Intel is making it harder for CEO Pat Gelsinger to earn a significant portion of its compensation package, even as those rewards have become increasingly out of reach as the stock price plummets.

The x86 giant on Tuesday announced changes to how and when Gelsinger can receive payouts from the performance-based equity awards of new hires granted to him upon becoming CEO in February 2021. The changes were outlined in an 8-K regulatory filing with US Securities. and exchange commission.

The changes, among other pay changes for senior executives described, were passed in response to a strong investor rebuke earlier this year to Intel’s top executive pay practices. Shareholders had voted in a nearly two-to-one ratio against the payouts of the chipmaker’s top executives. Although not binding, Intel said at the time that it took the vote seriously.

In general, changes to Gelsinger’s new-hire performance-based stock awards have increased “stock price performance hurdles for certain awards,” while “lengthening the period during which stock price performance hurdles shares must stand,” according to the SEC filing.

For Gelsinger to exercise his performance-based stock options, he must now increase Intel’s share price by 50% – instead of the original figure of 30% – over the five-year period after have received the options. Additionally, Intel’s stock price must stay above that 50% threshold for 90 days instead of the original 30 days for Gelsinger to receive payment.

For its Strategic and Outperformance Stock Units, Intel has removed the ability for Gelsinger to receive payouts for a portion of the awards on the third anniversary of the grant date, meaning he will now have to wait the full five years. from that moment to acquire them. The company also extended the period the share price is above the applicable thresholds of each award from 30 days to 90.

To explain how this makes it harder for Gelsinger to receive payouts for these awards, consider that Intel stock price closed at $29.67 today. That’s less than half Intel’s stock price of $61.81 when Gelsinger became CEO in February 2021.

That means Gelsinger has to work magic to get shareholders absolutely hyped so he can win his performance-based stock options, which requires Intel shares to hit at least 74.47. $ in a few years. To vest its stock units, Intel’s stock price must reach even higher, at $148.95. And stocks must be maintained at this level or higher for three times as long.

Investors have not been happy with the cost of Gelsinger’s comeback plan for Intel, with all the new factories and expensive manufacturing investments it entails. He promised the company would surpass Asian foundry giants in advanced chip-making capabilities by 2025, meaning Intel will have little time to drive the stock price higher before the end of 2020. the grant period next year. ®

We are going to see large block trades in new age tech stocks – sold by SoftBank at a discounted price of Rs 555, TPG Capital is selling in blocks at a discount of 0.5%. Now Paytm is testing Rs 500. At this price, would you finally be a buyer?
No, and the main reason is that these companies still don’t have a model for making a profit. I’ve always said that they were built trying to increase valuation by posting higher and higher GMV or higher sales without focusing on profit. Now, because the markets have punished them so much, management has started talking about free cash flow flowing into earnings.

But I don’t see any change in strategy that would allow them to achieve this. Saying something and doing it are two different things. It’s for those companies. Second, the fact that many older investors want to bail out on the very first day the lockdown ends and at prices that are either at all-time lows or 52-week lows, gives no confidence. It is better to wait widely on the whole of this sector. Some stocks will reach a buy level at some point which could be in the first quarter of 2023.

What is your vision of the whole rail space? Vinayak Chatterjee said there was a resurgence in order books for rail electrification, new lines, etc. and that the investment plans for the railway sector seem quite encouraging. Do you like a stock in this space?
Sandip Sabharwal: Yes, the overall railway investment cycle is very strong. If you want to play pure play railroads, there are those PSU railroads that I don’t normally play; then there are those wagon companies

.

Titagarh reported very strong numbers yesterday and both of these stocks are something we own, albeit at levels well below current levels. I still think the next two to three years will be good for them. The other companies are in various other EPC companies but also work for railway companies like

, etc. which also received good orders from the railways. Some of them will do well. Then there are others that are either unlisted or multinational and we can’t really play them.

On a sector level, a new trend is that metals are emerging as winners. Are you comfortable investing or putting new allocations into metals?
It will be too premature to address metals at this stage, as there has been a small short-term upside as the dollar index has fallen and many metals have rebounded globally; we have to examine it fundamentally.

