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2021-07-14

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Moderna tops $100 billion market cap for first time

2021-07-06

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3 Warren Buffett Stocks to Buy in July

2021-07-05

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2021-07-04

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When Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.

2021-07-02

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Palantir: Great Company, Risky Investment

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22:51","market":"us","language":"en","title":"Moderna tops $100 billion market cap for first time","url":"https://stock-news.laohu8.com/highlight/detail?id=1110985217","media":"seekingalpha","summary":"Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.","content":"<ul>\n <li>Moderna&nbsp;trades sharply higher in morning hours, topping $100B in market cap for the first time ever.</li>\n <li>Late June, the shares surged to their historic peak after Moderna detailed the efficacy of its coronavirus vaccine against newly discovered variants of the virus including the&nbsp;highly transmissible Delta variant.</li>\n <li>The announcement coincided with the Emergency Use Authorization granted for the COVID-19 shot in India, where the variant was first discovered.</li>\n <li>As&nbsp;indicated in the graph,&nbsp;Moderna shares have added over a tenth over the past week to outperform the broader market as concerns over the Delta variant rattled investors and health authorities.</li>\n <li>Last week, the data from The Centers for Disease Control and Prevention (CDC) indicated that the Delta variant which is believed to be 60% more transmissible than the Alpha variant had become the dominant strain of&nbsp;the virus in the U.S.</li>\n</ul>\n<p><img src=\"https://static.tigerbbs.com/043affcf30a9feb2d573535e31e336b1\" tg-width=\"846\" tg-height=\"571\" referrerpolicy=\"no-referrer\"></p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Moderna tops $100 billion market cap for first time</title>\n<style 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margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nModerna tops $100 billion market cap for first time\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-14 22:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.\nLate June, the shares surged to their historic peak after Moderna detailed the efficacy of its ...</p>\n\n<a href=\"https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MRNA":"Moderna, Inc."},"source_url":"https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1110985217","content_text":"Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.\nLate June, the shares surged to their historic peak after Moderna detailed the efficacy of its coronavirus vaccine against newly discovered variants of the virus including the highly transmissible Delta variant.\nThe announcement coincided with the Emergency Use Authorization granted for the COVID-19 shot in India, where the variant was first discovered.\nAs indicated in the graph, Moderna shares have added over a tenth over the past week to outperform the broader market as concerns over the Delta variant rattled investors and health authorities.\nLast week, the data from The Centers for Disease Control and Prevention (CDC) indicated that the Delta variant which is believed to be 60% more transmissible than the Alpha variant had become the dominant strain of the virus in the U.S.","news_type":1},"isVote":1,"tweetType":1,"viewCount":217,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":154751338,"gmtCreate":1625547740424,"gmtModify":1703743479732,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Cool!&nbsp;","listText":"Cool!&nbsp;","text":"Cool!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/154751338","repostId":"2149533820","repostType":4,"repost":{"id":"2149533820","kind":"highlight","pubTimestamp":1625535445,"share":"https://ttm.financial/m/news/2149533820?lang=&edition=fundamental","pubTime":"2021-07-06 09:37","market":"us","language":"en","title":"3 Warren Buffett Stocks to Buy in July","url":"https://stock-news.laohu8.com/highlight/detail?id=2149533820","media":"Motley Fool","summary":"You might call these the legendary investor's \"A-list.\"","content":"<p>Warren Buffett is back to his winning ways. His beloved&nbsp;<b>Berkshire Hathaway</b> (NYSE:BRK.A) (NYSE:BRK.B) lagged well behind the S&amp;P 500 in 2020. However, it's a much better story so far this year with Berkshire's shares up more than 20% -- well ahead of any of the major market indexes.</p>\n<p>It wouldn't be a bad move at all for investors to scoop up shares of Berkshire. However, I think some of Berkshire's holdings that underperformed in the first half of this year are poised to deliver stronger gains. Here are three Buffett stocks to buy in July.</p>\n<p><img src=\"https://static.tigerbbs.com/82ffb7dc12b5585bc26897b86105cb8a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"></p>\n<p>Image source: The Motley Fool.</p>\n<h2>AbbVie</h2>\n<p>Buffett appeared to be a big fan of big pharma in 2020, buying shares of several large drugmakers.&nbsp;<b>AbbVie</b> (NYSE:ABBV) ranked as <a href=\"https://laohu8.com/S/AONE\">one</a> of his top buys. Berkshire has trimmed its position in AbbVie somewhat but still owns nearly 22.9 million shares.</p>\n<p>My view is that AbbVie is Buffett's best dividend stock by far. It offers a dividend yield of over 4.5%. The company has increased its dividend for 49 consecutive years, a feat that puts it in the upper echelon of dividend stocks.</p>\n<p>Sure, AbbVie will lose U.S. exclusivity for blockbuster drug Humira in 2023. However, the company has several other growth drivers that it thinks will fuel robust overall revenue growth through the rest of this decade after a temporary pause when Humira's sales begin to decline.</p>\n<p>The stock should have at least <a href=\"https://laohu8.com/S/AONE.U\">one</a> potential catalyst on the way in the near future. AbbVie hopes to win European approval for Rinvoq in treating atopic dermatitis in Q3 after receiving a positive recommendation from the Committee for Medicinal Products for Human Use.</p>\n<h2>Amazon.com</h2>\n<p>You could argue that <b>Amazon.com</b> (NASDAQ:AMZN) really isn't a Buffett stock. One of the legendary investor's lieutenants actually picked the stock for Berkshire's portfolio in 2019. However, Buffett has been a longtime fan of Amazon's business and its founder, Jeff Bezos.</p>\n<p>In some respects, Amazon seems like an ideal Buffett stock. The internet giant has a strong moat -- something that the Oracle of Omaha has always prized. It also generates a high return on equity, another big plus in Buffett's eyes.</p>\n<p>Both of these are good reasons to consider buying Amazon stock. I'd put the company's growth prospects even higher on the list, though.</p>\n<p>You might not think Amazon would have a lot of growth opportunities in e-commerce considering how dominant it already is. But online sales made up only 13.4% of total retail sales in the U.S. during the first quarter of 2021.</p>\n<p>Amazon has even better avenues for growth with its AWS cloud unit and its forays into other markets. I especially look for the company to gain traction in the healthcare sector with its pharmacy and telehealth businesses.</p>\n<h2>Apple</h2>\n<p>Last, but not least, on the \"A-list\" of Buffett stocks to buy in July (each stock begins with the letter \"A\") is <b>Apple</b> (NASDAQ:AAPL). Actually, Apple should have arguably been first on the list. It's Berkshire's single biggest equity holding. Buffett has even referred to Apple as \"probably the best business I know in the world.\"</p>\n<p>I wouldn't argue with Buffett on that point. Apple recently reclaimed its throne as the world's most valuable brand (knocking Amazon out of the top spot). The company's customers remain intensely loyal.</p>\n<p>Apple continues to provide good reasons for consumers to stay in its ecosystem. Sales of its 5G-enabled iPhones are soaring. This momentum fuels higher sales for many of the company's other products and services, including AirPods and apps on the App Store.</p>\n<p>The future for Apple also looks bright. The company reportedly has a foldable iPhone on the way. It's positioned for success in augmented reality (AR). I expect that Apple will further cement its place as Buffett's favorite -- and make him and other investors a lot more money.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>3 Warren Buffett Stocks to Buy in July</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Warren Buffett Stocks to Buy in July\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-06 09:37 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/07/05/3-warren-buffett-stocks-to-buy-in-july/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Warren Buffett is back to his winning ways. His beloved Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) lagged well behind the S&P 500 in 2020. However, it's a much better story so far this year with ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/07/05/3-warren-buffett-stocks-to-buy-in-july/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BRK.A":"伯克希尔","BRK.B":"伯克希尔B"},"source_url":"https://www.fool.com/investing/2021/07/05/3-warren-buffett-stocks-to-buy-in-july/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2149533820","content_text":"Warren Buffett is back to his winning ways. His beloved Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) lagged well behind the S&P 500 in 2020. However, it's a much better story so far this year with Berkshire's shares up more than 20% -- well ahead of any of the major market indexes.\nIt wouldn't be a bad move at all for investors to scoop up shares of Berkshire. However, I think some of Berkshire's holdings that underperformed in the first half of this year are poised to deliver stronger gains. Here are three Buffett stocks to buy in July.\n\nImage source: The Motley Fool.\nAbbVie\nBuffett appeared to be a big fan of big pharma in 2020, buying shares of several large drugmakers. AbbVie (NYSE:ABBV) ranked as one of his top buys. Berkshire has trimmed its position in AbbVie somewhat but still owns nearly 22.9 million shares.\nMy view is that AbbVie is Buffett's best dividend stock by far. It offers a dividend yield of over 4.5%. The company has increased its dividend for 49 consecutive years, a feat that puts it in the upper echelon of dividend stocks.\nSure, AbbVie will lose U.S. exclusivity for blockbuster drug Humira in 2023. However, the company has several other growth drivers that it thinks will fuel robust overall revenue growth through the rest of this decade after a temporary pause when Humira's sales begin to decline.\nThe stock should have at least one potential catalyst on the way in the near future. AbbVie hopes to win European approval for Rinvoq in treating atopic dermatitis in Q3 after receiving a positive recommendation from the Committee for Medicinal Products for Human Use.\nAmazon.com\nYou could argue that Amazon.com (NASDAQ:AMZN) really isn't a Buffett stock. One of the legendary investor's lieutenants actually picked the stock for Berkshire's portfolio in 2019. However, Buffett has been a longtime fan of Amazon's business and its founder, Jeff Bezos.\nIn some respects, Amazon seems like an ideal Buffett stock. The internet giant has a strong moat -- something that the Oracle of Omaha has always prized. It also generates a high return on equity, another big plus in Buffett's eyes.\nBoth of these are good reasons to consider buying Amazon stock. I'd put the company's growth prospects even higher on the list, though.\nYou might not think Amazon would have a lot of growth opportunities in e-commerce considering how dominant it already is. But online sales made up only 13.4% of total retail sales in the U.S. during the first quarter of 2021.\nAmazon has even better avenues for growth with its AWS cloud unit and its forays into other markets. I especially look for the company to gain traction in the healthcare sector with its pharmacy and telehealth businesses.\nApple\nLast, but not least, on the \"A-list\" of Buffett stocks to buy in July (each stock begins with the letter \"A\") is Apple (NASDAQ:AAPL). Actually, Apple should have arguably been first on the list. It's Berkshire's single biggest equity holding. Buffett has even referred to Apple as \"probably the best business I know in the world.\"\nI wouldn't argue with Buffett on that point. Apple recently reclaimed its throne as the world's most valuable brand (knocking Amazon out of the top spot). The company's customers remain intensely loyal.\nApple continues to provide good reasons for consumers to stay in its ecosystem. Sales of its 5G-enabled iPhones are soaring. This momentum fuels higher sales for many of the company's other products and services, including AirPods and apps on the App Store.\nThe future for Apple also looks bright. The company reportedly has a foldable iPhone on the way. It's positioned for success in augmented reality (AR). I expect that Apple will further cement its place as Buffett's favorite -- and make him and other investors a lot more money.","news_type":1},"isVote":1,"tweetType":1,"viewCount":156,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":155788085,"gmtCreate":1625453801747,"gmtModify":1703742014534,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Nice !","listText":"Nice !","text":"Nice !","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/155788085","repostId":"1177847846","repostType":4,"isVote":1,"tweetType":1,"viewCount":498,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":155306552,"gmtCreate":1625372685676,"gmtModify":1703740969625,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Nice&nbsp;","listText":"Nice&nbsp;","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/155306552","repostId":"1189605893","repostType":4,"repost":{"id":"1189605893","kind":"news","pubTimestamp":1625363433,"share":"https://ttm.financial/m/news/1189605893?lang=&edition=fundamental","pubTime":"2021-07-04 09:50","market":"us","language":"en","title":"When Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.","url":"https://stock-news.laohu8.com/highlight/detail?id=1189605893","media":"Barron's","summary":"It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.Investors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&P 500—m","content":"<p>It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.</p>\n<p>Owning the Big Five—Apple(ticker: AAPL),Microsoft(MSFT),Amazon.com(AMZN),Facebook(FB), andAlphabet’sGoogle (GOOGL)—has been lucrative: These companies have logged gains of 125% to 245% since the beginning of 2019. These stocks are widely held, not just by index investors, but also among all kinds of active fund managers—including those who don’t typically own growth companies.</p>\n<p>Together, the five companies account for almost 22% of theS&amp;P 500index. Of course, the Nifty Fifty stocks dominated the 1970s, and blue-chip stalwarts such asIBM(IBM) andAT&amp;T(T) ruled the 1980s. Those companies may have wielded even more influence over the broad economy than today’s biggest companies do, but the level of market concentration is higher now, and the Big Five’s impact on the broad market is much greater because of their size, according to Howard Silverblatt, senior index analyst at S&amp;P Dow Jones Indices. Apple and Microsoft are the first U.S. stocks whose market values have soared past $2 trillion. Though it has slipped a bit this year, Apple hit peak concentration for a single stock in the S&amp;P 500 last year at about 7%, higher than IBM’s in its heyday.