News and Views

The Official Blog of WhaleWisdom.com

Apple Inc. (AAPL) weathered market volatility over the past year and has outperformed the S&P 500, also rising on the WhaleWisdom Heatmap to eight from thirteen. While hedge funds were selling in the first quarter, Apple rose by approximately 18% as of August 12, 2022, compared to the S&P’s loss of about 5% over the past year.

Apple is a multinational technology company driven by innovation. Apple designs, manufactures and markets smartphones, personal computers, networking applications, and portable music players. The technology company offers online services such as Mac App, a digital distribution platform for its applications, and iTunes, a media library and store. Amidst market volatility, Apple has begun to thrive again since July 2022.

(WhaleWisdom)

Hedge Funds and Institutions Sell

Hedge Funds adjusted their portfolios, and the aggregate 13F shares held decreased to approximately 1.1 billion shares from 1.2 billion, a slide of about 0.7%. Overall, 22 hedge funds created new positions, 230 added to an existing position, 34 closed exited, and 332 reduced their stakes. Institutions were also selling and lowered their holdings by about 1.9% to 9.3 billion. The 13F metrics between 2000 and 2022 show that funds held remain on a steady rise despite a challenging market.

(WhaleWisdom)

Encouraging Multi-year Figures

Analysts expect to see earnings rise through 2023, with increases in growth estimated to bring earnings per share to $6.10 by September 2022 and $6.44 by September 2023. Year-over-year estimated increases could also bring revenue to close to $411.7 billion by 2023, up from a predicted $392.5 billion in 2022.

(WhaleWisdom)

Analysts See Apple’s Potential

Apple stands to see a boost in revenue from increased pricing and the upcoming releases of new products. Analyst Ming-Chi Kuo of TF International Securities shared news of price hikes for the new iPhone 14 series and that the release of a new mixed reality headset may be as early as January 2023. Bernstein analyst Toni Sacconaghi was also interested in September’s upcoming launch of the iPhone 14. Sacconaghi noted Apple management’s confidence in their business and views the level of success of the new iPhone as a vital sign as to whether consumer demand remains strong for upgrades despite challenging economic times.

Fair Outlook

Apple’s sales remain strong despite a volatile economy, and analysts have shared encouraging earnings and revenue growth predictions through 2023. Their iPhones and other products are likely to see increased demand with upcoming launches. The technology stock holds long-term potential for patient investors.

Etsy, Inc. (ETSY) underperformed the S&P 500, seeing a loss of roughly 50% compared to the S&P 500’s loss of around 5% over the past year. Despite market volatility, hedge funds were actively buying Etsy’s shares, and the stock was added to the WhaleWisdom Whale Index 100 on May 17, 2022.

Etsy is an e-commerce company that connects buyers and sellers worldwide through its two-sided online marketplaces. While the company’s initial focus was providing a place for buying and selling handmade and vintage items, its business line has grown to operate in four segments: Etsy, Reverb, Depop, and Elo7. The Etsy marketplace continues to connect artisans and entrepreneurs with consumers, and Etsy acquired Elo7 in 2021 to help expand its reach; Elo7 is a popular Brazilian marketplace specializing in handmade items and custom made-to-order merchandise. The company also offers a Reverb marketplace exclusively focused on musical instruments and Depop, a fashion resale marketplace. Etsy’s marketplaces experienced a surge in popularity at the onset of the Coronavirus pandemic with handmade and customized products such as face masks, mask storage solutions, and other pandemic-associated accessories. Though the pandemic helped accelerate the trend of online shopping, as the world journeys beyond the pandemic and inflation rise, e-commerce businesses like Etsy have experienced a slowdown in sales.

(WhaleWisdom)

Hedge Funds and Institutions Are Active

Etsy received positive attention from hedge funds and institutions in the first quarter. Hedge funds increased their aggregate 13F shares to approximately 30.3 million from about 22.8 million, a change of roughly 32.6%. Of hedge funds, 33 created new positions, 72 added to an existing position, 43 closed out their holdings, and 49 exited. Institutions increased their aggregate holdings by roughly 4.4% to about 119.2 million from 114.2 million. The long-term 13F metrics between 2016 and 2022 suggest that Etsy’s upward trend has plateaued.

(WhaleWisdom)

Encouraging Multi-year Estimates

Analysts expect to see earnings rise, with increases in growth that could bring earnings to $4.24 per share by December 2023, up from an estimated $3.75 for 2022. Year-over-year estimated increases could also bring revenue to about $2.8 billion by 2023, up from a predicted $2.5 billion in 2022.

