Tencent punished, Microsoft boosted, McDonald's boomed. Other US companies have presented their figures in the past week. In China, meanwhile, there was a huge crash!
However, the delta variation as well as rising inflation concerns are clouding the outlook a bit.
As we do every week, we let our community decide which stocks they think are relevant or not. Some will sound familiar, while others may be a hidden gem.
P.S. and as always, please remember that investing comes with risk, especially at times like now when we are seeing increased volatility and an abundance of liquidity in the markets.
China punishes tech giants
Tencent stock has taken a beating in the recent past. The reason for this was, among other things, new regulations and laws aimed at the issue of data security and privacy. In order to comply with the new requirements, Tencent had to install a new update that temporarily suspended new registrations. However, these should be possible again since the beginning of August.
Another reason for the share price slide was China's planned ban on commercial student tutoring. Besides Tencent, Alibaba and Netease were also indirectly affected. In addition, rumors of a restriction on U.S. investments in Hong Kong and China continue to weigh on investor sentiment.
However, there is also positive news. The group's day-to-day business seems to be in good health. The latest mobile gaming figures also confirm this. For example, the Group was able to take first and second place in the mobile games industry with its games "Honor of Kings" and "PUBG Mobile". At the same time, the two games claimed a third of the top 10 sales.
Soon to be crowned king?
The pharmaceutical company, in which star investor Warren Buffett is also invested, published its Q2 report last Friday. The company raked in revenue of $13.96 billion, beating average analyst expectations of $13.63 billion. The biggest hurdle Abbvie faces going forward is the patent loss of its Humira drug in 2023. Humira currently accounts for about 60% of total sales.
To offset the loss of the patent, Abbvie is introducing new drugs. For example, the drug Rinvoq is expected to bring in $8 billion by 2025. At the moment it is only 681 million. In addition, the group has bought the company Allergan. This squeezed the company's profits. However, Abbvie expects future high growth from this acquisition.
The stock is considered a darling among dividend investors and will most likely rise to the rank of Dividend King next year.
Boeing also published its figures last week and made its first profit in 6 quarters. This amounted to 567 million US dollars. Also the turnover of the American aerospace company increased and was with 17 billion dollars far higher than in the year before. In addition, the operating profit of the defense and space division also increased.
The stock was punished by flight bans and a flattened order book due to the Corona pandemic. Production shortcomings and the 737-Max debacle also kept catching up with the group.
The company also planned a space flight of the Starliner capsule in cooperation with NASA. The destination was to be the International Space Station (ISS). However, the Russian capsule Nauka shifted the ISS from its expected position during docking, so the flight of the Starliner capsule was delayed.
Ronald McDonald ft. BTS
The fast food company also opened its books. The company's sales in the second quarter were $5.89 billion. On a yearly basis, the group actually improved by 41% compared to the previous year. Profit rose to $2.22 billion, which translates to $2.95 per share. However, the stock experienced a sell-off despite the good figures.
The group continues to benefit from the high demand for "comfort food", which has strengthened during the Corona year. According to the Group, the best seller was the Crispy Chicken Sandwich launched in February. In addition, the advertising campaign with Korean pop band BTS is proving successful.
According to McDonalds CEO Chris Kempczinski, 70% of all McDonalds stores in the U.S. have already reopened. If the Delta variant does not cause another lockdown, he sees a 100% opening rate by Labor Day (September 6).
On cloud 9?
As the last candidate of the community picks, Microsoft also let itself be looked at in the books. The Redmont-based company thus manifested its position in the club of $2 trillion companies led by Apple. Quarterly revenues were $46.15 billion. In comparison, the previous year's revenues were $38.03 billion. The convincing figures prompted analysts to revise their forecasts upward, in some cases drastically.
CEO Nadella expressed satisfaction with the results. For example, the LinkedIn, Gaming and Security sectors each brought in more than $10 billion in annual revenue over the last three years.
The company still has its sights set on knocking Amazon off the cloud throne. To that end, it is diligently expanding into the emerging markets of India and China. Thus, the plan of a new participation in the Indian hotel chain Oyo was also announced. The aim is to incorporate the cloud service into the company. The strong demand of the cloud was also driven by the home office trend, as employers needed to find a way to enable remote working. In addition, many companies' IT budgets are steadily increasing, which will play into Microsoft's hands.