Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
SBA Communications‘ SBAC extensive and geographically diverse wireless communication infrastructure portfolio is well-positioned to gain from the wireless carriers’ high capital spending for network expansion amid growth in mobile data usage and accelerated 5G network deployment efforts.
The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves, domestically and internationally, to capitalize on the secular trends of the industry are encouraging.
However, customer concentration and consolidation in the wireless industry are key near-term concerns. The churn arising from the Sprint-related decommissioning is likely to hurt top-line growth.
Shares of this Zacks Rank #3 (Hold) company have risen 25.9% over the past three months, outperforming the industry’s upside of 16.5%.
Image Source: Zacks Investment Research
What’s Aiding SBAC?
The advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. This has resulted in wireless service providers and carriers expanding their networks and deploying additional equipment for existing networks to boost network coverage and capacity to meet the rising consumer demand, poising tower real estate investment trusts like SBAC well for growth.
SBA Communications has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive.
As the company continues to expand its tower portfolio and seek new growth opportunities, it focuses on business expansion into domestic and select international markets with high growth characteristics. During the first half of 2024, SBAC acquired 128 towers and related assets. In the second quarter of 2024, it also built 100 towers. Subsequent to June 30, 2024, the company purchased or is under contract to purchase 106 communication sites for a total cash consideration of $49.3 million. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth across the globe.
Solid dividend payouts are arguably the biggest enticement for investment in REIT stocks. SBAC has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 22.42%. Given SBA Communications’ decent financial position and lower-than-industry dividend payout rate, the dividend distribution is expected to be sustainable over the long run.
What’s Hurting SBAC?
The company has a high customer concentration, with T-Mobile TMUS, AT&T T and Verizon VZ accounting for the majority of its domestic site-leasing revenues. In the second quarter of 2024, T-Mobile, AT&T and Verizon accounted for 38.2%, 29.7% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.
The loss of any of these customers, consolidation among them or a reduction in network spending might hurt the company’s top line significantly. The churn arising from the Sprint-related decommissioning is likely to weigh on its performance in the near term.
SBA Communications has a substantially leveraged balance sheet, with $12.4 billion of total debt and net debt to the annualized adjusted EBITDA leverage of 6.4X as of the end of the second quarter of 2024. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated. Moreover, its debt-to-capital ratio is higher than the industry average. A high debt-to-capital ratio limits its strength to withstand any credit crisis and unexpected negative externalities in the future.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Peter Schiff Compares Bitcoin Investors To Frogs On The Boil: 'How Much Longer Will You Let The Water Temperature Rise Before Jumping Out Of The Pot?'
Renowned economist Peter Schiff scoffed at Bitcoin BTC/USD HODLers for being oblivious to the impending bear market.
What Happened: On Thursday, the staunch Bitcoin critic took to X to highlight the leading cryptocurrency’s decline against gold—an asset Schiff vehemently advocates for.
“For now, Bitcoin is holding $60,000 support. More significantly, it’s down 40% priced in gold since hitting its record high just under 3 years ago,” Schiff remarked.
He urged Bitcoin investors to “Wake up, and smell the bear market.” He used the famous “frog in a boiling water” theory to ridicule them, asking, “How much longer will you let the water temperature rise before jumping out of the pot?”
Why It Matters: Schiff’s comments follow a series of similar hot takes on Bitcoin’s underperformance vis-à-vis gold’s growth.
Last week, he pointed out that gold had reached another record high, but the significance of this rise has been overlooked due to the overwhelming focus on Bitcoin.
In fact, Schiff added an X poll to ascertain if Bitcoin investors were worried about the leading cryptocurrency’s declining value against gold. Interestingly, more than 75% voted that they were not worried, while just about 22% hinted that they were concerned.
Price Action: At the time of writing, Bitcoin was exchanging hands at $60,941.26, down 0.43% in the last 24 hours, according to data from Benzinga Pro.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
If You'd Invested $1,000 in Amazon Stock 27 Years Ago, Here's How Much You'd Have Today
When it comes to growth potential over time, few stocks have matched Amazon (NASDAQ: AMZN). The e-commerce pioneer has evolved from an online bookseller to a conglomerate that leads the way in several niches of retail and technology.
