) is the biggest holding of the Invesco S&P 500 High Dividend Low Volatility ETF (NYSE:SPHD), representing 3.14% of the total portfolio. Altria Group, Inc. (NYSE:MO) is an American company that manufactures and sells smokable and oral tobacco products in the United States. On August 25, Altria Group, Inc. (NYSE:MO) declared a $0.94 per share quarterly dividend, a 4.4% increase from its prior dividend of $0.90. The dividend is distributable on October 11, to shareholders of record on September 15. The company delivered a dividend yield of 8.69% on September 22. 

According to the second quarter database of Insider Monkey, 48 hedge funds held stakes worth $1.8 billion in Altria Group, Inc. (NYSE:MO), up from 47 funds the prior quarter worth $1.95 billion. Arrowstreet Capital is the leading position holder in the company, with 8.86 million shares valued at $370.3 million. 

Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:

“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.

MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”

8. Vanguard 500 Index Fund (NYSE:VOO)

Vanguard 500 Index Fund (NYSE:VOO) is one of the best ETFs to diversify a portfolio and avoid risks. The fund invests in stocks in the S&P 500 Index, which represents 500 of the largest American companies. Vanguard 500 Index Fund (NYSE:VOO) offers an expense ratio of 0.03% as of the end of April. The ETF is a feasible investment for long-term investors who want to grow their money. On August 31, the median market cap stood at $168.5 billion.

Apple Inc. (NASDAQ:AAPL) is the biggest holding of Vanguard 500 Index Fund (NYSE:VOO), with the stock representing 7.16% of the total portfolio. On September 20, Evercore ISI analyst Amit Daryanani raised the price target on Apple Inc. (NASDAQ:AAPL) to $190 from $185 and reiterated an Outperform rating on the shares, noting that demand for high-end iPhone models is "notably higher" compared to prior years. 

According to Insider Monkey’s Q2 data, Apple Inc. (NASDAQ:AAPL) was part of 128 hedge fund portfolios, compared to 131 in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with a position worth more than $122 billion. 

In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.”

7. Invesco S&P 500 GARP ETF (NYSE:SPGP)

Invesco S&P 500 GARP ETF (NYSE:SPGP) seeks to track the investment results of the S&P 500 Growth at a Reasonable Price Index. The underlying index comprises roughly 75 stocks from the S&P 500 that have been categorized as having the largest “growth scores” and “quality and value composite scores”. Invesco S&P 500 GARP ETF (NYSE:SPGP) has an average market cap of roughly $138 billion as of the end of June 2022, and the total expense ratio on September 21 came in at 0.33%. It is one of the best ETFs to diversify a portfolio and avoid risks in this market environment. 

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a New York-based manufacturer of medicines for multiple diseases, holds the leading position in Invesco S&P 500 GARP ETF (NYSE:SPGP)’s portfolio. On September 16, Canaccord analyst John Newman raised the price target on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) to $750 from $700 and maintained a Buy rating on the shares, citing successful preliminary trial results from its collaboration with Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). 

Among the hedge funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies is the biggest stakeholder of the company, with 583,062 shares worth $344.6 million. Overall, 44 hedge funds were bullish on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) at the end of June 2022, with collective stakes worth $1.60 billion. 

In addition to Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Johnson & Johnson (NASDAQ:JNJ), Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the stocks on the radar of smart investors. 

Oakmark Funds shared its stance on Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q2 2021 investor letter. Here is what the investment management firm said:

“We restored Regeneron Pharmaceuticals from a rather trivial to a more normal position size. You may recall Regeneron performed well for the Fund during the Covid-19 crisis, so we significantly reduced our position as its price-value gap narrowed. During the past several quarters, however, the market has experienced the now infamous “reopening trade,” in which companies that performed well during the pandemic trailed as the economy reopened. Regeneron suffered a similar fate and its shares have lagged the S&P 500 by roughly 4000 basis points, despite the company’s strong fundamentals and robust pipeline of new products. The underperformance widened Regeneron’s price-value gap, so we restored it to a more normal position size.”

6. Invesco QQQ Trust (NASDAQ:QQQ)

Invesco QQQ Trust (NASDAQ:QQQ) tracks the NASDAQ-100 Index and ranks in the top 1% of large-cap growth ETFs. Invesco QQQ Trust (NASDAQ:QQQ)’s performance has historically outperformed the S&P 500 Index. The fund exposes investors to long-term investment themes like augmented reality, cloud computing, big data, online streaming, electric vehicles, and more. As of September 21, Invesco QQQ Trust (NASDAQ:QQQ) reported $157.21 billion in assets under management. 

