2 Chip Stocks That Are Screaming Buys in September
Semiconductor stocks have soared recently, and it’s not just the artificial intelligence (AI) boom.
While the advent of generative AI is a key driver in the industry, the semiconductor sector is also bouncing back from a cyclical downturn that came after the pandemic as demand for electronics like PCs and smartphones slowed in the economic reopening.
The cyclical recovery and demand surge for all things AI is creating opportunity in the sector beyond Nvidia. Keep reading to see two chip stocks that look like great buys right now.
1. Micron
Few semiconductor stocks are as cyclical as Micron (NASDAQ: MU), the integrated memory chipmaker. Just a few quarters ago, Micron was seeing revenue plunge and reporting wide losses.
Now, driven in part by AI-related demand, Micron is moving in the opposite direction, seeing revenue surge and margins rapidly expand. In the fiscal third quarter, which ended on May 30, revenue jumped 82% year over year to $6.81 billion, and it flipped a $1.6 billion adjusted net loss in the quarter a year ago to a profit of $702 million.
Gross margin jumped 810 basis points sequentially to 28.1%, showing the company is benefiting from rapidly rising prices.
Like many of its peers, Micron is seeing strong demand for data center chips due to the AI boom. Management said that AI demand drove data center revenue up more than 50% sequentially, showing the company could be just starting to capitalize on the trend. Additionally, the company is looking forward to 2025, anticipating continued data center growth due to demand for AI PCs and AI smartphones, which will drive more revenue from the data center. Management also forecast record revenue in fiscal 2025.
Based on its business model and the rebound in demand, the company looks well positioned to ride the AI boom.
Like Intel, Micron also manufactures its own chips, and the company is set to receive $6.1 billion from the CHIPS Act for manufacturing. JPMorgan Chase recently predicted that prices for NAND chips would increase through next year, while DRAM prices are expected to rise through 2026.
The stock now trades at a forward P/E of 10 based on the analyst consensus for 2025. With tailwinds from AI demand, the cyclical recovery, and the CHIPS Act, Micron looks like a smart buy at the current price.
2. Arm Holdings
Another chip stock that is riding similar trends to Micron is Arm Holdings (NASDAQ: ARM).
Arm is unique in the semiconductor industry as it makes most of its money from licensing its CPU architecture and collecting royalties on it, rather than designing complete chips like most of its peers.
The model, along with the company’s power-efficient technology, has made it a success, and like Micron, Arm looks poised for another step up thanks to cyclical tailwinds and the surge in AI demand.
Because of its battery-saving architecture, Arm is a mainstay in the smartphone industry as its designs are in more than 99% of smartphones. Roughly half of Arm’s revenue comes from Apple, and the new generation of AI-based iPhones could be a boon for Arm. Investors recently bid the stock up on reports that Apple is using Arm’s latest CPU architecture, v9, for the new smartphones; that should lead to a windfall for Arm, as the v9’s royalty rate is double that of the previous generation, the v8.
Arm doesn’t have as strong a presence in data centers, but it is seeing increased demand from cloud infrastructure customers. The same battery-efficient technology gives it an advantage there, and AI applications demand a lot of power.
Arm is seeing a boom in new licenses; licensing revenue was up 72% in its most recent quarter, which will flow through to royalty revenue over the next two or three years.
With AI demand continuing to surge, Arm looks to be in an excellent position to capitalize on the boom thanks to its power-efficient technology.
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2 Chip Stocks That Are Screaming Buys in September was originally published by The Motley Fool
Alibaba, JD Shares Riding High In Friday Pre-Market: What's Going On?
Alibaba Group Holding Ltd BABA and JD.Com Inc JD saw significant gains after China’s central bank revealed new economic stimulus measures.
What Happened: The market rally follows the People’s Bank of China announcing a reduction in the amount of cash banks need to hold and outlining plans to support the struggling property market. These measures aim to boost the Chinese economy, CNBC reported on Friday.
As per Benzinga Pro, Alibaba was up 2.17% and trading at $106.81 at the time of writing while JD was up by 4.90% and trading at $39.65 simultaneously.
Big-name investors like billionaire hedge fund founder David Tepper have become more bullish on Chinese stocks, with Tepper buying more shares in companies like Alibaba and Baidu after the U.S. Federal Reserve cut interest rates this month.
See Also: How To Earn $500 A Month From Nvidia Stock
Why It Matters: The Chinese government’s recent economic stimulus measures are part of a broader effort to stabilize its economy amid ongoing challenges. The Chinese economy has been grappling with a property market slump, weakening consumer demand, and trade tensions with the U.S. These issues have prompted the government to take action to prevent a deeper economic downturn.
