investing - Financeritual https://financeritual.net Your Go-To Source for Financial Freedom Mon, 14 Feb 2022 15:17:41 +0000 en-US hourly 1 https://wordpress.org/?v=5.8.4 https://financeritual.net/wp-content/uploads/2021/12/cropped-finance-fav-32x32.png investing - Financeritual https://financeritual.net 32 32 All You Need to Know About FinTech https://financeritual.net/all-you-need-to-know-about-fintech/ Fri, 17 Jul 2020 11:53:46 +0000 https://financeritual.net/?p=2527 You’ve probably heard this new term “FinTech” somewhere, but what is it exactly? And why should all entrepreneurs know about it? FinTech (Financial Technologies) in the broadest definition means technologies applied in the sector of financial services, mainly used by financial organizations themselves in their operations.  In addition to that, FinTech is increasingly starting to […]

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You’ve probably heard this new term “FinTech” somewhere, but what is it exactly? And why should all entrepreneurs know about it?

FinTech (Financial Technologies) in the broadest definition means technologies applied in the sector of financial services, mainly used by financial organizations themselves in their operations.  In addition to that, FinTech is increasingly starting to involve services that are disrupting regular financial operations like mobile payments, loans, money transfers, fundraising, and so on.

Don’t think that FinTech is just another buzzword. According to a report by Accenture, the investment in this sphere has increased sharply from $930 million (2008) to more than $12 billion worldwide (2015).

And we can still see this trend present, the investments in FinTech are only growing, which is not surprising as these technologies can be used not only in the financial sector but in essentially every business. FinTech startups are small but they develop very fast, that’s why they able to compete successfully with the traditional financial institutions. Fast innovations are key to thriving today.

How FinTech can change your business

In the past, if a person decided to start a business, they would go to a bank and apply for a loan or try to find a traditional investor. And in case a company wanted to take credit cards, it would have to have an account with a credit provider along with a landline and lots of equipment. Thankfully, it’s not the case anymore.

FinTech is rapidly changing the way small businesses start up, receive payments, and go to the international market, thus making it so much easier for business owners.

Instead of investors and loans, there’s crowdfunding – you can raise money fast and cheaply from people living in different countries who you’ve never even met. It has leveled the field for market players and made the process much less time-consuming.

It has also become easier for small companies to accept payments. Even a farm in the middle of nowhere can take credit and debit cards now with such services as Square or PayPal. There are fees, but on the bright side, the business owner doesn’t have to have a business of a certain volume to qualify.

Now let’s talk about international money transfers. They have been a thorny issue for entrepreneurs for a very long time, but thanks to FinTech, they are also getting easier. PayPal suits for smaller transactions, as it automatically converts currencies. Anf for bigger ones, there’s a service called TransferWise, which is streamlining international transfers with a 90% discount on bank fees.

How FinTech is changing your customer

FinTech also influences the behavior and expectations of customers. They are so used to accessing all sorts of data in just seconds, that it seems absolutely natural to them to adjust their investment portfolio while waiting in a line at a grocery store.

So clients of both small and large firms expect the same high level of service. They also expect to be able to use a credit card or even their phones everywhere. It’s essentially a warning to businesses that there is no way around introducing the latest technologies into their work, otherwise, they might lose business.

The FinTech industry is changing rapidly, and wise business owners will do everything to stay informed. Companies will be able to offer many more services at a fraction of the price, which in the end will be beneficial to everybody.

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Why now is the right time to start investing in fintech https://financeritual.net/why-now-is-the-right-time-to-start-investing-in-fintech/ Fri, 17 Jul 2020 11:40:14 +0000 https://financeritual.net/?p=2523 Thanks to continuous innovation and a promising future, fintech is the right sphere to invest in. Leaders in Global finance have always thought of fintech as a great driving force that can change entire industries. According to Goldman Sachs, the worldwide fintech pie can now reach US$4.7 trillion in its worth with more than 12,000 […]

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Thanks to continuous innovation and a promising future, fintech is the right sphere to invest in.

Leaders in Global finance have always thought of fintech as a great driving force that can change entire industries. According to Goldman Sachs, the worldwide fintech pie can now reach US$4.7 trillion in its worth with more than 12,000 startups in different countries, and many more to come.