Basically Western economies are going into recession, China, despite all the reports coming out in terms of growth numbers, seems to be in recession already. So the demand drivers for the metals are lacking and that could lead to further difficulties in 2023. I think these will be trade bets, if at all. In fact, they are good trade bets in the sense that they tend to move 10-20% very quickly. For people who can act on such action and move in and out quickly, there could still be an opportunity; otherwise in the longer term I do not see it for the moment.

What about the telecom space? There is news coming that raises fares in two states. The desire to increase tariffs improves the average revenue per user and is one of the most important parameters for telecommunications companies. Would that be a good trigger?
It should be like you said it’s practically a duopoly now with Jio and Bharti Airtel.

Of course there are other activities and telecommunications are a part but not the majority of the company. Pure play therefore remains Bharti Airtel. Bharti is doing well, he is at a new high and I think his outperformance should continue. A disclosure, we own the stock.

How did you interpret the quarterly numbers for the overall capital goods space? Are you sticking your neck out and moving away from the likes of L&T to other players?
We own some of the other companies. Some of them had margin execution issues, but now they are coming back. We own companies like KEC International, Kalapataru and a few small amounts of

and other capital goods companies. A company where the story should be very good over the next two or three years is . There the execution was very strong and the margin improvements very impressive.

Debt reduction and free cash flow generation have been very strong. Over the next two or three years we will see huge earnings growth from this company and it is still trading at only 7 to 8 times next year’s earnings. This is a company where a revaluation is imminent and investors can watch them.

The big winner of the past year was . Where do you find comfort in the two-wheeler space?
I don’t watch the two-wheeler space except for

. They are doing quite well in the field and sales are picking up. Valuations are still not cheap. I think that might be the only overperformer. Otherwise, TVS Motors is very heavily owned at this point. TVS is very highly valued at this point, has issues with exports and is not doing well despite positive feedback from management.

Much has been said about the finances that ended the year on top. We saw how it went, we saw how SBI went. The question now is for people who might be entering the banking and finance space now, what is cheap? What is likely to see more benefits?
Unfortunately, what has happened is that given the huge outperformance of financials, they are no longer cheap across the board. There will be a few small NBFCs that look cheap, but then they have issues with raising low-cost funds at a time when credit growth is double deposit growth.

Even if lending rates don’t rise as much from here, deposit rates will continue to rise because the gap between deposit growth and credit growth has continued to widen. It is also a sector that has been a favorite of traders and we are seeing huge trading activity limited to financials now because many other sectors are not performing.

Overall, performance expectations for financial companies going forward should be moderate and people should stick to the big banks. It is premature to say this because the balance sheets keep improving in terms of NPA, GNPA and net NPA. But historically, whenever interest rates rise and as sharply as they have – 2-3% in a short time, we again see a re-emergence of NPAs. This is something that most analysts do not integrate. Given the pace of change in financial stocks, people’s return expectations from here should be moderate now.

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NYKAA SLIPS NEARLY 7%

SpiceJet shares fell more than 4% in morning trading on Tuesday after the company reported a widening net loss to Rs 837.8 crore in the three months to September. The stock, after a weak start, fell further by 4.24% to Rs 37.20 on BSE. SpiceJet on Monday reported a widening net loss to Rs 837.8 crore in the three months to September as record fuel prices and the depreciation of the rupee caused turbulence for the budget carrier.

Price as of Nov 15, 2022 11:32 amClick on company names for their live prices.

BUZZING: Micro Fusion Extends Losses, Down 7% From IPO Price

Shares of Indian Railway Catering and Tourism Corporation (IRCTC), owned by Indian Railways, fell 3.6% to Rs 731.50 in Tuesday’s intraday trading on BSE as its consolidated net profit fell by 7.94% to Rs 226 crore QoQ in the second quarter of FY23.

Price as of Nov 15, 2022 11:07Click on company names for their live prices.

STOCK IN FOCUS: SOBHA LTD.

Shares of Knowledge Marine & Engineering Works were locked in the upper circuit on Tuesday to hit a new 52-week high as it posted a strong performance in the second quarter and veteran investor Ashish Kacholia is likely to enter the society. According to the company’s exchange filing, the company announced the issuance of 5.65 lakh preferred shares at an issue price of Rs 700 each totaling Rs 39.55 crore including Ashish Kacholia.

Price as of Nov 15, 2022 10:39Click on company names for their live prices.