Microsoft Corporation (NASDAQ:MSFT) is one of the premier holdings of Invesco QQQ Trust (NASDAQ:QQQ). On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly dividend of $0.68 per share, a 10% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record on November 17. In a recent interview with Bloomberg, Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella reiterated his confidence that the $69 billion deal to acquire Activision Blizzard will get approved by regulators in the United Kingdom. It is Microsoft's largest acquisition ever.

Among the hedge funds tracked by Insider Monkey, Microsoft Corporation (NASDAQ:MSFT) was part of 258 public stock portfolios, with collective stakes worth $56 billion. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with a stake valued at $7.36 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)

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Disclosure: None. 10 Best ETFs to Diversify Your Portfolio and Avoid Risks is originally published on Insider Monkey.


Stocks slip following Fed-induced sell-off

2022-09-22 15:24:09 by Yahoo Finance Video

Yahoo Finance's Jared Blikre breaks down how stocks are moving after the Fed's interest rate hike on Wednesday.


Stocks fall on possibility of 75-basis-point Fed rate hike

2022-09-16 15:13:46 by Yahoo Finance Video

Yahoo Finance's Ines Ferré breaks down how stocks are moving near the close of the week, consumer sentiment, and ExxonMobil's market cap nearing that of Meta.


Tech giants have bigger problems than rising interest rates: Morning Brief

2022-09-16 10:00:24 by Julie Hyman from Yahoo Finance

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Friday, September 16, 2022

Today's newsletter is by Julie Hyman, anchor and correspondent at Yahoo Finance. Follow Julie on Twitter @juleshyman.

Another day, another tumble in tech stocks.

The disproportionate shellacking the sector has suffered recently has raised questions about why, exactly, technology is seemingly so vulnerable to rising interest rates. 

The answer? Rate hikes are far from tech's only problem.

Traditionally, rising rate periods have implications for many sectors — not just tech. When rates go up, it costs more for companies to borrow money to finance their businesses. It can also mean consumers have less disposable income because they, too, are paying more for mortgages and cars and credit cards. That latter point is especially pertinent now. Not only are homebuyers paying more than 6% interest for a 30-year mortgage for the first time since 2008 — they’re doing it while paying 13.5% more for groceries than a year ago.

In other words, we’re seeing the double whammy of inflation and rising interest rates. While the Federal Reserve has been raising rates to tamp down on inflation, the central bank still has a long way to go. Data released on Tuesday revealed that inflation remains high at 8.3%, though it moderated slightly in August.

Of course, this environment has taken its toll on the broader market. The S&P 500 has fallen 17% this year, beginning its decline before the Federal Reserve began raising interest rates on March 16.

Still, tech has gotten slammed harder. The S&P Info Tech Index — whose members include tech giants such as Apple (AAPL) and Microsoft (MSFT) — has fallen 25% this year. The Communications Services group, with Netflix (NFLX) and Apple (AAPL), has fallen even further — by 33%.

Netflix Co-CEO Ted Sarandos accepts the 2022 Economic Development Visionary Award during the Hollywood Chamber of Commerce 2022 Economic Development Summit in Los Angeles, California, U.S., August 25, 2022. REUTERS/Mario Anzuoni
Netflix Co-CEO Ted Sarandos accepts the 2022 Economic Development Visionary Award during the Hollywood Chamber of Commerce 2022 Economic Development Summit in Los Angeles, California, U.S., August 25, 2022. REUTERS/Mario Anzuoni
Mario Anzuoni / reuters

Let’s leave aside the modeling and nitty-gritty calculation of higher financing costs and whether Netflix is paying more to service its debt than energy companies (the best S&P 500 performers this year).

Some of tech’s underperformance might come down to vibe. Speaking to Yahoo Finance's Brian Sozzi this week, Goldman Sachs Managing Director Eric Sheridan pointed out that tech is an inherently risky sector — and right now, investors crave safety because they're uncertain of the Fed's next moves.

“At the end of the day, what tech investors want is visibility into a calm economic environment,” Goldman Sachs Managing Director Eric Sheridan told our Brian Sozzi at his firm’s tech conference this week. In order for tech stocks to do well, he added, “You really need a stable macro environment where people feel comfortable putting more risk back on in their portfolio.”

It’s not just about feelings, though. Technology companies across the spectrum have seen lower demand recently as COVID-19 has eased and inspired consumers to re-join the physical world. Investors have had to readjust their expectations for the future growth of companies like Netflix and Meta (META).

Semiconductor makers have been hit in particular as they’ve struggled to adjust to the tightness in supply brought on during the pandemic, followed by the unwinding of that trend.