Additionally, the U.S.-China trade tensions have had a significant impact on global markets, influencing investor sentiment and economic policies in both countries. The recent stimulus measures by China are seen as an attempt to mitigate these effects and restore confidence in its markets.
Furthermore, the recovery of China’s tech sector is crucial for the global technology industry. Companies like Alibaba, Tencent, and Meituan play a significant role in the global tech ecosystem, and their performance can have ripple effects across international markets.
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7 Levels Of Wealth: What Stage Are You At In 2024 According To Grant Sabatier?
In a world where financial anxieties loom, many Americans wonder just how financially secure they are.
For those wondering, Grant Sabatier, a voice in the FIRE (Financial Independence, Retire Early) movement, offers a perspective with his seven-level framework of wealth. The road map, written in his book “Financial Freedom,” is a gauge that might resonate with those seeking to understand their financial journey.
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Sabatier’s first level, “Clarity,” is about taking stock. For some, it might mean confronting the reality of living paycheck to paycheck, which plagues 78% of working Americans, according to a 2023 Payroll.org survey cited by Forbes.
Sabatier’s system breaks down as follows, according to Acorns:
2. Self-sufficiency: Covering basic expenses without external support. While it may still mean living paycheck to paycheck, it’s an important step.
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3. Breathing Room: The end of the paycheck-to-paycheck cycle. This level allows for discretionary spending and marks the beginning of financial comfort. “Just because you make a lot of money doesn’t mean you’re saving that money,” Sabatier said. “Most people in [the U.S.] live through debt.”
4. Stability: A solid financial foundation. “At this level, you’re not worried if you lose your job or have to move to a different city,” Sabatier explained. Stability typically involves saving six months of living expenses.
5. Flexibility: The ability to take calculated risks. With at least two years of living expenses saved, individuals can consider major life changes without financial fear. “You could take a year off from your job if you wanted to,” he said.
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6. Financial Independence: At this stage, investment income covers living expenses, making work optional. “You either have a large pile of money in an investment portfolio generating interest or you have rental properties and cash flow from the rent covers your living expenses or a hybrid of the two,” Sabatier said.
7: Abundant Wealth: More money than needed, allowing for a dream lifestyle and generous giving. “You don’t have to worry about money and it’s not essential to your day-to-day existence,” he said.
Sabatier’s approach offers a more nuanced view of wealth beyond simple income brackets. It acknowledges the psychological aspects of financial well-being, from the stress of living paycheck to paycheck to the freedom of financial independence.
Trending: Founder of Personal Capital and ex-CEO of PayPal re-engineers traditional banking with this new high-yield account — start saving better today.
Critics, like entrepreneur Dr. Jimmy Turner, argue that Sabatier’s frameworks might oversimplify how complex personal finance can be.
“I didn’t agree 100% with some of the details in the investing section,” Turner said in a review of Sabatier’s book. “For example, he says ‘it’s important to rebalance four times a year.’ I’ve read data that demonstrates rebalancing once or twice a year is adequate and most of us can rebalance in an ongoing fashion with new additions without having to sell assets while we’re still earning a living.”
As Americans grapple with inflation and economic uncertainty, Sabatier’s system does provide a benchmark for progress. It challenges traditional notions of wealth, pointing to financial freedom over mere accumulation.
“With every dollar you save, you give yourself more freedom and options in life,” Sabatier said.
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China’s Market Marred by Glitches as Frenzy Grips Stocks
(Bloomberg) — China’s long-awaited stimulus measures may have been too much for the markets to handle.
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With shares soaring and turnover reaching 710 billion yuan ($101 billion) in the first hour of trading on Friday, Shanghai’s stock exchange was marred by glitches in processing orders and delays, according to messages from brokerages seen by Bloomberg News. The Shanghai Stock Exchange is investigating reasons for delays, it said in a statement.
The Shanghai Composite Index stayed roughly unchanged from 10:10 a.m. for about an hour even as the Shenzhen composite gained 4.4% over the period. As trading resumed, the Shanghai index surged.
Some continue to experience delays in getting orders through in the afternoon session, multiple traders told Bloomberg News. Onshore turnover was fairly muted after 1 p.m. local time.
“I only recall a trading delay like this one during the 2015 rally, but generally it sends a positive signal,” said Du Kejun, fund manager at Shandong Camel Asset Management Co. “While it was but a small disruption to our trading, it would have been a big annoyance for firms that were eager to increase their positions today.”