These stocks from the FCMG pack bleed the most

Price as of Nov 15, 2022 10:26Click on company names for their live prices.

Shares of NDTV in Tuesday’s trading session hit a 5% higher home run at Rs 383.05 after Adani Group secured regulatory approval from SEBI for an additional 26% stake in New Delhi Television Limited . Vishvapradhan Commercial Private Limited (VCPL) together with AMG Media Networks Limited (AMNL) and Adani Enterprises are making an open offer at a price of Rs 294 per share to acquire up to 26% stake in NDTV.

Price as of Nov 15, 2022 10:22Click on company names for their live prices.

Aurobindo in focus! USFDA classifies Aurobindo’s Unit XI as Voluntary Action Indicated (VAI)

#ETNOWEExclusive | Aurobindo in focus! USFDA classifies Aurobindo’s Unit XI as Voluntary Action Indicated (VAI)… https://t.co/Uom8PNPApt

— AND NOW (@ETNOWlive) 1668486668000

Rupee slides after positive open on corporate dollar demand

The Indian rupee was unable to maintain its slight opening rise against the dollar on Tuesday, due to the likely interest of importers to cover their debts, traders said. The rupee was trading at 81.44 per US dollar at 0442 GMT, down from 81.26 in the previous session. The local had managed to rally as high as 81.14 in opening trades.

Price action was similar to Monday but in a tighter range. On Monday, the rupee climbed to near 80.50, before quickly falling back below 81. Again, there is very good demand for dollars from private banks and foreign banks, probably linked to their client companies, said a cash trader.

Fusion Micro Finance debuts muted, listings at 2% off

Fusion Micro Finance made its muted debut on Dalal Street as the company listed at Rs 360.50 on Tuesday, a 2% discount to its issue price of Rs 368 on BSE. The young microfinance player made its debut with a 2% discount to Rs 359.50 compared to the issue price given on the National Stock Exchange (NSE). Prior to its listing on Dalal Street, shares of Fusion Microfinance were trading at a discount of Rs 5 in the gray market.

Aptech signs a multi-year MoU with an education body under the Ministry of Education to conduct computer-based testing in India.

Price as of Nov 15, 2022 09:44Click on company names for their live prices.

Citigroup downgraded NMDC to sell with a target price of Rs 100. The downgrade was largely due to domestic ore pricing issues. NMDC is trading at 4x 1 year ahead, EV/EBITDA on consensus – this is in line with global peers. The global investment bank said it was struggling to find upside triggers.

Price as of Nov 15, 2022 09:42Click on company names for their live prices.

The strongest tailwind for equity markets globally is the spike in US inflation and the possibility of a slower pace of rate hikes. In line with this trend, CPI inflation in India also declined from 7.4% in September to 6.7% in October. Crude’s decline to $92 is another positive. All of this may take the Nifty to a new all-time high, but in typical market specs it may not happen when the consensus expects it to happen. A healthy trend in the market right now is the slow accumulation of high quality large cap stocks. Sustained purchases by FII support this trend. Some profit reservations can be seen in the mid and small caps which have performed well.

– Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Opening Movers

Price as of Nov 15, 2022 09:23Click on company names for their live prices.

Opening bell: Sensex wins 130 points, Nifty above 18,350 points; Apollo Tires jumps 5%, Uflex drops 4%

Pre-open session: Sensex loses more than 100 points; Clever below 18,310

Asian stocks mixed as oil tumbles on China COVID outlook

Asian stock markets were mixed on Tuesday and oil was weaker as investors sought to digest the economic implications of China’s COVID policy adjustments and a bailout for the country’s struggling real estate sector.

Quarterly results today

13 companies are to publish their results for the quarter ended in September.

SGX Nifty reports positive start

Nifty futures on the Singapore Stock Exchange traded up 36 points, or 0.20%, at 18,413.50, signaling Dalal Street was heading for a positive start on Tuesday.

Tech View: Clever charts signal indecision on Street

The Nifty stock index formed a bearish candle on the daily charts today, indicating indecision between bulls and bears. The index has formed higher highs – higher lows since the last two sessions.