Paul Meeks, a veteran tech investor and portfolio manager at Independent Solutions Wealth Management, told Yahoo Finance that semiconductors are a key reason he’s underweight tech right now

While Meeks believes in tech in the long term, he contends the current inventory correction puts them at risk right now. “I’m really worried now, because the key driver for the tech sector is semiconductors. The semiconductor stocks are in peril," he said. “Semiconductor companies will be required to lead us out, and unfortunately, they are really sagging here. I don’t see near-term relief.”

While inflation and interest rates are two problems for tech, they’re clearly not the only challenges the sector faces right now. In the short term, at least, investors might continue to stay away.

What to Watch Today

Economic calendar

  • 10:00 a.m. ET: University of Michigan Consumer Sentiment, September preliminary (60.0 expected, 58.2 during prior month)


  • Manchester United (MANU)

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The 7 Best Retirement Stocks for Gen-Z Investors

2022-09-13 17:22:53 by Larry Ramer from InvestorPlace

When choosing the best retirement stocks for Gen-Z investors, I selected the shares of rapidly growing companies that have exceptionally strong products, face little competition and are either profitable or very well-positioned to become profitable.

When picking stocks that you intend to buy and hold for decades, it’s important to identify companies that have excellent chances of generating great financial results for many years.

Firms that are on top of their sectors, face little competition and are already in the black are quite likely to increase their top and bottom lines by huge amounts over the years.

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Additionally, I selected companies whose technology is great. Of course, we live at a time when amazing, life-changing technologies, such as self-driving vehicles, artificial intelligence, green hydrogen, huge wind-energy turbines, and the cloud   – are proliferating tremendously.

The stocks of the companies that successfully exploit those technologies are likely to climb a great deal for many decades to come.

ROKU Roku  $68.06
NOW ServiceNow’s $454.40
TAN Invesco Solar ETF $87.98
LIT Global X Lithium & Battery Tech ETF  $0.06
STEM Stem’s $16.80
GOOG Alphabet’s  $107.11
DNNGY Orstedm  $32.53

Roku (ROKU)

A close-up shot of a hand holding a TV remote with a blurred screen in the background.Source: Shutterstock

Roku (NASDAQ:ROKU) is one of the best retirement stocks for Gen-Z investors because the company has a leading streaming TV operating system, and streaming TV’s share of the overall TV market continues to grow. In July U.S. consumers spent more time streaming video than on any other TV activity for the first time ever.

Since advertisers tend to “follow the eyeballs,” Roku is very well-positioned to, over the long-term, generate a tremendous amount of ad revenue. Roku’s impressive partners show how alluring its platform is for large marketers.

Among the huge marketers that ally with Roku are Walmart (NYSE:WMT), Best Buy (NYSE:BBY) and Warner Bros. Discovery’s (NASDAQ:WBD) HBO Max.

On the technology front, Roku allows marketers to use interactive ads, combining the high entertainment value of conventional TV and the interactivity and measurability of internet ads.

Although I haven’t been a big fan of Cathie Wood’s over the last couple of years, I agree with her bullish thesis on ROKU stock.

In her “base-case” scenario Roku’s revenue will grow at a rapid, average annual rate of 39% through 2026. ARK’s base-case scenario also calls for Roku’s EBITDA margin, excluding certain items, to reach a strong 29% in 2026, up from 17% in 2021.

ServiceNow (NOW)

ServiceNow office building in Silicon Valley;Source: Sundry Photography /

ServiceNow’s (NASDAQ:NOW) software enables companies to accomplish certain tasks automatically that used to have to be carried out by IT employees.

As a result, the company allows its clients to “drive better productivity, greater efficiency and cost savings,” in the words of its CFO, Gina Mastantuono. In good, bad and mediocre economic times, many companies will be happy to buy products that save them money.

So it’s not at all surprising that the CFO last month stated that the company was continuing to benefit from vigorous demand and a “strong pipeline.”

Although Mastantuono reported that it’s taking ServiceNow longer to close some deals, she reiterated the company’s previous 2022 guidance. And if NOW meets that guidance, its subscription revenue will jump 24% this year versus 2021. Given that strong growth outlook, I believe that competition is not a major problem for NOW.

Meanwhile, analysts, on average, expect the company’s earnings per share to come in at a robust $9.24 next year, showing that the firm is generating strong profits.

Invesco Solar ETF (TAN)

Solar penny stocks: Piggy bank in front of solar panel infrastructureSource: Shutterstock

Under the health and energy spending bill passed by Congress last month, 30% of all the money spent on solar projects in the U.S. will be refunded in the form of tax credits for both businesses and individuals.

