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Globe and Mail
03-05-2025
- Business
- Globe and Mail
The 5 Top Buys for May: Strong Signals at Critical Support Levels
The five top buys for May have two things in common: leadership positions in technology and strong signals at critical support levels. These stocks corrected in late Q1 and early Q2 but have regained traction at critical levels and are firing solid entry signals for investors. These signals include increased volume, stochastic crossovers, MACD swings, and bullish activity aligning with long-term trends. The takeaway is that Magnificent Seven stocks like NVIDIA (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT), which have been leading the market for years, are in position for robust rebounds, and other significant AI-centric companies, including Oracle (NYSE: ORCL) and Palantir (NASDAQ: PLTR), are following suit. The catalyst for the bigger move will likely come with the Q1 earnings reports due in May. NVIDIA: Outlook Is Reset, Market Can Regain Traction [content-module:CompanyOverview|NASDAQ:NVDA] Like the rest of the S&P 500 (NYSEARCA: SPY), NVIDIA's stock price reset is due to several factors affecting the earnings outlook. However, the correction appears to be over, with the worst tariff fears behind us and an improving outlook for onshoring Blackwell and subsequent Rubin production. The loss of China as a customer is a concern, but it is offset by Western demand, which is sufficient to make up the difference. The analysts have mixed views on Q1. About half have lowered revenue and earnings estimates since the Q1 report, while the other half have increased them, resulting in a consensus forecast for 62% year-over-year growth and a strong margin. Analyst sentiment trends are bullish despite the recent price target reduction. Analyst coverage is increasing, sentiment is firming with a bullish bias to the Moderate Buy rating, and the consensus target forecasts a 50% upside from late April trading levels. Amazon Has Low Bar to Hurdle and Dual Tailwinds to Drive It [content-module:CompanyOverview|NASDAQ:AMZN] Amazon has dual tailwinds arising from its leadership position in the cloud and consumer strength. Consumers have shifted their habits, but spending remains strong, and Amazon is well-positioned to benefit from this. At the same time, its AWS data center business and AI applications are in demand, aiding its clients and core, consumer-oriented business. This means that outperformance is likely in Q1. The beat could be substantial due to the low bar set by analysts and about three-quarters of the 28 tracked by MarketBeat lowered their forecast for the quarter, expecting growth to slow into the high single-digit range compared to the previous quarter and year. They rate the stock as a Moderate Buy and see it advancing by 30% at the consensus. Microsoft Is Gaining Ground in the Cloud [content-module:CompanyOverview|NASDAQ:MSFT] Microsoft's business model is exceptionally diversified, spanning enterprise software, cloud computing, AI services, cybersecurity, gaming, and professional networking through LinkedIn. Its customer base includes companies across virtually every industry vertical, from healthcare and finance to manufacturing and education, providing a robust and resilient revenue foundation. The strategic integration of artificial intelligence and cloud solutions, particularly through Azure and partnerships like OpenAI, has significantly reinforced Microsoft's leadership position in cloud infrastructure and next-generation AI-enabled enterprise services. Analysts anticipate solid revenue growth for Microsoft's fiscal Q3/calendar Q1 earnings report. However, in line with broader industry trends observed in peers such as Amazon, growth rates are expected to moderate into the high single-digit percentage range as macroeconomic headwinds and a maturing cloud market exert some pressure. Key catalysts for the stock include the potential for earnings outperformance relative to conservative expectations, continued strength in Azure and AI-related services, and the prospect of management issuing strong forward guidance, particularly if AI monetization initiatives begin translating more visibly into top-line results. Oracle: On Track for a Trillion-Dollar Valuation? [content-module:CompanyOverview|NYSE:ORCL] Oracle is still small compared to the Magnificent Seven but is on track to achieve a trillion-dollar valuation within a few years. The company's transition to the cloud and leaning into AI and AI services has set it up as a budding hyperscaler fundamental to AI infrastructure. Its database services are ubiquitous across the cloud and facilitate AI training globally. The stock is set up to rally strongly after the Q4 release because 100% of analysts lowered their forecasts despite the strengths shown in Q3. While reported results were mixed, the internals, including RPO and backlog, are accelerating robustly and suggest the same for revenue and earnings as backlog demand is met. Palantir: Companies and Governments Need It [content-module:CompanyOverview|NASDAQ:PLTR] Palantir's business is accelerating due to several factors, including data-driven insights, threat detection, and its impact on efficiency. Recent developments include a partnership with Google. This partnership makes Palantir a gateway that provides many businesses with access to government contracts. Valuation is a concern for PLTR investors in 2025, but it is offset by the robust growth outlook and the high likelihood that forecasts are too low. Other catalysts in 2025 include expectations for increased government defense spending and expanding partnerships with private businesses. Where Should You Invest $1,000 Right Now? Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now...