Tokyo Nikkei index opens flat

Tokyo’s key Nikkei index opened flat on Tuesday after Wall Street pulled back following last week’s rallies that were fueled by hopes the Federal Reserve would ease its interest rate hikes. trade after drifting between positive and negative territory, while the broader Topix index rose 0.23%, or 4.52 points, to 1,961.42.

Wall Street ends lower as investors assess Fed policy trajectory

Wall Street’s major indexes ended lower on Monday, with real estate and discretionary sectors leading large declines, as investors digested comments from US Federal Reserve officials on interest rate hike plans and looked for the next catalysts after last week’s big stock market rally.

Oil prices slide on OPEC demand cut forecast, China COVID cases

Oil prices extended early Asian trade losses on Tuesday after OPEC cut its 2022 global demand forecast, while rising COVID-19 cases in China clouded the consumer outlook of fuel in the world’s leading crude oil importer.

Rupee drops 50 paise to 81.28 on dollar demand

The rupee depreciated 50 paise to close at 81.28 against the US currency on Monday on strong demand for dollars from businesses and oil companies and a firm dollar in overseas markets.

Sensex, nice on Monday

The 30-stock Sensex ended down 171 points at 61,624, while its broader counterpart Nifty 50 came in at 18,329.

Hello, dear reader! Here’s something to start your trading day

DR Horton Inc (DHI) receives a strong review ranking of 73 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings and growth rate. DHI is better valued than 73% of stocks based on these valuation analyses. Investors who primarily focus on buy and hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Metrics analysis

DHI has a year-over-year price-to-earnings (PE) ratio of 4.8. The historical average of around 15 indicates good value for DHI stock as investors pay lower prices relative to company earnings. DHI’s low trailing PE ratio shows that the company has been trading below fair market value recently. Its trailing 12-month earnings per share (EPS) of 15.55 more than justifies the current share price. However, rolling PE ratios do not take into account the company’s projected growth rate, resulting in many new companies having high PE ratios due to high growth potential that attracts investors despite insufficient earnings. . DHI has a 12-month PE-to-Growth (PEG) ratio of 0.67. Markets are overvaluing DHI relative to its expected growth, as its PEG ratio is currently above the fair market value of 1. The PEG of 15.55 stems from its forward price-to-earnings ratio being divided by its growth rate . PEG ratios are one of the most widely used valuation metrics due to the incorporation of more fundamental business metrics and the focus on the future of the business rather than about his past.

Summary

DHI’ has a strong valuation at its current price due to an undervalued PEG ratio due to strong growth. DHI’s PE and PEG are better than the market average, which translates into an above-average valuation score. Click here for the full DR Horton Inc (DHI) stock report.

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Investing is a perfect option for those looking to grow their money and build wealth over time. As new investors search for opportunities, they come across stocks like Apple, with prices well above $100 — or more.

These high prices can become a hindrance for many. The good news is that there are plenty of stocks that cost less than $10 to choose from.

Read: 5 things you need to do when your savings hit $50,000

Best stocks to buy under $10

Those looking for the best stocks under $10 should be prepared to do their research. Stocks under $10 typically represent smaller companies, leading to a bias among investors against low-priced stocks. Nevertheless, with a little research, it is possible to find pearls in this price range.

1. Crescent Point Energy Corp. (NYSE: GIC)

Crescent Point Energy is the only stock on this list to post gains so far in 2022. The Canadian oil and gas exploration company benefited from an oil price boom. The rising price of oil dramatically increased the company’s revenue, allowing it to pay off its debt at a rapid pace. The company paid off $270 million in debt in the third quarter alone.

Analysts who cover the ticker love it. All three price the stock as “Buy” and the average price target is $10.45. This means there is room for a potential upside of around 26% to come.

2. Nokia OYJ (NYSE: NOK)

Nokia was once known for its mobile phones, but in 2014 it sold its mobile and devices division to Microsoft. Today, the company focuses on the development of network processors, routers and other equipment that supports the telecommunications infrastructure. Like others on this list, the stock has seen painful declines in 2022 due to macro concerns and bearish market conditions.

Nevertheless, analysts expect a strong recovery. Five out of six of them rate the stock as a “Buy”, with the last analyst rating it as a “Hold”. The consensus price target is $6.37, which is more than 40% higher than today’s price.

