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Trader's Diary

Economic calendar

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Definition of terms:
Earnings

Earnings

refer to the profits or net income generated by a company during a specific period.

  • Earnings are a measure of a company's financial performance and are often reported on a quarterly or annual basis.

  • Positive earnings indicate that a company has made a profit, while negative earnings indicate a loss.

  • Earnings can be influenced by various factors, such as revenue, expenses, taxes, and other financial activities.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Actual

Actual refers to the real or current value or result of something. In the context of IPOs, actual can refer to the actual price or number of shares sold in the IPO, as opposed to the estimated price or number of shares.

Estimate

Estimate refers to a prediction or approximation of something, such as the expected price or number of shares in an IPO. Estimates are often made by investment banks and analysts based on market demand and other factors.

Difference

Difference refers to the numerical or percentage variance between two values. In the context of IPOs, difference can refer to the variance between the estimated and actual price or number of shares sold in the IPO.

Percent

Percent refers to a fraction of 100, often used to express a proportion or rate. In the context of IPOs, percent can be used to express the difference between the estimated and actual price or number of shares sold as a percentage of the estimated value.

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IPOs

IPOs (Initial Public Offerings):

An IPO occurs when a private company sells its stock to the public for the first time to raise capital or money.

The money raised from an IPO can be used for various purposes, such as paying down debt, investing in the company's long-term health, research and development, expanding into new product lines, or purchasing fixed assets.

During the IPO process, the equity shares of private investors

convert into publicly owned shares of the new entity, and early investors may sell their stock once the company's shares begin trading.

The chief benefit of an IPO is to help the company raise money and gain access to the capital markets, allowing for expansion and increasing credibility.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Name

The name is the official name of the company whose shares are being offered in the IPO.

Exchange

The exchange is the stock exchange where the company's shares are listed and traded. Examples of stock exchanges include the New York Stock Exchange (NYSE) and the Nasdaq.

Currency

The currency is the type of currency in which the company's shares are priced and traded. This can vary depending on the country and stock exchange where the company is listed.

Start date

The start date is the date on which the company's shares begin trading on the stock exchange after the IPO.

Offer price

The offer price is the price at which the company's shares are initially offered to the public in the IPO. This price is set by the company and its underwriters based on market demand and other factors.

Shares

Shares refer to the units of ownership in the company that are being offered to the public in the IPO. These shares can be bought and sold on the stock exchange after the IPO.

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Splits

Splits (Stock Splits):

A stock split occurs when a company increases the number of its outstanding shares of stock to boost the stock's liquidity.

In a stock split, the number of shares outstanding increases by a specific multiple, but the total dollar value of all shares remains the same.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and increase the liquidity of trading in its shares.

For example, if a company decides to split its stock 2-for-1, the number of shares outstanding would double, while the share price would be halved.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Split date

The split date refers to the date on which the stock split takes effect. It is the date when the new shares resulting from the split are distributed to existing shareholders. Optionable

Optionable refers to whether the stock is eligible to be used as an underlying asset for options contracts. If a stock is optionable, it means that options can be traded on that stock.

Old shares

Old shares refer to the existing shares of a company before a stock split takes place. These are the shares that will be exchanged for the new shares resulting from the split.

New shares

New shares are the additional shares that are issued to existing shareholders as a result of a stock split. The number of new shares is determined by the split ratio, such as 2-for-1 or 3-for-2, where shareholders receive a certain number of new shares for each old share they own.

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Amazon Returns to the Investing Phase, Will We See a Stock Rise or a Correction?

Date: 21.8.2024

Today, I'm focusing my analysis on the stock of Amazon.com Inc (AMZN), a company that has garnered considerable attention from investors across the globe in recent weeks. After the company reported its quarterly results in early August, there was a distinct shift in its strategy, which undoubtedly had a major impact on its stock's current and future performance [1]. *

Amazon Returns to the Investing Phase, Will We See a Stock Rise or a Correction?

Today, I'm focusing my analysis on the stock of Amazon.com Inc (AMZN), a company that has garnered considerable attention from investors across the globe in recent weeks. After the company reported its quarterly results in early August, there was a distinct shift in its strategy, which undoubtedly had a major impact on its stock's current and future performance [1]. *

A return to investment mode

Amazon has once again decided to shift its focus to major investments, particularly in the field of artificial intelligence. This change comes after a period of significant cost-cutting, which resulted in an increase in profitability and a dramatic rise in share price. *This return to investment mode, as expected, has raised concerns among investors who fear that increased capital spending will negatively impact the company's cash flow. [1]

Return on capital

Another important factor affecting the current perception of Amazon among investors is its relatively modest approach to returning capital to shareholders. Amazon is one of the few technologies mega-firms that does not pay dividends and makes only minimal share buybacks compared to its peers. Its $10 billion buyback program, which was authorized in 2022, was only half complete as of the end of June, with no repurchases made in the most recent quarter.

