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Venture Capitalist Marc Andreessen once said that “software is eating the world.” Over the previous decade, he has been proven right over and over, as technology takes over every area of our life. But how can investors get in on the long-term software profits? One way is to invest in software giant Autodesk, which sells tools to architects and engineers, among others.

Is Autodesk a company worth owning for a long time? Let’s find out.

Autodesk sells software for people who make things. This includes companies within architecture, construction and engineering, utilities, manufacturing, infrastructure, and entertainment. The majority of its income comes from the first three, specifically with its design software. Its last quarter, 73.6% of its total sales came from these products. Within this sector, Autodesk’s top software are Revit, which aids people in designing and managing buildings, and computer-aided design program AutoCAD.

Its core products should bring in steady profits for Autodesk, but the company has other programs and economic trends that should help grow its operations over the next ten years. For examply, inside manufacturing and engineering, Fusion 360 is expanding and looking to disrupt the sector with a cloud-based approach. It is also price undercutting many of Autodesk’s competitors by sticking to a low annual price of $500 per year (most other software in this sector cost at a few thousand dollars). At the end of the quarter, the offering had 152,000 subscribers. Investors should anticipate this number to increase substantially over the next three years.

There is also political and economic trends that are positively impacting Autodesk’s business. The infrastructure bill in the U.S., which is giving $715 billion to aid water and transportation management (among other things), should increase demand for many of Autodesk’s software programs.

Should you buy?

Autodesk is valued at $64 billion and is expected to get to $1.6 billion in free cash flow this year. This means the company has a forward price to free cash flow (P/FCF) ratio of 40. That is expensive when you compare it to the Nasdaq, whose P/FCF averages under 30. But Autodesk believes it can reach free cash flow of 2.4 billion by next year, which would lower its P/FCF down to 27, which is right around the average.

With the potential of Fusion 360 and AutoDesk’s other products, along with increasing government stimulus helping out, Autodesk could generate more than $2.4 billion in free cash flow five and 10 years from now.

Author: Steven Sinclaire

As the popularity of cryptocurrencies continues to expand, many people around the world are showing interest in the price moves of Bitcoin and Ethereum. BTC and ETH are the 2 top cryptocurrencies by overall cap.

According to a cryptocurrency analyst, the short-term Ethereum moves looks better and more bullish than that of Bitcoin. The analyst made a comparison to decide which coin will outperform in the month of July.

In addition, the analyst reports that the ETH/BTC pair is revealing some bullish signs. Therefore, it is more likely that Ethereum will beat Bitcoin this month.

After getting to an all-time record high on May 12, Ethereum has gone down. Throughout its drop, it has been staying on a lowering resistance path. However, the expert said that, on June 22, it formed a double bottom pattern near this same level. Thus, he reported that this is a possible bullish pattern.

Also, from its June 22 low, the current Ethereum high has been added up to an increase of 34.62%. So, according to the expert, there was no overlap with the previous high, allowing for the potential that the upward drive is impulsive.

Bitcoin Movement

After getting to a record all-time high price on April 14, Bitcoin has been selling in a range between $40,500 and $31,400 since May 19th. However, back on June 22, it went to a low of $28,805 before going back up.

After this, the analyst stated that its upward move came after a very bullish change with the RSI, MACD & Stochastic oscillator. “But the RSI has yet to cross over 50 and the Stochastic oscillator has formed a bearish cross,” said the analyst.

Also, he said that given the daily time frame, the price move is more bullish for Ethereum. But technical studies seem to be more bullish for Bitcoin. So, when compared to Ethereum, the short-term move seems to be more bearish for Bitcoin.

This comes at a time when the Chinese government has cracked down on Bitcoin and other cryptocurrency mining and prevented banks from provided crypto services to their customers.

Author: Scott Dowdy

Two years ago, Microsoft’s value was at $1 trillion. On June 24, it reached over $2 trillion. It’s incredible how Microsoft — one of the world’s top software companies — doubled their value in only a short amount of time.