Fintech companies are growing so rapidly because of the wealthy and tech-savvy customers. Capgemini’s research has found that almost half of clients (46%) use services provided by three fintech companies or more; also 60% of financial institutions see these companies as potential partners.

Why is this sphere thriving? It has made the expansion of capital access much easier to small businesses, women, minorities, and immigrants, who previously regarded fundraising as nearly impossible; in a way, the technologies leveled the playing field.

Enhancing financial data security

It’s an enormous challenge for banks and financial institutions to protect sensitive data. With that, there are strict data privacy requirements, and the banks and financial organizations are under constant pressure to be transparent regarding policy steps taken to strengthen data protection. That’s why such companies invest in fintech – they need to protect themselves and their clients from losses due to cyberattacks.

In addition to security reasons, fintech services ensure convenient transactions, which lead to frictionless cash-flow and perfectly smooth financial operations. A working cybersecurity strategy involves encryption as well as controlled security policies. These steps ensure protection from cyber-attacks, as fintech makes it possible for businesses to monitor all the traffic and minimize potential threats.

Low-cost service

Not only does fintech dramatically reduce  the costs of services, but it provides great results, too. Automatization of all processes and human-in-the-loop computing systems allow for carrying out functions smoothly. Fintech companies don’t have to waste money on archaic technologies like call centers.

They already have all the necessary information about the client in case a problem arises, so they are likely to know about it in advance, which gives fintech companies a unique ability to have a plan before it’s even needed.

New fintech companies, too, adopt multi-channel strategies and use the most advance digital marketing tools without having to pay the expensive regulation costs. Compared to banks, fintech companies only face 1% of the acquisition costs.

Blockchain in various industries

According to the World Economic Forum’s estimations, by 2027 blockchain’s net worth is expected to rise to 10% of the world’s GDP. About 90% of banks from Europe and the US are investing in this technology.

Cryptocurrencies have a large share in the fintech market, there are many startups building around the most popular blockchain-based currency, Bitcoin. Nowadays, consumers need uninterrupted control over their finances. In the past, a system that can’t be mismatched, which is not controlled by the government and with no fees was impossible to even imagine.

The app world

Digital payment is the biggest product of fintech right now, it makes up for 25% of the whole ecosystem. Almost all smartphone users make mobile payments; this is why mobile payments alone are expected to break the $1 trillion record in 2020.

There is still significant potential for growth. Because of the high fee in transactions, most American users have to lose a part of their revenue. For instance, a $100 transaction will result in $97.30 in earnings for merchants on average. Starbucks decided to try out a new approach to change this situation – their app gives the consumer an opportunity to pay using money from their bank account or credit card to avoid fees.

Increased regulations

The more fintech develops, the more concerns the governments have regarding it, and the more regulations they are trying to impose, especially with the integration of technology in the financial sphere. This has multiplied regulatory problems for lots of companies.

In many cases, regulations can be detrimental to growth, we could observe this in many sectors. They are meant to make things safer and more controllable, but this also slows things down. However, the case of fintech has been the opposite so far, and the regulations led a significant acceleration in the sphere.

In order to limit the amount of personal information that the banks have access to, the European Union has passed the General Data Protection Regulation. Some other states like South Korea and Japan also followed the EU’s example.

Hopefully, you too see the potential of fintech now and will use this information to make a smart move and invest in this amazing sector. With its promising future, fintech is a great way to gain the maximum return of your investment.

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Why Should You Invest in Fintech? https://financeritual.net/why-should-you-invest-in-fintech/ Sat, 11 Jul 2020 03:18:39 +0000 https://financeritual.net/?p=2468 Fintech has recently blown up, and many investors are considering whether it’s a good idea to invest in this sphere. According to KPMG, in 2019, the overall investment in fintech exceeded US$37 billion, which is much more than in the past. For example, in 2013, the fintech market only had US$4.05 billion invested. Growth in […]

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Fintech has recently blown up, and many investors are considering whether it’s a good idea to invest in this sphere. According to KPMG, in 2019, the overall investment in fintech exceeded US$37 billion, which is much more than in the past. For example, in 2013, the fintech market only had US$4.05 billion invested.

Growth in investor interest, venture capital investment, and private equity investment have enhanced innovation and investment in fintech. Read on to find out more about this promising market.