China’s stock markets erased losses for the year, following a blitz of stimulus measures introduced this week. That has sparked a frenzy of trading, with the volume turnover nearing 1 trillion yuan in the morning session. That’s more than the total for a full day seen in recent months.
Investors are rushing in amid a fear of missing out as China’s most daring policy campaigns in decades sparked a rally of about 15% in the onshore benchmark this week.
That makes this five-day period through Friday the busiest prior to a national day holiday on record.
The Politburo, comprised of the ruling Communist Party’s 24 most-senior officials including President Xi Jinping, vowed to strengthen fiscal and monetary policies and pledged to “strive to achieve” the annual goal, according to a Thursday statement. They also committed to action to make the property sector “stop declining,” their strongest vow yet to stabilize the crucial industry.
“The trading system is simply overwhelmed. There is a huge stampede of stock bulls.” Hao Hong, chief economist at Grow Investment Group, said in a post on X.
–With assistance from Emma Dong, Mengchen Lu and Shuqin Ding.
(Updates with traders comment in fourth paragraph)
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Alibaba Stock Adds To Gains, JD Breaks Out On Latest Stimulus Reports
U.S.-listed China tech stocks are surging again Thursday, following reports the Chinese government is planning further stimulus to boost the world’s second largest economy. E-commerce giant JD.com (JD) stock broke out, while Alibaba (BABA), PDD Holdings (PDD) and Baidu (BIDU) added to recent rallies.
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The China tech stocks started rallying earlier this week, after China’s central bank announced plans to cut interest rates among other measures.
Economists described the plans as China’s most forceful stimulus efforts since it ended its zero Covid policy in late 2022. On Thursday, Chinese media reported the government had further plans, including cash vouchers to boost consumer spending.
All of this has been good news for beaten-down Chinese tech stocks.
Alibaba stock is up 8% at 103.17 in recent action on the stock market today. Shares are up nearly 25% in September. That would mark the e-commerce giants best month since January 2023. Meanwhile, shares of Alibaba rival JD.com are up 12% at 37.18 in recent action. That marks a breakout beyond a 35.69 cup pattern buy point identified by MarketSurge.
JD, Alibaba Stock Leading China Tech Stocks Higher
Both Alibaba and JD remain well below highs from late 2020 and early 2021, respectively. Alibaba in particular was hurt by a government crackdown on tech firms in 2020.
But Alibaba has rebuilt some momentum this year. Alibaba stock is up 37% and scored a recent breakout. Shares climbed above an 85.79 cup-with-handle buy point, as identified by MarketSurge, on Sept. 19. The tech giant released new AI models and video-to-text capabilities that day.
Alibaba stock has an improving IBD Composite Rating of 84 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
JD stock, meanwhile, has a Composite Rating of 96 out of 99.
Elsewhere, China internet search leader Baidu is up 7% at 101.22. It is testing highs last reached in July.
PDD Stock, TCOM Jump On News
PDD Holdings, parent company of the Pinduoduo shop in China and Temu globally, is also having a strong day. Shares are up 10% at 125.90 in recent action, nearly overtaking PDD’s 200-day moving average. PDD is working on bouncing back from a dive that followed its Q2 earnings report last month. The stock gained nearly 90% in 2023 but is down nearly 15% year-to-date.
Another stock on the move: Trip.com (TCOM). Shares of China’s largest online travel agency are up 8.2% at 54.88 in recent action. Shares have formed a cup pattern with a buy point of 58, according to MarketSurge. The gains are adding to a strong run for the travel company. Shares are up more than 50% year-to-date.
Meanwhile, WeChat parent company Tencent (TCEHY) stock is up 7% at 56.46 in recent action. The stock on Tuesday broke out above a 50.89 flat base buy point on its weekly chart, according to MarketSurge. Shares of Tencent are listed in Hong Kong and trade over-the-counter in the U.S.
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Alibaba Stock, JD Boosted By Stimulus Plan; Tencent Breaks Out
A Trump Media investor just dumped more than 7 million shares
United Atlantic Ventures LLC (UAV) has divested over 7.5 million shares of Trump Media’s stock, according to a 13G regulatory filing made with the Securities and Exchange Commission (SEC) on Thursday.