3. Rocket Lab USA Inc. (NASDAQ: RKLB)

Space has always been an interesting subject, and Rocket Lab USA strives to turn this subject into profit. The Company operates in the aerospace sector, offering launch services, satellite technology and other space-related products and services.

Five analysts rate the stock as a “buy”, while another rates it as a “short”. There are no “Hold” odds. The average price target is $10.00 per share, more than 90% higher than the current price.

4. Oatly AB Group – ADR (NASDAQ: OTLY)

Oatly Group is the largest oat beverage company in the world. Like others on this list and the market as a whole, the stock has fallen on hard times in 2022, falling more than 74% at the end of October, largely due to macroeconomic headwinds and supply chain issues. ‘supply.

The good news is that analysts are expecting a significant rebound. There are currently six analysts covering the stock, with three rating it as “Buy”, two rating it as “Hold” and one rating it as “Sell”. The average price target for all analysts is $4.74, which is around 130% higher than the current price.

5. Telefonaktiebolaget LM Ericsson ADR Class B (NASDAQ: ERIC)

For those willing to take a little risk, Ericsson stock is an unmissable opportunity. The company is a household name in telecommunications technology and infrastructure and is playing a major role in the shift to 5G compatibility.

On the other hand, the SEC and DOJ are currently investigating the company regarding corruption and fraud, adding to the risk of investing in stocks.

Analysts don’t seem too concerned about the case. Three of them rate it as “Buy”, four as “Hold” and none as “Sell”. The average price target is over 47% higher than today’s price at $8.15.

Final take

While the stocks above are some of the best to buy under $10, investors today don’t need to view stock prices as a barrier to entry. Many brokers offer fractional shares, allowing you to invest as little as $1 in stocks that cost hundreds of dollars. Consider buying fractional shares of larger, more established companies.

Information is accurate as of November 4, 2022 and is subject to change.

What happened

Franklin Resources (WELL -3.62%) saw its stock price drop 3.6% on Tuesday to $22.60 per share. The asset management firm was down as much as 8% in the day as of 11:33 a.m. ET, but recovered somewhat in the afternoon.

All major indexes were down on Tuesday. The Dow Jones Industrial Average fell by 60 points (-0.2%), the S&P500 fell by 13 points (-0.3%) and the Nasdaq down 89 points (-0.8%).

So what

The asset management firm released its fourth quarter and year-end 2022 numbers on Tuesday and it was a mixed bag. It beat revenue and profit estimates, but totals were down given tough market conditions for the company, which runs the Franklin Templeton family of funds, among other investments.

Franklin Resources reported operating revenue of $1.94 billion, down 11% year-over-year, and adjusted earnings per share (EPS) of $0.78, down 38 % from $1.26 per share a year ago this quarter. Analysts were expecting revenue of $1.5 billion and EPS of $0.70.

The company ended the quarter with approximately $1.3 trillion in assets under management, down 15% year-over-year due to market asset depreciation, distributions and net outflows to term, all resulting from near-bearish market conditions.

“Since January, macroeconomic and geopolitical uncertainty has led to significant volatility and correlated declines in global equity and fixed income markets. Our assets under management and flows have been impacted by these unprecedented conditions and pressures industry-wide,” said President and CEO Jenny Johnson.

Now what

It was one of the worst years in recent years for assertion managers, given the performance of the stock market, which has been in bearish territory for most of the year. But a market rally in October certainly gets Franklin Resources and other fund managers off to a strong start this quarter, with the Dow Jones Industrial Average climbing nearly 14% in October.

Additionally, Franklin Resources has taken steps to expand its offerings to alternative investments. In April, it completed its acquisition of Lexington Partners, a private equity manager. Today, it completed its acquisition of Alcentra, a credit and private debt manager based in Europe.

“Pro forma for Alcentra, alternative assets total $260 billion as of September 30, 2022, making Franklin Templeton one of the largest alternative asset managers with a significant presence in major alternative categories,” Johnson said.

As the market improves, Franklin’s outlook should improve along with it. But in the meantime, Franklin’s growing alternative investment activity provides him with an income stream that is generally uncorrelated to the public markets.

Additionally, Franklin is an excellent dividend-paying stock, with a quarterly payout of $0.29 at a yield of 5.1%. He’s a dividend aristocrat, having raised his dividend for 40 straight years.