Many private equity firms like Blackstone, P2 Partners and Silver Lake have already noticed this trend and placed their billions of dollars into fintech. In the U.S. alone, the amount of money invested in this sphere exceeded $54 billion in 2018. It was significantly more compared to $29 billion in 2017.

In 2018, not only the US but also Asia ($22.7 billion) and Europe (34.2 billion) reported record financing levels in fintech. In the KPMG report, it was stated that automation and artificial intelligence (AI) are the most promising subsectors of the fintech industry.

In the third quarter of 2018 in Canada, there were 995 fintech companies; more than 70 percent of fintech firms there were small businesses and had less than 50 employees.

With the development of this sector, we’re starting to observe more and more trends characterizing it. According to the Fintech Growth Syndicate, paytech companies (they enable the electronic transfer of value) make up 25 percent of the whole industry.

Experts state that four main trends shaping the capital markets are AI and advanced analytics, distributed ledger technology, post-trade products, and quantum computing. Many firms, for example, Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS), are using blockchain technology and cryptocurrency for their operations.

Recently S&P Global reported 276 fintech completed deals that by the end of 2019; their total deal value was $127.99 billion. Interestingly enough, the number of fintech deals decreased since 2018, but deal values increased by a lot, thus proving that the market continues to do well.

If you want to invest in fintech, there are many ways to start, like stocks and exchange-traded funds (ETFs).

Let’s talk about ETFs first.

Launched in September 2016, The Global X FinTech Thematic ETF (NASDAQ:FINX) is mostly focused on American companies regardless of the name.

Another example of a fintech ETF is The Tortoise Digital Payments Infrastructure Fund (CBOE:TPAY), which started trading in February 2019 and focuses on companies from the digital payment sector.

Now onto fintech stocks.

Fintech companies are popping up everywhere, so it can get overwhelming. This is a brief list of fintech stocks worth your attention: First Global Data (TSXV:FGD) GoldMoney (TSX:XAU), and VersaPay (TSXV:VPY).

The fintech sector has been growing in recent years. There are more and more companies entering the market, and it looks like the industry is going to keep growing in the future.

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Three Stocks to Buy Under $10 https://financeritual.net/three-stocks-to-buy-under-10/ Sat, 11 Jul 2020 03:10:17 +0000 https://financeritual.net/?p=2463 Cheap stocks tend to be riskier. But there are exceptions. These three companies offer great bull cases for those who want to spice up their portfolios. There are so many stocks out there, people can even get lost in them. At the moment the largest companies like Amazon.com or Google parent Alphabet which trade at […]

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Cheap stocks tend to be riskier. But there are exceptions. These three companies offer great bull cases for those who want to spice up their portfolios.

There are so many stocks out there, people can even get lost in them. At the moment the largest companies like Amazon.com or Google parent Alphabet which trade at four-figure prices. Bear in mind that nominal prices don’t mean much – $50 stocks can be just as solid as $250 stocks.

However, typically cheap small caps or even micro-caps are cheap for a good reason. It might be compelling to buy cheap stocks because of the psychological factor; it’s nice to be able to buy many shares. What is more, these stocks are often characterized by price swings, and it seems to investors that they’ll lead to big gains in a short time.

Institutional investors do the opposite, though. Sometimes they trade once a stock dips below $10 or lower. That’s due to low nominal prices typically being a sign of higher risk – they might be in long-term decline. Even good cheap stocks carry some risk, for example, narrow revenue streams or debt.

Here you can find five cheap stocks that have promising potential. Once again: they are risky, so only invest in these what you can afford to lose.

LiveXLive Media

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Company’s market value: $195 million

Ever since the start of the pandemic, one of the things people miss is live music: concerts, club performances, dance-hall shows, and so on.

It’s good that in such circumstances LiveXLive Media (LIVX, $3.28) doesn’t only rely on live events. Thanks to it, the company shows more-than-doubling of shares. This digital media company that works with live music does the same thing with streaming music, internet radio, and video content.

In June 2020, LiveXLive announced record 2020 revenues of $38.7 million. That’s a significant improvement from $33.7 million in 2019. Here we have to remember that its losses growing quickly, too.

Despite everything, analyst Brian Kinstlinger has LIVX in his portfolio. He points out that the company has a new direct sales force which is driving better monetization. Another analyst, Jon Hickman, raised his price target, it is now $5.75 instead of $4.50 due to the growth of subscribers.