Favorable Price Targets

Analysts appeared encouraged by second quarter (Q2) results and raised price targets. Etsy’s gross merchandise sales reached the $3 billion mark expected by Wall Street, and the e-commerce company reported about 6 million new buyers. Analyst Seth Sigman of Guggenheim Securities was optimistic following Q2 results and Q3 guidance and raised the firm’s price target on Etsy to $105 from $101, keeping a Buy rating on shares. Rick Patel of Raymond James Equity Research and Jason Helfstein of Oppenheimer & Co. maintained Outperform ratings on Etsy’s shares. Patel raised the firm’s price target to $115 from $100 and shared that projected growth rates for Etsy support signs of stabilization. Helfstein raised the firm’s price target to $127 from $120, noting increased buyer frequency and Etsy’s improved efficiency over marketplace searches and marketing. BTIG, LLC analyst Marvin Fong kept a Buy rating on Etsy and raised the firm’s price target to $122 from 105.

(WhaleWisdom)

Optimistic Long-term Outlook

Etsy has favorable earnings and revenue estimates from analysts through 2023. While Etsy’s stock price fluctuated in 2022, hedge funds bought the stock amidst a volatile market. Analysts are optimistic about e-commerce revenue and raised price targets. Etsy may be a good buying opportunity for long-term investors.

Microsoft Corp. (MSFT) continues to weather the market downturn and keep pace with the S&P 500. The stock declined by roughly 9% alongside the S&P 500’s similar loss over the past year. Hedge funds have been actively selling Microsoft’s shares, and the stock slid on the WhaleWisdom Heatmap to 14 from 4.

Microsoft is a multinational technology corporation that develops, licenses, and supports computer software, in addition to consumer electronics and personal computers. The company’s primary revenue sources come from three main business lines: Productivity and Business Processes, Intelligent Cloud, and Personal Computing. Microsoft provides systems and software to support businesses and entertainment. It is well known for its Windows operating system, Office software, Azure cloud and artificial intelligence, Xbox Games, and LinkedIn professional network.

Hedge Funds and Institutions Sell

Hedge Funds adjusted their portfolios in the first quarter, and the aggregate 13F shares held decreased to approximately 905.6 million from 917.8 million, a slide of roughly 1.3%. Overall, 33 hedge funds created new positions, 333 added, 40 exited, and 352 reduced their stakes. Institutions lowered their holdings by about 1.8% to 5.2 billion from approximately 5.3 billion. The 13F metrics for funds held rose over the past twenty years, more indicative of long-term investment potential.

Encouraging Multi-year Estimates

Analysts anticipate that earnings will rise, with increases in growth from the fiscal year 2023 to the fiscal year 2024 that could bring earnings to $11.96 per share by June 2024, up from a predicted $10.23 from June 2023. Year-over-year growth is estimated to bring revenue to approximately $220.2 billion by 2023 and $252.5 billion by 2024.

Analysts Cut Price Targets

Many analysts lowered price targets following Microsoft’s fourth quarter results. Analyst J. Derrick Wood of Cowen and Co. lowered the firm’s price target to $320 from $220 and kept an Outperform rating on Microsoft shares. Deutsche Bank analyst Brad Zelnick maintained a Buy rating on Microsoft. While fourth-quarter results were better than expected amid weaker customer demand for personal computers, Zelnick lowered the firm’s price target to $330 from $350. Stifel Institutional analyst Brad Reback kept a Buy rating on shares while reducing the firm’s price target to $300 from $320. Mark Murphy of JPMorgan Chase & Co. lowered the firm’s price target to $305 from $320 and kept an Overweight rating on shares.

Favorable Long-term Outlook

While Microsoft’s growth has slowed, there is optimism for future earnings. Many analysts lowered price targets after fourth-quarter results; however, estimated revenue through 2024 is encouraging, and the technology stock has an impressive performance history. Microsoft is a leader in the industry and presents an investment opportunity for patient investors.

MasterCard, Inc. (MA) continues to navigate market volatility and nip at the heels of the S&P 500. As of July 2022, MasterCard slid to a loss of approximately 8% compared to the S&P 500’s loss of about 7% over the past year. The company advanced on the WhaleWisdom Heatmap in the first quarter of 2022 to a rank of seven from twenty-five.

MasterCard is a technology company in the global payments industry. While known worldwide for its MasterCard credit card brand, the company offers payment solutions that include credit, debit, prepaid, commercial, and payment programs and solutions for consumers and merchants. MasterCard earns revenue primarily from fees paid by financial institutions and switched transaction fees covering authorization. The company earns income based on the number of transactions completed for financial institutions that issue their card and the dollar volume of transactions. During a challenging economic time of high inflation, consumer spending continues to rise, bringing steady revenue to MasterCard.