In hindsight, if one had the patience to wait and the fortitude to ride out massive declines, a $1,000 investment in the company’s initial public offering (IPO) would have paid off handsomely for shareholders.
Amazon’s growth
A $1,000 investment at the closing price on the day of the IPO and not sold would be worth roughly $1.87 million today. The stock made its debut on May 15, 1997, at a pre-split closing price of $23.50 per share ($0.098 per share split-adjusted). Assuming one could buy fractional shares, the 42.55 shares bought on that day would have grown to 10,212 shares worth $182.69 each as of the time of this writing.
Those who owned the stock for the entire 27-year history haven’t been on a predictable or easy path.
Investors may have anticipated Amazon would venture beyond the sale of just books, it was next to impossible to predict the huge variety of products it would sell or that it would spearhead the cloud computing industry through Amazon Web Services (AWS). This is critical because AWS generates the majority of its operating income.
Investors also endured a brutal sell-off during the dot-com bust. Between 1999 and 2001, Amazon’s stock fell as much as 95% and didn’t return to its 1999 high until 2009.
For a time, that drop made it look more like many of the failed online retailers at the time. Hence, investors would have had to have a strong belief in the vision of founder Jeff Bezos to hold their shares through that period.
Ultimately, the history of Amazon stock outlines both the rewards and the difficulties of IPO investing. While the potential returns can be massive, it typically takes vision, analysis skills, discipline, and a high pain tolerance to identify such investments early and allow them to grow to their full potential.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $728,325!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 30, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
If You’d Invested $1,000 in Amazon Stock 27 Years Ago, Here’s How Much You’d Have Today was originally published by The Motley Fool
Buy These 3 Dividend Stocks Today and Sleep Soundly for a Decade
Consumer spending drives most of the U.S. economy, but industrial companies are the foundation of modern life in the United States. Thanks to the work of certain industrial companies, people are, in general, safer, healthier, and enjoy more basic luxuries than decades ago.
These companies enjoy enormous market opportunities, leadership in their fields, and strong financials that create sustained earnings growth, dividends, and investment returns.
Investing doesn’t always need to be complicated. Sometimes, what’s worked in the past will likely continue working. Here are three industrial dividend-paying companies investors can confidently buy and hold for at least the next decade.
1. Lockheed Martin
Defense contractor Lockheed Martin (NYSE: LMT) is critical in protecting the United States and its allies. The company sells air, land, sea craft, weapons systems, and technology to the U.S. military. War is terrible, but the unfortunate reality is that America’s role as a world power tends to draw the country into various geopolitical conflicts. Currently, the United States is supporting Ukraine and Israel in their respective conflicts in Europe and the Middle East. The U.S. defense budget ebbs and flows, but generally heads higher over time and is poised to continue rising.
Lockheed Martin has benefited from that spending, generating steady growth that has fueled 22 consecutive years of dividend growth and market-beating total returns over the past decade. Lockheed Martin’s dividend payout ratio is only 47% of its estimated 2024 earnings. Plus, the dividend offers a solid 2.1% starting yield.
Lockheed Martin produces the F-35 Lightning II, the world’s most expensive weapons program. That program should help drive long-term growth, leading to higher earnings and dividends for the next decade.
2. Emerson Electric
Companies must evolve to continue growing as the world changes. Emerson Electric (NYSE: EMR) has enjoyed decades of success as a prominent industrial conglomerate. The stock is a Dividend King because the company has paid and raised its dividend for 67 consecutive years. Yet, the company hasn’t rested on its laurels. Over the past few years, Emerson has restructured itself, shedding undesirable businesses and acquiring new ones to position itself for long-term growth in renewable energy, factory automation, and industrial software.
Emerson should continue raising its dividend for years. Its dividend payout ratio is just 38% of estimated 2024 earnings and yields 1.9% at the current share price. Emerson’s management team targets double-digit annualized earnings growth through economic ups and downs, which could mean hefty raises that don’t move the payout ratio much. With healthy growth on the horizon, now might be the best time in years for dividend investors to check out Emerson.