Evoke Pharma

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Company’s market value: $86.0 million

Having a pharmaceutical/biotech name or two is a must in any list of cheap stocks to buy. They are often characterized by having big quick-movement potential based on trial data.

Evoke Pharma (EVOK, $3.48) is among such names. The stock has grown more than two times this year thanks to the excitement caused by its Gimoti nasal spray, which was approved recently by the U.S. Food and Drug Administration (the FDA).

Gimoti (its generic name is metoclopramide), is unique as it’s the only nasal product (others are administered orally) approved to treat gastroparesis, which is a condition that interferes with digestion and let the stomach to contract.

This approval by the FDA gives Evoke a chance to access a $5 million credit line for the purposes of funding manufacturing and commercialization. Also, the company stands out because it virtually has no debt.

EVOK, similar to other cheap stocks, is not appreciated by Wall Street. However, analyst Raghuram Selvaraju upgraded the shares from Neutral to Buy after the FDA approval; he set a 12-month price target of $10, which is three times more than current prices.

AIM ImmunoTech

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Company’s market value: $83.5 million

Of course, right now both the medical community and the stock market are focused on research related to treating coronavirus. AIM ImmunoTech (AIM, $2.56) is a biotech company based in Florida with an entry in the product pool of the disease: Ampligen (rintatolimod), which is used for treating severely debilitated patients with chronic fatigue syndrome. In May, human trials to assess the effectiveness of Ampligen was authorized by the FDA, as well as interferon also called alfa-2b, which is extremely important for the progress in helping cancer patients with COVID-19.

The company has also applied to treat chronic fatigue caused by coronavirus after some evidence backing Ampligen’s effectiveness was found in Argentine. Similarly to many health and pharmaceutical companies working to fight COVID-19, AIM shares have increased in value a lot in 2020; at the start of the year it was below 60 cents, and now it’s well above $2.

The shares have received three Buy ratings from three so far. One of the latest ratings was given by Jason McCarthy; his idea about the price target is $5 per share, as he thinks that the value of Ampligen’s potential hasn’t been quite captured yet.

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3 Excellent Stocks Under $10 https://financeritual.net/3-excellent-stocks-under-10/ Sat, 11 Jul 2020 02:57:17 +0000 https://financeritual.net/?p=2457 In theory, a stock’s price is not that important. It’s true that the stock’s price depends (to a degree) on the company’s performance, its value correlates with both the company’s success and the number of issued shares. Because of the second factor, a big and successful company’s shares can have a lower price. There’s something […]

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In theory, a stock’s price is not that important. It’s true that the stock’s price depends (to a degree) on the company’s performance, its value correlates with both the company’s success and the number of issued shares. Because of the second factor, a big and successful company’s shares can have a lower price.

There’s something compelling about collecting cheaper shares. First of all, it’s easier to buy a round-number lot when it doesn’t break the bank. Secondly, there’s actually evidence that such shares have a tendency to perform better than their higher-priced counterparts.

So, check out these great stocks under $10 worth of adding to your portfolio!

Sirius XM Holdings

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In our age of mobile internet, it’s honestly quite amazing that this hardware-specific satellite radio business based on subscription can do well. But it’s true! Sirius XM Holdings (NASDAQ:SIRI) is a good example of that. Last year the company added about a million new paying members, bringing the total subscriber number close to 30 million.

We should admit, however, that the growth pace is rather slow. As Rick Munarriz has pointed out, the 2020’s revenue is expected to grow by 4%, and that’s not a lot. Each year the satellite radio business is closer to reaching its full potential in the total addressable market. But Sirius XM is working on its plan-B, the company has acquired Simplecast to enhance the monetization of its already existing podcast business.

But this is what can be compensated by Sirius XM’s consistency. The customers are devoted not only to the commercial-free radio but to the people hosting their favorite programs. Sirius XM also gives access to some exclusive sports events and programs that aren’t available otherwise.

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Nokia

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You probably think that Nokia (NYSE:NOK) is just a mobile phone maker, which is true to a degree (it sold a big part of its smartphone division to Microsoft in 2013). That’s why phone production is less and less of a priority for Nokia. The next big thing for the company is 5G – the technology that will be appreciated by the investors soon.