Let’s take a moment to look at how they went from $1 trillion to $2 trillion, and see how it could reach the $3 trillion milestone.

$1 trillion to $2 trillion

When Nadella took over as CEO, he had a new “cloud and mobile first” agenda. Under his watch, Microsoft left the Windows Phone and created mobile apps for Android and iOS instead. It changed Office’s desktop software into cloud services, which kept users with subscriptions, and pushed Azure into the number two cloud infrastructure service after AWS.

Between fiscal ’14 and ’20, which ended July of last year, the company’s commercial cloud revenue — which mostly comes from Microsoft 365, Dynamics, and Azure — increased from $2.8 billion to $51.7 billion.

Nadella’s new approach started out as a squeeze on the company’s margins, but it has certainly paid off and led to exciting new growth.

Future: $2 trillion to $3 trillion

For Microsoft to make it to the $3 trillion marker, its stock must rise another 50% — which could certainly happen during the next couple of years, for three reasons.

First, the cloud market might grow at a compounded annual growth rate (CAGR) of 16.4% between 2020 and 2027. If Microsoft maintains its pace in the sector, its cloud revenue could keep rising at high double-digit rates and account for an even greater percentage of its top line.

Azure will keep attracting customers, especially retailers, as the perfect alternative to AWS. And the increasing need for AI and data storage will tie those customers to its platform.

Second, Microsoft’s gaming sector will also grow as it creates new Xbox systems, improves its cloud gaming platform, and buys more game publishers like Bethesda to create exclusive first-party titles. Microsoft could slowly also remove the boundaries that exist between Windows games and Xbox systems with local streaming options.

Finally, Microsoft will keep expanding into next-gen markets. Its HoloLens AR headset, as an example, will likely make way for new consumer-oriented hardware — which will diversify its business and increase its reach well beyond PCs and cell phones.

Author: Steven Sinclaire

Dogecoin has been a growing giant in the crypto world. Its value has increased by over 4,500% since the start of the year and is up almost 11,000% over the previous 12 months.

Even its biggest competitors haven’t been able to get such a fast growth. For example, the price of Bitcoin has gone up “only” 300% or so over the previous year, and Ethereum is up nearly 860% in the same time frame.

However, with Dogecoin’s fast rise, it’s a very risky investment. There are two main reasons it could be doomed to fall, and one reason it could thrive.

Why Dogecoin might fall

1. It does not have real-world utility currently

For any cryptocurrency to do well over the long term, it must have good utility inside the real world.

Right now, Bitcoin is by far the most widely accepted crypto among merchants, and very few accept Dogecoin as payment. Many businesses are still undecided even about cryptocurrency itself, and those that do accept it are far more likely to use Bitcoin instead of Dogecoin.

2. There is almost no barrier to entry in cryptocurrencies

Anyone can create a new cryptocurrency, so the barrier to entry is very low. In fact, Dogecoin was created by two programmers as a joke in response to the crazy speculation inside cryptocurrencies in 2013.

Because Dogecoin is not accepted by businesses and does not have a competitive advantage, it would not take much for a new cryptocurrency to pop up and beat it.

Why Dogecoin might make it big

1. It has a large following

Despite Dogecoin having shakey fundamentals, it is managed to create quite a fan club. And although it has substantially lowered in value over the previous few weeks along with other cryptocurrencies, it is still up almost 400% over the previous three months.

Part of the reason Dogecoin has gotten such high returns is due to retail investors artificially bringing up its price. Billionaires like Elon Musk have also aided in the fueling of Dogecoin’s rise to the top by voicing their support for the new coin.

These factors could point to Dogecoin being a short-term investment, not a long-term one. However, because Dogecoin has great name recognition, it might gradually gain better acceptance — which could give it a great shot at being competitive and going much higher.