3. Badger Meter
Water is a basic necessity, but it isn’t easy to filter, treat, and transport it to everyone. Even in the United States, the water systems need more investment. The American Society of Civil Engineers 2021 Infrastructure Report Card graded U.S. water infrastructure at a C-, and it’s far worse in many places worldwide. Badger Meter (NYSE: BMI) sells products that help control and monitor water flow and quality, and has enjoyed years of strong growth. The stock has been an absolute rock star, outperforming the S&P 500 index by roughly 10-to-1 over the past few decades.
The company’s success has enabled management to shower investors with dividends. Badger Meter has raised its dividend for 32 consecutive years, with an average increase of 11% over the most recent decade. There is plenty of room for future growth, too. The dividend will only take up 33% of Badger Meter’s estimated 2024 earnings, and analysts believe the company’s earnings will grow by an average of 18% annually over the next three to five years. The yield is only 0.6% today, but a decade of double-digit dividend growth adds up.
Those looking for rapid dividend growth and potential market-beating returns should check out this under-followed water stock.
Should you invest $1,000 in Lockheed Martin right now?
Before you buy stock in Lockheed Martin, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lockheed Martin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $716,988!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 30, 2024
Justin Pope has positions in Emerson Electric. The Motley Fool has positions in and recommends Emerson Electric. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.
Buy These 3 Dividend Stocks Today and Sleep Soundly for a Decade was originally published by The Motley Fool
Publicly Traded South African Mining Co. Invests In Fire-Resistant Hemp Buildings – New Industry Or PR Stunt?
Afrimat AFTLF is known for its operations in lime, iron ore, anthracite and manganese, has made a move into the hemp industry by partnering with legacy brand Hemporium.
Together, they are using hemp-based materials to expand a building in Cape Town. This venture raises questions: is Afrimat betting on the future of South Africa’s hemp industry, or is it a PR stunt?
The investment comes at a time when South Africa is pushing to grow the sector, having recently issued 1,110 permits for hemp cultivation as part of the government’s master plan under the Cannabis for Private Purposes Bill.
Afrimat’s involvement could provide the industry with much-needed capital to scale.
- Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you’re serious about the business.
Afrimat’s Green Transition
Afrimat’s collaboration with Hemporium signals the company’s interest in sustainability.
Beyond its mining operations, the publicly-traded Afrimat has been working on renewable energy initiatives, recycling mining by-products and rehabilitating mined-out areas through reforestation and water conservation projects, reported Hemp Today.
Mining operations for materials like lime, iron ore, anthracite and manganese have significant environmental impacts. Iron ore mining, for example, can contaminate water sources through increased sediment levels and metal runoff, while the removal of vegetation for mining operations drastically reduces biodiversity. Limestone mining similarly contributes to environmental degradation by altering land-use patterns and causing dust and noise pollution, which can harm local ecosystems and communities.
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Hemp Town
The hemp-lime block technology used in Cape Town, combined with specialized binders, promises to offer a sustainable alternative in the construction industry.
Hemporium and Afrimat Hemp, a subsidiary of Afrimat, are nearing the completion of a seven-story expansion on an existing five-story building. The new structure, built with 28 cm-thick hemp blocks, will bring the building’s total height to 12 stories.
The space will house Hemporium’s flagship retail outlet, where they will sell hemp-derived clothing, skincare and CBD products, along with a steak restaurant and 50 hotel rooms.
The walls are built with hempcrete blocks, made by Afrimat Hemp from European hemp hurd and locally sourced lime, capable of withstanding fire for 135 minutes.
The building also features solar panels, smart metering, a borehole with filtration for backup water and a thermally activated building system (TABS) to regulate temperature without mechanical heating or cooling.
How Is Concrete Made Out Of Hemp?
Hempcrete, a sustainable building material, begins with harvesting the stalks of the hemp plant. Once harvested, the stalks are left on the ground for 10 to 14 days to degrade the outer fibers. This microbial breakdown helps release the inner woody core, known as the hemp hurd, which is the essential construction material.