The filing reveals that UAV now owns less than 5% of the company’s common stock. This follows the merger in late March, during which UAV held 7,525,000 shares, representing 5.5% of the company’s stock. As of the filing date, UAV’s holdings have significantly decreased to just 100 shares. Andrew Litinsky, the managing member of UAV, is considered to share beneficial ownership of these shares, per the filing.
In February 2021, Litinsky and Wes Moss, former co-founders of Trump Media, proposed the idea of the company to former President Donald Trump while they were contestants on his show, “The Apprentice.” The duo suggested the concept after he was banned from Twitter (now known as X), and Facebook (META), in the aftermath of the Jan. 6 attack on the Capitol.
Since then, Litinsky and Moss have been embroiled in legal battles over claims that Trump Media has diluted their share value in the multi-billion dollar company.
The sell-off comes shortly after Trump stated earlier this month that he had “absolutely no plans” to sell his stake of company shares, which come to roughly 56%.
VENCANNA VENTURES INC. PROVIDES A SECOND UPDATE TO ITS DELAY IN FILING ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED APRIL 30, 2024 AND RELATED MANAGEMENT'S DISCUSSION AND ANALYSIS
CALGARY, AB, Sept. 26, 2024 /CNW/ – Vencanna Ventures Inc. VENI (“Vencanna” or the “Company“), an Alberta-based go-to capital provider for early-stage cannabis initiatives, was issued a management cease trade order (the “Order“) on August 29, 2024, by its principal regulator, the Alberta Securities Commission, pursuant to National Policy 12-203 – Management Cease Trade Orders (“NP 12-203“). The Company sought the Order because it needed to delay filing its audited annual financial statements for the year ended April 30, 2024, the related management’s discussion and analysis and related CEO and CFO certificates (collective, the “Required Documents“), all of which had a required deadline of August 28, 2024. The delay is attributable to the reasons outlined in the default announcement which was filed by the Company on SEDAR+ on August 27, 2024 (the “Default Announcement“). The Company expects to file the Required Documents on or before October 25, 2024 (the “Extension Period“).
Since the filing of the Default Announcement, the Company has worked with its audit team to answer the necessary questions for the audit team to complete its review in a timely manner. Related to the Company’s acquisition of The Cannavative Group, LLC, which closed earlier this year, the Company engaged with third-party consultants preparing the purchase price adjustment (the “Price Adjustment”), which the Company understands will be completed shortly, and the fair value of the personal property assets (the “Property FV”), which report has now been completed. Progress continues to be made in the preparation of the Price Adjustment, Property FV reports, and the audit team’s field work so that the Company may file the Required Documents within the Extension Period.
Except as described herein, there have been no material changes to the information contained in the Default Announcement or the default status report the Company filed on SEDAR+ on September 11, 2024. The Company has encountered no failures in fulfilling its stated intention in its Default Announcement with respect to satisfying the provisions of the alternative information guidelines under NP 12-203 (the “Alternative Information Guidelines“).
The Company does not anticipate any specified default subsequent to the default which is the subject of the Default Announcement, except for the need to additionally delay the filing of its interim financial report for the period ended July 31, 2024, the related management’s discussion and analysis and related CEO and CFO certificates, all of which have a filing deadline of September 30, 2024. The Company anticipates that such filings will be made on or before October 25, 2024. Subject to section 11 of NP 12-203, there is no other material information concerning the affairs of the Company that has not been generally disclosed.
The Company confirms that it will satisfy the provisions of the Alternative Information Guidelines by continuing to issue biweekly default status reports in the form of news releases for so long as it remains in default of the above-noted filing requirements.
About Vencanna
Vencanna is dedicated to offering investors a diversified and high-growth cannabis investment strategy. It proposes to achieve this through strategic investments and acquisitions spanning the entire cannabis value chain, encompassing cultivation, processing, distribution, retail, and ancillary businesses, with a particular focus in the Unities States of America.
Reader Advisory
Neither Canadian Securities Exchange nor its Market Regulator (as that term is defined in policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information concerning the anticipated filing of the financial statements.
Vencanna believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Vencanna can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to inherent risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed.
SOURCE Vencanna Ventures Inc.
View original content: http://www.newswire.ca/en/releases/archive/September2024/26/c4263.html
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trump Vs. Harris: As Vice President Builds Lead In Michigan And Inches Ahead In Pennsylvania, Pollster Says 'Get-Out-The-Vote Strategies' Crucial In Highly Competitive Race
Vice President Kamala Harris remains in the lead in two key swing states that will matter for the Nov. 5 election results, according to a new poll by the University of Massachusetts Lowell/YouGov Survey published Thursday.
