Latest news with #HQPortfolio
Forbes
08-05-2025
- Business
- Forbes
10% Yield To Beat Any CD Or Savings Account?
What if you could earn a 10% annual yield on your capital - nearly double what even the best savings accounts or CDs offer today - while positioning yourself to potentially own a great business at a steep discount? That's exactly what's possible with a smart options strategy on Arista Networks (NASDAQ: ANET) - a company founded by Andy Bechtolsheim, the legendary investor who wrote the first check to Google's founders, Larry Page and Sergey Brin. Compare this yield with current high-yield savings rates, which rarely cross 4.5%, and often much less at large banks like JPMorgan, BofA, or Goldman Sachs. Suddenly, this strategy doesn't just look attractive - it looks compelling. The strategy is reliable because large institutions have tested the strategy at scale, and for the right long-term investors, may serve just right. As an aside, the Trefis High Quality portfolio targets long-term value creation and has outperformed the S&P 500 and achieved returns greater than 91% since inception. ANET stock is trading around $86. You can sell a long-dated Put option - expiring June 18, 2026 - with a strike price of $65, and collect $640 in premium per contract (each contract represents 100 shares). That's almost a 10% yield on the $6,500 you're setting aside for the possibility of buying the stock. And here's the kicker → You're agreeing to buy ANET at $65 - 25% discount to today's price - only if the stock drops below that level by the expiration date. This is what investors call getting paid to wait. Two outcomes: In short, you win either way, especially if you're comfortable owning a quality company for the long haul. If you do end up owning ANET stock, you're not stuck with some speculative small-cap. You're holding a company that: The best part? With ANET's focus on providing network equipment for data centers and cloud computing companies - this may be the right time, especially if you believe in the broader AI and data center growth story. ANET doesn't have the same hype that is associated with Nvidia or Broadcom, but we believe may in fact be better positioned in a world where people can't seem to have enough data. See ANET's key metrics and financials in analysis: Buy or Sell ANET Selling puts is only as good as the quality of the business you're willing to own. Luckily, with ANET, the downside risk is inherently low, thanks to exceptional fundamentals that make the company a far cry from speculative tech. A great asymmetric risk-reward offer with a built-in 25% margin of safety These are the kinds of margin-of-safety setups and asymmetric risk-reward tradeoff that we seek in the Trefis HQ portfolio, which is focused on long-term value creation. With a collection of 30 stocks, it has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Forbes
24-04-2025
- Business
- Forbes
What's Going On With META Stock?
An illustration photograph taken on April 17, shows the Facebook app available to download from the ... More App Store displayed on a phone screen, in a residential property in Guildford, south of London. (Photo by Justin TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images) Meta Platforms' stock has declined approximately 13% this year, facing headwinds from potential tariff impacts that could affect the company in two significant ways: Despite this year's setback, Meta has demonstrated remarkable resilience over a longer timeframe, with the stock gaining 56% since early 2022, substantially outperforming the broader Nasdaq index's modest 7% increase. This outperformance can be attributed to several key factors: Meta Platforms has delivered impressive revenue growth of 39%, increasing from $118 billion in 2021 to $165 billion in the trailing twelve months. This robust performance stems from multiple growth drivers: Meta's profitability metrics show substantial improvement, with the net income margin expanding from 33.4% in 2021 to 37.9% currently. This enhanced profitability is complemented by a strategic 9% reduction in shares outstanding, made possible by the company's substantial $122 billion investment in share repurchases. The combination of higher revenues, expanded margins, and fewer outstanding shares has resulted in a 73% increase in earnings per share, rising from $13.77 in 2021 to $23.86 in the most recent period. Despite Meta's impressive financial performance across revenue growth, margin expansion, and earnings improvement, its P/E ratio has declined by 10%. This valuation compression can be attributed to several factors: Given these uncertainties, investors should ask themselves critical questions: Do you want to hold on to your META stock now? Will you panic and sell if it starts dropping further? Holding on to a falling stock is never easy. While META remains fundamentally strong with impressive growth and improving profitability, investors seeking to preserve wealth in volatile markets might consider alternative strategies. Trefis works with Empirical Asset Management—a Boston area wealth manager—whose asset allocation strategies yielded positive returns even during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics..
Forbes
21-04-2025
- Business
- Forbes
More Downside For Upstart Stock?