Yahoo
02-05-2025
- Business
- Yahoo
Is Xtrackers MSCI EAFE Hedged Equity ETF (DBEF) the Best International Index Fund to Invest In?
We recently published a list of . In this article, we are going to take a look at where Xtrackers MSCI EAFE Hedged Equity ETF (NYSEARCA:DBEF) stands against other best international index funds to invest in. Undoubtedly, the US plays host to the largest equity market in the world as home to the largest stock exchanges. Likewise, it is home to the largest companies in the world by market capitalization. Therefore, investors often turn to the US, given the high liquidity always in play when seeking exposure to some of the biggest and emerging market segments. Over the years, US indices have provided broad exposure to various sectors, from financial services to healthcare, technology, industrials, and even consumer cyclical. However, amid the escalating tariff and trade war pitting the US and its allies or other economies, sentiments in the equity markets are increasingly shifting. Major US equities and indices have pulled back significantly from record highs after President Donald Trump imposed significant trade tariffs on Canada, China, the EU, and other nations. In the year's first quarter, the US S&P 500 was down by about 6% as the tech-heavy Nasdaq 100 slid more than 8.1%. The slump came as investors became net sellers concerned by the impact of the trade war waged by the Trump administration. In contrast, European equities were on a roll, with the EURO STOXX 50 index tracking the 50 largest blue chip stocks in the trading block, soaring 11%. The rally in European equities underscores how the focus is increasingly shifting away from US equities to other markets. 'The first months of 2025 have shown increased investor focus on international investing, with developed markets strongly outperforming their U.S. counterparts,' says Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. This superior performance has been fueled by a shift towards international equities, primarily linked to the Trump administration's growing isolationist stance. A mix of diminished backing for Ukraine and tariffs imposed on crucial trading allies such as Canada has led to a reevaluation of the stability of the U.S. market, which has long been a fundamental aspect of investor trust. In addition to policy issues, valuations have also influenced this trend. For many years, U.S. stocks have been priced at considerably higher forward price-to-earnings (P/E) ratios than their international counterparts. Now, as those multiples shrink, investors are rethinking their investment strategies. Likewise, the best international index funds offer a way out of the turmoil in the US equity markets as they offer broad market exposure to some of the biggest companies at some of the lowest costs. 'Adding international stocks to your portfolio can dampen volatility and improve returns, since the U.S. economy and market may face challenges at different times compared to international regions,' says Scott Klimo, chief investment officer at Saturna Capital. 'Mitigating currency risk also plays a role, as the U.S. dollar may strengthen or weaken versus other countries at different times.' To make the list of 9 Best International Index Funds to Invest In, we scanned the global equity markets. We then settled on the best funds based on a number of factors including market index cost (expense ratio) and long-term performance. Finally, we ranked the index funds in ascending order based on the fund's expense ratio. At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A professional financial analyst studying data on a computer, illustrating the company's index investment decisions. Xtrackers MSCI EAFE Hedged Equity ETF (NYSEARCA:DBEF) is a low-cost index fund that seeks results that correspond to the MSCI EAFE US Dollar Hedged Index, which measures the equity market performance of developed markets outside the US and Canada. The index fund mostly focuses on investment holdings in Europe, Australasia, and the Far East. Xtrackers MSCI EAFE Hedged Equity ETF relies on a passive or indexing investment approach while tracking developed market performance and mitigating exposure to fluctuations between the U.S. dollar's value and the countries' currencies. With a low expense ratio of 0.350%, the fund boasts a 1.24% 12-month yield. It has also generated an average of 14.08% over the past five years. Overall, DBEF ranks 7th on our list of best international index funds to invest in. While we acknowledge the potential of DBEF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than DBEF but that trades at less than 5 times its earnings check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
Yahoo
02-05-2025
- Business
- Yahoo
Is SPDR EURO STOXX 50 ETF (FEZ) the Best International Index Fund to Invest In?