That’s up from a 26% tax credit in 2021, and the credit had been scheduled to gradually fall over time. Moreover, the 30% tax credit will be intact for a record amount of time: ten years.

All of the components of the Invesco Solar ETF (NYSEARca:TAN) will benefit from that provision for many years.

Geopolitical issues in Europe are meaningfully boosting the sales of the many solar companies with TAN that sell their products to customers on that continent.

With the EU’s efforts to diversify away from fossil fuels in general and Russian gas in particular likely to continue, TAN stock is definitely one of the best retirement stocks for Gen-Z investors.

Global X Lithium & Battery Tech ETF (LIT)

Lithium element on the periodic table. Lithium stocks.Source: tunasalmon / Shutterstock

The Global X Lithium & Battery Tech ETF (NYSEArca: LIT) is one of the best retirement stocks for Gen-Z investors.

Earlier this month research firm Benchmark estimated that the “Demand for lithium-ion batteries is set to grow six-fold by 2032.” As a result, the firm estimates that 300 additional lithium mines have to be built between now and 2035 to keep pace with demand.

In other words, both lithium miners and lithium battery makers are going to be able to sell as much as they produce for years and decades to come. That, of course, is great news for companies that mine lithium and firms that produce lithium-ion batteries, as both types of companies are poised to benefit from insatiable demand and high prices for the foreseeable future.

Stem (STEM)

A vector illustration of a battery with neon lines swirling it; forever batterySource: MarySan / Shutterstock

Stem’s (NYSE:STEM) software utilizes artificial intelligence (AI) to maximize the utility of electricity storage systems and batteries. It also offers solar energy monitoring systems.

Given the rapidly increasing popularity of battery storage systems and solar energy, Congress’ recent authorization of tax breaks for many types of such systems for the first time, and the electrification of transportation, STEM is well-position to benefit from very strong demand for its products.

Other positive catalysts for Stem and STEM stock are the increased complexity of the grid in light of the increased use of renewable energy and higher electricity prices both in the U.S. and Europe. Moreover, all of those trends are poised to continue for many years to come.

Stem’s top line soared 2.5 times YOY last quarter to $67 million, while the company raised its 2022 bookings guidance to a record $775 million-$950 million from $650 million-$750 million. At the midpoint of the new range, the company’s bookings would jump over 20% versus 2021.

Clearly, Stem’s business is growing very rapidly. Analysts, on average, expect the company to become profitable in 2024.

Alphabet (GOOG)

Alphabet Inc. (GOOG, GOOGL) and Google logos seen displayed on smartphones. The Google stock split is happening today.Source: IgorGolovniov /

Alphabet’s (NASDAQ:GOOG) ad business revenue climbed 12.6% YOY last quarter, while even its operating income increased a bit YOY, reaching $19.45 billion.

Google Search’s top line jumped an impressive 13.5% YOY, showing that, unlike Meta (NASDAQ:FB) and Snap (NYSE:SNAP), Google ads are a “must-have” for advertisers.

Google Cloud is clearly gaining market share and becoming a meaningful part of Alphabet’s revenue, as the unit’s top line soared 35.6% YOY.

Using a sum-of-the-parts-valuation method that gives Google Cloud a value of $339 billion, Seeking Alpha columnist Julian Lin estimates that GOOG stock is worth “at least $144 per share. versus the company’s current share price of $112.

Moreover, in the decades to come, the company’s Waymo self-driving unit and its Google Fiber business, which should take market share away from existing internet service providers, are well-positioned to generate significant revenue and profit for the company.

Orsted (DNNGY)

Orsted factory and logoSource: oleschwander /

In a previous column, published in May, I predicted that Orstedm (OTC:DNNGY) would be a big beneficiary of Europe’s need to obtain new sources of electricity.

That thesis already appears to be playing out, as the offshore wind energy company’s EBITDA soared 48% YOY to $1.55 billion dollars. Orsted more-than doubles raised its EBITDA guidance.

Orsted continues to win impressive new deals, make needle-moving acquisitions and move into additionallucrative types of renewable energy.

In July, the company won a deal to build a 2.85-gigawatt offshore wind project, Hornsea 3, off the coast of the UK. The project will become “the world’s single biggest offshore wind farm,” according to the firm. And in April, Orsted was awarded  New Jersey’s 1.2 gigawatt offshore wind project.

Finally, one of Orsted’s joint ventures has won a contract to provide an 880-megawatt offshore wind project to New York.