If you had asked me for a great dividend stock ten years ago, I wouldn’t even have stopped to think about it. International Business Machines (IBM 2.77%) was the obvious choice for income investors at the time.

IBM was a superstar in 2012. Other companies were lined up to copy Big Blue’s successful business plan, serving as a one-stop-shop for any information technology needs your business might face. The dividend yield was not extremely high. At 1.7%, it was actually among the top six less generous payments on the Dow Jones Industrial Average at the time.

But IBM’s commitment to a high-quality dividend was unquestioned, and somewhat of a big deal. Additionally, the company has fueled these growing payments with ample cash flow. The only reason the performance wasn’t more impressive was that IBM’s stock price had made massive gains from 1995 to 2012. Of all the problems an investment could face, this one is pretty sweet.

IBM data by YCharts

That being said, IBM was at a crossroads in 2012. The company had just installed Ginni Rometty in the CEO’s office, and she had begun to give Big Blue a new direction. This process has been painful and is not yet fully completed, although Rometty has already handed over the CEO baton to cloud computing veteran Arvind Krishna.

The IBM you see today is a very different company from the hardware/software/services giant of 2012. But is Big Blue still a no-brainer dividend investment?

Big Blue’s Recent Dividend History

It turns out that IBM’s dividend accomplishments have continued to pile up over the past decade.

By 2012, the company had increased its payouts every year for 17 years. Now, the unbroken streak of dividend increases has stretched to 27 years, qualifying the stock as a true dividend aristocrat. Admittedly, the increases have been relatively small in recent years, but Big Blue gritted its proverbial teeth and found the money. Token increases in dividends still matter, and annual payouts per share have roughly doubled over the past ten years.

If you had bought IBM stock at the start of its series of aristocratic dividend increases, you would have paid a share-adjusted price of about $22 per share in December 1995. Today, IBM pays dividend checks quarterly totaling $1.65 per year. . The effective yield of these old shares then amounts to 7.5%. That’s not too shabby, and up from an effective return of 3.9% a decade ago.

In total, the payment has increased by 2,540% in 27 years:

IBM Dividend data by YCharts

Is IBM a great income investment for fresh money?

Investors snapping up new IBM shares right now are starting with a respectable 4.8% yield. From this rich payout, you have a head start on long-term income generation.

Now that IBM has moved from a full IT buffet to a leaner specialist in artificial intelligence and hybrid cloud computing, I expect the company to experience impressive growth over the next decade. Once the global economy recovers its feet, IBM should emerge as a leader and highly trusted provider of cloud and artificial intelligence services.

And renewed financial growth will likely inspire another round of more generous dividend increases, like the 2007 to 2020 push that followed the slower increases between 1995 and 2005. The company has a long history of paying shareholder-friendly dividends. and buyouts first, and I don’t expect that philosophy to change.

So yeah, IBM is still a great dividend stock. On the contrary, it only gets better with age. Time and consistent dividend increases are the magic ingredients in this wealth building potion.

What happened

Sofi Technologies (SOFI -2.12%) saw its stock price drop 2.1% on Wednesday. It had risen 1.9% around 10:30 a.m. ET but fell and ended the day at $5.55 per share. The stock price is down about 65% since the start of the year.

It was a mixed day on Wall Street as the Dow Jones Industrial Average gained 2 points, the S&P500 fell by 28 points (0.7%) and the Nasdaq Compound lost 228 points (2%).

So what

On Wednesday, no specific catalyst dragged online bank and lender SoFi Technologies. Instead, fintech likely felt the pull of some top tech companies that underperformed in the third quarter.

The big one was Alphabet, which missed revenue and earnings estimates and ended the day down 9.6%. And while Microsoft beat earnings expectations, the stock fell 7.7% as cloud revenue fell short of estimates.

The Nasdaq fell on the news, ending the day down 228 points, or 2%, and it dragged fintechs including SoFi down with it.

The Nasdaq slump erased early gains for SoFi, which was up about 1.9% at the start of the trading day on strong third-quarter earnings from Visa. Visa beat revenue and earnings estimates with earnings up 19% year-over-year on the back of a 10% year-over-year increase in gross payment volume, driven by the increase in consumer spending. Visa shares rose 4.7% on the day.