</p>\n<p>There are signs that investor appetite for risk is waning, which could hurt the prospects for the growth of Big Tech. There has beena selloff in speculative cornersof the market, such as cryptocurrencies and special purpose acquisition companies, better known as SPACs. And, of course, there is therising consternationabout both inflation andinterest ratesmoving higher. If the Big Fiveslow downor tumble, the entire market—including all index investors—will feel it. If these stocks decline by 10%, for instance, in order for the S&amp;P 500 to keep trading flat, the bottom 100 stocks in the index would have to rise by a collective 75%, according toGoldman Sachs.This dynamic explains why narrow market breadth has often preceded big losses.</p>\n<p><b>When Less May Be More</b></p>\n<p>These funds are more diversified than the S&amp;P 500, and could be more resilient if the tech megacaps stumble.</p>\n<p><img src=\"https://static.tigerbbs.com/d308adf067ef3205da5f7c1bddb75e77\" tg-width=\"697\" tg-height=\"366\" referrerpolicy=\"no-referrer\"></p>\n<p>Investors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&amp;P 500—more than the energy, real estate, materials, or utilities sectors. Amazon hasn’t hit an all-time high this year, and has underperformed the S&amp;P 500 by 25 percentage points since September 2020 amid questions about the company’s e-commerce growth. Add in regulatory pressure, which could make the path ahead for these companies rockier, such as a House panel’s approval of sweeping legislation last month that could curb the dominance of companies like Google and Facebook.</p>\n<p>A global recovery could also make the Big Five stocks less special. “The story line with megacap tech stocks has been that economic growth has been hard to find and rates so low that you wanted to own powerful growth stocks,” says Scott Opsal, director of research at Leuthold Group. “But for those who think the economy has room to run, you don’t have to pay up for the growth that investors were willing to pay for in 2018 or 2019.” For Opsal, the changing backdrop is reason for a barbell approach, owning some of the technology winners but also diversifying into a wider array of more value-oriented and smaller stocks.</p>\n<p>With the market so concentrated in a handful of megacap tech stocks, Opsal says that investors may want the type of funds that do what the fund consultants advise against: be willing to drift out of their lane, and be willing to not fit neatly into a growth or value category.</p>\n<p>It isn’t easy finding good fund managers with the acumen to pick the right stocks beyond the other 495, the grit to avoid the crowd, and the track record that demonstrates to investors that they can be different and correct. Performance doesn’t look all that great for managers whose wariness led them to own less of the technology darlings that drove the market to highs over the past several years. And the decision to not own any—or even just less—of these companies sometimes pushed managers out of theirMorningstarcategory into areas like large-cap blend.</p>\n<p>High active share has often been a go-to gauge for finding fund managers who look different than their benchmarks. That’s a good place to start, but different doesn’t always lead to outperformance, so Morningstar strategist Alec Lucas recommends understanding what is in the managers’ portfolios and the thinking behind the picks—as well as when they buy or sell the stocks.</p>\n<p><i>Barron’s</i>looked for large-cap growth-oriented managers that don’t usually stick too close to an index and have long, and strong, track records. We turned up both diversified and concentrated funds; some didn’t own any of the Big Five, while some owned a bit, albeit less than their peers. All may offer investors a way to tweak rather than overhaul their portfolios, giving them some more diversification while still tapping into large, growing companies.</p>\n<p><b>A Concentrated Approach</b></p>\n<p>The Akre Focus fund (AKREX) falls into the concentrated bucket. It owns about 20 well-managed companies that the managers, John Neff and Chris Cerrone, think are superior businesses and adept at reinvesting in the companies. The fund has just a 4% turnover, so it holds on to its investments for years. That has been a winning long-term strategy: Akre Focus has an 18% average annual return over the past decade, beating 84% of its peers.</p>\n<p>The past few years have been tough, though: The fund hasn’t owned the Big Five, and has just 13% of its assets in any kind of technology company, whereas most of its peers have close to a third in tech. It has averaged 22% annually over the past three years; not too shabby on an absolute basis, but landing it midpack among competitors. The managers are resolute in finding growth elsewhere. “They are tremendous businesses, but how many more times can they double in value, given their current size? Maybe many times, but it’s an important question,” says Neff. “We’ve generally focused on smaller businesses with ostensibly longer runways with which to compound.”</p>\n<p>The tech investments that the managers have made are largely in software companies like Constellation Software (CSU.Canada),Adobe(ADBE), andCoStar Group(CSGP) that have long paths to growth ahead of them as more companies rely on their products. The fund also looks for companies with the type of “network effect” that makes Google and Amazon attractive—the business model gets stronger as more people use it, and makes the company that much harder to replace. Top holdings like Mastercard (MA) andVisa(V) fit that description.</p>\n<p>Many of the companies the duo favors are positioned to hold up, stand out, or even benefit from difficult times, like auto-parts retailerO’Reilly Automotive(ORLY), which recently reported its best comparable same-store sales in 25 years. Given the market backdrop, co-manager Cerrone says they aren’t finding that many bargains today—and they are willing to hold cash if that continues. Today, cash sits at just 2%. “We frankly wish we had more cash than we do today,” Cerrone says. “We’re not bearish, but we think we will be presented with better opportunities.”</p>\n<p><b>Underappreciated Growth</b></p>\n<p>The $10.1 billionPrimecap Odyssey Growthfund (POGRX) hunts for companies with above-average earnings growth, but not one of the Big Five tech stocks can be spotted in their top 10 holdings.</p>\n<p>That underweight has been painful; the fund’s 19.6% annual average return over the past five years puts it in the bottom third of large growth funds. But the managers’ willingness to stick with companies with above-average growth for the long haul, often adding to their shares in downturns, wins them fans.</p>\n<p>The fund’s managers are investing in some of the broad trends driving the Big Five—like e-commerce and cloud computing—but doing it differently, says Morningstar’s Lucas. For example, the fund owns Alibaba Group Holding (BABA) instead of Amazon, opting for China’s version of an e-commerce and cloud-computing giant that also trades at a meaningful discount to the U.S. company, Lucas says. Primecap declined to comment.</p>\n<p>About 18% of the fund is invested outside the U.S. and its average price/earnings ratio is 20, cheaper than the 29 for the large growth category, according to Morningstar. Though the fund isn’t concentrated in the Big Five tech stocks, it has double the stake in healthcare, almost 30% of assets, than other large growth funds. Its top 10 positions includeEli Lilly(LLY),Biogen(BIIB),Abiomed(ABMD), andAmgen(AMGN).</p>\n<p><b>Lean Profit Machines</b></p>\n<p>The $10.3 billionJensen Quality Growth(JENSX) focuses on companies that generate 15% return on equity for 10 consecutive years—a metric that co-manager Eric Schoenstein sees as a gauge forfoundational excellenceand fortress-like competitive advantages. Amazon and Facebook don’t make the cut. Alphabet, Microsoft, and Apple rank among the top holdings, but Schoenstein holds roughly a third less than in the Russell 1000 Growth index. Schoenstein says he is trying to be conscious of the risk of concentration if the momentum trade reverts or regulation puts a target on these companies’ backs.</p>\n<p>Schoenstein’s caution and a focus on quality companies have pushed the fund toward the bottom decile of the large blend Morningstar category year to date, with a return of 11.6%. But the fund’s 17.3% average return over the past five years puts it in the top 35% of large-blend funds tracked by Morningstar. Plus, the fund’s risk-adjusted, long-term performance stands out, losing about 77% as much as the S&amp;P 500 and Russell 1000 Growth indexes when stocks have fallen since Schoenstein began co-managing the fund in 2004, according to Morningstar.</p>\n<p>Lately, Schoenstein has been adding to quality stocks that may not be growing as fast but are more attractively priced as investors have left them behind, such asStarbucks(SBUX)—a stock that had been too pricey until the pandemic hit. “What better business is there to be in than branded addiction?” Schoenstein asks.</p>\n<p>While offices in New York City may not get to 100% occupancy, Schoenstein sees hybrid work situations continuing to drive business to Starbucks, potentially with fewer customers but higher sales, as one person buys for multiple people. The company is also closing stores to become more efficient and moving more toward quick-serve and grab-and-go in some locations rather than an all-day café experience.</p>\n<p><img src=\"https://static.tigerbbs.com/81aeb359e30f7394a363f00feb8ce0cf\" tg-width=\"707\" tg-height=\"477\" referrerpolicy=\"no-referrer\"></p>\n<p>Insurance is another area that Schoenstein has been adding to, with companies like Marsh &amp; McLennan (MMC), which is dominant in multiple businesses—insurance brokerage, health benefits, and retirement asset management with Mercer. Switching costs are high in the world of insurance, and the company benefits from new trends in cybersecurity and data privacy, as well.</p>\n<p>Another recent purchase: Data-analytics providerVerisk Analytics(VRSK), which serves property and casualty insurers and gets about 80% of its revenue from subscriptions and long-term agreements. The company helps take raw data and analyze it to help insurers, for example, underwrite policies. Says Schoenstein: “Some recovery is still needed because business has struggled over the past year, with business failures and companies putting [projects] on hold. So, it’s a small position, but I think about companies that are super-entrenched with their customers.”</p>\n<p><b>Multiple Managers</b></p>\n<p>Unlike the Jensen and Akre funds, which typically own 20 to 30 stocks, the $87 billionAmerican Funds Amcapfund (AMCPX) is well diversified, with more than 200 holdings, as managers hunt for the best ideas regardless of size.Abbott Laboratories(ABT),Broadcom(AVGO),EOG Resources(EOG), and Mastercard are top holdings along with four of the megacap tech quintuplets.</p>\n<p>But the fund is valuation-sensitive, and its allocation to the Big Five is lower than other growth managers, hurting its performance over the past five years; its average annual return of 17.3% puts it in the bottom decile of performance. For investors looking for diversification, the fund is a relatively cheap option—charging an expense ratio of 0.68%—that isn’t beholden to a benchmark and is run by multiple managers who can hunt for their highest-conviction ideas.</p>\n<p>Managers favor companies with strong competitive positioning, which can allow companies to boost prices and better weather near-term inflationary periods. While that includes a healthy helping of healthcare and technology stocks, managers have also gravitated toward cyclical growth companies, including semiconductor firms, travel-related companies, auto suppliers, retailers, and financials benefiting from secular growth as well as getting an additional boost from the Covid recovery.</p>\n<p>“It’s very consistent, and a good core fund with a lot of good stockpickers behind it,” says Russel Kinnel, Morningstar’s director of manager research. “You want a fund to have some good technology exposure because it’s a dynamic sector.”</p>\n<p><b>Growth on the Cheap</b></p>\n<p>The $357 million Cambiar Opportunity fund (CAMOX) is a concentrated fund that owns roughly 40 stocks. The fund looks for relative values among industry winners that boast strong long-term demand prospects and pricing power that differentiate it from some of its peers. The fund’s 16% average annual return over the past five years helped it beat 94% of its large-value peers.</p>\n<p>The fund holds Amazon, which it bought for the first time in early 2020 when the market wasn’t giving the e-commerce behemoth much value for its cloud business. It has been harder to own other megacap technology stocks, says Ania Aldrich, an investment principal at Cambiar. That’s in part because of their high valuations, but especially as exchange-traded funds continue to receive record-high inflows—$400 billion in the first half of 2021, versus $507 billion for all of last year, according to ETF.com—which contributes to the market concentration.</p>\n<p>Instead, the fund has focused on areas such as financials, including JPMorgan Chase (JPM) and Charles Schwab (SCHW), that can grow in this economic environment. Both would benefit from higher interest rates, but Aldrich says that wasn’t the reason to buy the stocks. Schwab, for example, is taking market share in wealth management, and its recent acquisition of Ameritrade gives it more heft and the ability to be more cost-efficient.</p>\n<p>Also attractive are companies that haven’t yet seen a full reopening of their businesses, like casino operatorPenn National Gaming(PENN), which Aldrich says is well positioned as states look for more revenue andallow online gambling, and food distributorSysco(SYY), which has yet to benefit from colleges and conferences getting back into full swing. While Sysco’s shares are up 43% in the past year, Aldrich sees more room for gains, noting that the company is a market leader and can take market share as smaller firms consolidate. Plus, it has pricing power to pass on higher commodity costs since it is a distributor.</p>\n<p>Another recent addition:Uber Technologies(UBER), which Aldrich says isn’t just a reopening beneficiary but also has increased the reach of its platform by moving into food delivery and opening the door to other services. “In the past, it was hard to outperform when you weren’t involved in the [concentrated stocks], but we see these trends as transitory. As growth normalizes, the value of other stocks should be recognized.”</p>","source":"lsy1610680873436","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>When Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhen Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-04 09:50 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1><strong>Barron's</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a...</p>\n\n<a href=\"https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1189605893","content_text":"It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.\nOwning the Big Five—Apple(ticker: AAPL),Microsoft(MSFT),Amazon.com(AMZN),Facebook(FB), andAlphabet’sGoogle (GOOGL)—has been lucrative: These companies have logged gains of 125% to 245% since the beginning of 2019. These stocks are widely held, not just by index investors, but also among all kinds of active fund managers—including those who don’t typically own growth companies.