In today's edition: Uber makes money from IPO, Crown Castle — на 5G, Microsoft - on II, KLA — на TSMC, а Renewable Energy Group — на ESG.
Uber can make money on Grab
Pick-up and delivery service Grab, originally from Southeast Asia, plans to go public through a merger with SPAC, a shell company specially created to search for such startups. (SPAC — special-purpose acquisition company, "a company specially created for the takeover").
The capitalization of the company at the current valuation will be approximately 40 billion dollars. We are preparing a solid material about SPAC, and the news itself is relevant for the owners of Uber shares (NYSE: UBER), because she owns ~16% in Grab. Extra money from the sale of shares of a “promising startup” will not interfere with Uber management, given its unprofitability and drawdown in the main areas of business.
Mixed Quarter at Crown Castle
Telecommunications REIT Crown Castle (NYSE: CCI), for which we had an investment idea, on Wednesday reported for the first quarter 2021 of the year. Results were mixed.: earnings per share was 1,71 $ against 1,61 $ expectations, and the revenue 1,49 billion against 1,5 billion expectations.
Basically, the result is quite decent. Considering, that American companies are actively investing in 5G, CCI's rental business still has good growth potential. But it's worth remembering, that the company pays more dividends, what does he make, so there is a risk of cuts in payouts and a subsequent fall in stocks.
More AI for investors
The leadership of the European Union plans to limit the scope of artificial intelligence - AI. AI types are going to be categorized: in some areas, programs will be able to work more or less autonomously (chatbots), somewhere - with human observation (issuance of loans), and something will be completely forbidden, for example, the compilation of a social rating of citizens. But while politicians discuss the ethics of using AI in everyday life, corporations are guided by this technology when planning their business operations.
Microsoft last week (NYSE: MSFT) announced the acquisition of Nuance, a software maker in the field of speech recognition. Transaction amount - 20 billion dollars. Nuance was not always a profitable investment from a commercial point of view: periods of profitability were replaced by long periods of loss. But, obviously, Microsoft sees great value in this acquisition - it remains to be seen, what will be the result. In time, this all coincides with a sharp increase in the number of vacancies in the field of AI around the world..
You can also earn from it: since "clean" companies, engaged only in AI, not on the stock exchange, then we can expect an influx of shareholders into the shares of those companies, who have serious experience in the field of AI and machine learning. For example, Baidu (NASDAQ: START), Simulations Plus (NASDAQ: SLP), Dynatrace (NYSE: DT).
More semiconductors to the god of semiconductors
Taiwan Semiconductor Manufacturing Company (NYSE: TSM) increased its investment plan for this year to 30 billion dollars. Previously, in January, she increased her spending plan with 25 to 28 billion. This is positive news for all TSM suppliers, e.g. KLA Corp. (NYSE: KLAC), and wider - for everyone, who works in the field of supply for semiconductor companies, e.g. Avnet (NYSE: AVT) и MKS Instruments (NYSE: MKSI).
The supply in this area is much inferior to the dynamics of demand: some auto plants in the US have already suspended operations due to, that there are no supply of chips, necessary for modern cars. Expected, that the semiconductor shortage will last at least all this year.
In general, all this will be an unconditional positive for the mentioned companies and their shareholders..
ESG has a beginning - ESG has no end
US President Joseph Biden has called for a reduction in carbon dioxide emissions by 50% to 2030 year. And this is not the only news of its kind.. The other day it became known, that JPMorgan Chase (NYSE: JPM) и Citigroup (NYSE: C) pledged to fund various ethical projects in total 3,5 trillion dollars: for renewable energy, sustainable agriculture, financing of regional development, etc.. Even earlier, there were reports in the press about, that blackrock investment holding has access (NYSE: BLK) to loans will depend on its ESG indicators, including the number of women in management, as well as the percentage of non-white employees in the state. If you have not read our long material about ESG investing, we advise you to do it now. You can make money from this in different ways..
Firstly, you can invest in "green fuel" like Renewable Energy Group (NYSE: REGI).
Secondly, of similar interest are clean energy utilities like Edison International (NYSE: AXIS).
Thirdly, surprisingly, it makes sense to take a closer look at some large non-environmentally friendly businesses like Total (NYSE: TOT), marked by investments in clean energy. For the triumph of ESG you need, that traditional businesses invest in clean energy first of all, - and for this kind of investment, shareholders will certainly encourage the quotes of companies, doing it.
Fourth, it's all, who loudly and convincingly shouts about, how they adhere to the ESG commandments: from the big banks mentioned above to companies like Twitter (NYSE: TWTR).
Fear lost
The fear and greed index shows, how much investors are willing to risk at the moment or, vice versa, how much they are afraid to take risks. And now this index is gradually leaning towards "wild greed", although still far from the maximum values. Probably, the index is not keeping up with the real greed of investors: evidence of this is the success of the over-the-counter company Hometown International (OTCMKTS: HWIN), whose capitalization over the last 1,5 years has grown to almost 10 times and has already exceeded 100 million dollars. What is she doing? This is a diner in rural New Jersey., managing director and chief accountant there - local wrestling coach. The company sells goods for 35 thousand dollars - not even for a year, but in two.
At all, this is a good reminder of, what amazing and terrible things can await investors in the over-the-counter market, where there is virtually no oversight and everything is possible.