Last year, the company acquired an Irish onshore wind energy firm, entering the European onshore wind energy market. Moreover, it has “signed an agreement to acquire the German and French onshore developer, Ostwind”. and it has formed four partnerships to enter the Spanish onshore-wind market.

Orsted has entered the red-hot green hydrogen sector, and it’s developing a large-scale green jet fuels project in its home market of Denmark.

On the macro front, Orsted is set to get a big boost from both new wind-energy tax breaks in the U.S.  and a deal by the governments of  Denmark, Germany, Belgium and the Netherlands to create “at least 150 gigawatts of offshore wind [in the North Sea] in 2050.”

On the date of publication, Larry Ramer held a long position in STEM. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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3 Best Index Funds to Buy Now

2022-09-13 15:50:55 by Joel Baglole from InvestorPlace

The modern exchange-traded fund (ETF) was invented in 1975 by John Bogle, who founded the investing firm Vanguard Group. Today, it has more than $7 trillion of assets under management.

Bogle noticed that most money managers failed to beat the annual return of the stock market. He concluded that if investors can’t beat the market return through stock picking, they should give up and simply track the performance of the market itself. Rather than pool a bunch of stocks together in a mutual fund, Bogle devised a way to track and approximate the market’s overall performance. Thus, the ETF industry was born.

Today, the industry exceeds a value of $10 trillion. Perhaps best of all, the passive investing style of ETFs lead to much lower fees and costs than actively managed mutual funds. Given the benefits of ETFs, it should come as no surprise they remain a preferred investment vehicle.

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Here are three of the best index funds to buy now.

Best Index Funds to Buy: iShares U.S. Energy ETF (IYE)

Blocks spelling out index fundsSource: Dmitry Demidovich / Shutterstock

Oil and gas stocks have been the lone bright spot in the overall market this year. With crude oil prices as high as $110 per barrel this summer, its highest level since the market collapsed in 2014 and 2015, stocks of major oil and gas companies have skyrocketed.

Shares of Occidental Petroleum (NYSE:OXY) are up 108% year-to-date (YTD), Exxon Mobil (NYSE:XOM) stock is up 51% and Devon Energy’s (NYSE:DVN) share price has gained 52%. All this occurred while both the S&P 500 and Nasdaq indexes fell into a bear market. For this reason, investors may want to add some exposure to the oil and gas sector to their portfolio through a leading energy ETF.

Among ETFs that cover the oil and gas industry, the iShares U.S. Energy ETF (NYSEARCA:IYE) is the very best in terms of the coverage and diversification it offers, as well as the fees it charges. With the IYE, investors get exposure to most of the major oil production and exploration companies in the U.S.

In addition to the aforementioned oil stocks, the IYE ETF also includes Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP) and Marathon Oil (NYSE:MRO), to name only a few. The fund is up 65% over the past year, pays a quarterly dividend of 34 cents per share and charges a management fee of 0.41%.

Vanguard 500 Index Fund (VOO)

image of vanguard website to represent index funds to buySource: Shutterstock

Perhaps the best ETF to track the overall market, the Vanguard 500 Index Fund (NYSEARCA:VOO) mirrors the performance of the benchmark S&P 500.

The nice thing about this index is that, owing to its size, it includes stocks that have small, mid-sized and large market capitalizations and provides built-in diversification to investors. Some of the most prominent investors of all-time, including Vanguard founder John Bogle and Berkshire Hathaway (NYSE:BRK-B) chief executive Warren Buffett, urge most investors to focus on an ETF that tracks the S&P 500.

“I recommend the S&P 500 index fund and have for a long, long time to people,” said Buffett at Berkshire Hathaway’s annual meeting in 2021. In fact, VOO is one of the few ETFs that Buffett holds within Berkshire’s massive stock portfolio that is worth more than $300 billion.

With Vanguard’s S&P 500 ETF, investors gain exposure to many of the largest and best-performing stocks in the world. The fund’s top 10 holdings include blue-chip names such as Apple (NASDAQ:AAPL), Johnson & Johnson (NYSE:JNJ), UnitedHealth (NYSE:UNH) and Berkshire Hathaway. It provides an enormous amount of diversification across economic sectors that include health care, real estate, energy, technology and consumer discretionary stocks.

While VOO is down almost 17% this year at $365 per share, the drop reflects the fact that the S&P 500 index itself is down this year. But over 10 years, the fund has gained 14.36%. And best of all, Vanguard’s S&P 500 ETF is extremely affordable to own, with an expense ratio of only 0.03%.