Compared with competitors that include companies such as Meta Platforms Inc, Alphabet Inc and Booking Holdings Inc, which combine share buybacks with dividend payments, Amazon is under increasing pressure to improve its return on capital. According to an analysis from Morgan Stanley, if nothing changes by the end of 2025, Amazon's net cash balance could make up about 8% of its market capitalization, which would put it among the companies with the highest cash reserves in the S&P 500. [2]

Current valuation and potential opportunities

Despite the current challenges, I've seen some investors begin to repurchase shares of technology companies, including Amazon, after recent declines. Amazon's stock is currently trading at about 28 times expected earnings, a discount to most of its Magnificent Seven peers, with only Alphabet trading at a lower multiple. *That ratio is close to the average of the Nasdaq 100 index, which trades at a multiple of 26. [3]

This suggests that Amazon may prove to be an attractive opportunity for investors who are accustomed to taking advantage of declines in tech giant stocks to buy. As James Abate noted, investors have "muscle memory" and if declines within the Magnificent Seven have proven to be buying opportunities, they will continue to do so as long as the approach works. [4]

Conclusion

Based on current developments, Amazon appears to be going through a critical period where it is refocusing its investment efforts, which may bring short-term challenges but also long-term opportunities. As an investor, I will be watching closely to see how the company handles this transition and how it approaches the issue of returning capital to shareholders. The potential for further upside in Amazon stock exists, but caution is in order in the current macroeconomic uncertainty. [5]

* Past performance is no guarantee of future results

[1], [2], [3], [4], [5] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing of future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.

[1] The development of Amazon's share price over the last five years: https://tradingeconomics.com/amzn:us

Date: 18.12.2024
Broadcom and Its "Nvidia Moment"

Broadcom Inc.’s (NASDAQ: AVGO) recent surge in the stock market feels like a déjà vu of Nvidia’s breakout in 2023. After posting impressive quarterly results, Broadcom shares skyrocketed 38% in just two days, pushing the company’s market cap close to $1.2 trillion.* The excitement stems from Broadcom’s projection of a $90 billion addressable market for its AI-focused components by fiscal 2027. Investors are asking: could this be the next big player in the AI revolution?

Date: 11.12.2024
TSMC Continues to Lead with Robust AI Demand

As I review my portfolio this month, Taiwan Semiconductor Manufacturing Co. (TSMC) remains a shining star, showcasing exceptional performance driven by surging demand for artificial intelligence (AI) hardware. In November alone, TSMC reported a remarkable 34% increase in sales, reaching NT$276.1 billion ($8.5 billion). These results highlight the company’s critical role as a supplier to major tech giants like Apple and Nvidia, as well as its pivotal position in the AI-driven transformation of data centers.

Date: 4.12.2024
Amazon Strengthens Its Position in Artificial Intelligence

Amazon.com Inc. (NASDAQ: AMZN) was the focus of my investing interest today when it announced significant moves to strengthen its position in artificial intelligence (AI). At its annual re:Invent conference, the company unveiled groundbreaking innovations, including new semiconductors and a large language model, which could significantly impact the generative AI market. These developments present several key considerations for traders and investors alike.

Date: 27.11.2024
Uneven Recovery in the Global Smartphone Market

This year, I’ve been closely watching the global smartphone market, which has finally rebounded after two years of decline. The numbers are encouraging, with a 6.2% growth and total shipments reaching an estimated 1.24 billion units. However, as I delve deeper, I see a more nuanced picture. Apple, despite its dominance, managed only a modest 0.4% increase in iPhone volumes, signaling the intense competition from Android-based manufacturers, especially in China and emerging markets.

Date: 20.11.2024
Qualcomm Expands Horizons Beyond Smartphones: I'm Buying This Promising Player at a Low Price

Today I took the time to analyze Qualcomm Inc. (NASDAQ: QCOM) in detail, which seems to be on a very interesting development trajectory. As the world's largest seller of smartphone processors, the company recognizes the need to diversify its business and find new sources of growth, which leads me as an investor to think more deeply about its future potential.

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