GOOGL Stock Forecast: Is Chelsea Market Worth $2.4 Billion? On April 23, Alphabet (NASDAQ: GOOGL), the parent company of Google, announced their Q1 2018 earnings. The revenue grew 26% year over year and EPS also jumped up 72% from $7.73 to $13.33. One of the main factors that contributed for the significant increase of EPS was Alphabet's investment in Uber. In 2013, Alphabet made $258 million investment in Uber at the market value of $3.8 billion. Uber is now worth more than $60 billion. Moreover, Alphabet also benefited from the lawsuit between Uber and Waymo, Alphabet’s self-driving car. As a result of the lawsuit, Uber has agreed to pay Waymo 0.34% of a late stock offering that is worth $245 million. Google's capital expenditure tripled in Q1 2018 compared to Q1 2017, mainly due to the acquisition of Chelsea Market.In March 2018, Alphabet has confirmed its purchased for Chelsea Market in Manhattan for $2.4 billion. According to Ruth Porat, the CFO of Alphabet, and Google, the deal is a proof for the growth commitment of the company. Despite the potential Chelsea Market's location, this deal is still a huge question mark for Alphabet’s stockholders. Alphabet has not announced its plan on the Chelsea Market. Moreover, as there is increasing competitiveness in the technology world, there could be a huge need for hardware investment. As a result, it may not be a good timing to invest in Chelsea Market now.



Not everything is going great for Apple though. Alphabet may have to face a third antitrust penalty from EU related to an Android case as history repeats itself. In June 2017, the European Commission announced a fine of €2.42 billion ($2.85 billion) on Google. Margrethe Vestager, the European commissioner, accused Google of abusing its market dominance by providing unfair advantage to its another product. The current penalty Alphabet is facing may cost the company up to $11 billion, more than 85% of the 2017 net income.To learn more about Google's core business and future revenue, our valuation of Alphabet based on a DCF mode, and the current I Know First GOOG forecast: Read More.



Treasury Yield Curves: An Indicator Of Economic Health

For a long time, yield curves have been a hot topic in the financial world. Many believe they are a good signal of a country's economic health. However, how each stock response to the changes in interest rate and the movement of the yield curve is still a big question that many human investors struggle with. I Know First has successfully built an Artificial Intelligence algorithm that factors yield curve and its relationship with other economic indicators to forecast the market movement. In this article, we discuss how to use yield curve as a market prediction indicator as well as how I Know First algorithms factor it.



So what even is a yield curve? A yield curve is a graphical depiction showing different interest rates or yields for different time periods ranging from 1 month to 30 years. Yield curves reflect the relationship between the yield of the interest rate on bonds and its maturity. The US Treasury market is the largest bond market with high liquidity. Moreover, investors consider the market to be free of default risks. Yield curves play an important role in the economy as a benchmark for bond pricing and standard yield for other bond sectors such as bank loans or corporate debt. Yield curve can be used to calculate bond price by discounting the future cash flow of the bond at the yield of a particular time frame and more.



As we understand more about the yield curve, the question now is how to interpret the shape and movement of yield curves to predict the health of the economy. Over the last 50 years, the yield curve has proved itself as a good prediction indicator of an incoming financial crisis. A financial crisis normally follows an inverted yield curve. The last two times we saw an inverted yield curve is in 2000, right before the dot-com bubble burst, and 2007, right before the global financial crisis. To learn about the 4 types of yield curve, the type of stocks most affected by yield curve changes, and how I Know First algorithm implements yield curves in its forecast: Read more.