\nTogether, the five companies account for almost 22% of theS&P 500index. Of course, the Nifty Fifty stocks dominated the 1970s, and blue-chip stalwarts such asIBM(IBM) andAT&T(T) ruled the 1980s. Those companies may have wielded even more influence over the broad economy than today’s biggest companies do, but the level of market concentration is higher now, and the Big Five’s impact on the broad market is much greater because of their size, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Apple and Microsoft are the first U.S. stocks whose market values have soared past $2 trillion. Though it has slipped a bit this year, Apple hit peak concentration for a single stock in the S&P 500 last year at about 7%, higher than IBM’s in its heyday.\nThere are signs that investor appetite for risk is waning, which could hurt the prospects for the growth of Big Tech. There has beena selloff in speculative cornersof the market, such as cryptocurrencies and special purpose acquisition companies, better known as SPACs. And, of course, there is therising consternationabout both inflation andinterest ratesmoving higher. If the Big Fiveslow downor tumble, the entire market—including all index investors—will feel it. If these stocks decline by 10%, for instance, in order for the S&P 500 to keep trading flat, the bottom 100 stocks in the index would have to rise by a collective 75%, according toGoldman Sachs.This dynamic explains why narrow market breadth has often preceded big losses.\nWhen Less May Be More\nThese funds are more diversified than the S&P 500, and could be more resilient if the tech megacaps stumble.\n\nInvestors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&P 500—more than the energy, real estate, materials, or utilities sectors. Amazon hasn’t hit an all-time high this year, and has underperformed the S&P 500 by 25 percentage points since September 2020 amid questions about the company’s e-commerce growth. Add in regulatory pressure, which could make the path ahead for these companies rockier, such as a House panel’s approval of sweeping legislation last month that could curb the dominance of companies like Google and Facebook.\nA global recovery could also make the Big Five stocks less special. “The story line with megacap tech stocks has been that economic growth has been hard to find and rates so low that you wanted to own powerful growth stocks,” says Scott Opsal, director of research at Leuthold Group. “But for those who think the economy has room to run, you don’t have to pay up for the growth that investors were willing to pay for in 2018 or 2019.” For Opsal, the changing backdrop is reason for a barbell approach, owning some of the technology winners but also diversifying into a wider array of more value-oriented and smaller stocks.\nWith the market so concentrated in a handful of megacap tech stocks, Opsal says that investors may want the type of funds that do what the fund consultants advise against: be willing to drift out of their lane, and be willing to not fit neatly into a growth or value category.\nIt isn’t easy finding good fund managers with the acumen to pick the right stocks beyond the other 495, the grit to avoid the crowd, and the track record that demonstrates to investors that they can be different and correct. Performance doesn’t look all that great for managers whose wariness led them to own less of the technology darlings that drove the market to highs over the past several years. And the decision to not own any—or even just less—of these companies sometimes pushed managers out of theirMorningstarcategory into areas like large-cap blend.\nHigh active share has often been a go-to gauge for finding fund managers who look different than their benchmarks. That’s a good place to start, but different doesn’t always lead to outperformance, so Morningstar strategist Alec Lucas recommends understanding what is in the managers’ portfolios and the thinking behind the picks—as well as when they buy or sell the stocks.\nBarron’slooked for large-cap growth-oriented managers that don’t usually stick too close to an index and have long, and strong, track records. We turned up both diversified and concentrated funds; some didn’t own any of the Big Five, while some owned a bit, albeit less than their peers. All may offer investors a way to tweak rather than overhaul their portfolios, giving them some more diversification while still tapping into large, growing companies.\nA Concentrated Approach\nThe Akre Focus fund (AKREX) falls into the concentrated bucket. It owns about 20 well-managed companies that the managers, John Neff and Chris Cerrone, think are superior businesses and adept at reinvesting in the companies. The fund has just a 4% turnover, so it holds on to its investments for years. That has been a winning long-term strategy: Akre Focus has an 18% average annual return over the past decade, beating 84% of its peers.\nThe past few years have been tough, though: The fund hasn’t owned the Big Five, and has just 13% of its assets in any kind of technology company, whereas most of its peers have close to a third in tech. It has averaged 22% annually over the past three years; not too shabby on an absolute basis, but landing it midpack among competitors. The managers are resolute in finding growth elsewhere. “They are tremendous businesses, but how many more times can they double in value, given their current size? Maybe many times, but it’s an important question,” says Neff. “We’ve generally focused on smaller businesses with ostensibly longer runways with which to compound.”\nThe tech investments that the managers have made are largely in software companies like Constellation Software (CSU.Canada),Adobe(ADBE), andCoStar Group(CSGP) that have long paths to growth ahead of them as more companies rely on their products. The fund also looks for companies with the type of “network effect” that makes Google and Amazon attractive—the business model gets stronger as more people use it, and makes the company that much harder to replace. Top holdings like Mastercard (MA) andVisa(V) fit that description.\nMany of the companies the duo favors are positioned to hold up, stand out, or even benefit from difficult times, like auto-parts retailerO’Reilly Automotive(ORLY), which recently reported its best comparable same-store sales in 25 years. Given the market backdrop, co-manager Cerrone says they aren’t finding that many bargains today—and they are willing to hold cash if that continues. Today, cash sits at just 2%. “We frankly wish we had more cash than we do today,” Cerrone says. “We’re not bearish, but we think we will be presented with better opportunities.”\nUnderappreciated Growth\nThe $10.1 billionPrimecap Odyssey Growthfund (POGRX) hunts for companies with above-average earnings growth, but not one of the Big Five tech stocks can be spotted in their top 10 holdings.\nThat underweight has been painful; the fund’s 19.6% annual average return over the past five years puts it in the bottom third of large growth funds. But the managers’ willingness to stick with companies with above-average growth for the long haul, often adding to their shares in downturns, wins them fans.\nThe fund’s managers are investing in some of the broad trends driving the Big Five—like e-commerce and cloud computing—but doing it differently, says Morningstar’s Lucas. For example, the fund owns Alibaba Group Holding (BABA) instead of Amazon, opting for China’s version of an e-commerce and cloud-computing giant that also trades at a meaningful discount to the U.S. company, Lucas says. Primecap declined to comment.\nAbout 18% of the fund is invested outside the U.S. and its average price/earnings ratio is 20, cheaper than the 29 for the large growth category, according to Morningstar. Though the fund isn’t concentrated in the Big Five tech stocks, it has double the stake in healthcare, almost 30% of assets, than other large growth funds. Its top 10 positions includeEli Lilly(LLY),Biogen(BIIB),Abiomed(ABMD), andAmgen(AMGN).\nLean Profit Machines\nThe $10.3 billionJensen Quality Growth(JENSX) focuses on companies that generate 15% return on equity for 10 consecutive years—a metric that co-manager Eric Schoenstein sees as a gauge forfoundational excellenceand fortress-like competitive advantages. Amazon and Facebook don’t make the cut. Alphabet, Microsoft, and Apple rank among the top holdings, but Schoenstein holds roughly a third less than in the Russell 1000 Growth index. Schoenstein says he is trying to be conscious of the risk of concentration if the momentum trade reverts or regulation puts a target on these companies’ backs.\nSchoenstein’s caution and a focus on quality companies have pushed the fund toward the bottom decile of the large blend Morningstar category year to date, with a return of 11.6%. But the fund’s 17.3% average return over the past five years puts it in the top 35% of large-blend funds tracked by Morningstar. Plus, the fund’s risk-adjusted, long-term performance stands out, losing about 77% as much as the S&P 500 and Russell 1000 Growth indexes when stocks have fallen since Schoenstein began co-managing the fund in 2004, according to Morningstar.\nLately, Schoenstein has been adding to quality stocks that may not be growing as fast but are more attractively priced as investors have left them behind, such asStarbucks(SBUX)—a stock that had been too pricey until the pandemic hit. “What better business is there to be in than branded addiction?” Schoenstein asks.\nWhile offices in New York City may not get to 100% occupancy, Schoenstein sees hybrid work situations continuing to drive business to Starbucks, potentially with fewer customers but higher sales, as one person buys for multiple people. The company is also closing stores to become more efficient and moving more toward quick-serve and grab-and-go in some locations rather than an all-day café experience.\n\nInsurance is another area that Schoenstein has been adding to, with companies like Marsh & McLennan (MMC), which is dominant in multiple businesses—insurance brokerage, health benefits, and retirement asset management with Mercer. Switching costs are high in the world of insurance, and the company benefits from new trends in cybersecurity and data privacy, as well.\nAnother recent purchase: Data-analytics providerVerisk Analytics(VRSK), which serves property and casualty insurers and gets about 80% of its revenue from subscriptions and long-term agreements. The company helps take raw data and analyze it to help insurers, for example, underwrite policies. Says Schoenstein: “Some recovery is still needed because business has struggled over the past year, with business failures and companies putting [projects] on hold. So, it’s a small position, but I think about companies that are super-entrenched with their customers.”\nMultiple Managers\nUnlike the Jensen and Akre funds, which typically own 20 to 30 stocks, the $87 billionAmerican Funds Amcapfund (AMCPX) is well diversified, with more than 200 holdings, as managers hunt for the best ideas regardless of size.Abbott Laboratories(ABT),Broadcom(AVGO),EOG Resources(EOG), and Mastercard are top holdings along with four of the megacap tech quintuplets.\nBut the fund is valuation-sensitive, and its allocation to the Big Five is lower than other growth managers, hurting its performance over the past five years; its average annual return of 17.3% puts it in the bottom decile of performance. For investors looking for diversification, the fund is a relatively cheap option—charging an expense ratio of 0.68%—that isn’t beholden to a benchmark and is run by multiple managers who can hunt for their highest-conviction ideas.\nManagers favor companies with strong competitive positioning, which can allow companies to boost prices and better weather near-term inflationary periods. While that includes a healthy helping of healthcare and technology stocks, managers have also gravitated toward cyclical growth companies, including semiconductor firms, travel-related companies, auto suppliers, retailers, and financials benefiting from secular growth as well as getting an additional boost from the Covid recovery.\n“It’s very consistent, and a good core fund with a lot of good stockpickers behind it,” says Russel Kinnel, Morningstar’s director of manager research. “You want a fund to have some good technology exposure because it’s a dynamic sector.”\nGrowth on the Cheap\nThe $357 million Cambiar Opportunity fund (CAMOX) is a concentrated fund that owns roughly 40 stocks. The fund looks for relative values among industry winners that boast strong long-term demand prospects and pricing power that differentiate it from some of its peers. The fund’s 16% average annual return over the past five years helped it beat 94% of its large-value peers.\nThe fund holds Amazon, which it bought for the first time in early 2020 when the market wasn’t giving the e-commerce behemoth much value for its cloud business. It has been harder to own other megacap technology stocks, says Ania Aldrich, an investment principal at Cambiar. That’s in part because of their high valuations, but especially as exchange-traded funds continue to receive record-high inflows—$400 billion in the first half of 2021, versus $507 billion for all of last year, according to ETF.com—which contributes to the market concentration.\nInstead, the fund has focused on areas such as financials, including JPMorgan Chase (JPM) and Charles Schwab (SCHW), that can grow in this economic environment. Both would benefit from higher interest rates, but Aldrich says that wasn’t the reason to buy the stocks. Schwab, for example, is taking market share in wealth management, and its recent acquisition of Ameritrade gives it more heft and the ability to be more cost-efficient.\nAlso attractive are companies that haven’t yet seen a full reopening of their businesses, like casino operatorPenn National Gaming(PENN), which Aldrich says is well positioned as states look for more revenue andallow online gambling, and food distributorSysco(SYY), which has yet to benefit from colleges and conferences getting back into full swing. While Sysco’s shares are up 43% in the past year, Aldrich sees more room for gains, noting that the company is a market leader and can take market share as smaller firms consolidate. Plus, it has pricing power to pass on higher commodity costs since it is a distributor.\nAnother recent addition:Uber Technologies(UBER), which Aldrich says isn’t just a reopening beneficiary but also has increased the reach of its platform by moving into food delivery and opening the door to other services. “In the past, it was hard to outperform when you weren’t involved in the [concentrated stocks], but we see these trends as transitory. As growth normalizes, the value of other stocks should be recognized.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":252,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":156607330,"gmtCreate":1625215520720,"gmtModify":1703738527173,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"nice&nbsp;","listText":"nice&nbsp;","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/156607330","repostId":"1115821085","repostType":4,"repost":{"id":"1115821085","kind":"news","pubTimestamp":1625214660,"share":"https://ttm.financial/m/news/1115821085?lang=&edition=fundamental","pubTime":"2021-07-02 16:31","market":"us","language":"en","title":"Palantir: Great Company, Risky Investment","url":"https://stock-news.laohu8.com/highlight/detail?id=1115821085","media":"seekingalpha","summary":"Summary\n\nPalantir holds a unique place in the market and has a significant moat around this business","content":"<p><b>Summary</b></p>\n<ul>\n <li>Palantir holds a unique place in the market and has a significant moat around this business.</li>\n <li>Having said this, even under optimistic assumptions, Palantir looks overvalued.