Author: Blake Ambrose

In June, the Consumer Confidence Index was 127, the highest number since Feb. of last year. Consumers are getting more and more optimistic about the economy growing even with continuing worries about inflation. Since this number is such a big signal about the future of stocks, we can expect to see major gains in already fundamentally strong stocks positioned to profit from certain trends in an improving economy.

Retail investors need only $1,500 to invest in certain stocks to benefit from the increasing sentiment. If you have this money and won’t need it for bills anytime soon, then Magellan Midstream Partners represents a great investment. Here’s why:

Magellan Midstream Partners

After a very hard 2020, midstream gas and oil player Magellan Midstream Partners has boosted over 15% this year. The company owns the largest refined petroleum products (mostly diesel and gasoline) pipeline in the country going about 9,800 miles with 47 million barrels of possible storage. After going down by 15.9% in 2020, the refined petroleum market in the country is expected to go up by 7.5% in 2021. MMP stands to benefit from this change since it has access to almost half of the capacity in the country. Based on the expected recovery from travel and overall economic increases and the expansion of the pipeline network in Texas, the company anticipates shipments of distillate, gasoline, and aviation fuel to rise y/y by 10%, 13%, and 25%, respectively, in 2021.

While growing adoption of electric vehicles is a threat, the Energy Information Agency estimates that total petroleum products demand in MMP’s markets will continue to grow slightly through 2050. The company is also moving its focus on the storage and transportation of crude oil and has been expanding its work with the transportation of renewable fuel.

Magellan Midstream Partners has a dividend of 8.4% and has routinely paid dividends for the previous 20 years. The company anticipates its annualized distribution coverage to be at 1.17 for fiscal 2021, close to the long-term annual goal of 1.2. The company has a good balance sheet and is among the highest-rated players in the country. Magellan has a $1 billion credit facility through 2024, while their next bond maturity is in 2025. Given these facts, the company has very good financial flexibility to pay dividends for a long time.

Author: Blake Ambrose

For over a decade, growth stocks have been in demand on Wall Street. Historically low interest rates, dovish monetary policies, and a spend-happy Capitol Hill have allowed rapidly growing companies to do well.

Usually, it’s the smaller companies that give the fastest growth, while large-cap companies grow at a much slower pace. Larger companies usually have more time-tested business models, making it less common that they create an eye-popping revenue boost.

However, the following two large stocks did not get that message. Both of them is on track to, at least, quintuple their total sales over a time frame of four years, according to investors’ consensus revenue predictions for 2024.

Sea Limited

According to some analysts, Singapore-founded Sea Limited is anticipated to have its full-year sales go from $4.39 billion last year to around $21.9 billion in 2024. That calculates out to a quintupling in revenue in four years.

Sea’s secret is that it has three quickly growing sectors. For the moment, it has been anchored by its digital gaming sector. The company closed March with 649 million users, 12.3% of which are paying money to play. That’s well higher than the industry average, and it is notably higher than the 8.9% of quarterly users who were paying just one year ago.

However, the best part of this company is the e-commerce sector, Shopee. It’s the top app downloaded in SE Asia, and it is becoming especially popular in the nation of Brazil. In the first quarter of this year, Shopee had $12.6 billion in gross merchandise value (GMV). For context, they did $10.3 billion for 2018. Both the pandemic and the rise of the middle class through Southeastern Asia is boosting online purchases.

Plug Power

Companies centered on renewable energy products should be the fastest growing in the coming years. Over the upcoming four years investors will have to work hard to find green-energy stocks expanding faster than fuel-cell solutions maker Plug Power. After giving $337 million in sales in 2020, Plug has guided for $1.7 billion in total revenue for 2024. That is a whopping 404% increase, if it ends up happening.

For right now, climate change is the company’s best friend. Biden winning the White House last year, combined with Democrats control of the Senate, gives the possibility for a clean energy bill. A bill that companies like Plug Power will benefit from.

Also, the company got two joint venture deals only days apart in Jan.. First, SK Group bought a 10% stake, with the two seeking to introduce hydrogen fuel-cell cars and hydrogen refilling locations in South Korea. Then, Plug also got a deal with French carmaker Renault that will lead to them going for the EU’s light commercial vehicle market. Both of these partnerships should give Plug Power a better future.

