Bitcoin Edges Lower to Extend Biggest Slump Since Pandemic Hit

(Bloomberg) -- Bitcoin and many of its major peers edged lower on Friday in the wake of some of the biggest declines since the onset of the pandemic, a sell-off that has stirred fresh doubt about this year’s craze for cryptocurrencies.The most-traded digital coin slipped as much as 2.6% to $16,613 before paring the decline. The Bloomberg Galaxy Crypto Index has dropped 14% drop since Wednesday -- its biggest two-day plunge since mid-March -- but that’s only erased gains notched earlier in the week.The sell-off was kicked off by worries over the prospect of tighter crypto rules in the U.S. and profit-taking after a big rally, investors said. Even with the slump, Bitcoin has more than doubled this year -- an advance that has split opinion.Crypto believers tout a broadening investor base and the search for a hedge against dollar weakness as reasons for a durable boom. Critics point to a history of big swings, including a spectacular boom and bust three years ago.“We will see some choppy water in the short term as the market finds new levels before attempting another assault on the all-time high” said crypto analyst Jason Dean at Quantum Economics. “The pullback so far would not concern experienced Bitcoin traders or holders to any significant degree.”Proponents of digital assets say the current focus on cryptocurrencies compared with 2017 is different because of growing institutional interest, for instance from the likes of Fidelity Investments and JPMorgan Chase & Co. Just this week, Van Eck Associates Corp. launched a Bitcoin exchange-traded note on the Deutsche Boerse Xetra exchange. In October, PayPal Holdings Inc. said it would allow customers access to cryptocurrencies.FOMO“After big rallies in shares and various other assets, they are all vulnerable to a bit of a pause,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney. “Bitcoin more than most, as it surged higher far more and had become far more frothy with speculative interest.”Others see signs of retail investors piling in to chase momentum for fast gains, storing up an inevitable reckoning. The rout in Bitcoin began just hours after it rose to within $7 of its record high of $19,511 set in December 2017.Profit-taking was inevitable and there are still factors in favor of Bitcoin as an asset class, according to Byron Goldberg in Sydney, who runs the Australian operations for Luno, the cryptocurrency exchange and trading platform.“It continues to attract both institutional and retail attention as a 21st-century substitute to the gold play,” he said.Crypto ‘Whales’A few large holders often referred to as whales own most Bitcoin. About 2% of the anonymous ownership accounts that can be tracked on the cryptocurrency’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto. That structure points to the risk of big price swings if major investors offload some of their stakes.“Bitcoin may be a victim of its own success,” said Michael McCarthy, chief market strategist at CMC Markets Plc in Sydney. “Traders suggested several large holders moved to...

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7 of the Best Cheap Stocks for December

Stocks can be cheap for a number of reasons and not all cheap stocks always offer value. Therefore, investors need to do due diligence to find bargain stocks that could also bring solid returns. Today’s article introduces seven of the best cheap stocks that also offer value. Over 80 years ago, economist Benjamin Graham, who later inspired Warren Buffett, among others, first put forward the idea of investing in shares that sold at a discount to their intrinsic value. Markets have had an incredible run-up since the lows hit in mid-March. Thus, it may feel as it there are no bargains to be found in the universe of robust shares. However, our markets are large and diverse enough to offer solid companies that are selling at discounts. Many such companies typically offer stable dividends, too.InvestorPlace – Stock Market News, Stock Advice & Trading Tips Investors should ideally not overpay for a firm’s growth potential. With that information, here are seven of the best cheap stocks for December: 10 Best Stocks to Buy for Investors Under 30 AT&T (NYSE:T) Cisco (NASDAQ:CSCO) CVS Health (NYSE:CVS) FedEx (NYSE:FDX) Fulgent Genetics (NASDAQ:FLGT) International Game Technology (NYSE:IGT) PPL (NYSE:PPL) AT&T (T) Source: Jonathan Weiss/Shutterstock 52-Week range: $ 26.08 – $39.55 Dividend yield: 7.12% Our first stock on this list of cheap stocks is Dallas, Texas-based tech group AT&T, which has global operations in telecommunications, media and entertainment. So far in 2020, T shares are down over 25%, pushing the dividend yield to over 7%. A juicy payout is an important