After this process, the hemp stalks are collected, crushed and sorted to separate the fiber from the hurd. The hurd, chopped into small particles (typically around 1 inch), is cleaned to remove dust, ensuring the quality of the material.
The next step involves mixing the processed hemp hurd with lime and water. The typical ratio is three parts hemp, one part lime, and one part water, although these proportions can vary depending on the humidity and specific requirements of the project. This mixture is then used to create blocks or panels for construction.
In some cases, the mixture is poured into molds to make bricks, which are compacted and allowed to air dry or placed in an oven. Alternatively, for larger structures, the mixture can be poured directly into formwork to create whole walls, reducing the need for individual brick assembly.
Hempcrete is known for being lightweight – 50% lighter than traditional concrete – and ten times more insulating, offering an eco-friendly and flexible building solution.
Read Next: Is Hempcrete The New Green Construction Material? It Could Soon Be Approved As Just That
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Charlie Munger's Three-Word Rule That Guided Warren Buffett Could Help You Too
A podcaster recently shared his experience of meeting Charlie Munger and having dinner with the legendary investor and former vice chairman of Berkshire Hathaway (NYSE:BRK)(NYSE:BRK).
Here’s the most valuable piece of advice and key takeaway from that encounter.
What Happened: Munger and investing icon Warren Buffett had a long-standing friendship, which continues to influence the success of Berkshire Hathaway. With Munger’s recent passing, his legacy and passion for surrounding himself with exceptional people continue to shape the company. Without their chance meeting, Berkshire Hathaway might have taken a very different path.
Don’t Miss:
David Senra, the Founders Podcast host, reads an entrepreneur’s biography each week and breaks it down as an episode on the podcast.
For one of the recent podcasts, Senra shared his thoughts on the book “Tao of Charlie Munger: A Compilation of Quotes from Berkshire Hathaway’s Vice Chairman on Life, Business, and the Pursuit of Wealth” by David Clark.
In the podcast episode, Senra mixes quotes and thoughts from the book with real-life answers he got from a dinner he had with Munger.
Trending: How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.
“I had dinner with Charlie Munger. I spent over 3 hours with him. I got to see his library. I could ask him any question I wanted,” Senra tweeted.
While Senra shared several quotes from Munger in the book and some that he heard from Munger at dinner, he pointed to one that made the biggest impact.
“The most important lesson I learned from him that night was: GO FOR GREAT.”
Senra said the quote from Munger breaks down to a combination of 4 simple ideas:
-
1. Charlie looks at everything through the lens of history. Human nature does not change. The same behaviors repeat forever.
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2. Problems from time to time should be expected. This is an inescapable part of life.
-
3. Wise people do not whine about problems. They prevent them. “Wisdom is prevention.”
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4. Great businesses are rare. Great people are rare, too. Great people and great businesses produce fewer problems.
Also Read: Are you rich? Here’s what Americans think you need to be considered wealthy.
Why It’s Important: In the podcast, Senra adds that a big portion of people’s lives is searching for their goals, and they often don’t reach where they’re meant to be until later in their life.
“Your mission in life is to get into a great business (and stay there) and build relationships with great people. Doing that will prevent the majority of problems that are under your control. Go for great,” Senra said of Munger’s four steps.
The podcaster said that most people have to start more than one company to reach their goal, including Munger.
“Munger was in his 40s before he was doing full-time what he was put on the Earth to do.”
Munger became the Vice Chairman of Berkshire Hathaway in 1978 and then became the right-hand man to Buffett. The position came after a meeting between Buffett, Munger and two friends that led to the two connecting over talking about stocks.
Trending: This Adobe-backed AI marketing startup went from a $5 to $85 million valuation working with brands like L’Oréal, Hasbro, and Sweetgreen in just three years – here’s how there’s an opportunity to invest at $1,000 for only $0.50/share today.
Munger had coincidentally worked at Buffett & Son, a grocery store owned by Buffett’s grandfather, as a teenager.
With Munger on board, Buffett changed some of his investing principles, including his concerns about diversification. Munger was able to get Buffett to not limit himself to Benjamin Graham’s teachings.