Author: Scott Dowdy

An agreement between payments company NCR and NYDIG has created a path for around 650 banks in the U.S. to now offer Bitcoin to their 24 million or so customers nationwide.

According to Forbes, the agreement between digital assets firm NYDIG and NCR will allow credit unions and banks to give clients crypto buying and selling through apps created by the payments companies.

“We are true believers in crypto’s benefits and its strategic application,” said Douglas Brown, the president of NCR’s digital banking branch.

These banks can avoid regulatory roadblocks involved in keeping cryptocurrency on behalf of their customers by using this service. They will rely on and use NYDIG’s custodial service, and will create revenue through transaction fees.

“I think you will see cheaper fees with banks compared to what we see today. But the banks get to decide what they want to charge,” NYDIG’s leader of banking solutions, Patrick Sells, said.

Brown reports that he anticipates that cryptocurrencies will require more time from banks’ customers. “Banking is usually a daily thing or couple of times per day thing for customers, which is what is usually seen. Crypto goes to an hourly or under level of increasing engagement,” he said.

Crypto Demand

A Dec. 2020 survey—done by Cornerstone Advisors—said that around 66 percent crypto holders would be willing to use their current bank as a way to invest in the asset.

Only 2% of banks had this enthusiasm at the time. However, large giants like Morgan Stanley and JPMorgan Chase have recently given positive comments about the crypto sector. In fact, in Dec., JPMorgan Chase analysts said that Bitcoin could erode gold’s value.

Morgan Stanley’s current Bitcoin investment plans were also revealed in SEC documents in April, with the banking giant being linked to four crypto funds already.

Author: Blake Ambrose

Psychedelics like LSD and psilocybin (otherwise known as “magic mushrooms”) have been touted for their therapeutic effects in helping with mood disorders and depression. However, their legality was a political issue during the 1960s. With lawmakers outlawing most psychedelics using the Controlled Substances Act, which put them in the same category as heroin.

Today, the political climate has allowed researchers and patients, who are interested in the medical benefits that psychedelics offer, to explore this possibility. Some would say that the efficacy of psychedelics is usually better than modern antidepressants in helping with mental illnesses. Here are three companies that could be creating innovations in this area.

1. Compass Pathways

Compass Pathways is creating a synthetic psilocybin named COMP360 to help with severe depression. So far, there are five independent scientific reviews on psilocybin for this treatment. All of them reveal that the drug can quickly help depression symptoms, with a high amount of statistical significance. By the end of this year, the company will give their results of their phase 2 study.

Compass Pathways is far ahead of the game in regards to their R&D compared to their peers. If approved, COMP360 might get between five and 11 years of market exclusivity.

The company has a market value of $1.4 billion. The stock is down around 10% over the past year. But it had a large trading area of $30 to $60. And this is a good stock since it is the leader in proving that psychedelics can deliver lots of benefits. Plus, it can use its IP legal protection to capture more of the multi-billion dollar market with psychedelics for some time if their trials work out.

2. Mind Medicine

Also called MindMed, this company develops LSD for numerous indications — the most advanced is pending to start phase 2 for treatment of anxiety. The study reviews the effects of 20 micrograms of LSD when compared to a placebo, and will start in the fourth quarter of this year. MindMed created the trial with LSD neutralizers standing by, which will stop patients’ hallucinogenic effects in under 30 minutes in case of bad side effects.

The company is also working with the University of Basel Hospital to create LSD therapies for things like cluster headaches, and has other psychedelic products in trial. Since its start, the company brought in $204 million from investors. MindMed is also supported by Bruce Linton, the co-founder of Canopy Growth. Its market cap is $1.2 billion and the stock is higher by 960% over the past year.

3. Cybin

Cybin’s top drug candidate is psilocybin given via a sublingual film; it is under review to treat depression. The phase 2 study will commence sometime this year and will go on for 12 months.