reason for the continued interest in the stock. AT&T reported Q3 earnings in late October. Consolidated revenues of $42.3 billion showed a decline of 5.1% YoY. Five main segments contribute to revenues: Mobility (revenue up 1.1% YoY); Entertainment Group (revenue down 10.2% YoY); Business Wireline (revenue down 2.5% YoY); WarnerMedia (revenue down 10% YoY); Latin America (revenue down 19.3% YoY). Quarterly adjusted net income of $2.8 billion means EPS of 76 cents. In the year-ago quarter, comparable metrics had been $3.7 billion and 94 cents. Free cash flow was $8.3 billion. CEO John Stankey said, “Our strong cash flow in the quarter positions us to continue investing in our growth areas and pay down debt. We now expect 2020 free cash flow of $26 billion or higher with a full-year dividend payout ratio in the high 50s%.” We believe the shares offer an opportunity for both capital appreciation and passive income. Cisco (CSCO) Source: Sundry Photography / Shutterstock.com 52-Week range: $32.40 – $50.28 Dividend yield: 3.38% San Jose, California-based Cisco focuses on networking, communications, security, collaboration, and the cloud. The tech giant helps customers transport data, voice and video traffic. The group reported FY21 Q1 in November. Revenue was $11.9 billion, a 9% decrease of YoY compared to $13.2 billion. Non-GAAP net income was $3.211 billion, representing a diluted non-GAAP EPS of 76 cents. Last year, the respective numbers had been $3.6 billion and 84 cents. Net cash flow provided by operating activities in the quarter was $4.1 billion. Chuck Robbins, chairman and CEO, was pleased with results. CFO Kelly Kramer commented: Our Q1 results reflect good execution with strong margins in a challenging environment. We continued to transform our business through more software offerings and subscriptions, driving 10% year over year growth in remaining performance obligations. We delivered strong growth in operating cash flow and returned $2.3 billion to shareholders. In past quarters, Cisco has, at times, found it difficult to grow its top line and its stock price has reflected the growth challenge. Nonetheless, transformation efforts are well underway as management diversifies into software and cloud support services. 7 Value Stocks That May Come Back into Style After the Pandemic Future quarters are likely to see top-line increases from recurring, high-margin, cloud-related and subscription services. CVS Health (CVS) Source: Jonathan Weiss / Shutterstock.com 52-Week range: $52.04 – $77.03 Dividend yield: 2.92% Rhode Island-based CVS Health is an integrated pharmacy healthcare company. As the parent company of CVS Pharmacy, it is the largest pharmacy services group stateside. Since this spring, it has been offering Covid-19 testing in 4,000 CVS Pharmacy locations. CVS Health operates through three segments: Pharmacy Services, Retail/LTC and Health Care Benefits. In early November, it released Q3 results. Revenue totaled $67.1 billion, up 3.5% YoY. The increase was driven by growth in the Health Care Benefits and Retail/LTC segments. Adjusted earnings per share was $1.66. A year ago, it was $1.84, a 21% decrease from $1.17 during the same period of the previous year. Net income also decreased 20.3% to $1.22 billion. Management increased the full year 2020 adjusted EPS guidance range to $7.35-$7.45 from $7.14-$7.27. Cash flow from operations guidance range was also increased to $12.75 billion-$13.25 billion from $11 billion-$11.5 billion. As of this writing, forward P/E and P/S ratios are 8.79 and 0.33, respectively. We find CVS shares undervalued and would look to buy the dips in this integrated healthcare powerhouse. FedEx (FDX) Source: Antonio Gravante / Shutterstock.com 52-Week range: $88.69 – $293.30 Dividend yield: 0.89% Memphis, Tennessee-based FedEx offers transportation and logistics services worldwide. FedEx delivered robust FY21 Q1 results in mid-September. Total non-GAAP revenue for was $19.3 billion and increased 13.5% YoY. Adjusted non-GAAP income was $1.28 billion and increased 60% compared to same period FY20 ($800 million). Non-GAAP diluted EPS came at $4.87. Management highlighted, “Operating results increased due to volume growth in FedEx International Priority and U.S. domestic residential package services, yield improvement at FedEx Ground and FedEx Freight, and one additional operating weekday. These factors were partially offset by costs to support strong demand and to expand services.” Put another way, the effect of the pandemic has so far been mixed on the results. Investors also noted various ongoing costs related to the integration of TNT Express, which FedEx acquired in mid-2016. These costs affect the GAAP results reported and will continue to do so for several more quarters. 