“Buy wonderful businesses at fair prices,” Munger told Buffett.
The concept was to buy businesses that throw off lots of cash, and then use the cash to invest in and buy other businesses. With Munger helping with investments, Buffett was convinced to invest in Coca-Cola (NYSE:KO), a decision he may never have made without Munger’s influence.
Going for great and surrounding himself with great people helped Buffett and Berkshire Hathaway immensely, and is one of the key pieces of advice he learned from Munger along the way.
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This story is part of a new series of features on the subject of success, Benzinga Inspire.
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This article Charlie Munger’s Three-Word Rule That Guided Warren Buffett Could Help You Too originally appeared on Benzinga.com
Microsoft's Targeted Upside Might Be Too Good to Ignore
Since hitting a record back in July and then selling off, shares of tech titan Microsoft Corp. MSFT have been a bit slower than others in getting back to highs. For context, the benchmark S&P 500 index was hitting fresh highs by the middle of September and, as recently as Monday, was closing at a new record.
Confirmation from the Fed that they’re going to start cutting rates and continuing signs that inflation is cooling have combined to re-ignite the risk-on sentiment that controlled stocks for much of the first six months of the year. Against the S&P 500’s 12% gain from its August lows, Microsoft has tacked on as much as 14%, but a week of losses means it’s holding on to less than 10% of them right now.
However, despite what appears to be this lackluster performance, there are several reasons to think that Microsoft is a solid buy right now and that any further selling will only boost its risk/reward profile. Let’s jump in and take a look.
Microsoft’s Fundamental Performance
To start with, let’s look at Microsoft’s fundamental performance. It’s worth pointing out that Microsoft’s most recent earnings report had a lot to do not only with its stock’s selloff in August but also with the bullish outlook investors and analysts have for it. The company smashed analyst expectations on both its headline numbers, which was always a good sign but then provided lighter-than-expected forward guidance for revenue from its Azure cloud unit.
Considering how softly Microsoft shares had been trading throughout July, it was understandable that a weak outlook like this sent them even lower. But what really compounded matters was the fact that the broader market started sinking the following week, as a dodgy jobs report ignited concerns that the Fed had delayed cutting rates too long.
Wall Street Targets Suggest Major Upside for Microsoft Stock
However, for those of us on the sidelines thinking about getting involved, there’s actually a lot to like here. Despite issuing weak forward guidance for a key part of the business and then enduring one of the wider stock market’s worst weeks in years, shares of Microsoft have been gaining since the first week of August. Not only have they been gaining, but they’ve been setting a pattern of higher, lower, and higher highs. This is one of the most bullish setups out there and indicates that there is a constant source of demand for Microsoft shares during any dip.
Considering the stock has fallen about 5% in the past two weeks alone, we could soon see this source of demand being tapped again. Beyond the promising technical performance, Microsoft shares are also enjoying the benefit of being highly rated by Wall Street analysts.
Take DA Davidson, for example, which reiterated its $475 price target on Microsoft shares in the last week of September. From where the stock closed on Tuesday evening, that suggests a targeted upside of nearly 15%. There’s also the $506 price target from Morgan Stanley last month and the $550 target from Wedbush in the aftermath of Microsoft’s earnings. It’s not often that analysts call for a potential upside of 30%, but that’s the case with Microsoft.
The Bottom Line: Microsoft’s Dip Could Be a Strong Buying Opportunity
Some concerns are worth noting, such as those of Allspring Global Investments, which noted earlier this week, “There’s some AI fatigue when it comes to companies like Microsoft, given the incredible run they’ve had.” There have also been some unfavorable comparisons between Microsoft and Oracle Corporation ORCL in this regard, given the fact that the latter is trading at a lower valuation.
However, aside from the weaker-than-expected Azure update, which has surely been properly baked into Microsoft’s shares by now, there are far more reasons to like the stock than to avoid it. The technical case is strong, while the analysts’ targeted upside speaks for itself. Let’s see if the current dip can start finding some buyers in the next few sessions and turning north once again.