We recently published a list of . In this article, we are going to take a look at where SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) stands against other best international index funds to invest in. Undoubtedly, the US plays host to the largest equity market in the world as home to the largest stock exchanges. Likewise, it is home to the largest companies in the world by market capitalization. Therefore, investors often turn to the US, given the high liquidity always in play when seeking exposure to some of the biggest and emerging market segments. Over the years, US indices have provided broad exposure to various sectors, from financial services to healthcare, technology, industrials, and even consumer cyclical. However, amid the escalating tariff and trade war pitting the US and its allies or other economies, sentiments in the equity markets are increasingly shifting. Major US equities and indices have pulled back significantly from record highs after President Donald Trump imposed significant trade tariffs on Canada, China, the EU, and other nations. In the year's first quarter, the US S&P 500 was down by about 6% as the tech-heavy Nasdaq 100 slid more than 8.1%. The slump came as investors became net sellers concerned by the impact of the trade war waged by the Trump administration. In contrast, European equities were on a roll, with the EURO STOXX 50 index tracking the 50 largest blue chip stocks in the trading block, soaring 11%. The rally in European equities underscores how the focus is increasingly shifting away from US equities to other markets. 'The first months of 2025 have shown increased investor focus on international investing, with developed markets strongly outperforming their U.S. counterparts,' says Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. This superior performance has been fueled by a shift towards international equities, primarily linked to the Trump administration's growing isolationist stance. A mix of diminished backing for Ukraine and tariffs imposed on crucial trading allies such as Canada has led to a reevaluation of the stability of the U.S. market, which has long been a fundamental aspect of investor trust. In addition to policy issues, valuations have also influenced this trend. For many years, U.S. stocks have been priced at considerably higher forward price-to-earnings (P/E) ratios than their international counterparts. Now, as those multiples shrink, investors are rethinking their investment strategies. Likewise, the best international index funds offer a way out of the turmoil in the US equity markets as they offer broad market exposure to some of the biggest companies at some of the lowest costs. 'Adding international stocks to your portfolio can dampen volatility and improve returns, since the U.S. economy and market may face challenges at different times compared to international regions,' says Scott Klimo, chief investment officer at Saturna Capital. 'Mitigating currency risk also plays a role, as the U.S. dollar may strengthen or weaken versus other countries at different times.' To make the list of 9 Best International Index Funds to Invest In, we scanned the global equity markets. We then settled on the best funds based on a number of factors including market index cost (expense ratio) and long-term performance. Finally, we ranked the index funds in ascending order based on the fund's expense ratio. At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). Close-up shot of a ticker board reflecting the companies stocks in the stock exchange. SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ) stands out as one of the best international index funds for gaining exposure to the top 50 blue chip stocks in the European Union. The fund seeks investment results that track the performance of the EURO STOXX 50 stocks while employing a sampling strategy, therefore not requiring purchasing all of the securities represented in the index. In addition, it offers exposure to the financial services sector at 21.11%, Industrials at 17.81%, and Technology at 16.20%. The index fund also offers exposure to SAP SE, ASML Holding NV, Siemens AG, and Allianz SE. While boasting a low expense ratio of 0.290%, the fund has generated an average return of 16.31% over the past five years. Overall, FEZ ranks 6th on our list of best international index funds to invest in. While we acknowledge the potential of FEZ as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FEZ but that trades at less than 5 times its earnings check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
Globe and Mail
28-04-2025
- Business
- Globe and Mail
Mitigating Tariffs: 3 Stocks to Gain From a Weaker U.S. Dollar