Tally In Michigan: Harris had a five-point lead in Michigan as she received the support of 48% of the likely voters versus the 43% support Republican candidate Donald Trump received. No other candidate received more than 2% support and 3% said they were undecided.
The survey was conducted on Sept. 11-19 with a sample of 650 likely voters in Michigan, with the adjusted sample of error at plus, or minus 4.37%.
“For a swing state, this margin is good news for the vice president’s campaign,” said Rodrigo Castro Cornejo, UMass Lowell assistant professor of political science.
“In the next few days, we can expect the Harris campaign will defend her lead. The Trump campaign, on the other hand, has a negative favorability that needs to be overcome if they want to remain competitive in the state.”
The Harris as well as Trump backers are firm in their choices, with only 6% of Trump backers and 4% of Harris backers saying they could change their minds and vote for different candidates.
On a negative note, Trump’s favorability rating left a lot to be desired. Notwithstanding the close race, suggested by the head-on-head matchup, the former president had a net negativity favorability rating of -15, with 41% viewing him favorably, while 56% viewed him unfavorably. Three percent said they had no opinion about him.
Harris had a net neutral favorability rating, with 47% each saying they viewed her favorably and unfavorably. Five percent said they had no opinion about her.
Trump is scheduled to campaign in West Michigan on Friday and is scheduled to speak at a manufacturing facility in a Grand Rapids suburb and host a town hall at Macomb Community College in Warren. Meanwhile, Harris was in Michigan last week and participated in a livestream event hosted by TV host Oprah Winfrey from Farmington Hills.
Tally in Pennsylvania: Harris prevailed over Trump by a margin of 48%-46% in the key swing state of Pennsylvania, another UMass UMass Lowell Center for Public Opinion and YouGov poll showed. No other candidate received more than 1% support and 4% said they were undecided.
The poll was conducted online-based between Sept. 11-19 and had a margin of error of plus/minus 4 percentage points.
Four percent of Trump voters said they could switch their preferences and a steeper 7% of Harris felt similarly.
“The presidential race remains very close in Pennsylvania with the coming weeks a crucial time for both campaigns,” said Castro Cornejo. “As can be expected in a highly competitive race with few undecided voters, get-out-the-vote strategies will become increasingly important to mobilize supporters and ensure they go to the polls on Election Day.”
No other candidate on the ballot received more than 1% of support from respondents in the survey, while 4% reported remaining undecided.
Harris had a net negative favorability rating of 1%, while her rival had a far worse negative 11 percent favorability rating.
In the Senate race, Sen. Bob Casey, Jr. (D-Pa.) was ahead of David McCormick by a 47%-38% margin.
The polling averages compiled by prominent pollster Nate Silver showed Harris leading Trump by 1.5 points in Pennsylvania (48.8%-47.3%) and by 2.3 points in Michigan (49.1%-46.8%).
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Record rental construction drives housing starts in Canada's largest cities
OTTAWA, ON, Sept. 26, 2024 /CNW/ – Total housing starts in the six largest census metropolitan areas (CMAs) rose by 4% in the first half of 2024 (68,639 units) compared to the same period in 2023 (65,905), driven by significant increases in Calgary, Edmonton, and Montréal. This according to the latest Housing Supply Report (HSR) by Canada Mortgage and Housing Corporation (CMHC), which examines new housing construction trends in Canada’s six largest CMA’s: Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montréal.
Developers continued to focus on multi-unit apartment buildings at historically high levels, as the 49,172 apartment starts in the first half of 2024 made up 72% of all new home construction in the six CMAs. Construction of rental housing, supported by many government incentives and policies, made up the highest share of apartment starts on record (47%) and over one third of total housing starts. For example, Montréal saw a 106% increase in rental construction, with 7,192 new rental units being started, the most out of the six markets covered.
Also in the first half of 2024, developers prioritized clearing backlogs of the record number of projects under construction. As a result, apartment completions increased across the six CMAs, setting new records in each one except Montréal and Vancouver.
Despite this progress, when adjusted for population growth, per-capita housing starts were flat compared to the same period last year and not enough to keep pace with the growth in demand.
You can download and read the entire Housing Supply Report (HSR) on the CMHC website.
Quote:
“The growth in actual starts observed in the first half of this year is encouraging, considering the tighter financing conditions and higher construction costs faced by homebuilders. With record low vacancy rates in Canada’s largest cities, the increased investment by the private sector, leading to a rise in rental construction was much welcomed. However, per-capita housing starts remain a concern, as supply did not rise enough to keep pace with demand and improve overall affordability,” said Aled ab Iorwerth, Deputy Chief Economist for the CMHC.