Its potential might be less than other companies’ (like Ericsson or Qualcomm), but it has its victories, too. In June, for example, it announced that China Unicom (NYSE:CHU) had tapped Nokia to provide about one-tenth of the tech for the 5G network. At the same time, the company became the leader in wireless broadband technology in the production of 1 GB wireless broadband speeds in the U.S. using C-band frequencies. This hadn’t previously been available to mobile network operators as well as manufacturers.  This is very important considering the fact that American radio waves have gotten very crowded.

It will probably take quite some time before the company reaches incredible highs, given that the shares are just $5, it may well be worth waiting.

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Plug Power

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Plug Power (NASDAQ:PLUG) is another promising stock under $10. The number of households familiar with this company is increasing, just like its revenue.

The reason for this growth is the fact that the public interest in what the company is doing is on the rise. Plug Power’s technology converts hydrogen into electricity, which makes for both backup power systems, and also as a viable primary option for electricity generation. In 2019, the company’s top line increased by nearly 40%.

But the best part of the investment in Plug power is how fast it’s approaching financial viability. With the present momentum, the company is likely to swing to a profit in 2023.

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Investing in Marijuana ETFs in 2020 https://financeritual.net/investing-in-marijuana-etfs-in-2020/ Sat, 11 Jul 2020 02:47:25 +0000 https://financeritual.net/?p=2454 Investors buy marijuana exchange-traded funds to gain exposure to the cannabis industry, and the number of such ETFs is growing since 2019. What are the best marijuana ETFs? Keep reading to find out! This market has had a bunch of problems in the past. For example, MedMen burned through cash in 2020, and CannTrust Holdings […]

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Investors buy marijuana exchange-traded funds to gain exposure to the cannabis industry, and the number of such ETFs is growing since 2019. What are the best marijuana ETFs? Keep reading to find out!

This market has had a bunch of problems in the past. For example, MedMen burned through cash in 2020, and CannTrust Holdings had to file for bankruptcy because of being caught growing cannabis illegally. High volatility makes marijuana stocks a riskier asset, that’s why it’s better to turn to marijuana ETFs.

The AdvisorShares Pure Cannabis ETF. It started trading in April 2019. The ETF’s expense ratio is 0.74%. 1. The AdvisorShares Pure Cannabis ETF provides a dividend yield of 7.26%, which is quite generous; the assets are estimated to be about $45 million. The fund tracks American and Canadian companies specializing in health care, consumer products, and real estate.

The Horizons US Marijuana Index ETF (which was the first U.S.-focused marijuana ETF), began trading in April 2019 in Canada; the expense ratio is 0.85%. There are 30 companies based in the U.S.A.

The Cannabis ETF first started trading in July 2019; it owns 30 stocks and the expense ratio is 0.7%. This fund is managed passively; it tracks the Innovation Labs Cannabis Index. Despite having only $20.7 million in assets, the fund provides a dividend yield of 4.1%.

Often investors prefer passively managed ETFs because the fees are lower and returns tend to be higher. According to Morningstar, last year’s net inflows of passively managed ETFs were accounted for $162.7 billion, whereas the actively managed ones reported net withdrawals of $204.1 billion.

It’s important to remember that investing in passively managed cannabis industry ETFs can be risky. Head trader at truetradinggroup.com and co-founder of marijuanastocks.com Jason Spatafora believes that such ETFs hold less risk as managers can divest companies as soon as a major problem arises, whereas in passive ETFs holdings are rebalanced quarterly.

He also doesn’t recommend adding cannabis ETFs to a portfolio, as they often hold a lot of “garbage”. Spatafora says investors should try to create their own “index” with a smaller number of companies. In his opinion, investing in such ETFs at the moment is risky as well, since the volume in cannabis stocks usually decreases in summer. His advice is to wait untill August.

Michael Berger, the founder of Technical420 claims that the volatility in the cannabis sector in 2019 has influenced the returns of stocks, and in this market environment an actively managed ETF is a better choice.

Another considerable disadvantage of investing in marijuana ETFs is that it’s prohibited by the SEC for providers to own shares of companies directly connected to marijuana plant as it is still a Schedule I controlled substance. That’s why many cannabis ETFs cannot have shares of American marijuana companies.