</li>\n <li>Furthermore, Palantir faces a unique and hard to control set of challenges.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/24b21fd364a3c58b289354c3e5b92fd0\" tg-width=\"768\" tg-height=\"512\"><span>Maria Marganingsih/iStock via Getty Images</span></p>\n<p><b>Thesis Summary</b></p>\n<p>Palantir Technologies Inc. (PLTR) is, by many accounts, an outstanding company. We believe that Palantir occupies a niche spot in the market, and has built a moat around its business thanks to its technology and workforce.</p>\n<p>We have derived a valuation for Palantir using trend analysis and comparables, with a 2030 horizon, where we tackle mainly profitability and equity dilution. Although our target price for that year is nearly $42 per share, this only represents a 4.6% annual growth rate from the current price.</p>\n<p>Ultimately, though Palantir is a great business, the current price does not offer investors attractive returns.</p>\n<p><b>What makes Palantir special?</b></p>\n<p>Palantir seems to be one of the most popular stocks to talk about in the last few months. The company, which has been around since 2003, but IPO'd only eight and a half months ago, is followed closely by both hawkish bears and delighted bulls. But why? What exactly makes Palantir so special?</p>\n<p>The bears would point out nothing, and while I do agree that, oftentimes, unwarranted hype is created around buzzwords like \"data\", I will argue here that Palantir is special. This is important because it puts Palantir in a great situation in terms of the competitive landscape and growth opportunities. However, it also creates a very particular set of \"risks\" and challenges for the company.</p>\n<p>On the most superficial level, Palantir is a \"data analytics company\", which has found itself a nice spot on the list of government contractors, both domestic and abroad. This already makes the company more interesting than many others. There is nothing today growing faster than data, and at close second we could put government spending. However, this misses the point of what actually makes the company special, or, more specifically, what has allowed the company to gain so much favour with public institutions, and now private clients.</p>\n<p>If we could put it into one sentence, we would say the following: Palantir walks a fine line between data analytics and consulting. Indeed, the company has some very powerful proprietary software, which we might as well call an AI, but it also has one of the most talented workforces in the world, with specific task forces being created to address the needs of each client/contract.</p>\n<p>Think about it like a mix between McKinsey and International Business Machines (IBM). In practice, it's not enough to have a powerful computer that can find great insights. First, it has to be led in the right direction, and then those insights have to be implemented properly. And of course, once you implement new measures, these create a whole new set of variables and data, so you can rinse and repeat indefinitely.</p>\n<p>This is what a lot of people miss about this company. Some think it just has great software, which it does, but its biggest asset, we would argue, is its \"business model\" which is powered by its workforce. Furthermore, many of those who do acknowledge the fact that Palantir relies heavily on using specialized employees to address their clients' needs point this out as a weakness rather than the great strength that it is. They would argue that Palantir has to spend a lot of money on employing people to help their clients use their product, which makes it less \"profitable\", but this is a very rudimentary understanding of the situation. It's true that it might not achieve such high margins as a traditional SaaS, but it definitely doesn't mean the company is unprofitable. Consulting firms, like McKinsey or Accenture plc (ACN), do just this, employ people to help out their clients, and they certainly don't seem to struggle to make a profit. Ultimately, a cost is justified as long as it brings sufficient value.</p>\n<p><b>Does Palantir have a \"moat\"?</b></p>\n<p>But even if Palantir is special; does this matter? How does this set it apart from its competitors? In this regard, Palantir faces three different sets of competitors:</p>\n<p>Firstly, Palantir is competing with traditional consulting firms. Ultimately, this is what the company does, since it is working hand-in-hand with its clients to improve their operations. Consulting firms like Accenture and McKinsey do this to a certain degree, but at the moment, they lack the technical requirements and niche focus that Palantir has.</p>\n<p>From a data analytics sector perspective, Palantir could be put into the same category as companies like IBM or SAP SE (SAP). These companies do indeed have the necessary resources to compete with Palantir in terms of services, but not on price. These companies have been around for too long and are way too big to be able to compete in price with Palantir. They simply cannot scale down efficiently enough.</p>\n<p>Lastly, the company competes head-to-head with other defence contractors such as Booz Allen Hamilton Holding Corporation (BAH) and SAIC. The problem these firms have competing with Palantir is that they are not specialized enough within their offerings.</p>\n<p>To sum up, we would argue that Palantir's moat comes, firstly, from its business proposition. Palantir was created with a very clear idea behind it, which allowed it to be a niche company. This specialization also allows it to be more efficient, and offer clients more competitive prices.</p>\n<p>It is true that this business model can be copied. There is nothing stopping new companies from doing what Palantir is doing and there are some startups attempting to do this, such as&nbsp;Digital Reasoning, but bear in mind this company has only ever received $134 million in funding. What does set Palantir apart from its competitors and is something that they can't easily replicate is its workforce. Palantir spends a lot of money to find and keep the best talent in the industry. A big part of this is done through stock-based compensation, which is a hot topic&nbsp;I discussed here. In any case, Palantir has the advantage of being \"the place to be\" right now, within the industry. This popularity and recognition has increased even more since its IPO and is a key factor in attracting and retaining young talent. This talent is, ultimately, the company's biggest strength.</p>\n<p><b>Addressable Market &amp; Growth Opportunities</b></p>\n<p>With that said, let's proceed towards analysing Palantir's TAM and Growth outlook.</p>\n<p>In the sections above, we mentioned how Palantir is in a unique situation, because it is both a consulting firm and a data analytics firm, and it also has significant government contracts. Therefore, we could look at TAM from these three perspectives:</p>\n<p>Starting with consulting, this is perhaps the least exciting of the three areas where Palantir can grow. According to research, the \"Management Consulting Services\" industry will grow at a CAGR of 8% through 2025, which would put the industry at a size of $1201.06 billion. Granted, this is not impressive growth but it is a remarkable size. In this sense, Palantir could actually attack much of this market, which is now dominated by \"the big four\".</p>\n<p>From the point of view of data analytics, we have a market that, in this case, is growing very fast. According to Quince Market Insights, this segment will grow at a&nbsp;CAGR of 25% in the next 10 years. Furthermore, studies have also found that, currently, companies only analyze around&nbsp;12% of their data.This creates a massive opportunity for a company like Palantir to come in, and show these companies exactly how and why they need to analyze their data.</p>\n<p>Lastly, since Palantir works closely with the government, it is only reasonable to believe that the more it spends, the more Palantir will make.The CBO projects&nbsp;average yearly deficits of $1.2 trillion from 2022 to 2030. This is in line with the current tendency of continued increase in public spending, but what is most encouraging is where this spending will take place:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8330575726862d333c1cfabc18987a50\" tg-width=\"1280\" tg-height=\"626\"><span>Source:CBO.gov</span></p>\n<p>By 2030, the biggest item on the Federal government's expense sheet will be Major Health Care Programs, which will be equivalent to 9% of GDP. Data from the NHE also suggest that by 2028 healthcare will be a&nbsp;$6.2 trillion business.Again, this is great news for Palantir, since data analytics within the healthcare industry is a high growth area. Palantir already has clients in this area, including the&nbsp;UK's National Health System[NHS].</p>\n<p>All in all, Palantir has the benefit of working within a fast-growing sector, data, but with the ability of being able to deploy their technology and workforce to solve niche applications. Given that the data analytics industry is projected to grow at 25% and that Palantir has strong government connections, we believe the company could easily achieve analysts' goal of 30% CAGR over the next 5 years.</p>\n<p><b>Profitability Analysis</b></p>\n<p>Profitability is expected to grow as revenues reach higher levels. The question that any investor would like answered is not only if this is going to be the case, but by how much. Our aim here is to make a forecast of Palantir revenues and earnings until 2030 so that we can later make a sound valuation of the stock through earnings multiples. The method used here is a combination of trendline analysis of existing financials, performances by most comparable competitors, and estimates by analysts and the company itself.</p>\n<p>We have already talked about the addressable market and growth prospects, now it is time to quantify the expected revenue path for Palantir. Since companies rarely sustain such high growth rates in the long run, we find that a second order polynomial trendline is often the best method to calculate this. This type of equation delivers a flatter curve than an exponential trendline, which assumes a constant growth rate. For Palantir's quarterly revenue, it is also a very good fit as you can see below. You can see the trendline along the actual revenue recorded in the last nine quarters, and a projection until 2030 Q4.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/acada8ddc443d930e8cb4e3929b42015\" tg-width=\"515\" tg-height=\"341\"><span>Source: Author's work based on financial records. Revenue in $million. Quarters are numbered from 1 (Q1 2019) to 48 (Q4 2030)</span></p>\n<p>If you apply the function above you get a forecasted yearly revenue of 11.9 billion for 2030, including $3.1 billion in Q4 of that year. This is not far from the consensus estimate for 2030 you can find on Seeking Alpha, which is $12.42 billion. According to the latest earnings call, management expects to deliver 30%+ growth at least in the next four years. To put this into perspective, a CAGR of 30% until 2030 would give a revenue of $11.5 billion. Taking the three into account, we will keep our trendline estimate of 11.9, which lies between the other two figures.</p>\n<p>Gross margins have been improving gradually according to GAAP figures over the last nine quarters, from nearly 68% in the first quarter of 2019 to over 78% in the latest quarter. Except for an unusually bad figure in Q3 2020, which has been taken out of the equation for a smoother analysis, the gross margin as a function of revenue shows a predictable path of improvement through a linear trend, as you can see in this chart.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9094dcdd5ddbc9df1499318bf694ad7a\" tg-width=\"481\" tg-height=\"289\"><span>Source: Author's work based on financial records. Items in $million</span></p>\n<p>Data excludes a figure of (289,140) from Q3 2020.</p>\n<p>The linear equation above, with a 0.9 slope, generates a forecast where the gross margin should tend towards 90% of revenue. Applying this formula to the forecasted revenue of $11.9 billion predicts a gross margin figure of $10.6 billion for 2030.</p>\n<p>In order to transform gross margins into net income, so that we can make a valuation based on an earnings multiple, we will look at one of Palantir's comparables, discussed&nbsp;in a previous article, Cognizant (NASDAQ:CTSH). The reason for using Cognizant is that not only is the activity they carry out similar but it is also an example of a profitable pier with a fairly consistent earnings margin, and with debt and gross margin volumes comparable to the ones we are predicting for Palantir.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7effd28b7de277b78a107d14608164ff\" tg-width=\"481\" tg-height=\"289\"><span>Source: Author's work.</span></p>\n<p>With gross margins stable at around 6 billion in recent years, CTSH has maintained a healthy level of net income, ranging from 22% to 35% of gross profits. To make a fair estimate, we will assume the average percentage through the 10-year period, which is 30.61% of gross profit. We will also assume that Palantir achieves that level in 2030, with a gradual increase of the percentage until then.</p>\n<p>This completes our revenue and earnings estimates for Palantir in 2030, reaching 11.9 billion revenue, $10.6 billion gross margin, and $3.3 billion net income.</p>\n<table>\n <tbody>\n  <tr>\n   <td><p>Year</p></td>\n   <td><p>2021</p></td>\n   <td><p>2022</p></td>\n   <td><p>2023</p></td>\n   <td><p>2024</p></td>\n   <td><p>2025</p></td>\n   <td><p>2026</p></td>\n   <td><p>2027</p></td>\n   <td><p>2028</p></td>\n   <td><p>2029</p></td>\n   <td><p>2030</p></td>\n  </tr>\n  <tr>\n   <td><p>Reven.</p></td>\n   <td><p>1,581</p></td>\n   <td><p>2,196</p></td>\n   <td><p>2,942</p></td>\n   <td><p>3,820</p></td>\n   <td><p>4,830</p></td>\n   <td><p>5,972</p></td>\n   <td><p>7,245</p></td>\n   <td><p>8,650</p></td>\n   <td><p>10,188</p></td>\n   <td><p>11,856</p></td>\n  </tr>\n  <tr>\n   <td><p>Gross Profit</p></td>\n   <td><p>1,382</p></td>\n   <td><p>1,936</p></td>\n   <td><p>2,608</p></td>\n   <td><p>3,399</p></td>\n   <td><p>4,309</p></td>\n   <td><p>5,338</p></td>\n   <td><p>6,485</p></td>\n   <td><p>7,751</p></td>\n   <td><p>9,136</p></td>\n   <td><p>10,639</p></td>\n  </tr>\n  <tr>\n   <td><p>Net Income</p></td>\n   <td><p>42</p></td>\n   <td><p>119</p></td>\n   <td><p>240</p></td>\n   <td><p>416</p></td>\n   <td><p>660</p></td>\n   <td><p>980</p></td>\n   <td><p>1,390</p></td>\n   <td><p>1,898</p></td>\n   <td><p>2,517</p></td>\n   <td><p>3,257</p></td>\n  </tr>\n </tbody>\n</table>\n<p>Source: Author's work. Items in $millions.</p>\n<p><b>Valuation</b></p>\n<p>Having forecasted revenues and earnings, we are prepared to estimate a path for Palantir's stock price. In order to do this, we need to also look into financing through equity and how the dilution will affect share prices. We are going to continue using the 2030 horizon as the timeframe.</p>\n<p>First, we will create an estimate for market capitalization based on the current sector median earnings multiple, and then we will make a forecast for the dilution. The current GAAP TTM Price/earnings ratio for the sector is 33.94. The assumption here is that as Palantir becomes profitable, its valuation should approach this multiple and be fairly valued for its earnings. Based on the earnings we forecasted and the 33.94 PE ratio, we get the following estimated market capitalizations:</p>\n<table>\n <tbody>\n  <tr>\n   <td><p>Year</p></td>\n   <td><p>2021</p></td>\n   <td><p>2022</p></td>\n   <td><p>2023</p></td>\n   <td><p>2024</p></td>\n   <td><p>2025</p></td>\n   <td><p>2026</p></td>\n   <td><p>2027</p></td>\n   <td><p>2028</p></td>\n   <td><p>2029</p></td>\n   <td><p>2030</p></td>\n  </tr>\n  <tr>\n   <td><p>Net Inc.