(WhaleWisdom)

Hedge Funds Sell

Hedge funds were selling the stock in the first quarter of 2022, with the aggregate 13F shares held lowered to approximately 152.99 million from 153.01 million, a change of roughly 0.01%. Of the hedge funds, 45 created new positions, 183 added, 46 exited, and 193 reduced their stakes. Institutions sold and decreased their aggregate holdings by about 1.2% to approximately 726.1 million from 735.1 million.

(WhaleWisdom)

Positive Earnings Estimates

Analysts expect to see earnings increase in 2022 and 2023, bringing earnings per share to $12.65 by December 2023, up from an estimated $10.52 for December 2022. Revenue estimates are also encouraging, with an anticipated rise to approximately $22.2 billion by December 2022 and an estimated revenue of about $25.9 billion by December 2023. The 13F metrics between 2012 and 2022 show that funds held remained reasonably steady, despite MasterCard’s more recent fluctuating stock price.

(WhaleWisdom)

Analysts Pull Price Targets

Analysts have been lowering price targets on MasterCard’s stock. Analyst Darrin Peller of Wolfe Research, LLC lowered the firm’s price target on the stock to $415 from $465 and kept an Outperform rating. Wolfe described MasterCard as a resilient business and believes it started to benefit from inflation. JP Morgan analyst Tien-tsin Huang kept an Outperform rating on MasterCard’s stock and adjusted the firm’s price target to $425 from $430. Analyst David Koning from Baird Capital lowered the firm’s price target on MasterCard to $416 from $470.

Optimistic Outlook Beyond 2022

MasterCard’s 2023 revenue and earnings estimates are encouraging after a rocky performance period to date in 2022. Analysts have lowered price targets, though indications are that the stock will rebound. MasterCard may be an opportunity best suited for patient investors.

Meta Platforms, Inc. (META) stock has underperformed the S&P 500, falling by over 50% compared to the S&P 500’s loss of around 12% over the past year. Meta experienced a slowdown in performance, and hedge funds have been actively selling the stock. The shares had a rank of twelve on the WhaleWisdom Heatmap for the first quarter of 2022.

Meta Platforms is a technology conglomerate that develops products for people to connect and share worldwide. The company was formerly known as Facebook, Inc. and Meta Platforms now operates a family of applications and its Facebook Reality labs. Meta Platforms’ products and services include Facebook, WhatsApp, Instagram, Giphy, and Oculus, among others. The latest stock market correction during a time of high inflation and interest rate hikes has negatively affected Meta Platforms, as it has other technology companies. Through the volatility, Meta Platforms has drawn revenue from its successful digital advertising business and continues to develop the Metaverse, promoted as the future of the internet.

Institutions and Hedge Funds Were Selling

Institutions overall were selling the stock, with the number of aggregate 13F shares decreasing by about 6.9% as of March 31, 2022. Hedge funds trimmed portfolios in the first quarter, reducing claims by roughly 7.8%. Reviewing hedge fund activity, 63 created new positions, 265 added, 110 exited, and 252 decreased their stake. Meta Platforms’ 13F metrics show that the number of hedge funds and institutions has held steady over the past decade. However, Meta’s stock value has faced more volatility over the past two years.

(WhaleWisdom)

Positive Earnings Estimates

Analysts expect to see earnings increase in 2022 and 2023, bringing earnings per share to $13.54 by December 2023, up from an estimated $11.54 for December 2022. Revenue estimates are also encouraging, with an anticipated rise by the end of 2022 to approximately $125 billion and continue to rise to an estimated $143.8 billion by December 2023.

(WhaleWisdom)

Analysts Lower Price Targets

Many analysts lowered price targets after first-quarter earnings were announced. Ronald Josey of Citi kept a Buy rating on shares while reducing the firm’s price target on the company to $270 from $300 amidst increased macroeconomic headwinds. Analyst John Blackledge of Cowen Inc. lowered his firm’s price target to $275 from $300 due to estimates of slowing advertising spending and kept an Outperform rating on the stock. Analyst Laura Martin of Needham & Co. downgraded Meta Platforms to Underperform from Hold, noting the impact of consumer behavior shifts, competitions, regulatory risks, and the company’s investment in the Metaverse as contributing factors.

Favorable Long-term Outlook

Meta Platforms has a history of growth, despite the recent downturn. While hedge funds were selling in this volatile market, analysts recognize that advertising is a continued source of revenue as the company also builds the metaverse. Analysts’ earnings estimates make this stock more attractive, as it will likely rebound and reward patient investors.