Best Index Funds to Buy: Invesco QQQ Trust (QQQ)

an LED display of stock tickers has big white letters spelling Index Funds to buySource: Shutterstock

Technology stocks are down this year, but they’re far from out. Many of the best-run and most profitable companies in the world are in the technology space, including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) and Nvidia (NASDAQ:NVDA).

Long-term technology stocks can be expected to rebound and thrive, especially the market-leading names in the space. One of the best ways for investors to gain exposure to technology stocks and innovation is by investing in the Invesco QQQ ETF (NASDAQ:QQQ), which tracks the Nasdaq 100 index that is comprised of the largest tech stocks by market weighting.

Often referred to as the “Triple Q” or simply the “Q,” the Invesco QQQ Trust gives investors access to the aforementioned tech giants, as well as stocks such as Apple, Amazon (NASDAQ:AMZN), Tesla (NASDAQ:TSLA) and Meta Platforms (NASDAQ:META). The QQQ ETF is down 26% year-to-date at $297 per share, mirroring the decline in the Nasdaq. But over the last decade, the Invesco QQQ Trust has delivered a 20% return to investors.

The expense ratio is also relatively affordable at 0.2%. Additionally, the QQQ is one of the best known and largest ETFs available to investors, with assets under management of $168 billion.

On the date of publication, Joel Baglole held long positions in MSFT, NVDA, GOOGL and AAPL. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.  

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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7 A-Rated Tech Stocks to Buy and Hold Now

2022-08-18 17:44:10 by Louis Navellier and the InvestorPlace Research Staff from InvestorPlace

As they lagged expectations, tech stocks have been one of the biggest stories of the stock market for the last few months. But have you noticed that tech is starting to finally turn around?

The Investo QQQ ETF (NASDAQ:QQQ) which tracks tech stocks is down 19% so far in 2022, but it’s gained more than 16% over the last two months. The Technology Select Sector SPDR Fund (NYSEARCA:XLK) dropped 13% since Jan. 1, but gained 16.6% in the last two months.

Tech stocks have long been a reliable source of solid returns and can be great momentum plays in good times. Now that tech is threatening to return to its winning ways, this may be an outstanding time to pick up A-rated tech stocks for the long term.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Here are seven for buy-and-hold investors.

BCOR Blucora $23.11
EXLS ExlService Holdings $178.44
SWCH Switch $34.02
KBR KBR $52.49
PDFS PDF Solutions $27.28
QLYS Qualys $155.57
PSN Parsons Corporation $42.62

Blucora (BCOR)

Stacks of coins hold up wooden blocks that spell out Source: Shutterstock

Perhaps nothing creates more anxiety for the general population every quarter and every year like taxes. If you mess up your taxes it could have both civil and criminal consequences, not to mention huge penalties.

That’s where Blucora (NASDAQ:BCOR) comes in. Blucora provides a suite of products and services that help people accurately file their taxes and identify potential deductions.

It also helps people use their tax data to for wealth management. Blucora owns TaxAct tax preparation software, and the HD Vest financial services firm.

Earnings for the second quarter included earnings of $256.88 million and adjusted earnings of 99 cents per share. Both were better than analysts’ expectations of $256.67 million revenue and 95 cents EPS.

The company is projecting full-year revenue of $892.5 million to $916 million, and EPS of $1.71 to $1.90 per share. The consensus analyst estimate is $1.83 per share.

BCOR stock has an “A” rating in the Portfolio Grader.

ExlService Holdings (EXLS)

An image of different icons stacked on top of eachother; clock, graph, bank, shield, phone, money, wifiSource: Zapp2Photo/Shutterstock

ExlService Holdings (NASDAQ:EXLS) is a holding company for New York-based EXL Service, which is an analytics and digital services company that works in insurance, banking and financial services, healthcare, media, and other industries.

It handles everything from finance and accounting to legal services, customer services and bill collection.

Earnings for the second quarter were outstanding. Revenue of $346.78 million, versus expectations of $329.68 million. Earnings of $1.50 per share were also better than analysts’ predictions of $1.32.

Even better, EXLS projected full-year earnings of $5.60 to $5.80 per share, with a midpoint better than the analysts’ consensus EPS projection of $5.57.

EXLS isn’t one of the tech stocks that will make a move soon. It isn’t waiting for the tech stock turnaround – its already moving up. ExlService us up 23% so far this year, including a 22% jump over the last 30 days.

Not surprisingly, EXLS stock has an “A” rating in my Portfolio Grader.

Switch (SWCH)

Binary code dataSource: carlos castilla/Shutterstock

With the internet becoming even more important for businesses following the outbreak of the Covid-19 pandemic, Las Vegas-based Switch (NYSE:SWCH) looks to be in a strong position.

