On 09.08.2019 the shares reached price $46.5. Investment idea brought about 9.64% yield in 24 days

Interactive Brokers LLC
(IEX: IBKR)

Ticker: IBKR
Sell: market ($51.13)
Take profit: $46.5



Interactive Brokers (IEX: IBKR) is an American brokerage firm that was founded in 1978. IB owns the largest trading platform in the US which has the highest number of deals per day (more than 800,000 completed assignments). It gives access to stocks, options, futures, bonds and funds. The company is traded on the IEX stock exchange.

We suppose that the company is oversold in comparison to its competitors.

InteractiveBrokers
(
IEX: IBKR)
TD Ameritrade
(Nasdaq: AMTD)
E*TRADE Financial
(
Nasdaq: ETFC)

TheCharlesSchwab
(NYSE: 
SCHW)
PE Ratio (TTM) 22.32 14.38 11.15 15.52

PR Ratio (TTM) 8.99 4.91 3.58 4.67

Dividend  Yield 0.77 2.35 1.22 1.69


In our opinion, the company is developing slower than its competitors and is missing the retail market.

- TD Ameridate enables cryptocurrency purchases in collaboration with ErisX.

- Robinhood has adopted a subscription model and doesn’t charge for trading. It currently has more than 4 million users.

- Schwab offers a product called Intelligent Portfolios for automated creation of investment portfolios.


Additional pressure on IB’s business might soon be caused by the following events and factors:

- Decreasing interest rates policy will reduce the cost-effectiveness of the brokerage business.

- The potential introduction of a tax on operations with securities that has been proposed by Bernie Sanders, the Democratic presidential candidate. If the tax was introduced, as a broker-discounter with the lowest margin, IB would suffer considerable losses due to the decreased number of operations and the business’s profitability.


Nevertheless, the company has several strong points which are the reasons for the cautious approach to the short-selling of the security. For example, IB has recently launched a major advertising campaign for a sports betting simulator. It is quite an interesting strategy of attracting those users who are inclined to take risks. A user has 1000 USD on his or her virtual account. The money that has been won by betting on sports event could be used to pay for commissions on the Interactive Brokers trading account.

Additionally, many fintech companies are using IB as a primary broker when providing services to their customers because IB doesn’t have its own positions and is one of the most reliable partners in the industry.

Technical analysis

The following patterns can be clearly observed on the graph:

- strong resistance on the level of $58-$60 starting in September 2018;

- attempts to reach SMA 100 were unsuccessful during the past year;

- the price is trying to break of the upward trend since April 2017. A similar attempt took place at the end of May 2019 and on July 15, 2019.


ibkr

Another argument to support the security is that its correction from the overall progression already amounts to 50% since 2018 whereas the oscillator is in the zero range on daily and weekly graphs.

We are opening market short on a half of funds allocated for the idea, we plan to average the other half in case of the price reaching $55. IBKR is one of the few short positions in the portfolio, that’s why we do not set a stop loss for this investment idea.


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On 19.06.2019 the shares were sold at price $34.26. Investment idea brought about 6.4% yield in 27 days

Brookfield Renewable Partners L.P.
(NYSE: BEP)

Ticker: BEP
Buy: market ($32.21)
Take profit: $34.5
Stop-Loss: $30.5
Updated Stop-Loss $32.5 (14.06.19)


In a period of uncertainty caused by Trump’s current policy, we recommend adding a dividend position to your portfolio - Brookfield Renewable Partners L.P. shares. (NYSE: BEP).

Brookfield Renewable Partners L.P. owns and manages renewable energy assets. The company was founded in 2011 and headquartered in Toronto, Canada. As of the end of 2017, Brookfield Renewable owned more than 200 hydropower plants, 100 wind power plants, more than 550 solar installations, and four storage facilities.