The article “Microsoft’s Targeted Upside Might Be Too Good to Ignore” first appeared on MarketBeat.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Spirit Airlines Engages In Bankruptcy Talks Amid Financial Struggles: Report
Spirit Airlines Inc SAVE is reportedly in discussions with bondholders regarding the terms of a potential bankruptcy filing. The budget airline is exploring restructuring options following a failed merger with JetBlue Airways Corporation JBLU.
What Happened: Spirit is considering a Chapter 11 filing as it grapples with significant financial challenges. The airline is also looking into restructuring its balance sheet through an out-of-court transaction, reported The Wall Street Journal on Thursday, citing people familiar with the matter.
However, according to the report, recent discussions have primarily focused on securing an agreement with bondholders and creditors to support a bankruptcy filing.
Spirit is facing mounting pressure due to its $3.3 billion debt load, which includes over $1.1 billion in secured bonds maturing within a year. The airline must refinance or extend these notes by Oct. 21, as per its credit card processor’s deadline.
CEO Ted Christie mentioned in August that the company is in active discussions with bondholders’ advisers to address these maturities.
“Before we get into the results, I want to note that we are engaged in productive conversations with the advisors of our bondholders to address the upcoming debt maturities. Because those conversations are ongoing, we are not going to go into detail or take any questions on this topic or speculate on potential outcomes. Needless to say, it is a priority, and we are focused on securing the best outcome for the business as quickly as possible, while staying focused on driving performance and implementing our new travel options and elevated guest experience,” Christie said in the August earnings call.
Spirit’s financial woes have been exacerbated by its inability to turn an annual profit since before the COVID-19 pandemic. The airline’s operational footprint is shrinking, with plans to reduce capacity by nearly 20% in the fourth quarter.
Additionally, Spirit has been affected by the recall of Pratt & Whitney engines, grounding part of its fleet and leading to pilot furloughs.
Why It Matters: The potential bankruptcy filing by Spirit Airlines comes in the wake of a terminated merger agreement with JetBlue Airways.
The two companies had initially planned a merger valued at $3.8 billion, which was expected to create a strong low-fare competitor in the airline industry. However, the merger was called off in March due to unmet conditions, impacting Spirit’s strategic plans.
Meanwhile, JetBlue has been focusing on its turnaround strategy, bolstered by rising air travel demand and lower fuel costs. Analysts have upgraded JetBlue’s stock, projecting a significant liquidity position by 2026.
Spirit Airlines has also faced regulatory challenges, such as a temporary block on a rule requiring airlines to disclose fees upfront. This legal development briefly boosted Spirit’s stock in July.
Price Action: Spirit Airlines Inc. stock closed at $2.24 on Thursday, down 3.45% for the day. In after-hours trading, the stock plummeted by 30.38% to $1.56. Year to date, Spirit Airlines has fallen significantly, down 86.30%.
Meanwhile, JetBlue Airways Corporation ended the day at $6.39, down 2.74%. In after-hours trading, the stock rose by 4.85%. Year to date, JetBlue has gained 21.25%, according to data from Benzinga Pro.
Read Next:
Photo via Wikimedia Commons
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Is QuantumScape Finally Turning the Corner?
At first glance QuantumScape (NYSE: QS) appears to be a dgreat investment. Its solid-state battery technology is developing at a time electric vehicles (EVs) are on the cusp of taking over global roads. Further, its solid-state battery technology can store more energy, improve range, charge faster, is safer, and reduces cost as it eliminates part of the bill of materials from traditional lithium-ion batteries.
The problem is QuantumScape has had years to develop and get this technology into commercial production, and so far it still hasn’t taken the final step. But is it about to finally turn the corner?
Cash burn
QuantumScape turning the corner comes down to two primary things: cash burn and commercial production. As QuantumScape has yet to generate meaningful revenue, it’s imperative that the company keeps its cash burn at the sweet spot of developing its technology fast enough, but also reserving enough cash runway to last until commercial production — unless it wants to raise more capital.
The good news is that the company ended the second quarter with $938 million in liquidity with a negative free cash flow of $308 million in 2023, which gives it a cash runway of roughly three years. Even better news is that its recent deal with PowerCo, the battery company of Volkswagen Group, and its capital-light licensing arrangement lengthens QuantumScape’s cash runway by 18 months into 2028.