The company says it has more than 700 issued and pending patents covering data center designs – and data centers, of course, are critical pieces of internet infrastructure, as they house storage systems, services and routers.

Earnings for Q2 were solid, as the company reported a beat on revenue by posting $168.19 million versus analysts’ estimates of $166.78 million. Earnings came in at $1.51 per share versus estimates of $1.46 per share.

Switch stock is up a strong 18% so far in 2022, making it one of the tech stocks to watch and helping give it an “A” rating in the Portfolio Grader.


smartphone displaying the KBR (KBR) logoSource: IgorGolovniov/

Formerly known as Kellogg Brown & Root, KBR (NYSE:KBR) is a spin-off of the oil company Halliburton (NYSE:HAL). It  went public in 2006.

KBR operates in the aerospace, defense, industrial and intelligence industries, and worked with NASA to launch the James Webb Space Telescope, which is the most powerful space telescope launched.

KBR also worked with the U.S. government in several hot spots around the world. It built sections of the U.S. Navy base in Guantanamo, Cuba; it built the U.S. embassy in Kabul, and it supported U.S. Marines serving in Iraq.

Despite an up-and-down 2022, KBR stock is up nearly 10% on the year. Earnings in Q2 were a mixed bag, beating on earnings per share (76 cents EPS versus analysts’ estimates of 65 cents) but missing on revenue ($1.62 billion versus analysts’ estimates of $1.64 billion).

This is one of the tech stocks with a strong position in the defense and aerospace industries. That, plus its market-beating performance in 2022, helps give it an “A” rating in the Portfolio Grader.

PDF Solutions (PDFS)

AI. Circuit board. Technology background. Central Computer Processors CPU concept. Motherboard digital chip. Tech science background. Integrated communication processor. 3D illustration representing semiconductor stocksSource: Shutterstock

Interestingly, PDF Solutions (NASDAQ:PDFS) doesn’t have anything to do with the portable document format, or PDF, that was created by Adobe (NASDAQ:ADBE) and widely used in business. Instead, PDF Solutions works with software that semiconductor manufacturers use to increase profits and output from their facilities.

The shortage of semiconductors weighed heavily on that segment as well as PDF Solutions in the first half of the year, with the stock down by nearly 40% by late June. But a big rally over the last few week has PDFS stock down now only 14% in 2022, with all indications there’s plenty more to come.

Earnings in the second quarter were more than promising, coming in at $34.67 million in revenue and EPS of 11 cents – both better than analysts’ estimates of $33.75 million and EPS of 7 cents.

Like the other names on this list, PDFS stock has an “A” rating in the Portfolio Grader.

Qualys (QLYS)

A Qualys sign hanging on a corporate office in Silicon Valley.Source: Michael Vi /

Qualys (NASDAQ:QLYS) is a software-as-a-service (SaaS) company, meaning its customers license software online by a subscription rather than buying licenses to install on individual computers.

With more than 10,000 customers in 130 countries, Qualys provides vulnerability management solutions that detects potential problems on servers, networked devices, printers and work stations – anything that has its own IP address.

More than 60% of the Forbes Global 50 companies work with Qualys, and the company notably has partnerships with Amazon (NASDAQ:AMZN) Web Services, Microsoft (NASDAQ:MSFT) Azure and Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud.

Earnings for the second quarter included revenue of $119.89 million and earnings of 89 cents per share, both better than analysts’ predictions of $117.53 million in revenue and EPS of 79 cents. This puts it among the tech stocks you should keep your eye on.

After a recent rally, QLYS stock is up 12% in 2022 – and that includes a 30% gain over the last three months. With momentum firmly on its side, Qualys stock has an “A” rating in the Portfolio Grader.

Parsons Corporation (PSN)

Tech stocks illustration. Representing PBTS stock.Source: whiteMocca / Shutterstock

Parsons Corporation (NYSE:PSN) is a Virginia-based tech company that works in defense, intelligence, security and infrastructure engineering.

Although the company was founded in 1944, it didn’t go public until 2019.

The company is best known for manufacturing bases for Titan and Minuteman missile sites and silos. It currently provides engineering and management support for missile defense systems for the U.S. and its allies.

PSN stock is having a solid year, up 27% so far this year as defense spending remains a high priority thanks to tensions with Russia and, to a lesser extent, China and North Korea.

Earnings for Q2 included revenue of $1.01 billion, which was better than the $930.97 million that analysts expected. The company also met expectations with EPS of 41 cents.