The total volume of generating capacity owned by the company is about 7.25 megawatts, which is currently 8.2% more than a year earlier. 75% of power is produced by hydroelectric power plants. The remaining volume is also generated from such renewable sources as wind and solar stations.

Over the year, Brookfield Renewable Partners' net income increased from $8 million (Q1’18) to $43 million (Q1’19).

The company's FFO (funds from operations) grew from $193 million (Q1’18) to $227 million (Q1’19), showing an 18 percent increase over the year. FFO is a key indicator for companies that own generations. It reflects the cash flow from the main activity, which is the sale of electricity in our case. It is calculated as follows: depreciation is added to the net profit of the company and the profit from the sale of generating stations is subtracted.

In Q1 2019, a hydroelectric power station was put into operation in Brazil, with a capacity of 19 megawatts. In addition, 134 megawatts of renewable energy was launched worldwide.

Dividends from the activity for the 1st quarter of 2019 grew to $0.515 per share (or 1.6% of the share price on May 22) and will be paid on June 28, 2019, to shareholders on the register dated May 31, 2019.

Technical analysis

The share overcame a strong resistance formed by the multi-year level near the $32 borders, as well as a downward channel from the highs of 2017. In a positive scenario, the price may return to the range of $31.5- $32 and resume its movement to the intended target of $34.5 from there. We set SL at $30.5 in order to keep the risk/return ratio close to 2.

1ris

While maintaining the current rate of new generations launching, we expect the stock price to grow to $34.5. Taking into account the dividend payout, the yield potential will be 8%.


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Price of the share has reached $17 on 18.04.2019, the investment idea brought about 17% yield in 15 days

TATA MOTORS (NYSE:TTM)

Ticker: TTM
Buy: market
Take profit: $17
Stop-Loss: $13.5

Tata Motors - one of the Tata Group companies - is an Indian multinational automobile manufacturer. The company includes the production of cars of different levels - from cheap Indian to global brands, as well as transport vehicles for various purposes – from trucks to military vehicles.

In its annual report, Tata Motors demonstrates an increase in domestic sales in 2018 by 16% compared with last year. The revenue of the entire concern boosted by 9.28% during the year. The company's net income for 2018 increased by more than 20% despite the fact, that the Jaguar Land Rover Group (JLR) acquired in 2008 generated losses for more than 4 billion US dollars in 9 months of 2018.

What happens to the JLR?

Sales in 2018 decreased by 4.6% compared with 2017. The main reason is the markets of China (-21.6%) and Europe (-7.8%). The purpose is the "trade war", aggravated in mid-2018. It was in the 2nd half of 2018 that Land Rover sales fell to 13.1 thousand cars against 27.4 in the first half of 2018. At the same time, JLR continues to fight for the Chinese market. After a three-year trial, the Beijing court ruled to suspend the sale of the British bestseller Evoque copy called Landwind X7. As we know, this is the original case in the global automotive industry. We believe that, together with a serious restyling, the Evoque JLR can regain region market share.

The fall in diesel sales in Europe caused by the Volkswagen scandal (FRA: VOW3) certainly hit the Land Rover SUV. But since 2018, most of the cars produced will be moderated hybrids – they will be able to contain a 48-volt battery to reduce emissions. In addition, the newest electric Jaguar I-Pace called the car in 2018 in Europe, confirms the advantages of Tata Motors. I-Pace should be serious competitors for cars Tesla.

The recent S&P credit rating reduction of JLR due to Brexit even will not affect the growth of car sales, moreover, if the group’s external financing becomes more expensive. According to the facts above, the potential growth in JLR auto sales will ultimately have a positive effect on the capitalization of the Tata Motors grou.

Analysis

Weekly trend is in the global downtrend channel (orange) since the beginning of 2015. The channel is clear with pronounced borders. According to the movement structure, an asset very often works out reversal patterns.

Purple lines indicate prices at which historical mirror support and resistance levels pass.