7 Weak-Looking SPACs to Avoid Right Now The company is likely to benefit from sales around the holiday season as well as international shipments. If you believe that increased e-commerce activity will continue to affect parcel carriers like FedEx positively, you should keep the shares on your shopping list of cheap stocks. Fulgent Genetics (FLGT) Source: Connect world / Shutterstock.com 52-Week range: $6.70 – $52.47 Dividend yield: N/A Founded in 2011, California-based Fulgent Genetics develops flexible and affordable genetic testing, such as cancer, neo-natal, and pre-natal screening. Its tests can also be customized as per customer requirements by combining next generation sequencing (NGS) with its technology platform. In recent weeks, it also started offering FDA-authorized Covid-19 testing solutions to businesses and schools. Fulgent Genetics released Q3 results in early November. Record revenue of $101.7 million meant an increase of 883% YoY. Non-GAAP income for FY20 Q3 was $49 million and non-GAAP diluted EPS were $2.08 per share. Paul Kim, CFO, cited, “Our third quarter results represent a meaningful inflection point in our business, with our test volume growing almost 5,000% year over year and revenue growing almost 900% … finally, we recorded deferred revenue of approximately $18 million as of September 30, 2020.” Investors were pleased with these robust top-line and bottom-line metrics. FLGT stock is up significantly from the lows seen in early spring. However, the business is not yet richly valued and we would look to buy the dips in this genetic screening company. In the coming quarters, Fulgent Genetics could also become a takeover candidate. International Game Technology (IGT) Source: Shutterstock 52-Week range: $3.59 – $15.56 Dividend yield: 5.96% The next stock on this list of cheap stocks comes from the other side of the Atlantic. London-headquartered International Game Technology manufactures and sells computerized gaming equipment and software, including slot machines, interactive gaming machines, and lottery technology. The company works with governments and regulators in over 100 countries. The group announced Q3 results in November. Consolidated revenue was $982 million and decreased 15% YoY. International Game Technology reports revenue in two segments: Global Lottery (quarterly revenue up 3% YoY); Global Gaming (quarterly revenue down 31% YoY). Adjusted net income was $54 million and increased 25%. Adjusted net income per diluted share were 26 cents compared to 21 cents in the prior year. The company also delivered $220 million in positive free cash flow in the quarter. CFO Max Chiara commented: “Robust cash flow generation during the quarter and year-to-date periods have enabled us to improve our liquidity and reduce net debt… [T]he improvement in our profitability should support our continued focus on reducing debt.” 7 Upcoming IPOs to Watch Heading Into 2021 During the quarter, the group signed 2-year contract extension with New York Lottery. The continued re-opening of casinos and betting establishments should provide further tailwinds for the shares. However, a potential pullback toward $11 would improve the margin of safety. PPL (PPL) Source: Shutterstock 52-Week range: $18.12 – $36.83 Dividend yield: 5.41% Headquartered in Allentown, Pennsylvania, PPL Corporation is a utility group providing energy services to more than 10 million customers in the U.S. and the U.K. The company generates electricity from power plants in Kentucky. PPL released Q3 results in early November. Revenues was $1.89 billion, a 2.5% decline from $1.93 billion during Q3 2019. Three segments contribute to revenues, namely U.K. Regulated, Kentucky Regulated and Pennsylvania Regulated segments. Adjusting earnings were $450 million, or 58 cents per share. A year ago, they had been $445 million, or 61 cents per share. Vincent Sorg, president and CEO said: While COVID-19 and milder weather through the first half of the year have impacted PPL’s ongoing earnings, we are on track to achieve the low end of our earnings guidance and have narrowed our 2020 guidance range to $2.40 to $2.50 per share from the prior range of $2.40 to $2.60 per share. Earlier in the year, management announced plans to sell the U.K. business, a large contributor to the operations. Such a sale would enable PPL to pay down long-term debt or buy U.S.-based assets. Therefore, potential investors may want to keep an eye on the developments. Nonetheless, we like the shares for the long-run. On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. Tezcan Gecgil Ph.D. has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner Radical New Battery Could Dismantle Oil Markets The post 7 of the Best Cheap Stocks for December appeared first on InvestorPlace.