Now what

SoFi investors should put aside lackluster results from the tech giants and focus on Visa’s strong quarter. Rising consumer spending led to gains in both transactions and gross payment volume for Visa, which is a good sign for the bank and its digital payments platform, Galileo, which relies on spending, loans and economic growth.

SoFi is a great value with plenty of upside earnings, but investors will get a better idea of ​​SoFi’s situation when it reports third-quarter results next week, November 1.

Dubai: Empower will confirm the share offering price on Nov. 9 and go through a DFM listing on Nov. 16, as another Dubai government entity revises its status to become a “public joint-stock company.” Empower, the world’s largest district cooling service provider, has an 80% share in Dubai and has confirmed that the next steps for growth could bring it into some of the other Gulf markets.

In Egypt, Empower – which “cools” Palm Island, Business Bay and Meydan, among others – had been invited to participate in tenders, but no decision was made. For IPO investors, what will matter will be the company’s entrenched presence in Dubai. “We have a highly visible revenue stream, predictive cash flow and a strong balance sheet,” an Empower spokesperson said. “We will add an additional 370,000 RTs (refrigerated tons) to our capacity immediately from existing master developers to the existing 1.6 million RTs from 81 district cooling plants in Dubai.”

The pure financiers

Yesterday, You’re here (NASDAQ: TSLA) released its third-quarter results, beating EPS but missing revenue. The quarter was marked by a number of issues, including supply chain issues in China, Twitter (TWTR) and inflation.

You’re here the stock fell 6.5% after hours shortly after the release of the statement. Most likely, the sale was a reaction to Elon Musk’s comments on the call rather than the actual numbers. The top and bottom measurements were mixed; basically earnings exceeded expectations. Additionally, TSLA rose in the first few minutes of after-hours trading, while the MarketWatch the table below shows.

However, after-hours trading turned sharply negative just minutes after markets closed. Elon Musk made a number of statements during the earnings call that likely rattled investors. These included:

• Admitting he paid too much for Twitter.

• say he was “unsure if China’s COVID lockdowns would ease.”

• Claiming Tesla shares could be worth more than Apple (AAPL) and Saudi Arabia combined.

The last item on this list may sound bullish, but you need to consider it in context. Elon Musk has faced a lot of criticism based on the idea that his Twitter deal puts downward pressure on TSLA shares. Many of Musk’s biggest supporters voiced this criticism, and Musk himself sold a huge number of shares.

Given this, it’s hard to avoid considering the possibility that Musk is trying to drum up excitement around Tesla stock to offset the effect of his own sales. In fact, that’s exactly what MarketWatch author Therese Poletti suggested in her article, “Elon Musk is pumping up Tesla shares with a ridiculous $4 trillion target. Does a dump come next? » In fact, she even hinted in the title of the article that more sales were expected.

It’s entirely possible that Musk will have to sell more Tesla stock to buy Twitter. Recently, Barron’s floated the idea that funding for the deal could collapse. Barron’s article also indicated that Musk would be allowed to walk out if the funding failed, so the coverage wasn’t entirely bearish. Still, there was a strong implication that Musk would continue to sell stocks.

Overall, Tesla looks much more attractive now than it did in the past. At today’s prices, it trades at 50 times earnings and 49 times cash flow – multiples which, while high, are not higher than the P/E ratio. Amazon (AMZN) has supported for decades. A fast enough growing tech stock may warrant high multiples, although it must be said that the current high rate environment does not encourage such bets. For this reason, along with the possibility of Musk selling more stock, I view Tesla as short to medium term “holding”.

Why the $4 trillion prediction is a red flag

Musk’s $4 trillion Tesla stock price target is a red flag, not because it’s impossible to achieve, but because it signals that Musk feels an urgent need to ‘energize’ the TSLA stock. This in turn could imply that he planned more sales. Musk selling stocks by itself poses no risk for long-term investors, but it is a risk for those with short to medium-term time horizons.

Elon Musk owns about 25% of Tesla shares, worth $173 billion. The Twitter deal is $44 billion. According to Bloomberg, Musk has sold $32 billion worth of Tesla stock since the deal was announced. If the financing failed and other investors bailed out, he would have to sell an additional $12 billion in stock to complete the deal. This would put appreciable selling pressure on TSLA, which would likely lead to its downfall. $12 billion represents approximately 1.7% of Tesla’s market capitalization and 60% of one-day dollar trading volume. So there will be downward pressure on TSLA’s price if Musk has to sell.