Upstart Holdings (NASDAQ: UPST), the AI-driven lending platform, has witnessed another sharp stock drop, falling over 55% from February highs of nearly $90 to under $40 currently. For shareholders, this turbulent ride is all too familiar—echoing the company's staggering 96% plunge during the 2022 inflation shock. If you're seeking upside with lower volatility than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P 500 and delivered over 91% returns since inception. Trefis Upstart's main business model—linking borrowers and lenders via its AI platform—faces a significant hurdle: its vulnerability to interest rate shifts. Higher rates typically reduce loan demand, thereby impacting revenue. This sensitivity has shown up in the company's recent financial results: Evaluating Upstart's financial health offers a mixed view: Several external risks weigh on Upstart's near-term outlook: At a price-to-sales ratio of 5.5x, Upstart trades above the S&P 500's 2.8x, though it's consistent with its three-year average. This suggests that investors are still expecting significant growth despite headwinds. Though the stock is far below its recent highs, caution is advised. A combination of macro uncertainty, lack of profitability, and a relatively high valuation leaves limited margin for error. Recent revenue growth shows that Upstart's AI lending model can thrive in low-rate environments, but the business remains highly exposed to broader economic cycles and credit market disruptions. For investors, the key question isn't whether Upstart can grow in ideal conditions—it clearly can—but whether it can build the resilience to withstand downturns without the extreme volatility seen in its stock. Holding on to a declining stock is never easy. Trefis collaborates with Empirical Asset Management—a Boston-based wealth manager whose strategies produced gains even during the 2008-09 crisis when the S&P 500 fell over 40%. Empirical uses the Trefis HQ Portfolio in this asset allocation framework to help clients achieve better returns with lower risk, as evidenced by the HQ Portfolio performance metrics. Investors hoping for a soft landing may wonder—how bad could it get in a downturn? Compare the last six market crashes here. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
Forbes
16-04-2025
- Business
- Forbes
Adobe: Why We're Bullish Now
CHONGQING, CHINA - MARCH 10: In this photo illustration, the Adobe logo is displayed on a smartphone ... More screen, with the company's latest stock market performance and candlestick charts visible in the background, highlighting Adobe's real-time financial trends, stock price fluctuations, market volatility, and investment developments within the software, digital media, and cloud computing sectors, on March 10, 2025, in Chongqing, China. (Photo illustration by) Let's not mince words – Adobe (NASDAQ: ADBE) is a compelling buy at current levels. The company leads its sector, has exceptional fundamentals, is resting on a strong technical support level, and is trading at a valuation rarely seen for businesses of its caliber. With shares down over 40% from their 2024 peak, Adobe may appear to be struggling. But this type of weakness often attracts savvy investors. Still, investing in any single stock comes with risk. You can reduce that risk and still participate in the upside with our High-Quality portfolio, which has significantly outperformed the S&P 500, delivering returns of over 91% since launch. Adobe remains strong. Consider the following metrics: All of this comes with a P/E ratio below 25. That's right, a sub-25 P/E for Adobe – one of the most reliable SaaS businesses out there. It's a rare blend of quality and value that long-term investors seek. Here are the main reasons for the recent decline: But none of these factors undermine Adobe's core strengths and long-term prospects. Beyond the compelling valuation, Adobe currently sits at a key technical support level that previously fueled rallies in 2020 and 2023. In 2023 alone, it surged nearly 80% from this price range. This isn't just a number – it's a historically proven base where market sentiment turns bullish. Adobe stands out as a timely opportunity. That said, timing individual stocks is difficult – it's hard to consistently buy at lows or sell at highs. A more consistent approach is to use a periodic, trigger-based rebalancing strategy like we implement in our High Quality Portfolio. With 30 curated stocks, it has regularly outperformed the S&P 500 over the last four years. Why? The HQ Portfolio delivers better returns with lower volatility than the index, as shown by the HQ Portfolio performance metrics. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
Forbes
16-04-2025
- Business
- Forbes
Unmasking W. R. Berkley: The Overachiever You're Missing
Trefis Let's just put it plainly: W. R. Berkley (NYSE: WRB) is one of the top-performing stocks you likely haven't noticed. While most investors are drawn to trendy names, WRB has consistently delivered 25% annualized returns over the past five years – significantly outpacing the S&P 500. Here's what makes it stand out: it's attractively valued, highly profitable, and serves as a solid hedge during market turmoil. This stock not only generates strong returns, but also helps protect your portfolio during market downturns. Considering market cycles to safeguard capital is a key theme in our High-Quality portfolio, which has outperformed the S&P 500, generating returns of over 91% since inception. Let's break down the data that strongly supports the case for WRB. WRB isn't just a flash in the pan. The company has achieved 13% annual growth – not only in the last year, but over the past three years as well. With an operating margin of 17.5% and a free cash flow margin of 25%, alongside prudent underwriting and a sound financial strategy, WRB has built a solid foundation for continued success. Perhaps WRB's most overlooked strength is its resilience during market downturns. Here's how it performed when markets fell: These results aren't random – they reflect a consistent pattern. Despite its impressive track record, WRB remains modestly valued. To put that into context: investors are paying double the valuation for similar cash flow metrics elsewhere. WRB's pricing reflects an opportunity that shouldn't be ignored. That said, individual stock investing carries risks, and WRB is no exception. It saw a nearly 25% decline from November 2022 to June 2023, significantly lagging during a strong 2024 market. To mitigate such stock-specific risk while maintaining upside potential, consider our High Quality Portfolio. Featuring 30 stocks, it has consistently outperformed the S&P 500 over the past four years. Why? Because collectively, HQ Portfolio stocks offer better returns with lower risk compared to the index, as reflected in HQ Portfolio performance metrics. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