It’s also this deal with Volkswagen’s PowerCo that could be the final step toward commercial production, although it will take time to take that last step.
Brief recap
The critical PowerCo deal is a major step forward for QuantumScape’s global scale-up strategy. The deal creates a dedicated team of experts from PowerCo and QuantumScape that will work together to commercialize production of QuantumScape’s solid-state batteries for up to 500,000 vehicles initially with an opportunity to double that production in time. The deal also calls for QuantumScape to receive a $130 million prepayment of royalties upon satisfactory technical progress — a big deal when you consider that covers almost half of the company’s cash burn annually.
But before QuantumScape can take this final step with PowerCo, it must first turn the corner with Raptor and Cobra. Raptor and Cobra are simply code names for two stages of its production process. In 2024 Raptor has been focused on enabling low-volume sample production of its first commercial product, named QSE-5. Next year, Cobra will ramp up and will be the company’s attempt at higher-volume QSE-5 production and becoming the core technology platform planned for PowerCo licensing. The company has already begun to order Cobra equipment for 2025.
What it all means
After years of watching QuantumScape make slow but steady progress, investors are likely ready for the company to finally turn a corner. QuantumScape has the cash runway and commercial strategy to turn into a phenomenal investment over time, but investors have to be patient.
QuantumScape appears closer than ever to turning the corner, and if Cobra is successfully ramped up, the company will be so much closer to taking that final commercializing production step with PowerCo, and on its way to rewarding longtime investors.
Should you invest $1,000 in QuantumScape right now?
Before you buy stock in QuantumScape, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and QuantumScape wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $716,988!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 30, 2024
Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Volkswagen. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy.
Is QuantumScape Finally Turning the Corner? was originally published by The Motley Fool
Options Movement At Trade Desk: Jeffrey Terry Green Exercises Worth $11.41M
A significant insider transaction involving the exercise of company stock options was reported on October 3, by Jeffrey Terry Green, President and CEO at Trade Desk TTD, as per the latest SEC filing.
What Happened: In an insider options sale disclosed in a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission, Green, President and CEO at Trade Desk, exercised stock options for 280,649 shares of TTD. The transaction value amounted to $11,413,994.
The latest update on Thursday morning shows Trade Desk shares up by 0.23%, trading at $108.96. At this price, Green’s 280,649 shares are worth $11,413,994.
Discovering Trade Desk: A Closer Look
The Trade Desk provides a self-service platform that helps advertisers and ad agencies programmatically find and purchase digital ad inventory (display, video, audio, and social) on different devices like computers, smartphones, and connected TVs. It utilizes data to optimize the performance of ad impressions purchased. The firm’s platform is referred to as a demand-side platform in the digital ad industry. The firm generates its revenue from fees based on a percentage of what its clients spend on advertising.
Key Indicators: Trade Desk’s Financial Health
Revenue Growth: Over the 3 months period, Trade Desk showcased positive performance, achieving a revenue growth rate of 25.91% as of 30 June, 2024. This reflects a substantial increase in the company’s top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Communication Services sector.
Holistic Profitability Examination:
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Gross Margin: With a high gross margin of 81.1%, the company demonstrates effective cost control and strong profitability relative to its peers.
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Earnings per Share (EPS): With an EPS below industry norms, Trade Desk exhibits below-average bottom-line performance with a current EPS of 0.17.
Debt Management: Trade Desk’s debt-to-equity ratio is below the industry average. With a ratio of 0.11, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
Financial Valuation Breakdown:
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Price to Earnings (P/E) Ratio: The P/E ratio of 213.16 is lower than the industry average, implying a discounted valuation for Trade Desk’s stock.
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Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 24.99 as compared to the industry average, the stock might be considered overvalued based on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Trade Desk’s EV/EBITDA ratio, surpassing industry averages at 134.12, positions it with an above-average valuation in the market.
Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.
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Illuminating the Importance of Insider Transactions
In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.
When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Breaking Down the Significance of Transaction Codes
When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Trade Desk’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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