A falling U.S. dollar has been one of the fallouts from the Trump tariffs, as tracked by the Invesco DB US Dollar Index Bullish Fund (NYSEARCA: UUP), which has been trading down approximately 6.4% in 2025. The consequence of a weaker dollar is that U.S. products become cheaper for international buyers, which can increase the demand. This is the opposite of a strong U.S. dollar, which causes international demand to fall. A weak U.S. dollar is not great for U.S. travelers as they have less buying power overseas, but it is favorable for tourists traveling to the U.S. A weaker U.S. dollar is favorable for foreign consumers buying U.S. products and unfavorable for domestic consumers buying foreign products. With that understanding, here are three stocks in the retail/wholesale sector, the computer and technology sector, and the industrials sector that could benefit from a weaker U.S. dollar and help mitigate some of the tariff effects. Before we go into individual stocks, it's important to remember a few principles. Currency Headwinds Can Turn Into Currency Tailwinds With a Weaker U.S. Dollar It's become common practice for companies with international exposure to reference 'currency headwinds' or the 'negative impact of foreign exchange (forex) headwinds' in their earnings reports. These terms highlight how fluctuations in exchange rates, particularly a stronger U.S. dollar, can erode overseas revenue and profits when converted back into dollars. To provide investors with an alternate view, companies often report revenue and growth metrics in 'constant currency' or on a 'currency-neutral' basis. These non-GAAP measures strip out the effects of currency fluctuations, offering a hypothetical look at what growth might have looked like in a stable currency environment. For instance, a company might report: 'XYZA recorded Q4 2024 revenue growth of 10% year-over-year (YoY) as reported, but 13% YoY in constant currency.' The constant currency figure is meant to illustrate the underlying business performance without the drag of a strong dollar, though it's important to remember that such adjustments are not standardized under GAAP and should be interpreted accordingly. A Weaker U.S. Dollar Means Lower Margins But Higher Volumes for Sales Overseas When you consider it, a weaker U.S. dollar means U.S. goods are sold cheaper overseas than before, which results in lower margins. However, since the products are sold cheaper, they should sell more of them since demand should rise. In essence, it becomes a quantity-over-quality trade-off where more sales are made but at lower margins. Here are three stocks with the majority of their revenues generated overseas and the anticipated currency headwinds that could turn into tailwinds, which can mitigate some of the export or retaliatory tariffs. Coca-Cola: An Iconic American Brand Derives Most of Its Revenues Overseas [content-module:Forecast|NYSE:KO] The Coca-Cola Co. (NYSE: KO) is synonymous with America and is considered the most recognizable brand in the world, with 94% global recognition. The company distributes over 3,500 products ranging from water, milk, and energy drinks to sodas throughout more than 200 countries, which is why it derives the majority of its revenues outside of the United States. Coca-Cola mentioned currency headwinds many times throughout its earnings reports and conference calls. In fact, the company mentions how well it did despite 'double-digit currency headwinds' in its fourth quarter 2024 earnings report. This is directly due to the strong U.S. dollar. The good news is that a weaker U.S. dollar can be a currency tailwind, which should generate more demand for its products and drum up order volumes in the upcoming quarters. Keep a lookout for earnings reports that mention the negative impact of currency headwinds and foreign exchange, as they could turn out to be tailwinds in future quarters. Coca-Cola Generates 63% of Its Revenues Overseas With 3% to 4% Forex Headwinds For 2024, Coca-Cola generated a 3% YoY net revenue growth to $47.1 billion. Operating margin was 23.5% in 2024, up from 21% in 2023. When it comes to currency impacts on revenues, the largest came from Europe, Middle East & Africa (EMEA) with 16%, Latin America with 14% and Asia Pacific with 3%. Currency impacts on operating income were 16% for the EMEA, 18% for Latin America, and 6% for Asia Pacific. For 2025, Coca-Cola expects non-GAAP organic revenue to grow 5% to 6%. For comp net revenue, Coca-Cola expects 3% to 4% current headwinds. Keep in mind that the U.S. dollar has fallen approximately 7% since the earnings release on Feb.11, 2025. The market is aware of this and surged KO stock to new all-time highs on Apr. 3, 2025. Apple Generates 57.65% of Total Revenues Overseas With 2.5% Forex Headwinds [content-module:Forecast|NASDAQ:AAPL] Apple Inc. (NASDAQ: AAPL) reported its 'best quarter ever' for fiscal Q1 2025. The company generated 4% YoY growth to $124.3 billion in total revenues. Only 42.35% of total revenue was generated in the Americas ($52.65 billion), leaving 57.65% of total revenue ($71.65 billion) to be generated overseas. Sales in Greater China fell from $20.82 billion in FQ1 2024 to $18.51 billion in FQ1 2025. China's Demand for Apple Products Shunned During Trade War With the United States The trade war with the United States may cause sales to continue falling even while gaining a reciprocal tariff exception for Chinese imports of smartphones, computers and chips. However, the previous 20% tariffs are still in place, and an upcoming semiconductor tariff may boost tariffs despite the reciprocal tariff exemptions. The question will be whether a weaker U.S. dollar could drum up demand for Apple products in China. In its FQ1 2025 conference call, CFO Kevin Parekh stated the currency impact for FQ2 2025, 'The color we're providing today assumes that the macroeconomic outlook doesn't worsen from what we're projecting today for the current quarter. As the dollar is strengthened significantly, we expect foreign exchange to be a headwind and to have a negative impact on revenue of about 2.5 percentage points on a year-over-year basis.' Caterpillar Generates 49.2% of Total Revenues Overseas and Lower Demand [content-module:Forecast|NYSE:CAT] While heavy construction and mining machinery manufacturer Caterpillar Inc. (NYSE: CAT) still generates most of its revenues ($8.236 billion) in North America, it generated 49.2% or $7.98 billion of Q4 2024 revenues overseas. Caterpillar has been suffering from declining YoY revenues and expects 2025 total revenues to fall below $64.8 billion. No Specific Numbers Given on Currency Headwinds In its 10-K filing, Caterpillar mentioned unfavorable currency impacts of the Brazilian real and the Japanese yen relative to a strong U.S. dollar. Full-year 2024 revenue declined by 3% YoY primarily due to lower sales volume and currency impacts, but the company didn't provide an actual percentage of the currency impact. Incidentally, it experienced a favorable currency impact in Q4 2024 in its Resources Industries and Energy & Transportation segment and an unfavorable currency impact in its Construction segment, where most of the heavy machinery is sold. A weaker U.S. dollar can increase Caterpillar's competitiveness overseas, spurring demand. Caterpillar forecasts slightly lower 2025 sales volume due to weaker end-market demand and high borrowing costs. However, a weaker U.S. dollar may help revive some demand. Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
Globe and Mail
27-04-2025
- Business
- Globe and Mail
3 Boring Stocks Outperforming the Market This Year
While much of the market has been on shaky ground in 2025, rattled by global uncertainties, trade tensions, and economic fears, a few boring but reliable companies have quietly delivered solid returns. Unlike the hype surrounding high-growth tech stock s or the once-mighty Magnificent Seven, these less flashy names have offered investors both safety and firm performance. Here are three stocks that are quietly outperforming the market and proving to be smart, stable investments in an otherwise volatile year. The Southern Company [content-module:CompanyOverview|NYSE:SO] The Southern Company (NYSE: SO), a leading electric and gas utility in the southeastern United States, has demonstrated impressive strength in 2025. While the S&P 500 remains down nearly 7% year-to-date, despite a recent bounce, SO is up roughly 11% YTD and has gained almost 25% over the past 12 months. As the second-largest holding in the Utilities Select Sector SPDR Fund (NYSEARCA: XLU) and with a market capitalization of nearly $100 billion, Southern is a heavyweight in its sector. In recent months, utilities have seen strong inflows as investors seek stability and yield amid macro uncertainty, and SO has been a clear beneficiary. Its dependable business model, recession-resilient earnings, and strong regional presence have made it a haven for investors. Southern offers a solid dividend yield of 3.16% along with its strong stock performance. The stock has been trading above its 200-day moving average and is now in a bullish consolidation pattern, just 3.6% off its 52-week high. Investors will be closely watching as the company reports its Q1 earnings on May 1. Last quarter, Southern slightly missed EPS expectations by a penny but beat on revenue, reporting $6.34 billion versus forecasts of $5.9 billion. The Coca-Cola Company [content-module:CompanyOverview|NYSE:KO] Consumer staples giant Coca-Cola (NYSE: KO) has also been a major winner in 2025, with shares up nearly 17% year-to-date, outperforming the broader market and even the consumer staples sector as a whole. The company's consistent global demand, pricing power, and defensive qualities have helped it thrive while many tech names have faltered. KO has also seen strong institutional support. Over the past 12 months, institutional inflows totaled nearly $18 billion, with $10 billion being recorded in the last quarter of 2024. This conviction reflects a growing appetite for safety, consistency, and yield, three things Coca-Cola offers in abundance. Analysts remain bullish. The stock holds a consensus Buy rating across 20 analysts, with an average price target of $75.06, implying further upside from current levels. Coca-Cola is set to report earnings on April 29. Last quarter, the company exceeded expectations with EPS of $0.55, surpassing the consensus estimate of $0.51. The stock also boasts a remarkable 64-year streak of dividend increases and currently yields 2.81%. Verizon Communications [content-module:CompanyOverview|NYSE:VZ] Verizon (NYSE: VZ), the largest wireless provider in the U.S., rounds out the trio of boring but outperforming stocks. The telecom giant is 7% on the year, outperforming the S&P 500 while offering a substantial 6.3% dividend yield. For income-focused investors, Verizon has been a bright spot in a choppy market. The company recently reported strong Q1 2025 results on April 22, delivering an EPS of $1.19, ahead of the $1.15 consensus. Revenue also beat expectations at $33.5 billion, a 1.5% year-over-year increase. Adjusted EBITDA reached $12.6 billion, and wireless service revenue climbed 3%. Verizon also reaffirmed its full-year guidance, offering reassurance amid broader market uncertainty. Verizon has increased its dividend for 20 consecutive years and continues to generate strong free cash flow, making it an attractive option for long-term investors seeking both growth and yield. Technically, the stock remains above its rising 200-day moving average, signaling ongoing strength. Where Should You Invest $1,000 Right Now? Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now...