Valeant (VRX) Veers Away From Scandal, Rebrands Company + Forecast

Over the past year, Valeant’s stock price has increased by a whopping 112.46% to a closing price of 26.6, a 52 week high, on June 12, 2018. Over the past year, the company has been working to decrease its debt while restoring its public image after a slew of scandals. For Q1 2018, Valeant outperformed expectations. The company had revenues of $1.995, billion which was a 5.4% decrease from Q1 2017, but still above analyst estimates of $1.949 billion. This translated to non-GAAP earnings per share (EPS) of $0.88. The company has consistently outperformed analyst expectations for earnings over the past four quarters.The company’s individual segments did well too; the Bausch + Lomb/ International segment’s revenues were down 3% to $1.103 billion while the branded Rx segment’s revenues were $593 million compared to $629 million in Q1 2017. While these numbers do not seem positive, it is important to acknowledge the impact of divestitures and discontinuations that the company has embarked in order to decrease debt. Excluding this, there was organic growth of 2% and 8% respectively for these segments. This is extremely significantly as this is the first time since 2015 that Valeant has delivered overall organic revenue growth.



Since 2018 began, the company has achieved dismissals or positive outcomes in 20 legal matters. The most significant of these involved a former executive, Gary Tanner, who engaged in fraud and money laundering with a pharmaceutical company called Philidor. However, the company was able to clear up the debacle with no finding of admission or liability by Valeant, instead only the executive at fault was found responsible. In an attempt to distance themselves from these scandals, on May 8, the company announced it will change its name to Bausch Health Companies (BHC) and introduce a new corporate brand identity in July. With Joseph Papa at the helm, Valeant is restoring its public image, growing key brands, stabilizing loss from older products, and focusing on products in the pipeline. Hopefully, the scandals the company has faced in the past are history as it changes its name to Bausch Health Companies which will be effective July 1. The current I Know First algorithm forecast for VRX is bullish: Read more.



Beating the Japanese Benchmark: Updated Performance Report

We've mentioned it in some of our past newsletters, but as a refresher: I Know First finished the implementation and the training period of its AI-based ranking and forecasting model for 1277 of the main equities listed on the Tokyo Stock Exchange (TYO) on December 28, 2017. On this date, I Know first published the first Japanese stock forecast for subscribers. Since then, we've been monitoring the results of portfolios using our forecasts and they have consistently beaten the benchmark we chose for the Japanese Stock Market, the Nikkei 225 index.



Our algorithm provides added value to investors by identifying promising opportunities in the Japanese stock market and implementing custom screens as overlay to support the individual research and investment process. Over the period from 12/16/2017 – 06/04/2018 the forecasts for the Tokyo Stock Exchange (I Know First coverage: 1277 stocks) have been generated daily. To see the exact numbers and how we achieved gains consistently higher than the benchmark: Read more



The 3 Driving Forces Behind AMD's Long Term Bullish Forecast There are 3 main forces driving AMD's long term bullish forecast: Ryzen APU’s leading to high earnings in Q1 2018, Radeon GPU strong mining revenue, and a doubling in sales of AMD EPYCs. AMD achieved a staggering total revenue of $1.65 billion for Q1 2018, which is a 40% year-over-year increase from Q1 2017. The increase in total revenue was mainly attributable to the 95% year-over-year increase in revenue of the Computing and Graphics segment, made possible through the higher sales of Ryzen APU’s and Radeon GPU’s. Sales of Ryzen APU’s during Q1 2018 accounted for 60% of client processor revenue and was attributed for double-digit percentage growth in client revenue. The most influential event regarding Ryzen APU’s was the delay of Intel’s 10nm chips, a competitor for AMD's chips. Building on the strong sales of Ryzen APU’s through Acer, HP, and Lenovo platforms during Q1 2018, AMD has numerous newly introduced systems from OEM partners for its Ryzen APUs.



The strong sales of Radeon GPU’s during Q1 2018 was mainly attributable to demand from the gaming and blockchain sector. Blockchain made up approximately 10% of AMD"s Q1 2018 revenue. On top of this, EPYC processor unit shipments almost doubled from the preceding quarter. The company expects this strong performance to continue throughout the rest of the fiscal year. To see I Know First's bullish outlook for AMD: Read More.

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