At the moment, a distinct “double bottom” pattern is drawn. It marks a local trend reversal. In the case of the weekly TF – it marks strong fall correction. Working out the entire figure height - and the first goal is the level of $ 17 for a depositary receipt. Further momentum conservation should bring the asset to the target mark of $ 20 for a depositary receipt. This number is confirmed by the center of the entire downstream channel. Reversal patterns from the borders of the channel tend to lead the price to their centers due to impulse. The further movement will be possible only with the preservation of favorable fundamental factors.

All indicators show strong bullish signals. There are triple convergences, both in stochastics and MACD. This feature additionally confirms the fact of price movement to $ 17, and after that - to $ 20.

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Closed with Stop-Loss, loss is about 10%

ALBEMARLE CORP (NYSE:ALB)

Ticker: ALB
Buy: market ($79)
Take profit: $104
Stop-Loss: $71

Albemarle Corporation (NYSE: ALB) is a chemical company founded in 1994 and headquartered in Charlotte, North Carolina.

On April 23, the company's share price fell by 5%, that is associated with the fear of a decline in demand for electric cars in China after changes in subsidies take effect.

However, the global trend for the use of renewable energy sources should improve the situation with ALB shares. Lithium is a fundamental component for the energy accumulation and release in batteries operating near wind and solar power stations, inside electric vehicles and any autonomous gadgets. In addition, lithium is currently used by SpaceX to manufacture fuel tanks in their FALCON9 missiles.

In 2018 the company showed a 10% revenue growth, while operating profit increased by 23%. The revenue share of Albemarle from lithium was 36%, but this segment brought 47.5% EBIDTA.

In 2018, ALB almost reached its main competitor, Sociedad Química y Minera de Chile (NYSE: SQM), in terms of lithium business margin lagging behind the Chilean giant by only one percent - 42.3% of ALB against 43.3% of SQM.

At the end of 2018, ALB entered into a partnership with Mineral Resources (ASX: MIN) to establish a mine with hard rock in Australia, that should support plans to increase production from 65,000 tons in 2018 to 175,000 tons in 2021. It is the second source of lithium in Australia for ALB in addition to ongoing projects in Nevada and Chile. Even despite the possible cost reduction of lithium, the production growth will increase the revenue of ALB.

Analysis

On the weekly chart, a complete deep correction of ABC is seen after a fairly clear five-wave, which suggests a possibility of a new upward movement. The trend line in September 2015 confirms the continuing uptrend.

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On the daily chart, the stochastic is in the oversold zone.

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We recommend purchasing of ALB shares with a target price of $104 with medium terms of selling. The cancellation of the scenario will be the breaking through of a strong level $71 after which the price will return to the range of 2010 - 2016.


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Closed with Stop-Loss, loss is about 8,5%

Nvidia (NASDAQ:NVDA)

Ticker: NVDA
Buy: market
Take profit: $195
Stop-Loss: $160

Nvidia Corporation (more commonly referred to as Nvidia) is an American technology company incorporated in Delaware and based in Santa Clara, California. It designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market. Nvidia is also now focused on artificial intelligence.

March 16, 2019 conference GTC19 took place, where Nvidia introduced its innovative solutions.

First of all, in April, a driver for the GeForce 10 family will appear, allowing the use of ray tracing technology previously available only to Turing RTX cards. The new release should show the technology advantages in games and stimulate the demand for more expensive video accelerators.

Secondly, a public release of Clara AI took place. Clara AI is a platform for radiology that helps diagnose diseases based on labeled data sets without the need to share patient images.

Thirdly, Nvidia announced Jetson Nano, a miniature computer for AI with 472 GFLOPS power and 5W power consumption. The assembly kit costs $ 99, with it you can create autonomous robots and drones.

Financial performance and prospects for 2019

In 2018, the revenue growth was 20.6%. In our opinion, it is an excellent indicator after 2 years of colossal growth of 40.6% and 37.6% in 2017 and 2016, respectively.