As a tech company working in the defense space, Parsons stock seems like a good pick for the long term. It has an “A” rating in the Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.

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3 Stocks to Buy for a Black Swan Market Crash

2022-08-17 10:30:48 by Bret Kenwell from InvestorPlace

We can account for regular market corrections and even the occasional bear market like we’re seeing now. However, a black swan market crash is impossible to predict and can have a devastating impact on one’s portfolio.

Black swan events are not fun and they do not simply look like a “sale” in the stock market.

As defined by Investopedia, “a black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.”

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Simply put, a black swan market crash is a destructive outcome with devastating effects. However, over time it does provide savvy, unlevered investors with an opportunity to buy quality stocks at a discount. Let’s look at a handful of stocks investors may want to flock to in a hypothetical black swan market event.

AAPL Apple $173.03
QQQ Invesco QQQ Trust Series $332.28
BRK.B Berkshire Hathaway $306.65

Apple (AAPL)

Apple (AAPL) logo on an Apple store in Santa Monica, California.Source: View Apart /

As generic as it may be, Apple (NASDAQ:AAPL) has to be atop our buy list in the event of a black swan market crash. Not only is the company the biggest public company in the world, but it’s the top holding in the S&P 500 and the Nasdaq.

It’s got immense cash flow and robust revenue. In 2021, Apple generated more than $365 billion in sales. It buys back an immense amount of stock and its balance sheet is more powerful than many individual countries. Not to mention, the company’s Services unit continues to hum along nicely.

Its trailing 12-month revenue clocks in at $77.2 billion, while its gross margins are double Apple’s Products unit. Further, Services is growing roughly three times faster than the Products unit.

Put it all together and we have a hugely profitable unit within the company that’s outpacing the growth of its traditional business. That’s how investors justify owning the stock, even at what some investors consider a higher valuation.

Plus, it’s the best-performing FAANG stock in 2022 — and also trumps Microsoft (NASDAQ:MSFT). That shows that even in times of trouble, investors are willing to buy this name.

Invesco QQQ ETF (QQQ)

Tiles that say ETF on top of stacks of coins on a blue backgroundSource: kenary820 / Shutterstock

It may seem lame for investors to pick an ETF, but if we really do get hit by a black swan market crash, diversity can be our best friend. However, when it comes to picking winners in the ETF world, I really like the Invesco QQQ Trust Series (NASDAQ:QQQ).

Coming into 2022, the QQQ has rallied in 17 of the last 19 years. One of those years was 2008, while the other — 2018 — was a loss of less than 1%. That compares to 15 out of 19 up-years for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which for the record, is still quite good.

Second, the QQQ outperformed the SPY the last time we did see a black swan event (in 2020). The QQQ suffered a peak-to-trough decline of 30.5% vs. the SPY, which suffered a 35.6% decline.

Further, the QQQ rallied 147.8% off its March 2020 low to its all-time high, while the SPY “only” rallied 119.9%. So not only was there less downside in the QQQ, but there was more upside as well.

The QQQ is up 393% over the last 10 years and 130% over the last five. That compares to five- and 10-year gains of 203% and 73% for the SPY, respectively.

Lastly, its got strong components. Apple holds a 13% weighting, while Microsoft sits at more than 10%. More than 50% of its weighting is in its top 10 holdings and many of these names have strong cash flow and powerful balance sheets.

Berkshire Hathaway (BRK.A, BRK.B)

A Berkshire Hathaway (BRK.A, BRK.B) sign sits out front of an office in Lafayette, Indiana.Source: Jonathan Weiss /

Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) is a conglomerate comprised of public stocks, private companies and exclusive deals. Berkshire is run by Warren Buffett, Charlie Munger and other prudent managers. Not only would shares of Berkshire be a great deal amid a sharp, broad-market selloff, but Berkshire would go on a buyer spree itself finding the best deals in the market.

Coming into 2022, it had more than $145 billion in cash and short-term investments. As of the most recent quarter, Berkshire still holds more than $100 billion. It’s got enormous businesses in freight, insurance, energy and more. Its public holdings are enormous, while Buffett can negotiate impressive deals regular investors cannot get.

For instance, the 100,000 preferred shares he has from Occidental Petroleum (NYSE:OXY) after helping it orchestrate a takeover of Anadarko Petroleum — valued at $100,000 apiece, or $10 billion in total that pays an 8% annual dividend. Or how about the preferred stock deals it got in companies like Bank of America (NYSE:BAC) or Goldman Sachs (NYSE:GS)?

Berkshire isn’t perfect, but it’s a low-valuation, high-functioning asset to buy on any extreme dips.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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