However, Timothy Seymour, founder of Seymour Asset Management and portfolio manager of Amplify Seymour Cannabis ETF is sure that the regulatory environment is most likely to change soon because of the growing market in this country. This is a sophisticated consumer product, in his opinion, with over the top retail distribution. Both quality of products and operational excellence have improved compared to that of 3-5 years ago, he adds.

Many cannabis ETFs own shares of companies from Canada have already seen all-time highs, Spatafora supposes, and cannabis ETFs are quite a good addition for investors’ portfolios. While the assets of such fund as ETFMG Alternative Harvest are $581million with a very generous dividend yield equal to 7.25%, the ETFs that are passively managed offer even more; for example, GW Pharmaceuticals (10.7%), or Cronos Group (9%).

Spatafora advises investors to trade the stocks of Canadian marijuana companies and not to keep them long-term. Consider the example of the Canadian company called Canopy which has lost more than half of its shareholder value comparing to last year.

American cannabis companies have bigger potential for growth thanks to a bigger customer base, but until the above-mentioned problems are solved, it’s better to avoid investing in the existing ETFs.

Canada’s biggest problem is that in its marketplace, there aren’t enough dispensaries open to consumers. According to Spatafora, Canadian companies lose to American ones (like Green Thumb or Trulieve) in putting up impressive numbers and positive EBITDA.

The marijuana market which was considered essential during the pandemic in many states is now growing. By 2025, this industry is expected to grow to $33.9 billion (with the compound annual growth rate of 18.2%), according to The Arcview Group.

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3 Excellent Stocks That Are Likely to at Least Double Your Money https://financeritual.net/3-excellent-stocks-that-are-likely-to-at-least-double-your-money/ Sat, 11 Jul 2020 02:35:12 +0000 https://financeritual.net/?p=2449 One of them hopes to triple its business; the second one is going to capitalize on a $100 billion market opportunity, and the third wants to grow the revenue seven times. Redfin (real estate), Floor & Decor Holdings (home-improvement), and RH (luxury furniture) have been considered promising since they went public, so we might well […]

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One of them hopes to triple its business; the second one is going to capitalize on a $100 billion market opportunity, and the third wants to grow the revenue seven times.

Redfin (real estate), Floor & Decor Holdings (home-improvement), and RH (luxury furniture) have been considered promising since they went public, so we might well expect them to grow even more in the future. They are determined to achieve their impressive business goals in the future, so the investors are likely to double their money (or maybe even more).

1. Floor & Decor Holdings

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Floor & Decor added as many as 20 new locations in 2019 (that’s 20% year-over-year unit growth, and this rapid growth is expected to go on for a while. There are 123 stores at the moment, and the company is striving for having 400 locations in 12 years. 

So far, Floor & Decor has managed to reopen all of its stores after the closures caused by the pandemic. Despite being hard to ship, the flooring materials were still being sold well, but real locations are a must in this business. Recently Floor & Decor CFO Trevor Lang supposed that commercial real estate might get cheaper because of numerous retail businesses shutting down. This, while being terrible news, means that the company will be able to get new locations.

Floor & Decor is consistently profitable even though it’s spending has been growing over the years. This trend has been present since 2014, and it doesn’t seem to disrupt the company’s impressive growth.

2. Redfin

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A real estate transaction includes lots and lots of expenses like the agent’s commission, title insurance, taxes, and so on. It’s so expensive and complicated. The good news is that Redfin can handle everything (except taxes) using the technology of a streamlined experience at lower rates.

If we calculate how much all the processes going into buying or selling a house make up for, we’ll come to the conclusion that Redfin has a more than $100 billion market opportunity. Take into account their $780 million revenue last year and you’ll see how much space for growth the company has. 

According to ATTOM Data Solutions, the average time a buyer lives in a house is estimated to be over eight years. Given that the company only launched in 2006, the customer loyalty has a great potential as well, even though it’s quite high already (there was 44% growth shown in repeat customers last year only).

All in all, it’s obvious that Redfin is picking up momentum, and it’s not going to slow down, which makes it a great investment idea.

 3. RH

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It’s difficult to imagine a more contrarian company than RH. While other players in the home furnishings business are opting for inexpensive products, RH concentrates on luxury furniture demonstrated in gaudy showrooms. This approach has its advantages — there are few (if any) other big-name companies doing the same thing.