</p></td>\n   <td><p>42</p></td>\n   <td><p>119</p></td>\n   <td><p>240</p></td>\n   <td><p>416</p></td>\n   <td><p>660</p></td>\n   <td><p>980</p></td>\n   <td><p>1,390</p></td>\n   <td><p>1,898</p></td>\n   <td><p>2,517</p></td>\n   <td><p>3,257</p></td>\n  </tr>\n  <tr>\n   <td><p>Mkt. Cap [PE]</p></td>\n   <td><p>1,436</p></td>\n   <td><p>4,023</p></td>\n   <td><p>8,129</p></td>\n   <td><p>14,126</p></td>\n   <td><p>22,384</p></td>\n   <td><p>33,272</p></td>\n   <td><p>47,160</p></td>\n   <td><p>64,420</p></td>\n   <td><p>85,421</p></td>\n   <td><p>110,532</p></td>\n  </tr>\n </tbody>\n</table>\n<p>Source: Author's work. Items in $millions.</p>\n<p>As you can see, the current market capitalization of slightly over $50 billion wouldn't be justified by earnings until after 2027, reaching a level of $111 billion by 2030. This represents a CAGR of just 8.57%, before we take dilution into account.</p>\n<p>In order to predict how the number of common shares is likely to evolve over these years, we have made a forecast of the book value based on revenue, assuming the balance sheet maintains a similar structure relative to the volume of operations. If we look at the last four quarters, we have a fairly consistent linear pattern of how book value has increased with quarterly revenue, as you can see below.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/9066505bd8b5fce4ebf0d4f538a4bafe\" tg-width=\"481\" tg-height=\"289\"><span>Source: Author's work based on financial records. Items in $million</span></p>\n<p>Applying this equation, with a revenue of $3.1 billion in Q4 2030, as per our previous forecast, the book value should rise to $34.2 billion. If we take into account the current book value of 1.8 billion and the accumulated net income we have already forecasted for the whole period, which is $11.5 billion, we estimate that an additional $20.9 billion of funding through new equity will be required. At the current share price of $27.37, this would mean 739 million additional common shares by the end of 2030. Added to the current 1.8 billion outstanding, the total is 2.6 billion common shares. Applying the $111 billion market capitalization we have forecasted, the resulting target price for the end of 2030 is $41.87. You can see a summary of these figures below.</p>\n<table>\n <tbody>\n  <tr>\n   <td><p>Concept</p></td>\n   <td><p>Amount</p></td>\n  </tr>\n  <tr>\n   <td><p>Revenue Q4 2030</p></td>\n   <td><p>3,128</p></td>\n  </tr>\n  <tr>\n   <td><p>Book Value Q4 2030</p></td>\n   <td><p>34,212</p></td>\n  </tr>\n  <tr>\n   <td><p>Book Value Q1 2021</p></td>\n   <td><p>1,806</p></td>\n  </tr>\n  <tr>\n   <td><p>Acc. Net Income Q2 2021-Q4 2030</p></td>\n   <td><p>11,517</p></td>\n  </tr>\n  <tr>\n   <td><p>Financing from new equity</p></td>\n   <td><p>20,889</p></td>\n  </tr>\n  <tr>\n   <td><p>Current Share Price</p></td>\n   <td><p>$ 27.37</p></td>\n  </tr>\n  <tr>\n   <td><p>New shares required</p></td>\n   <td><p>763</p></td>\n  </tr>\n  <tr>\n   <td><p>Market cap 2030 Q4</p></td>\n   <td><p>110,532</p></td>\n  </tr>\n  <tr>\n   <td><p>Nº Shares 2030 Q4 (millions)</p></td>\n   <td><p>2,640</p></td>\n  </tr>\n  <tr>\n   <td><p>Target Price 2030 Q4</p></td>\n   <td><p>$ 41.87</p></td>\n  </tr>\n  <tr>\n   <td><p>CAGR</p></td>\n   <td><p>4.58%</p></td>\n  </tr>\n </tbody>\n</table>\n<p>Source: Author's work. Monetary items in $millions, except per share items, nº of shares in millions.</p>\n<p>As you can see, the expected CAGR for Palantir's stock price as per our forecasted fair value at the end of 2030 is just 4.58%. If we were to require, say, a 10% return, which is more reasonable for a growth stock, the fair price today would be $16.93, 38% lower than the current price.</p>\n<p><b>Risks</b></p>\n<p>Having said all this, we also have to mention some particular challenges that a company like Palantir faces. The most significant of these would relate to how the company has to manage its image in a world where privacy is becoming \"taboo\".</p>\n<p>Palantir is a company that, on many levels, has a lot of power, which can be both a blessing and a curse. The company has to be very careful with its data to avoid any events that could damage its reputation, which it needs in order to survive. Think, for example, Edward Snowden, who before becoming one of the most wanted men in the world was working for Booz Allen. What would happen if the next whistleblower came from within Palantir's ranks?</p>\n<p>On top of that, Palantir is also facing resistance from organizations abroad. For example, there is currently a campaign in the UK trying to stop Palantir fromworking with the NHS. It's understandable that some people may not want their medical data to be handled by a foreign company, even if it is from an allied country.</p>\n<p>Ultimately, these are very particular challenges that Palantir faces. Its growth could be hampered if people or even the government start to think the company is \"too powerful\". Furthermore, if anything happened to damage the company's reputation, Palantir could be finished overnight. Of course, this is why the company invests so heavily in its workforce. But will it be enough?</p>\n<p><b>Takeaway</b></p>\n<p>In conclusion, we believe Palantir is qualitatively a great company. They operate in a niche market with a lot of growth potential. On top of that, Palantir has one of the best technologies and workforces in the market right now, but this is not enough. Even with double-digit growth and assuming a steady path towards profitability, Palantir seems way too expensive today to provide investors with good returns. A great company doesn't always make a great investment, and we feel this is the case with Palantir.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Palantir: Great Company, Risky Investment</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nPalantir: Great Company, Risky Investment\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-02 16:31 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4437458-palantir-great-company-bad-investment><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nPalantir holds a unique place in the market and has a significant moat around this business.\nHaving said this, even under optimistic assumptions, Palantir looks overvalued.\nFurthermore, ...</p>\n\n<a href=\"https://seekingalpha.com/article/4437458-palantir-great-company-bad-investment\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"PLTR":"Palantir Technologies Inc."},"source_url":"https://seekingalpha.com/article/4437458-palantir-great-company-bad-investment","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1115821085","content_text":"Summary\n\nPalantir holds a unique place in the market and has a significant moat around this business.\nHaving said this, even under optimistic assumptions, Palantir looks overvalued.\nFurthermore, Palantir faces a unique and hard to control set of challenges.\n\nMaria Marganingsih/iStock via Getty Images\nThesis Summary\nPalantir Technologies Inc. (PLTR) is, by many accounts, an outstanding company. We believe that Palantir occupies a niche spot in the market, and has built a moat around its business thanks to its technology and workforce.\nWe have derived a valuation for Palantir using trend analysis and comparables, with a 2030 horizon, where we tackle mainly profitability and equity dilution. Although our target price for that year is nearly $42 per share, this only represents a 4.6% annual growth rate from the current price.\nUltimately, though Palantir is a great business, the current price does not offer investors attractive returns.\nWhat makes Palantir special?\nPalantir seems to be one of the most popular stocks to talk about in the last few months. The company, which has been around since 2003, but IPO'd only eight and a half months ago, is followed closely by both hawkish bears and delighted bulls. But why? What exactly makes Palantir so special?\nThe bears would point out nothing, and while I do agree that, oftentimes, unwarranted hype is created around buzzwords like \"data\", I will argue here that Palantir is special. This is important because it puts Palantir in a great situation in terms of the competitive landscape and growth opportunities. However, it also creates a very particular set of \"risks\" and challenges for the company.\nOn the most superficial level, Palantir is a \"data analytics company\", which has found itself a nice spot on the list of government contractors, both domestic and abroad. This already makes the company more interesting than many others. There is nothing today growing faster than data, and at close second we could put government spending. However, this misses the point of what actually makes the company special, or, more specifically, what has allowed the company to gain so much favour with public institutions, and now private clients.\nIf we could put it into one sentence, we would say the following: Palantir walks a fine line between data analytics and consulting. Indeed, the company has some very powerful proprietary software, which we might as well call an AI, but it also has one of the most talented workforces in the world, with specific task forces being created to address the needs of each client/contract.\nThink about it like a mix between McKinsey and International Business Machines (IBM). In practice, it's not enough to have a powerful computer that can find great insights. First, it has to be led in the right direction, and then those insights have to be implemented properly. And of course, once you implement new measures, these create a whole new set of variables and data, so you can rinse and repeat indefinitely.\nThis is what a lot of people miss about this company. Some think it just has great software, which it does, but its biggest asset, we would argue, is its \"business model\" which is powered by its workforce. Furthermore, many of those who do acknowledge the fact that Palantir relies heavily on using specialized employees to address their clients' needs point this out as a weakness rather than the great strength that it is. They would argue that Palantir has to spend a lot of money on employing people to help their clients use their product, which makes it less \"profitable\", but this is a very rudimentary understanding of the situation. It's true that it might not achieve such high margins as a traditional SaaS, but it definitely doesn't mean the company is unprofitable. Consulting firms, like McKinsey or Accenture plc (ACN), do just this, employ people to help out their clients, and they certainly don't seem to struggle to make a profit. Ultimately, a cost is justified as long as it brings sufficient value.\nDoes Palantir have a \"moat\"?\nBut even if Palantir is special; does this matter? How does this set it apart from its competitors? In this regard, Palantir faces three different sets of competitors:\nFirstly, Palantir is competing with traditional consulting firms. Ultimately, this is what the company does, since it is working hand-in-hand with its clients to improve their operations. Consulting firms like Accenture and McKinsey do this to a certain degree, but at the moment, they lack the technical requirements and niche focus that Palantir has.\nFrom a data analytics sector perspective, Palantir could be put into the same category as companies like IBM or SAP SE (SAP). These companies do indeed have the necessary resources to compete with Palantir in terms of services, but not on price. These companies have been around for too long and are way too big to be able to compete in price with Palantir. They simply cannot scale down efficiently enough.\nLastly, the company competes head-to-head with other defence contractors such as Booz Allen Hamilton Holding Corporation (BAH) and SAIC. The problem these firms have competing with Palantir is that they are not specialized enough within their offerings.\nTo sum up, we would argue that Palantir's moat comes, firstly, from its business proposition. Palantir was created with a very clear idea behind it, which allowed it to be a niche company. This specialization also allows it to be more efficient, and offer clients more competitive prices.\nIt is true that this business model can be copied. There is nothing stopping new companies from doing what Palantir is doing and there are some startups attempting to do this, such as Digital Reasoning, but bear in mind this company has only ever received $134 million in funding. What does set Palantir apart from its competitors and is something that they can't easily replicate is its workforce. Palantir spends a lot of money to find and keep the best talent in the industry. A big part of this is done through stock-based compensation, which is a hot topic I discussed here. In any case, Palantir has the advantage of being \"the place to be\" right now, within the industry. This popularity and recognition has increased even more since its IPO and is a key factor in attracting and retaining young talent. This talent is, ultimately, the company's biggest strength.\nAddressable Market & Growth Opportunities\nWith that said, let's proceed towards analysing Palantir's TAM and Growth outlook.\nIn the sections above, we mentioned how Palantir is in a unique situation, because it is both a consulting firm and a data analytics firm, and it also has significant government contracts. Therefore, we could look at TAM from these three perspectives:\nStarting with consulting, this is perhaps the least exciting of the three areas where Palantir can grow. According to research, the \"Management Consulting Services\" industry will grow at a CAGR of 8% through 2025, which would put the industry at a size of $1201.06 billion. Granted, this is not impressive growth but it is a remarkable size. In this sense, Palantir could actually attack much of this market, which is now dominated by \"the big four\".\nFrom the point of view of data analytics, we have a market that, in this case, is growing very fast. According to Quince Market Insights, this segment will grow at a CAGR of 25% in the next 10 years. Furthermore, studies have also found that, currently, companies only analyze around 12% of their data.This creates a massive opportunity for a company like Palantir to come in, and show these companies exactly how and why they need to analyze their data.\nLastly, since Palantir works closely with the government, it is only reasonable to believe that the more it spends, the more Palantir will make.The CBO projects average yearly deficits of $1.2 trillion from 2022 to 2030. This is in line with the current tendency of continued increase in public spending, but what is most encouraging is where this spending will take place:\nSource:CBO.gov\nBy 2030, the biggest item on the Federal government's expense sheet will be Major Health Care Programs, which will be equivalent to 9% of GDP. Data from the NHE also suggest that by 2028 healthcare will be a $6.2 trillion business.Again, this is great news for Palantir, since data analytics within the healthcare industry is a high growth area. Palantir already has clients in this area, including the UK's National Health System[NHS].\nAll in all, Palantir has the benefit of working within a fast-growing sector, data, but with the ability of being able to deploy their technology and workforce to solve niche applications. Given that the data analytics industry is projected to grow at 25% and that Palantir has strong government connections, we believe the company could easily achieve analysts' goal of 30% CAGR over the next 5 years.