Day: November 26, 2024

AbbVie is another big pharmaceutical company that’s been underperforming in a bull market. Shares of the stock are up by just 9.5% since the end of 2022 because of a huge patent cliff regarding its lead drug.

Humira is an anti-inflammation injection that racked up $21.2 billion in sales during 2022. It lost patent-protected market exclusivity in 2023 and sales fell to an annualized $8.9 billion in the third quarter.

Even though the bottom has fallen out from under the company’s top-selling product, AbbVie is still raising its dividend payout. The payment scheduled for February will be 5.8% higher than the payouts investors received this year. At recent prices, it offers a 3.7% yield, and there could be plenty of big payout bumps in its future.

Third quarter Humira sales collapsed by 37% year over year. Those losses were more than offset by soaring sales of Skyrizi, a psoriasis injection, and Rinvoq, an arthritis tablet. Both of these drugs launched in 2019, and they’re already generating a combined $19.3 billion in annualized sales.

Skyrizi and Rinvoq aren’t the only growth drivers that will help AbbVie continue raising its dividend rapidly. The Food and Drug Administration approved Vyalev, a new treatment for Parkinson’s disease, in October. There are over 10 million people living with the progressively debilitating disease. As the first and only injectable levodopa treatment that lasts for 24 hours, advanced-stage patients and their physicians could start beating a path to AbbVie’s door.

AbbVie’s raised its dividend more than fourfold since spinning off from Abbott Laboratories in 2013. With several blockbusters driving growth and new ones entering the market, income-seeking investors can look forward to at least another decade of steady dividend raises from this stock.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,053!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,533!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $484,170!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Pfizer. The Motley Fool has a disclosure policy.

2 High-Yield Dividend Stocks to Buy Now for a Lifetime of Passive Income was originally published by The Motley Fool

Pinterest has opened its social platform to demand from third-party advertisers, and it has since partnered with two of the three largest ad tech companies in the world.

Specifically, Pinterest last year announced a collaboration with Amazon that brought retail ads to its platform in the U.S., and the partnership recently expanded to Canada and Mexico. Likewise, the company earlier this year announced a collaboration with Google in previously unmonetized and under-monetized international markets.

Importantly, both partnerships bring more advertising content to Pinterest, which furthers its ability to surface relevant and shoppable products for users. Management believes that strategy can meaningfully boost sales in the future. Indeed, CEO Bill Ready recently told analysts, “We are still significantly under-monetized as a platform relative to the amount of commercial intent on the platform.”

Pinterest looks cheap by historical standards. Shares trade at 5.9 times sales. That is essentially the lowest valuation in the past year, and it falls below the three-year average of 6.7 times sales. Additionally, Wall Street anticipates the company’s adjusted earnings will grow at 21% annually through 2025. That makes the current valuation of 21 times adjusted earnings look like a bargain.

Comparatively, Wall Street anticipates Palantir’s adjusted earnings will increase at 27% annually through 2025. That makes the current valuation of 190 times adjusted earnings look absurdly expensive. To that end, Israel Englander’s decision to slash his stake in Palantir was sensible, as was his decision to increase his position in Pinterest.

Before you buy stock in Pinterest, 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 Pinterest 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 $869,885!*

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*.

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*Stock Advisor returns as of November 25, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Amazon, Palantir Technologies, and Pinterest. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Palantir Technologies, and Pinterest. The Motley Fool has a disclosure policy.

Billionaire Israel Englander Sold 90% of His Palantir Stock and Is Buying an AI Stock Partnered With Amazon and Google was originally published by The Motley Fool

Additionally, Broadcom is much more than just an “AI stock.” It’s a leading provider of wireless chips and accessories used in next-generation smartphones. A steady device replacement cycle spurred by wireless providers upgrading their networks to support 5G download speeds has been a growth driver for the company.

With so much going Broadcom’s way, you might be wondering why Halvorsen and his team cashed in their chips. One possibility is that Viking Global’s investment team is acutely aware of history.

There hasn’t been a game-changing innovation for 30 years that’s avoided an early innings bubble-bursting event. Without fail, investors consistently overestimate the early stage adoption and utility of next-big-thing innovations, which eventually leads to disappointment. If the AI bubble were to burst, it’ll undoubtedly be bad news for Broadcom’s fastest-growing initiative.

Another reason to ring the register is Wall Street’s historically expensive valuation. The S&P 500‘s Shiller price-to-earnings (P/E) ratio is the third-priciest it’s ever been during a bull market, when back-tested to 1871. What’s more, the “Buffett Indicator” hit its highest reading ever this month. Growth stocks tend to be hit hard during stock market corrections, and a few predictive valuation tools foreshadow trouble to come.

Lastly, Broadcom is no longer the smoking-hot bargain it once was. Though shares of the company have averaged a reasonably low forward P/E ratio of 16.5 over the trailing-five-year period, Broadcom is currently valued at a 61% premium to this average.

On the other end of the spectrum is a stock Halvorsen couldn’t stop buying during the September-ended quarter. I’m talking about globally dominant payment processor Visa (NYSE: V), whose shares have risen by nearly 2,400%, including dividends, since its IPO in March 2008.