Quick facts:
- Calgary and Edmonton led the growth in housing starts, which reached the highest and second-highest level on record, respectively, including uniquely strong growth in single-detached starts.
- In Montréal, housing starts rebounded, up 58% from last year’s 26-year low, with most starts geared toward the rental market.
- Housing starts decreased in Toronto, Vancouver, and Ottawa. Apartment starts, notably condominiums, fell as investors – especially those in Toronto and Vancouver – found pre-construction apartments less appealing amid high financing costs and lower demand.
- Amid tighter financing conditions for new projects, homebuilders prioritized clearing backlogs of projects under construction, leading to increased apartment completions across all six CMAs.
- Despite regional differences in new home construction, municipalities and provinces across the country are working actively to increase housing supply and variety.
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View the related podcast with report spokesperson CMHC Deputy Chief Economist, Aled ab Iorwerth on CMHC’s YouTube channel.
Get the most up-to-date information on housing research by subscribing to CMHC’s Housing Updates newsletter.
CMHC plays a critical role as a national convenor to promote stability and sustainability in Canada’s housing finance system. Our mortgage insurance products support access to home ownership and the creation and maintenance of rental supply. Our research and data help inform housing policy. By facilitating cooperation between all levels of government, private and non-profit sectors, we contribute to advancing housing affordability, equity, and climate compatibility. And we actively support the Government of Canada in delivering on its commitment to make housing more affordable.
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SOURCE Canada Mortgage and Housing Corporation (CMHC)
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/September2024/26/c9053.html
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'Big Short' investor Michael Burry bet half of his portfolio on Chinese stocks. It's finally starting to pay off.
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Famed “Big Short” investor Michael Burry is benefiting from the recent surge in Chinese stocks.
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Burry’s Scion Asset Management has nearly half of its portfolio invested in Chinese tech giants like Alibaba.
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China’s recent stimulus measures, including interest-rate cuts, have sparked a surge in stock gains.
The surge in Chinese stocks this week should be music to the ears of hedge fund manager Michael Burry of “The Big Short” fame.
Burry began aggressively buying Chinese stocks in the fourth quarter of 2022, and it seems to finally be paying off.
According to 13F filings, Burry’s Scion Asset Management, which manages about $200 million, has about half of its portfolio invested in Chinese tech giants.
Burry counts Alibaba at his largest position at 21% of the portfolio, and he was still buying the stock as recently as the second quarter, boosting his stake by 24%.
Burry also has 12% of his portfolio invested in Baidu, and another 12% of his portfolio invested in JD.com. Altogether, Burry had about 46% of his portfolio invested in the three Chinese stock as of June 30.
All three stocks have surged this week after China got serious about announcing stimulus plans to revitalize its struggling economy.
The People’s Bank of China announce key interest rate cuts, lowered bank reserve requirements to stimulate lending, and said it plans liquidity support for the stock market.
The country also encouraged its companies to start buying back stock.
All of these measures and dovish speak from policymakers led to a massive surge in China’s stock market this week.
The iShares MSCI China ETF is up 18% so far this week. Meanwhile, shares of Alibaba, Baidu, and JD.com are up 19%, 18%, and 32% so far this week, respectively.
According to data from HedgeFollow, which tracks and compiles data from 13F filings, the recent gains in China’s stock market should mean Burry too is seeing some sizable gains in his portfolio, with Alibaba leading the charge.
HedgeFollow estimates that Burry has an average cost per share of $78.83 for his Alibaba stake. Shares of Alibaba hit $105.25 in Thursday afternoon trades, representing an estimated gain of 34%.
This assumes that Burry has not sold any shares since Scion’s last 13F filing, which offers data as of June 30.
Burry isn’t the only hedge fund manager making money off of the recent surge in China’s stock market.
Billionaire investor David Tepper said on Thursday that it’s a buy “everything” moment for Chinese stocks.
Like Burry, Tepper count Alibaba as his hedge fund’s largest position, making up about 12% of his $6.2 billion Appaloosa fund. Tepper believes there’s more upside to be had in Chinese stocks due to their depressed valuations.
“Even with the recent moves they’re like on a flat-line low compared to where they have been in the past. And you’re sitting there with single multiple PEs, with double-digit growth rates for the big stocks that trade over here,” Tepper said in an interview with CNBC on Thursday.
Read the original article on Business Insider