\nProfitability Analysis\nProfitability is expected to grow as revenues reach higher levels. The question that any investor would like answered is not only if this is going to be the case, but by how much. Our aim here is to make a forecast of Palantir revenues and earnings until 2030 so that we can later make a sound valuation of the stock through earnings multiples. The method used here is a combination of trendline analysis of existing financials, performances by most comparable competitors, and estimates by analysts and the company itself.\nWe have already talked about the addressable market and growth prospects, now it is time to quantify the expected revenue path for Palantir. Since companies rarely sustain such high growth rates in the long run, we find that a second order polynomial trendline is often the best method to calculate this. This type of equation delivers a flatter curve than an exponential trendline, which assumes a constant growth rate. For Palantir's quarterly revenue, it is also a very good fit as you can see below. You can see the trendline along the actual revenue recorded in the last nine quarters, and a projection until 2030 Q4.\nSource: Author's work based on financial records. Revenue in $million. Quarters are numbered from 1 (Q1 2019) to 48 (Q4 2030)\nIf you apply the function above you get a forecasted yearly revenue of 11.9 billion for 2030, including $3.1 billion in Q4 of that year. This is not far from the consensus estimate for 2030 you can find on Seeking Alpha, which is $12.42 billion. According to the latest earnings call, management expects to deliver 30%+ growth at least in the next four years. To put this into perspective, a CAGR of 30% until 2030 would give a revenue of $11.5 billion. Taking the three into account, we will keep our trendline estimate of 11.9, which lies between the other two figures.\nGross margins have been improving gradually according to GAAP figures over the last nine quarters, from nearly 68% in the first quarter of 2019 to over 78% in the latest quarter. Except for an unusually bad figure in Q3 2020, which has been taken out of the equation for a smoother analysis, the gross margin as a function of revenue shows a predictable path of improvement through a linear trend, as you can see in this chart.\nSource: Author's work based on financial records. Items in $million\nData excludes a figure of (289,140) from Q3 2020.\nThe linear equation above, with a 0.9 slope, generates a forecast where the gross margin should tend towards 90% of revenue. Applying this formula to the forecasted revenue of $11.9 billion predicts a gross margin figure of $10.6 billion for 2030.\nIn order to transform gross margins into net income, so that we can make a valuation based on an earnings multiple, we will look at one of Palantir's comparables, discussed in a previous article, Cognizant (NASDAQ:CTSH). The reason for using Cognizant is that not only is the activity they carry out similar but it is also an example of a profitable pier with a fairly consistent earnings margin, and with debt and gross margin volumes comparable to the ones we are predicting for Palantir.\nSource: Author's work.\nWith gross margins stable at around 6 billion in recent years, CTSH has maintained a healthy level of net income, ranging from 22% to 35% of gross profits. To make a fair estimate, we will assume the average percentage through the 10-year period, which is 30.61% of gross profit. We will also assume that Palantir achieves that level in 2030, with a gradual increase of the percentage until then.\nThis completes our revenue and earnings estimates for Palantir in 2030, reaching 11.9 billion revenue, $10.6 billion gross margin, and $3.3 billion net income.\n\n\n\nYear\n2021\n2022\n2023\n2024\n2025\n2026\n2027\n2028\n2029\n2030\n\n\nReven.\n1,581\n2,196\n2,942\n3,820\n4,830\n5,972\n7,245\n8,650\n10,188\n11,856\n\n\nGross Profit\n1,382\n1,936\n2,608\n3,399\n4,309\n5,338\n6,485\n7,751\n9,136\n10,639\n\n\nNet Income\n42\n119\n240\n416\n660\n980\n1,390\n1,898\n2,517\n3,257\n\n\n\nSource: Author's work. Items in $millions.\nValuation\nHaving forecasted revenues and earnings, we are prepared to estimate a path for Palantir's stock price. In order to do this, we need to also look into financing through equity and how the dilution will affect share prices. We are going to continue using the 2030 horizon as the timeframe.\nFirst, we will create an estimate for market capitalization based on the current sector median earnings multiple, and then we will make a forecast for the dilution. The current GAAP TTM Price/earnings ratio for the sector is 33.94. The assumption here is that as Palantir becomes profitable, its valuation should approach this multiple and be fairly valued for its earnings. Based on the earnings we forecasted and the 33.94 PE ratio, we get the following estimated market capitalizations:\n\n\n\nYear\n2021\n2022\n2023\n2024\n2025\n2026\n2027\n2028\n2029\n2030\n\n\nNet Inc.\n42\n119\n240\n416\n660\n980\n1,390\n1,898\n2,517\n3,257\n\n\nMkt. Cap [PE]\n1,436\n4,023\n8,129\n14,126\n22,384\n33,272\n47,160\n64,420\n85,421\n110,532\n\n\n\nSource: Author's work. Items in $millions.\nAs you can see, the current market capitalization of slightly over $50 billion wouldn't be justified by earnings until after 2027, reaching a level of $111 billion by 2030. This represents a CAGR of just 8.57%, before we take dilution into account.\nIn order to predict how the number of common shares is likely to evolve over these years, we have made a forecast of the book value based on revenue, assuming the balance sheet maintains a similar structure relative to the volume of operations. If we look at the last four quarters, we have a fairly consistent linear pattern of how book value has increased with quarterly revenue, as you can see below.\nSource: Author's work based on financial records. Items in $million\nApplying this equation, with a revenue of $3.1 billion in Q4 2030, as per our previous forecast, the book value should rise to $34.2 billion. If we take into account the current book value of 1.8 billion and the accumulated net income we have already forecasted for the whole period, which is $11.5 billion, we estimate that an additional $20.9 billion of funding through new equity will be required. At the current share price of $27.37, this would mean 739 million additional common shares by the end of 2030. Added to the current 1.8 billion outstanding, the total is 2.6 billion common shares. Applying the $111 billion market capitalization we have forecasted, the resulting target price for the end of 2030 is $41.87. You can see a summary of these figures below.\n\n\n\nConcept\nAmount\n\n\nRevenue Q4 2030\n3,128\n\n\nBook Value Q4 2030\n34,212\n\n\nBook Value Q1 2021\n1,806\n\n\nAcc. Net Income Q2 2021-Q4 2030\n11,517\n\n\nFinancing from new equity\n20,889\n\n\nCurrent Share Price\n$ 27.37\n\n\nNew shares required\n763\n\n\nMarket cap 2030 Q4\n110,532\n\n\nNº Shares 2030 Q4 (millions)\n2,640\n\n\nTarget Price 2030 Q4\n$ 41.87\n\n\nCAGR\n4.58%\n\n\n\nSource: Author's work. Monetary items in $millions, except per share items, nº of shares in millions.\nAs you can see, the expected CAGR for Palantir's stock price as per our forecasted fair value at the end of 2030 is just 4.58%. If we were to require, say, a 10% return, which is more reasonable for a growth stock, the fair price today would be $16.93, 38% lower than the current price.\nRisks\nHaving said all this, we also have to mention some particular challenges that a company like Palantir faces. The most significant of these would relate to how the company has to manage its image in a world where privacy is becoming \"taboo\".\nPalantir is a company that, on many levels, has a lot of power, which can be both a blessing and a curse. The company has to be very careful with its data to avoid any events that could damage its reputation, which it needs in order to survive. Think, for example, Edward Snowden, who before becoming one of the most wanted men in the world was working for Booz Allen. What would happen if the next whistleblower came from within Palantir's ranks?\nOn top of that, Palantir is also facing resistance from organizations abroad. For example, there is currently a campaign in the UK trying to stop Palantir fromworking with the NHS. It's understandable that some people may not want their medical data to be handled by a foreign company, even if it is from an allied country.\nUltimately, these are very particular challenges that Palantir faces. Its growth could be hampered if people or even the government start to think the company is \"too powerful\". Furthermore, if anything happened to damage the company's reputation, Palantir could be finished overnight. Of course, this is why the company invests so heavily in its workforce. But will it be enough?\nTakeaway\nIn conclusion, we believe Palantir is qualitatively a great company. They operate in a niche market with a lot of growth potential. On top of that, Palantir has one of the best technologies and workforces in the market right now, but this is not enough. Even with double-digit growth and assuming a steady path towards profitability, Palantir seems way too expensive today to provide investors with good returns. A great company doesn't always make a great investment, and we feel this is the case with Palantir.","news_type":1},"isVote":1,"tweetType":1,"viewCount":381,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":156607330,"gmtCreate":1625215520720,"gmtModify":1703738527173,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"nice&nbsp;","listText":"nice&nbsp;","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/156607330","repostId":"1115821085","repostType":4,"isVote":1,"tweetType":1,"viewCount":381,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":155788085,"gmtCreate":1625453801747,"gmtModify":1703742014534,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Nice !","listText":"Nice !","text":"Nice !","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/155788085","repostId":"1177847846","repostType":4,"isVote":1,"tweetType":1,"viewCount":498,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":144602598,"gmtCreate":1626277687514,"gmtModify":1703757063643,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/144602598","repostId":"1110985217","repostType":4,"repost":{"id":"1110985217","kind":"news","pubTimestamp":1626274263,"share":"https://ttm.financial/m/news/1110985217?lang=&edition=fundamental","pubTime":"2021-07-14 22:51","market":"us","language":"en","title":"Moderna tops $100 billion market cap for first time","url":"https://stock-news.laohu8.com/highlight/detail?id=1110985217","media":"seekingalpha","summary":"Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.","content":"<ul>\n <li>Moderna&nbsp;trades sharply higher in morning hours, topping $100B in market cap for the first time ever.</li>\n <li>Late June, the shares surged to their historic peak after Moderna detailed the efficacy of its coronavirus vaccine against newly discovered variants of the virus including the&nbsp;highly transmissible Delta variant.</li>\n <li>The announcement coincided with the Emergency Use Authorization granted for the COVID-19 shot in India, where the variant was first discovered.</li>\n <li>As&nbsp;indicated in the graph,&nbsp;Moderna shares have added over a tenth over the past week to outperform the broader market as concerns over the Delta variant rattled investors and health authorities.</li>\n <li>Last week, the data from The Centers for Disease Control and Prevention (CDC) indicated that the Delta variant which is believed to be 60% more transmissible than the Alpha variant had become the dominant strain of&nbsp;the virus in the U.S.</li>\n</ul>\n<p><img src=\"https://static.tigerbbs.com/043affcf30a9feb2d573535e31e336b1\" tg-width=\"846\" tg-height=\"571\" referrerpolicy=\"no-referrer\"></p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Moderna tops $100 billion market cap for first time</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nModerna tops $100 billion market cap for first time\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-14 22:51 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.\nLate June, the shares surged to their historic peak after Moderna detailed the efficacy of its ...</p>\n\n<a href=\"https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"MRNA":"Moderna, Inc."},"source_url":"https://seekingalpha.com/news/3715156-moderna-reaches-a-new-high-to-cross-100b-market-cap-for-first-time","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1110985217","content_text":"Moderna trades sharply higher in morning hours, topping $100B in market cap for the first time ever.\nLate June, the shares surged to their historic peak after Moderna detailed the efficacy of its coronavirus vaccine against newly discovered variants of the virus including the highly transmissible Delta variant.\nThe announcement coincided with the Emergency Use Authorization granted for the COVID-19 shot in India, where the variant was first discovered.\nAs indicated in the graph, Moderna shares have added over a tenth over the past week to outperform the broader market as concerns over the Delta variant rattled investors and health authorities.\nLast week, the data from The Centers for Disease Control and Prevention (CDC) indicated that the Delta variant which is believed to be 60% more transmissible than the Alpha variant had become the dominant strain of the virus in the U.S.","news_type":1},"isVote":1,"tweetType":1,"viewCount":217,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":155306552,"gmtCreate":1625372685676,"gmtModify":1703740969625,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Nice&nbsp;","listText":"Nice&nbsp;","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/155306552","repostId":"1189605893","repostType":4,"repost":{"id":"1189605893","kind":"news","pubTimestamp":1625363433,"share":"https://ttm.financial/m/news/1189605893?lang=&edition=fundamental","pubTime":"2021-07-04 09:50","market":"us","language":"en","title":"When Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.","url":"https://stock-news.laohu8.com/highlight/detail?id=1189605893","media":"Barron's","summary":"It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.Investors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&P 500—m","content":"<p>It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.</p>\n<p>Owning the Big Five—Apple(ticker: AAPL),Microsoft(MSFT),Amazon.com(AMZN),Facebook(FB), andAlphabet’sGoogle (GOOGL)—has been lucrative: These companies have logged gains of 125% to 245% since the beginning of 2019. These stocks are widely held, not just by index investors, but also among all kinds of active fund managers—including those who don’t typically own growth companies.</p>\n<p>Together, the five companies account for almost 22% of theS&amp;P 500index. Of course, the Nifty Fifty stocks dominated the 1970s, and blue-chip stalwarts such asIBM(IBM) andAT&amp;T(T) ruled the 1980s. Those companies may have wielded even more influence over the broad economy than today’s biggest companies do, but the level of market concentration is higher now, and the Big Five’s impact on the broad market is much greater because of their size, according to Howard Silverblatt, senior index analyst at S&amp;P Dow Jones Indices. Apple and Microsoft are the first U.S. stocks whose market values have soared past $2 trillion. Though it has slipped a bit this year, Apple hit peak concentration for a single stock in the S&amp;P 500 last year at about 7%, higher than IBM’s in its heyday.