Among the 23 new purchases made by Viking Global during the third quarter, none was larger than Visa (3,505,747 shares), which became the fund’s fifth-largest holding by market value, and its second-largest financial holding, behind only U.S. Bancorp.

One of the greatest investing catalysts for financial stocks is that they’re able to take advantage of the non-linearity of the economic cycle. While recessions are both normal and inevitable, they’re historically short-lived.

Since World War II ended in September 1945, only three out of 12 recessions lasted longer than 12 months, and none surpassed 18 months in length. By comparison, most periods of growth have endured multiple years, if not a decade on rare occasion. Financial stocks are able to take advantage of these disproportionately long periods of growth.

Another reason investors like Ole Andreas Halvorsen tend to pile into Visa is its dominant role as a payment processor. According to eMarketer, Visa accounted for roughly $6.45 trillion in credit card network purchase volume in the U.S. in 2023, which was more than double its next-closest competitor, Mastercard, at $2.73 trillion. Visa is highly unlikely to cede its leading market share in domestic payment processing anytime soon.

Furthermore, Visa may be able to sustain double-digit sales and earnings growth for years to come thanks to its international opportunity. For fiscal 2024, which ended Sept. 30, Visa recorded cross-border payment volume growth of 15%! Most emerging markets remain chronically underbanked, which should allow Visa to organically or acquisitively expand its reach in the coming years.

Lastly, Visa stock is still inexpensive. Despite its seemingly never-ending rally since its IPO, shares are valued at 24.5 times forward-year earnings. This represents a 14% discount to its average forward P/E ratio over the trailing-five-year period.

While Visa is cyclical and susceptible to downside when recessions occur, the company’s competitive advantages far outweigh any short-term concerns.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,053!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,533!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $484,170!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Sean Williams has positions in Mastercard, U.S. Bancorp, and Visa. The Motley Fool has positions in and recommends Mastercard, U.S. Bancorp, and Visa. The Motley Fool recommends Broadcom and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

Billionaire Ole Andreas Halvorsen Dumped Viking’s Entire Stake in Broadcom in Favor of a Globally Dominant Company That’s Risen Nearly 2,400% Since Its IPO was originally published by The Motley Fool

Importantly, recent commentary from Fed Governor Michelle Bowman underscores how closely policymakers will be watching the PCE price index reading for October.

“We have seen considerable progress in lowering inflation since early 2023, but progress seems to have stalled in recent months. The 12-month measure of core personal consumption expenditures inflation — which excludes food and energy prices — has moved sideways at around 2.7% since May, and the latest consumer and producer price index reports point to a similarly elevated or even higher reading for October.”

To summarize, the consensus estimate says the PCE inflation reading for October will clock in at 2.1%. But other economic data points released in recent weeks hint at a possible reacceleration. If that happens, the stock market could fall sharply as investors recalibrate their expectations regarding future rate cuts.

Alternatively, if the PCE inflation reading for October falls below the consensus estimate, the stock market could move sharply higher. Unfortunately, there is no way for investors to anticipate the outcome. But I believe the most prudent course of action is to stay invested in quality stocks that make good long-term holdings.

Admittedly, Nov. 27 could be a rough day for investors that follow that advice, but the stock market has never failed to recoup its losses following past drawdowns. Conversely, investors that sell stocks to avoid a possible decline may miss a very good day, and may hesitate to buy again while waiting for a correction that never comes.

I’ll end with a quote from famous investor Peter Lynch. “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,053!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,533!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $484,170!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 25, 2024

Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool recommends CME Group. The Motley Fool has a disclosure policy.

The Stock Market Could Rise or Fall Sharply Tomorrow (Nov. 27). Here’s Why was originally published by The Motley Fool

Before the election, Chinese stocks surged as the government implemented stimulus initiatives many investors believed would awaken the Chinese economy. Many Chinese stocks have strong earnings growth but don’t trade at nearly the same valuations as growth and tech stocks in the U.S. The sector can be difficult to navigate due to the Chinese government’s influence, and China’s economy, which has struggled this year.

However, the rally has stalled since Election Day as investors grow worried about President-elect Donald Trump’s administration and potential tariffs on Chinese imports that could be as high as 60%, according to Trump.

It’s worth noting that Burry purchased additional shares in these stocks before knowing the election’s outcome. He also purchased a significant amount of put options on these three Chinese stocks, setting up what could be a protective put trading strategy. Buying put options typically leads to profits when a stock goes down but when paired with a long position as a protective put, the strategy is bullish overall.

Burry likely knew that a Trump victory was possible. He might also think the impact of tariffs will be tough at first but that the market will digest them over time, or that Trump may not actually impose tariffs as high as 60%. Either way, Burry is one of the greats, so his positions should be taken seriously. JD.com, Alibaba, and Baidu have significant potential but the road could be rocky in the near term so be prepared for volatility if you decide to invest.

Before you buy stock in Baidu, 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 Baidu 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 $869,885!*

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*.

See the 10 stocks »

*Stock Advisor returns as of November 25, 2024

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Baidu. The Motley Fool recommends Alibaba Group and JD.com. The Motley Fool has a disclosure policy.

Ultimate Contrarian Michael Burry, Who Correctly Called the Housing Crisis in 2008, Is Now Piling Into 3 Stocks That Could Struggle Under a Trump Administration was originally published by The Motley Fool