RH has been showing great results: in 2015-2019 its net income more than doubled thanks to the management wise enough to grow the business and save money at the same time. For instance, RH has chosen a sale/leaseback expansion model which includes developing a location while selling the property and then leases the space. That’s a great way to expand without paying too much for operational expenses.

RH wants to expand into all the major markets in the U.S. and generate $5 billion or $6 billion each year (in 2019 their net revenue was $2.6 billion). In addition, taking the showrooms to international markets is believed to make RH a $20 billion brand.

And there’s more. RH aspires to expand into hotels, food service, experiences, and so on. CEO of the company Gary Friedman stated the objective to create The World of RH. He thus estimates the market opportunity to be from $70 billion to $100 billion. Even a fraction of this success in the future will make your investment into the company today a great financial decision.

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2 Penny Stocks That Are Expected to Grow https://financeritual.net/2-penny-stocks-that-are-expected-to-grow/ Sat, 11 Jul 2020 02:20:26 +0000 https://financeritual.net/?p=2444 With all that’s been going on since the beginning of the pandemic, the state of the stock market is very unstable. This lack of stability has led to panic among some investors, while others perceive market volatility as a great buying opportunity. In such conditions, people often buy penny stocks (stocks that are trading for […]

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With all that’s been going on since the beginning of the pandemic, the state of the stock market is very unstable. This lack of stability has led to panic among some investors, while others perceive market volatility as a great buying opportunity.

In such conditions, people often buy penny stocks (stocks that are trading for less than $5), because if there’s even a small share price appreciation, the investors will get hefty profits.

So, how can we choose good penny stocks? Read on to find out about two promising stocks.

1. Xeris Pharmaceuticals (XERS)

Xeris Pharmaceuticals is based on an innovative technology platform that offers solutions for injectable and infusible therapies that simplify the process. Despite a serious sell-off at the end of June (at one point there was a loss coming in at 49%), its new $2.59 share price allows investors to go ahead and purchase these promising shares.

Analyst David Amsellem believes that is XERS underestimated as their innovative technologies are going to help adult patients with type 1 diabetes. Their cross-over study with 18 adult participants has proven that there was a 62% decrease in hyperglycemia in subcutaneous injections (SC) of XP-3924 (XERS innovation) comparing to injections of insulin alone. This gives the analytics and investors hope that the company’s future is going to be marked by rapid growth.

In the future Amsellem expects the company to look for a development partner in order to enhance the production capabilities of XERS and overall business growth. Amsellem thinks it’ll bring the shares to $11 price target (it 326% growth!), and other experts (from TipRanks, for example) agree.

2. Avinger (AVGR)

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Avinger is a company that designs medical devices for diagnosis and treatment of patients with Peripheral Artery Disease (PAD). The current price is only $0.29 apiece, which makes it a very promising investment.

Nathan Weinstein from Aegis Capital thinks that the company’s recent capital raise due to equity financing combined with their efforts to cut operating costs has significantly strengthened its position despite the challenges AVGR had to face due to coronavirus. The analyst believes that eventually there will be a return to normalcy in both patient volumes and ordering activity. 

Weinstein’s optimistic outlook implies a $1.40 price target, which is essentially a twelve-month gain of 368% compared to the current levels. It’s important to note that his opinion is shared by others, judging by the information from TipRanks. 

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Rules of a Working Investing Strategy https://financeritual.net/rules-of-a-working-investing-strategy/ Sat, 11 Jul 2020 02:10:31 +0000 https://financeritual.net/?p=2441 Summary The current market optimism with deteriorating economics on the background is worrying, to say the least. However, with the right mindset and a long-term investing strategy, we should be just fine.  This is why now we should be focusing on risk control and avoiding rushed decisions. The Central Bank’s interventions aimed at increasing liquidity […]

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Summary

The current market optimism with deteriorating economics on the background is worrying, to say the least. However, with the right mindset and a long-term investing strategy, we should be just fine. 

This is why now we should be focusing on risk control and avoiding rushed decisions. The Central Bank’s interventions aimed at increasing liquidity no matter what are misleading investors by giving them a false sense of security. 

First, let’s discuss the risk connected to investing. We can think of two types: to lose money and to miss an opportunity. You can avoid one of them, but not both at the same time. It’s up to you whether you want to play safe and potentially lose an opportunity or take an active approach and risk losing money.