</p>\n<p>There are signs that investor appetite for risk is waning, which could hurt the prospects for the growth of Big Tech. There has beena selloff in speculative cornersof the market, such as cryptocurrencies and special purpose acquisition companies, better known as SPACs. And, of course, there is therising consternationabout both inflation andinterest ratesmoving higher. If the Big Fiveslow downor tumble, the entire market—including all index investors—will feel it. If these stocks decline by 10%, for instance, in order for the S&amp;P 500 to keep trading flat, the bottom 100 stocks in the index would have to rise by a collective 75%, according toGoldman Sachs.This dynamic explains why narrow market breadth has often preceded big losses.</p>\n<p><b>When Less May Be More</b></p>\n<p>These funds are more diversified than the S&amp;P 500, and could be more resilient if the tech megacaps stumble.</p>\n<p><img src=\"https://static.tigerbbs.com/d308adf067ef3205da5f7c1bddb75e77\" tg-width=\"697\" tg-height=\"366\" referrerpolicy=\"no-referrer\"></p>\n<p>Investors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&amp;P 500—more than the energy, real estate, materials, or utilities sectors. Amazon hasn’t hit an all-time high this year, and has underperformed the S&amp;P 500 by 25 percentage points since September 2020 amid questions about the company’s e-commerce growth. Add in regulatory pressure, which could make the path ahead for these companies rockier, such as a House panel’s approval of sweeping legislation last month that could curb the dominance of companies like Google and Facebook.</p>\n<p>A global recovery could also make the Big Five stocks less special. “The story line with megacap tech stocks has been that economic growth has been hard to find and rates so low that you wanted to own powerful growth stocks,” says Scott Opsal, director of research at Leuthold Group. “But for those who think the economy has room to run, you don’t have to pay up for the growth that investors were willing to pay for in 2018 or 2019.” For Opsal, the changing backdrop is reason for a barbell approach, owning some of the technology winners but also diversifying into a wider array of more value-oriented and smaller stocks.</p>\n<p>With the market so concentrated in a handful of megacap tech stocks, Opsal says that investors may want the type of funds that do what the fund consultants advise against: be willing to drift out of their lane, and be willing to not fit neatly into a growth or value category.</p>\n<p>It isn’t easy finding good fund managers with the acumen to pick the right stocks beyond the other 495, the grit to avoid the crowd, and the track record that demonstrates to investors that they can be different and correct. Performance doesn’t look all that great for managers whose wariness led them to own less of the technology darlings that drove the market to highs over the past several years. And the decision to not own any—or even just less—of these companies sometimes pushed managers out of theirMorningstarcategory into areas like large-cap blend.</p>\n<p>High active share has often been a go-to gauge for finding fund managers who look different than their benchmarks. That’s a good place to start, but different doesn’t always lead to outperformance, so Morningstar strategist Alec Lucas recommends understanding what is in the managers’ portfolios and the thinking behind the picks—as well as when they buy or sell the stocks.</p>\n<p><i>Barron’s</i>looked for large-cap growth-oriented managers that don’t usually stick too close to an index and have long, and strong, track records. We turned up both diversified and concentrated funds; some didn’t own any of the Big Five, while some owned a bit, albeit less than their peers. All may offer investors a way to tweak rather than overhaul their portfolios, giving them some more diversification while still tapping into large, growing companies.</p>\n<p><b>A Concentrated Approach</b></p>\n<p>The Akre Focus fund (AKREX) falls into the concentrated bucket. It owns about 20 well-managed companies that the managers, John Neff and Chris Cerrone, think are superior businesses and adept at reinvesting in the companies. The fund has just a 4% turnover, so it holds on to its investments for years. That has been a winning long-term strategy: Akre Focus has an 18% average annual return over the past decade, beating 84% of its peers.</p>\n<p>The past few years have been tough, though: The fund hasn’t owned the Big Five, and has just 13% of its assets in any kind of technology company, whereas most of its peers have close to a third in tech. It has averaged 22% annually over the past three years; not too shabby on an absolute basis, but landing it midpack among competitors. The managers are resolute in finding growth elsewhere. “They are tremendous businesses, but how many more times can they double in value, given their current size? Maybe many times, but it’s an important question,” says Neff. “We’ve generally focused on smaller businesses with ostensibly longer runways with which to compound.”</p>\n<p>The tech investments that the managers have made are largely in software companies like Constellation Software (CSU.Canada),Adobe(ADBE), andCoStar Group(CSGP) that have long paths to growth ahead of them as more companies rely on their products. The fund also looks for companies with the type of “network effect” that makes Google and Amazon attractive—the business model gets stronger as more people use it, and makes the company that much harder to replace. Top holdings like Mastercard (MA) andVisa(V) fit that description.</p>\n<p>Many of the companies the duo favors are positioned to hold up, stand out, or even benefit from difficult times, like auto-parts retailerO’Reilly Automotive(ORLY), which recently reported its best comparable same-store sales in 25 years. Given the market backdrop, co-manager Cerrone says they aren’t finding that many bargains today—and they are willing to hold cash if that continues. Today, cash sits at just 2%. “We frankly wish we had more cash than we do today,” Cerrone says. “We’re not bearish, but we think we will be presented with better opportunities.”</p>\n<p><b>Underappreciated Growth</b></p>\n<p>The $10.1 billionPrimecap Odyssey Growthfund (POGRX) hunts for companies with above-average earnings growth, but not one of the Big Five tech stocks can be spotted in their top 10 holdings.</p>\n<p>That underweight has been painful; the fund’s 19.6% annual average return over the past five years puts it in the bottom third of large growth funds. But the managers’ willingness to stick with companies with above-average growth for the long haul, often adding to their shares in downturns, wins them fans.</p>\n<p>The fund’s managers are investing in some of the broad trends driving the Big Five—like e-commerce and cloud computing—but doing it differently, says Morningstar’s Lucas. For example, the fund owns Alibaba Group Holding (BABA) instead of Amazon, opting for China’s version of an e-commerce and cloud-computing giant that also trades at a meaningful discount to the U.S. company, Lucas says. Primecap declined to comment.</p>\n<p>About 18% of the fund is invested outside the U.S. and its average price/earnings ratio is 20, cheaper than the 29 for the large growth category, according to Morningstar. Though the fund isn’t concentrated in the Big Five tech stocks, it has double the stake in healthcare, almost 30% of assets, than other large growth funds. Its top 10 positions includeEli Lilly(LLY),Biogen(BIIB),Abiomed(ABMD), andAmgen(AMGN).</p>\n<p><b>Lean Profit Machines</b></p>\n<p>The $10.3 billionJensen Quality Growth(JENSX) focuses on companies that generate 15% return on equity for 10 consecutive years—a metric that co-manager Eric Schoenstein sees as a gauge forfoundational excellenceand fortress-like competitive advantages. Amazon and Facebook don’t make the cut. Alphabet, Microsoft, and Apple rank among the top holdings, but Schoenstein holds roughly a third less than in the Russell 1000 Growth index. Schoenstein says he is trying to be conscious of the risk of concentration if the momentum trade reverts or regulation puts a target on these companies’ backs.</p>\n<p>Schoenstein’s caution and a focus on quality companies have pushed the fund toward the bottom decile of the large blend Morningstar category year to date, with a return of 11.6%. But the fund’s 17.3% average return over the past five years puts it in the top 35% of large-blend funds tracked by Morningstar. Plus, the fund’s risk-adjusted, long-term performance stands out, losing about 77% as much as the S&amp;P 500 and Russell 1000 Growth indexes when stocks have fallen since Schoenstein began co-managing the fund in 2004, according to Morningstar.</p>\n<p>Lately, Schoenstein has been adding to quality stocks that may not be growing as fast but are more attractively priced as investors have left them behind, such asStarbucks(SBUX)—a stock that had been too pricey until the pandemic hit. “What better business is there to be in than branded addiction?” Schoenstein asks.</p>\n<p>While offices in New York City may not get to 100% occupancy, Schoenstein sees hybrid work situations continuing to drive business to Starbucks, potentially with fewer customers but higher sales, as one person buys for multiple people. The company is also closing stores to become more efficient and moving more toward quick-serve and grab-and-go in some locations rather than an all-day café experience.</p>\n<p><img src=\"https://static.tigerbbs.com/81aeb359e30f7394a363f00feb8ce0cf\" tg-width=\"707\" tg-height=\"477\" referrerpolicy=\"no-referrer\"></p>\n<p>Insurance is another area that Schoenstein has been adding to, with companies like Marsh &amp; McLennan (MMC), which is dominant in multiple businesses—insurance brokerage, health benefits, and retirement asset management with Mercer. Switching costs are high in the world of insurance, and the company benefits from new trends in cybersecurity and data privacy, as well.</p>\n<p>Another recent purchase: Data-analytics providerVerisk Analytics(VRSK), which serves property and casualty insurers and gets about 80% of its revenue from subscriptions and long-term agreements. The company helps take raw data and analyze it to help insurers, for example, underwrite policies. Says Schoenstein: “Some recovery is still needed because business has struggled over the past year, with business failures and companies putting [projects] on hold. So, it’s a small position, but I think about companies that are super-entrenched with their customers.”</p>\n<p><b>Multiple Managers</b></p>\n<p>Unlike the Jensen and Akre funds, which typically own 20 to 30 stocks, the $87 billionAmerican Funds Amcapfund (AMCPX) is well diversified, with more than 200 holdings, as managers hunt for the best ideas regardless of size.Abbott Laboratories(ABT),Broadcom(AVGO),EOG Resources(EOG), and Mastercard are top holdings along with four of the megacap tech quintuplets.</p>\n<p>But the fund is valuation-sensitive, and its allocation to the Big Five is lower than other growth managers, hurting its performance over the past five years; its average annual return of 17.3% puts it in the bottom decile of performance. For investors looking for diversification, the fund is a relatively cheap option—charging an expense ratio of 0.68%—that isn’t beholden to a benchmark and is run by multiple managers who can hunt for their highest-conviction ideas.</p>\n<p>Managers favor companies with strong competitive positioning, which can allow companies to boost prices and better weather near-term inflationary periods. While that includes a healthy helping of healthcare and technology stocks, managers have also gravitated toward cyclical growth companies, including semiconductor firms, travel-related companies, auto suppliers, retailers, and financials benefiting from secular growth as well as getting an additional boost from the Covid recovery.</p>\n<p>“It’s very consistent, and a good core fund with a lot of good stockpickers behind it,” says Russel Kinnel, Morningstar’s director of manager research. “You want a fund to have some good technology exposure because it’s a dynamic sector.”</p>\n<p><b>Growth on the Cheap</b></p>\n<p>The $357 million Cambiar Opportunity fund (CAMOX) is a concentrated fund that owns roughly 40 stocks. The fund looks for relative values among industry winners that boast strong long-term demand prospects and pricing power that differentiate it from some of its peers. The fund’s 16% average annual return over the past five years helped it beat 94% of its large-value peers.</p>\n<p>The fund holds Amazon, which it bought for the first time in early 2020 when the market wasn’t giving the e-commerce behemoth much value for its cloud business. It has been harder to own other megacap technology stocks, says Ania Aldrich, an investment principal at Cambiar. That’s in part because of their high valuations, but especially as exchange-traded funds continue to receive record-high inflows—$400 billion in the first half of 2021, versus $507 billion for all of last year, according to ETF.com—which contributes to the market concentration.</p>\n<p>Instead, the fund has focused on areas such as financials, including JPMorgan Chase (JPM) and Charles Schwab (SCHW), that can grow in this economic environment. Both would benefit from higher interest rates, but Aldrich says that wasn’t the reason to buy the stocks. Schwab, for example, is taking market share in wealth management, and its recent acquisition of Ameritrade gives it more heft and the ability to be more cost-efficient.</p>\n<p>Also attractive are companies that haven’t yet seen a full reopening of their businesses, like casino operatorPenn National Gaming(PENN), which Aldrich says is well positioned as states look for more revenue andallow online gambling, and food distributorSysco(SYY), which has yet to benefit from colleges and conferences getting back into full swing. While Sysco’s shares are up 43% in the past year, Aldrich sees more room for gains, noting that the company is a market leader and can take market share as smaller firms consolidate. Plus, it has pricing power to pass on higher commodity costs since it is a distributor.</p>\n<p>Another recent addition:Uber Technologies(UBER), which Aldrich says isn’t just a reopening beneficiary but also has increased the reach of its platform by moving into food delivery and opening the door to other services. “In the past, it was hard to outperform when you weren’t involved in the [concentrated stocks], but we see these trends as transitory. As growth normalizes, the value of other stocks should be recognized.”</p>","source":"lsy1610680873436","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>When Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhen Big Tech Stumbles, the Market Can Fall Hard. These 5 Funds Can Help.\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-04 09:50 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1><strong>Barron's</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a...</p>\n\n<a href=\"https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.barrons.com/articles/big-tech-stocks-risk-funds-51625257865?mod=hp_LEAD_1","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1189605893","content_text":"It is possible to have too much of a good thing. After riding five megacap technology stocks to new highs after new highs, investors’ portfolios may be uncomfortably concentrated in these winners at a time that some strategists see a potential turn ahead in the markets.\nOwning the Big Five—Apple(ticker: AAPL),Microsoft(MSFT),Amazon.com(AMZN),Facebook(FB), andAlphabet’sGoogle (GOOGL)—has been lucrative: These companies have logged gains of 125% to 245% since the beginning of 2019. These stocks are widely held, not just by index investors, but also among all kinds of active fund managers—including those who don’t typically own growth companies.