The deterioration in annual revenue growth occurred primarily due to a sales decline of 30.7% in 4Q2018, due to a demand collapse of GPUs for games by 46%, low demand for Turing models (RTX 2070, RTX 2080) and negative macroeconomic situation.

Nevertheless, we are looking forward to the recovery and growth in demand for GPUs in 2019 thanks to the gaming industry development, the growth of products based on artificial intelligence technologies and the improvement of self-piloted cars. In particular, the company Alphabet (Nasdaq:GOOG) announced a budget of $ 13 billion for the data centers construction in 2019. In the gaming field, Nvidia has announced the release of the Nvidia 1660 card with Tuting's graphics architecture, which justifies the invested money by impressive performance results.

Nvidia bought the Israeli company Mellanox (Nasdaq: MLNX), known for producing high-speed networks for supercomputers.

Acquisition of Mellanox (revenue for 2018 was $ 1088 million) will allow Nvidia to make up for lost revenue by the sale of GPU to miners. In the 2Q2018, the decline in sales of GPU for mining was more than 90 percent. ($ 18 million versus $ 289 for Q1 2018), and in Q4, Nvidia suspended the shipment of GPU for mining.

In other words, NVDA loses about $ 1 billion a year due to stagnation on the cryptocurrency market.

The acquisition of MLNX will also provide Nvidia by an additional increase in the sales of data center solutions, which amounted to 52% in 2018.

Weekly schedule

After a strong fall, the asset is trying to recover. Unlike many sector mates, NVDA lost more than half of the total value within two impulses. On weekly candles, it is very difficult to distinguish them. Only RSI and other “sharp” indicators can demonstrate a small double bottom.

On the one hand, this is positive – the asset is bought off in the form of the letter "V" - in the form of a spike. "Spike turns" are the strongest. As a rule, they mark a cardinal change in market sentiment or force majeure situations.

On the other hand, 80% of global trend reversals occur through the normal “double or triple bottom” distribution, which is clearly visible in the histogram and in the MACD lines.

NVDA weekly trend is trying to grow. But it is worse repeating that normal reversals occur either through the strongest weekly divergences (which do not exist now) or through reversal patterns. "Spikes" are extremely rare on the market. Based on this, the asset is able to “draw” the second bottom on the weekly TF, which means that the price may return to $ 130-140. Confirmation of this factor is an attempt to achieve a semi-annual moving average. Most likely, NVIDIA will succeed and should meet at ~ $ 180-185. Taking into account the momentum conservation, the price can get up to $ 190-200. After that, a regular correction should occur.

1ris

The figure above shows schematically the closest growth limit, where you can fix most of the long positions with the expectation of a deep correction (indicated by arrows). But, as a result, the price should still come to a normal Fibonacci distribution and make up 50-61.8% from the whole fall correction. This will be the final goal of the investment. The target zone passes in the range of $ 210-230.

Daily schedule

This is a medium-term trend. There is exactly what we mentioned in the first part. Reversal pattern "inverted head with shoulders" with an (unsuccessful) attempt to cancel and further shot at good volumes.

The purpose of the reversal figure price movement is always the height of this figure itself. In this case, the height is from the top (head) to the neckline (from $ 125 to $ 160). We add the difference to the figure exit point ($ 160) and get the target mark of $ 195. It turns out just the figure was discussed in the first part. $ 195 with an error will be the closest resistance interval, where the asset will be met by an army of bears with fairly large capital.

2ris

Summary

We buy an asset at market value, fix at $ 195. Next, we are waiting for script development. If we break through $ 200 and fix there for 1-2 weeks, then we can collect longs with targets for $ 230 again. If the asset price cannot consolidate above $ 200 and begins to be adjusted - wait for closing at $ 140 and recruit a position for a long time again.

The asset going down from current prices and fixing below $ 160 per share will provoke the cancellation of the whole scenario.


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