Being cautious and mature seems old-fashioned to some. So when asked whether they are willing to risk to get rich, they usually say yes. How should one act to get profit?

Be unemotional

It is a trait of almost all great investors. It makes sense if you think about it: emotional people tend to buy when prices are high and sell at the bottom. Many successful investors practice contrarianism. It involves doing the contrary of what everybody else is doing at the extremes. 

What makes people emotional? Greed and fear. During market crashes logic tries to make you participate in the unique opportunity, but the emotions cause people to make bad decisions. This is the reason we should practice self-discipline. 

But no one is perfect, and the following rules are going to help you.

Rules

– Be a scale-up buyer

– Have actionable goals

– Decisions made under the influence of emotions make the investment process pointless

– Follow trends – the most part of your portfolio performance is mainly influenced by the long-term trends, so don’t worry too much about the short-term fluctuations

– Don’t turn a “trading opportunity” into a long-term investment – think about your goals concerning a particular stock 

– Always be disciplined 

– Losing money is an integral part of the investment process, so don’t invest money you aren’t prepared to loose

– You are more likely to score a good deal when the fundamental analysis is backed up by the technical price action

– Adding to a losing position is a bad idea

– The market can be “bearish” or “bullish”. In a bull market, you should be neutral or act considering long-term goals. In a bear market, you can also be neutral or take into account short-term trends

– If the market is trading at extremes, do the opposite of what everyone else is doing

– Consider rebalancing, when the money is taken away from winners and added to losers. You should only give your money to winners

– Pay attention to “Buy” and “Sell” signals. If you’re trying to get by without a “buy/sell” discipline, you’re bound to fail

– There are no perfect strategies. Just be consistent and learn from your mistakes

– Look closely at risk and volatility: analyze what leads to mistakes and try to use this information to generate profit

The long-term bullish trend which started back in 2009 is still here. The 2020 crash seems to have been reversed by the extreme monetary interventions of the Central Bank. It looks like in order to keep the bull trend intact we’ll need more and more interventions. 

If these measures fail, it will be a signal of the start of the next bear market cycle. 

It’s very difficult to predict what is going to happen next. But we should all remember that good things come to an end just like everything else. During disastrous times investors should focus on controlling the risks in the short-term, and try to stay away from major draw-downs.

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A great company to invest in during this stock market crash https://financeritual.net/a-great-company-to-invest-in-during-this-stock-market-crash/ Sat, 11 Jul 2020 02:00:41 +0000 https://financeritual.net/?p=2438 There have been such trading days in 2020 when the volatility of the stock market was similar to the Bitcoin price in terms of fluctuation. We’ve seen huge price swings with sudden drops and fast reversals. All long-term investors had to fight the urge to ‘day trade’ to avoid losing money, as buying and selling […]

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There have been such trading days in 2020 when the volatility of the stock market was similar to the Bitcoin price in terms of fluctuation. We’ve seen huge price swings with sudden drops and fast reversals. All long-term investors had to fight the urge to ‘day trade’ to avoid losing money, as buying and selling at the wrong moment can turn out to be very expensive. It seems that the best approach is a measured one because the stock market crashes offer great deals for long-term investors.

On the contrary, Bitcoin often makes you act fast. It’s not the kind of asset you buy and then forget about it for years. Its value, in the long run, could be $0 as or $20,000. In addition, there’s the need to negotiate Bitcoin forks, as well as fraud and lack of trustworthy forecasts. 

One stock that was especially deeply affected by the crash is M&G (LSE:MNG). The price fell by 50% in just one month at one point but then stabilized. However, the shares are still sold at a 30% lower price comparing to the start of this year. M&G might not be the most promising stock out there, but the company is well-run and equally well-capitalized. That’s why we can count on M&G to be just fine when the world goes back to normal, whenever that is.

At the end of May 2020, M&G representatives said that the company was in a financially strong position, despite the pandemic, and paid dividends to the shareholders. This demonstrates that cash flow doesn’t appear to be an issue.

Not only that, but they also went ahead to acquire other businesses. It was announced recently that M&G was purchasing Royal London’s Acentric platform, which is essentially an investment shop for financial advisors. This seems to provide the company with external revenue channels.

All in all, M&G is a solid business in a strong position despite the pandemic at a 30% discount. If this isn’t a bargain, what is?

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