Cybin is doing a lot more than just creating psychedelic products. Right now, it is working with neurotechnology company Kernel to measure psychedelic experiences. This data is worth a lot, as it can give incredible insights on how new molecules handle neurological disorders.

Since its start, the company has brought in over 88 million. It currently has a market cap numbered at $308 million and the stock is higher by 217% from last November.

Author: Scott Dowdy

On May 26th, when the tech giant Nvidia showed off its Q1 earnings, company leaders also revealed their plans to initiate a 4-for-1 split on July 19th. The stock went up over 21% since the announcement.

Many investors are now wondering: Is Nvidia a buy before its highly anticipated stock split which happens next month? Also, stockholders just approved a boost in the total amount of shares from 2 million to 4 million, which will help liquidity, since the stock can now be purchased for a reasonable price.

The approaching stock split will be the company’s fifth since going public. The GPU maker split its stock on a 2-for-1 in 2000, 2001, and 2006. It also split on a 3-for-2 basis back in 2007. Its current 2021 split will happen on a 4-for-1 basis, meaning investors will now get four shares for every one that they own.

The price of current shares will be divided by four. For example, instead of having one share — currently trading priced at $760 — after the split, investors will have four shares valued at $190 each.

While shares of Nvidia certainly look good today, the upcoming stock split is not the reason you should be buying up shares.

A better reason to buy up NVIDIA

Despite the stock split, there are better reasons to buy NVIDIA stock right now. The company’s impressive results and the growing opportunity ahead of it makes it a timely opportunity.

NVIDIA’s Q1 revenue went up to 84% y/y/ and its EPS went higher by 106%. To give a context, NVIDIA’s revenue of $5.66 billion by far beat the $5.3 billion it was hoping for. Revenue in the gaming sector increased 106% on greater demand for the company’s GPUs which are used by gamers. At this same time, its datacenter revenue also went up by 79% y/y on an increasing trend for NVIDIA’s advanced processors used for better cloud computing and artificial intelligence.

Given Nvidia’s impressive growth and its accelerating push into cloud computing, AI and gaming, there are many more reasons to be bullish for NVIDIA other than its stock split.

Author: Blake Ambrose

“Given EV product moves by GM, VW Group, Ford and Hyundai, we anticipate Tesla’s lead to narrow from here on,” said UBS analyst Patrick Hummel.

Tesla shares went lower on Tuesday after UBS analysts dropped their price target on the carmaker, citing growing competition from U.S. and European rivals and a lower lead in EV sales from Chinese buyers.

UBS analyst Patrick Hummel did keep his ‘neutral’ rating on Tesla, but decreased his price target by $70, down to $660 a share, before the company’s highly-anticipated Q2 delivery numbers due out later this week.

UBS wants to see a Q2 delivery number of 195,000, including mostly Model 3 and Y products with 5,000 S and X also, but stressed that “the demand issue in China is a concern, with local EV companies rapidly getting share.”

“German premium incumbents Mercedes, Audi, and BMW are still wanted vs. Tesla in face-to-face competition,” Hummel stated. “Given the moves by GM, VW Group, Ford and Hyundai, we believe Tesla’s lead will shrink from here on.”

“In China, their lead still exists but with a slightly negative year-on-year decline while local EV carmakers going up in the ranking,” he said.

Tesla shares were around 0.6% lower in trading on Tuesday to be sold at $685.50 each.

CEO and founder Elon Musk hinted at a possible 800,000 2021 delivery target previously this year after the company posted a record 499,950 for 2020, before also having a record Q1 total of 184,800 and revenues reaching $10.4 billion.

Increasing China demand, however, make take Tesla’s Q2 total over 200,000 when the numbers are published later on this week, with data from the nation’s Passenger Car Association revealing massive gains from the pandemic base and a run-rate of nearly 92,000 deliveries for the three month period which ended in June.

Author: Blake Ambrose

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