\nTogether, the five companies account for almost 22% of theS&P 500index. Of course, the Nifty Fifty stocks dominated the 1970s, and blue-chip stalwarts such asIBM(IBM) andAT&T(T) ruled the 1980s. Those companies may have wielded even more influence over the broad economy than today’s biggest companies do, but the level of market concentration is higher now, and the Big Five’s impact on the broad market is much greater because of their size, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Apple and Microsoft are the first U.S. stocks whose market values have soared past $2 trillion. Though it has slipped a bit this year, Apple hit peak concentration for a single stock in the S&P 500 last year at about 7%, higher than IBM’s in its heyday.\nThere are signs that investor appetite for risk is waning, which could hurt the prospects for the growth of Big Tech. There has beena selloff in speculative cornersof the market, such as cryptocurrencies and special purpose acquisition companies, better known as SPACs. And, of course, there is therising consternationabout both inflation andinterest ratesmoving higher. If the Big Fiveslow downor tumble, the entire market—including all index investors—will feel it. If these stocks decline by 10%, for instance, in order for the S&P 500 to keep trading flat, the bottom 100 stocks in the index would have to rise by a collective 75%, according toGoldman Sachs.This dynamic explains why narrow market breadth has often preceded big losses.\nWhen Less May Be More\nThese funds are more diversified than the S&P 500, and could be more resilient if the tech megacaps stumble.\n\nInvestors’ portfolios are chock-full of these stocks, leaving them less diversified for a possible turn in the market. These companies are already beginning to slow down. Take Amazon, which accounts for roughly 4% of the S&P 500—more than the energy, real estate, materials, or utilities sectors. Amazon hasn’t hit an all-time high this year, and has underperformed the S&P 500 by 25 percentage points since September 2020 amid questions about the company’s e-commerce growth. Add in regulatory pressure, which could make the path ahead for these companies rockier, such as a House panel’s approval of sweeping legislation last month that could curb the dominance of companies like Google and Facebook.\nA global recovery could also make the Big Five stocks less special. “The story line with megacap tech stocks has been that economic growth has been hard to find and rates so low that you wanted to own powerful growth stocks,” says Scott Opsal, director of research at Leuthold Group. “But for those who think the economy has room to run, you don’t have to pay up for the growth that investors were willing to pay for in 2018 or 2019.” For Opsal, the changing backdrop is reason for a barbell approach, owning some of the technology winners but also diversifying into a wider array of more value-oriented and smaller stocks.\nWith the market so concentrated in a handful of megacap tech stocks, Opsal says that investors may want the type of funds that do what the fund consultants advise against: be willing to drift out of their lane, and be willing to not fit neatly into a growth or value category.\nIt isn’t easy finding good fund managers with the acumen to pick the right stocks beyond the other 495, the grit to avoid the crowd, and the track record that demonstrates to investors that they can be different and correct. Performance doesn’t look all that great for managers whose wariness led them to own less of the technology darlings that drove the market to highs over the past several years. And the decision to not own any—or even just less—of these companies sometimes pushed managers out of theirMorningstarcategory into areas like large-cap blend.\nHigh active share has often been a go-to gauge for finding fund managers who look different than their benchmarks. That’s a good place to start, but different doesn’t always lead to outperformance, so Morningstar strategist Alec Lucas recommends understanding what is in the managers’ portfolios and the thinking behind the picks—as well as when they buy or sell the stocks.\nBarron’slooked for large-cap growth-oriented managers that don’t usually stick too close to an index and have long, and strong, track records. We turned up both diversified and concentrated funds; some didn’t own any of the Big Five, while some owned a bit, albeit less than their peers. All may offer investors a way to tweak rather than overhaul their portfolios, giving them some more diversification while still tapping into large, growing companies.\nA Concentrated Approach\nThe Akre Focus fund (AKREX) falls into the concentrated bucket. It owns about 20 well-managed companies that the managers, John Neff and Chris Cerrone, think are superior businesses and adept at reinvesting in the companies. The fund has just a 4% turnover, so it holds on to its investments for years. That has been a winning long-term strategy: Akre Focus has an 18% average annual return over the past decade, beating 84% of its peers.\nThe past few years have been tough, though: The fund hasn’t owned the Big Five, and has just 13% of its assets in any kind of technology company, whereas most of its peers have close to a third in tech. It has averaged 22% annually over the past three years; not too shabby on an absolute basis, but landing it midpack among competitors. The managers are resolute in finding growth elsewhere. “They are tremendous businesses, but how many more times can they double in value, given their current size? Maybe many times, but it’s an important question,” says Neff. “We’ve generally focused on smaller businesses with ostensibly longer runways with which to compound.”\nThe tech investments that the managers have made are largely in software companies like Constellation Software (CSU.Canada),Adobe(ADBE), andCoStar Group(CSGP) that have long paths to growth ahead of them as more companies rely on their products. The fund also looks for companies with the type of “network effect” that makes Google and Amazon attractive—the business model gets stronger as more people use it, and makes the company that much harder to replace. Top holdings like Mastercard (MA) andVisa(V) fit that description.\nMany of the companies the duo favors are positioned to hold up, stand out, or even benefit from difficult times, like auto-parts retailerO’Reilly Automotive(ORLY), which recently reported its best comparable same-store sales in 25 years. Given the market backdrop, co-manager Cerrone says they aren’t finding that many bargains today—and they are willing to hold cash if that continues. Today, cash sits at just 2%. “We frankly wish we had more cash than we do today,” Cerrone says. “We’re not bearish, but we think we will be presented with better opportunities.”\nUnderappreciated Growth\nThe $10.1 billionPrimecap Odyssey Growthfund (POGRX) hunts for companies with above-average earnings growth, but not one of the Big Five tech stocks can be spotted in their top 10 holdings.\nThat underweight has been painful; the fund’s 19.6% annual average return over the past five years puts it in the bottom third of large growth funds. But the managers’ willingness to stick with companies with above-average growth for the long haul, often adding to their shares in downturns, wins them fans.\nThe fund’s managers are investing in some of the broad trends driving the Big Five—like e-commerce and cloud computing—but doing it differently, says Morningstar’s Lucas. For example, the fund owns Alibaba Group Holding (BABA) instead of Amazon, opting for China’s version of an e-commerce and cloud-computing giant that also trades at a meaningful discount to the U.S. company, Lucas says. Primecap declined to comment.\nAbout 18% of the fund is invested outside the U.S. and its average price/earnings ratio is 20, cheaper than the 29 for the large growth category, according to Morningstar. Though the fund isn’t concentrated in the Big Five tech stocks, it has double the stake in healthcare, almost 30% of assets, than other large growth funds. Its top 10 positions includeEli Lilly(LLY),Biogen(BIIB),Abiomed(ABMD), andAmgen(AMGN).\nLean Profit Machines\nThe $10.3 billionJensen Quality Growth(JENSX) focuses on companies that generate 15% return on equity for 10 consecutive years—a metric that co-manager Eric Schoenstein sees as a gauge forfoundational excellenceand fortress-like competitive advantages. Amazon and Facebook don’t make the cut. Alphabet, Microsoft, and Apple rank among the top holdings, but Schoenstein holds roughly a third less than in the Russell 1000 Growth index. Schoenstein says he is trying to be conscious of the risk of concentration if the momentum trade reverts or regulation puts a target on these companies’ backs.\nSchoenstein’s caution and a focus on quality companies have pushed the fund toward the bottom decile of the large blend Morningstar category year to date, with a return of 11.6%. But the fund’s 17.3% average return over the past five years puts it in the top 35% of large-blend funds tracked by Morningstar. Plus, the fund’s risk-adjusted, long-term performance stands out, losing about 77% as much as the S&P 500 and Russell 1000 Growth indexes when stocks have fallen since Schoenstein began co-managing the fund in 2004, according to Morningstar.\nLately, Schoenstein has been adding to quality stocks that may not be growing as fast but are more attractively priced as investors have left them behind, such asStarbucks(SBUX)—a stock that had been too pricey until the pandemic hit. “What better business is there to be in than branded addiction?” Schoenstein asks.\nWhile offices in New York City may not get to 100% occupancy, Schoenstein sees hybrid work situations continuing to drive business to Starbucks, potentially with fewer customers but higher sales, as one person buys for multiple people. The company is also closing stores to become more efficient and moving more toward quick-serve and grab-and-go in some locations rather than an all-day café experience.\n\nInsurance is another area that Schoenstein has been adding to, with companies like Marsh & McLennan (MMC), which is dominant in multiple businesses—insurance brokerage, health benefits, and retirement asset management with Mercer. Switching costs are high in the world of insurance, and the company benefits from new trends in cybersecurity and data privacy, as well.\nAnother recent purchase: Data-analytics providerVerisk Analytics(VRSK), which serves property and casualty insurers and gets about 80% of its revenue from subscriptions and long-term agreements. The company helps take raw data and analyze it to help insurers, for example, underwrite policies. Says Schoenstein: “Some recovery is still needed because business has struggled over the past year, with business failures and companies putting [projects] on hold. So, it’s a small position, but I think about companies that are super-entrenched with their customers.”\nMultiple Managers\nUnlike the Jensen and Akre funds, which typically own 20 to 30 stocks, the $87 billionAmerican Funds Amcapfund (AMCPX) is well diversified, with more than 200 holdings, as managers hunt for the best ideas regardless of size.Abbott Laboratories(ABT),Broadcom(AVGO),EOG Resources(EOG), and Mastercard are top holdings along with four of the megacap tech quintuplets.\nBut the fund is valuation-sensitive, and its allocation to the Big Five is lower than other growth managers, hurting its performance over the past five years; its average annual return of 17.3% puts it in the bottom decile of performance. For investors looking for diversification, the fund is a relatively cheap option—charging an expense ratio of 0.68%—that isn’t beholden to a benchmark and is run by multiple managers who can hunt for their highest-conviction ideas.\nManagers favor companies with strong competitive positioning, which can allow companies to boost prices and better weather near-term inflationary periods. While that includes a healthy helping of healthcare and technology stocks, managers have also gravitated toward cyclical growth companies, including semiconductor firms, travel-related companies, auto suppliers, retailers, and financials benefiting from secular growth as well as getting an additional boost from the Covid recovery.\n“It’s very consistent, and a good core fund with a lot of good stockpickers behind it,” says Russel Kinnel, Morningstar’s director of manager research. “You want a fund to have some good technology exposure because it’s a dynamic sector.”\nGrowth on the Cheap\nThe $357 million Cambiar Opportunity fund (CAMOX) is a concentrated fund that owns roughly 40 stocks. The fund looks for relative values among industry winners that boast strong long-term demand prospects and pricing power that differentiate it from some of its peers. The fund’s 16% average annual return over the past five years helped it beat 94% of its large-value peers.\nThe fund holds Amazon, which it bought for the first time in early 2020 when the market wasn’t giving the e-commerce behemoth much value for its cloud business. It has been harder to own other megacap technology stocks, says Ania Aldrich, an investment principal at Cambiar. That’s in part because of their high valuations, but especially as exchange-traded funds continue to receive record-high inflows—$400 billion in the first half of 2021, versus $507 billion for all of last year, according to ETF.com—which contributes to the market concentration.\nInstead, the fund has focused on areas such as financials, including JPMorgan Chase (JPM) and Charles Schwab (SCHW), that can grow in this economic environment. Both would benefit from higher interest rates, but Aldrich says that wasn’t the reason to buy the stocks. Schwab, for example, is taking market share in wealth management, and its recent acquisition of Ameritrade gives it more heft and the ability to be more cost-efficient.\nAlso attractive are companies that haven’t yet seen a full reopening of their businesses, like casino operatorPenn National Gaming(PENN), which Aldrich says is well positioned as states look for more revenue andallow online gambling, and food distributorSysco(SYY), which has yet to benefit from colleges and conferences getting back into full swing. While Sysco’s shares are up 43% in the past year, Aldrich sees more room for gains, noting that the company is a market leader and can take market share as smaller firms consolidate. Plus, it has pricing power to pass on higher commodity costs since it is a distributor.\nAnother recent addition:Uber Technologies(UBER), which Aldrich says isn’t just a reopening beneficiary but also has increased the reach of its platform by moving into food delivery and opening the door to other services. “In the past, it was hard to outperform when you weren’t involved in the [concentrated stocks], but we see these trends as transitory. As growth normalizes, the value of other stocks should be recognized.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":252,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":154751338,"gmtCreate":1625547740424,"gmtModify":1703743479732,"author":{"id":"4087982572079650","authorId":"4087982572079650","name":"DD2","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087982572079650","authorIdStr":"4087982572079650"},"themes":[],"htmlText":"Cool!&nbsp;","listText":"Cool!&nbsp;","text":"Cool!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/154751338","repostId":"2149533820","repostType":4,"isVote":1,"tweetType":1,"viewCount":156,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}