None of this is to say that Tesla can’t reach a market cap of $4 trillion. Notably, Apple was once 75% of the way to that goal. Tesla’s revenue growth is currently 60%, if you slow it down to a third of the current level (20% growth), you still have the makings of a very valuable business. Tesla earned $1.05 in earnings per share (“EPS”) in the quarter, up 69%. Let’s say, conservatively, that growth will slow to 20% over the next 10 years. $1.05 compounded to $6.5 over 10 years at this rate. On a full year basis, it’s $26. With a multiple of 20 times earnings, we arrive at a stock price of $520. Multiply that by Tesla’s $3.063 billion in outstanding stock, and you get a market capitalization of $1.59 trillion. It’s 39.75% of the way. This is all based on a high growth assumption, but the assumed high growth is well below Tesla’s historical growth. So a market capitalization for Tesla somewhere in the trillions is not unthinkable.

What is Tesla stock worth in the long term?

Having looked at a short-term negative catalyst for Tesla stock, we can now ask what it is worth in the long term. In previous articles, I have used discounted cash flow models to arrive at fair value estimates for TSLA between $750 and $860. That was before the recent 3-to-1 split. It’s worth revisiting Tesla’s valuation again in light of the recent earnings release and stock split.

The tricky part of Tesla’s modeling is the growth. A company’s free cash flow is the product of many moving parts, including revenue, cash operating expenses, investment in working capital, and more. In the case of Tesla, these parts are mostly growing very quickly. We can come up with a basic model by carefully assuming where these various elements will go in the future.

Tesla’s revenue growth in the last quarter was 55%. It was 60% over the 12 month period. Conservatism demands that we reduce this number to account for scale effects. So I assume revenue grows at a CAGR of 20% over 5 years.

We now have the cash portion of the operating costs. These decreased by $1.5 billion. It’s nice to see costs come down, but I wouldn’t expect it to last – a lot of companies are saving money this year to deal with the recession, it’s something temporary. So I don’t foresee a continued decline in costs, but I will assume that they grow more slowly than revenues, to account for management trying to keep them under control. So I guess they go up 10%.

Finally, we have the other elements of free cash flow: investments and working capital. Tesla’s CAPEX growth has slowed significantly while its net working capital has fluctuated between positive and negative, so I assume these elements remain collectively unchanged from the baseline. From there, I get the following model:

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So we end up with $72.5 billion of free cash flow. With today’s share count, that works out to $23.69 per share. This is a CAGR growth rate of 59.8% from the current $2.26 in FCF per share. If we assume no growth after the five years of growth and use a discount rate of 6%, we end up with a price target of $338. The market capitalization at this price would be over $1 trillion, but nowhere near $4 trillion. Musk’s predictions will not be met in five years based on this model. The model does, however, suggest that Tesla has an advantage, so it may be worth taking a look at for investors with long-term horizons.

A big risk to keep in mind

As we’ve seen so far, Tesla stock faces short-term headwinds but has long-term potential. Whether it’s investable really depends on your time horizon – for my money it’s just a hold.

If you choose to go long in Tesla, the main risk factor you should keep in mind is the possibility of supply chain disruptions in China. Elon Musk has bet big on China, where he not only manufactures, but also sells his cars. Tesla’s operations in China are very lucrative for the company, but they are also risky. China’s zero-COVID policy led to a slowdown in production at Tesla’s Shanghai factory in the second quarter. Xi Jinping recently signaled at the Chinese Party Congress that he will not end zero COVID, so this remains a risk to watch.

The essential

The bottom line about Tesla is that it’s a real company whose stock has non-zero value. In fact, even if you assume that Tesla’s revenue growth is more than halved, it still ends up being worth more than what it’s trading for today. As a long-term bet, Tesla has a lot of potential. I’m not sure I see a path to $4 trillion, but I could see it reaching $1.5 trillion.

The short term, on the other hand, is less rosy. If Musk pursues his Twitter deal, he could sell more shares, whether due to stalled funding or simply to avoid interest payments. Either way, it will be a negative catalyst, putting downward pressure on TSLA shares. It’s not the end of the world, but it’s something shorter-term minds should beware of.