NCTY

Market Whipsaw: Crypto Collapse and a Lower-than-Expected Inflation Print

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Image: Uncertainty in the cryptocurrency markets has surged with concerns over the liquidity of a key exchange. Investors are weighing the spillover effects of crypto with the view that the pace of inflation may have peaked. — By Brian Nelson, CFA — The U.S. equity market continues to be highly volatile as it whipsaws between concerns over the health and sustainability of cryptocurrency and optimism over lower-than-feared inflation readings. We maintain our bearish/defensive stance on equities, but at the same time, we continue to be “fully-invested” across the simulated newsletter portfolios in part because we don’t want to miss out on days like today, November 10, when the markets are soaring ~2.5%-5.5% depending on which index you are monitoring. We’re also … Read more

Hut 8 Mining Is an Interesting Play on Cryptocurrencies

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Image Source: Hut 8 Mining Corporation – November 2021 IR Presentation By Callum Turcan Hut 8 Mining Corporation (HUT) is headquartered in Toronto, Canada (in the province of Ontario), and “mines” digital assets from two operations in Alberta, Canada (in the city of Medicine Hat and town of Drumheller). The firm is in the process of developing a third mining operation in Ontario, Canada, at the small city of North Bay, having secured a long-term power purchase agreement with Validus Power Corp. Overview  Though Hut 8 Mining mines for both bitcoin (BITO) and ether, two of the most popular cryptocurrencies, when it mines for Ether it historically has preferred to get paid in bitcoin. Hut 8 Mining has built up … Read more

What You Should Know About MMORPGs

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The Valuentum analyst team talks about the Chinese gaming industry and the financials of Tencent (TCEHY) and Netease (NTES), in particular. Both generate strong free cash flow and have solid balance sheets, but there are myriad risks to consider, too. ~5 mins. Podcast no longer available. Transcript as follows. Chris Araos: Welcome to Valuentum’s podcast. This is Christopher Araos, and joining us today is Brian Nelson and Kris Rosemann. Today, we’re going to talk about the MMORPG landscape in China. Brian? Brian Nelson, CFA: Thanks for that Chris. I think just to give a little bit of background MMORPG stands for massively multiplayer online role-playing (PC-client) games. Wow, that’s a mouthful. These are very, very popular games across the globe … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

GameStop Tumbles on Lower Than Expected Holiday Outlook

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One of the ‘Top 25 Overvalued Stocks on the Market’ reported third-quarter results Thursday. GameStop (GME) represents the latest firm that we highlighted as significantly overvalued to engage in a large pricing correction toward our fair value estimate. Third-quarter results at the world’s largest video game retailer weren’t the problem. Total global sales advanced 18.8%, while comparable store sales rose 20.5%. Sales of new software increased 43.1% thanks to strong performance from Grand Theft Auto V. Hardware sales also performed well, jumping 15.3% thanks to a strong sell-thru of Nintendo 2DS and 3DS. Pre-owned sales, however, declined 2%. The strong overall performance led to 675 basis points of market share gains. GameStop’s net earnings jumped 45.3%, to $68.6 million, while the … Read more

Grand Theft Auto V Will Drive Fantastic Results at Take-Two

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It is no secret that the video game industry is surprisingly cyclical for many players. Look no further than GameStop (click ticker for report: ), which has seen shares soar after a multi-year lull in games now appears to be over with the launch of Microsoft’s Xbox One (click ticker for report: ) and Sony’s PlayStation 4 (click ticker for report: ). The game-developing business is probably even more cyclical, but it has little to do with broader economic conditions. Rather, development is somewhat similar to biotechnology in the sense that developers may spend years developing a game before finally launching and recouping costs with extraordinarily high marginal profits. That story is playing out at Take-Two Interactive Image Source: TTWO … Read more