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3 Tech Stocks With More Potential Than Any Cryptocurrency

3 years 2 months ago
It wasn't too long ago that cryptocurrencies were one of the hottest investments, with the media filled with stories of people getting rich seemingly overnight. However, excitement in the industry has cooled considerably. Investors have become wary of its volatility, with prices

3 Tech Stocks With More Potential Than Any Cryptocurrency

3 years 2 months ago
It wasn't too long ago that cryptocurrencies were one of the hottest investments, with the media filled with stories of people getting rich seemingly overnight. However, excitement in the industry has cooled considerably. Investors have become wary of its volatility, with prices

FTHI ETF: Why Its 8%+ Dividend Yield May Not be Good Enough

3 years 2 months ago
Investors are increasingly interested in dividend ETFs with high dividend yields that pay monthly, and the First Trust BuyWrite Income ETF ( NASDAQ:FTHI) is one such option, with a monthly payout and an 8.5% dividend yield. However, FTHI may not be the best choice for income investors. Let's see why. What is FTHI ETF’s Strategy? According to First Trust, FTHI looks to generate income for its investors “by investing in equity securities listed on U.S. exchanges of all market capitalizations and by utilizing an ‘option strategy’ consisting of writing (selling) U.S. exchange-traded covered call options on the Standard & Poor's 500 Index (the "Index").” This “option strategy” entails FTHI writing “U.S. exchange-traded covered call options on the Index in order to seek additional cash flow in the form of premiums on the options that may be distributed to shareholders on a monthly basis.” This strategy is a great way to generate income, but investors should be aware that there is a tradeoff. By selling these covered calls, FTHI potentially leaves upside on the table. Selling covered calls can cap the upside from capital appreciation because if the price of the underlying stock rises beyond the strike price, FTHI investors forgo these additional gains. To its credit, fund sponsor First Trust makes this clear right from the get-go, stating that “the fund’s primary investment objective is to provide current income,” while capital appreciation is its “secondary objective.”  FTHI's Portfolio FTHI has a diverse and well-rounded portfolio. The income-oriented ETF holds 225 positions, and its top 10 holdings account for just 30.6% of the fund. You can check out an overview of FTHI’s top 10 holdings below using TipRanks’ holdings tool. As you can see, the fund’s holdings don’t look all that different from your typical broad market or S&P 500 fund ( SPX ), with mega-cap stocks like Apple ( NASDAQ:AAPL ), Microsoft ( NASDAQ:MSFT ), Amazon ( NASDAQ:AMZN ), Nvidia ( NASDAQ:NVDA ) and Alphabet ( NASDAQ:GOOG ) ( NASDAQ:GOOGL ) populating the top 10.  Is FTHI Stock a Buy, According to Analysts?  Turning to Wall Street, FTHI has a Moderate Buy consensus rating, as 174 of analyst ratings are Buys, 49 are Holds, and three are Sells. At $23.95, the average FTHI stock price target implies 16.10% upside potential. An Abundance of Alternatives FTHI’s main drawback is its steep expense ratio of 0.85%. This is an actively-managed ETF that runs a fairly complex strategy, so it’s understandable that the fees will be more expensive than those of a typical index fund.  However, FTHI’s 0.85% expense ratio is also considerably higher than many of its actively-managed peers that employ similar strategies, pay dividends on a monthly basis, and sport high dividend yields. For example, the JPMorgan Equity Premium Income ETF ( NYSEARCA:JEPI) , the largest and most popular ETF in this space, has a much lower expense ratio of 0.35%. Similarly, the JPMorgan Nasdaq Equity Premium Income ETF ( NASDAQ:JEPQ) also has an expense ratio of 0.35%. Even the NEOS S&P 500 High Income ETF ( BATS:SPYI) , a newer entrant into the space, which itself has a relatively high expense ratio of 0.68%, is comparatively cheaper than FTHI.  On the surface, the 0.85% expense ratio means that investors pay $85 in fees and expenses on a $10,000 investment in year one, which might not sound too bad in and of itself. But these expenses compound over time. Over the course of 10 years, assuming that the fee stays where it is now and that the fund returns 5% per year, this same investor would pay an astounding $1,049 in fees or more than one-tenth of their initial investment. For comparison, an investor in JEPI or JEPQ would pay a far more reasonable $443 in fees over the course of 10 years. Furthermore, in addition to having lower expense ratios, these three alternatives currently feature higher yields than FTHI’s current dividend yield of 8.5%. JEPI's dividend yield is 10.2%, while JEPQ currently yields 12%. SPYI’s dividend yield stands at 10.9%. Below, you’ll find a comparison of FTHI and these alternatives from TipRanks’ ETF Comparison Tool, which allows investors to compare up to 20 ETFs based on a wide variety of criteria.  Past Performance FTHI's performance in recent years has been decent, but it hasn't really done enough to justify its high fees. From the beginning of the year to the end of July, the fund's total return was a solid 15.1%. Over the past year, FTHI's total return was 9.5%, and its three-year annualized return was 9.2%, which are respectable returns. However, over the longer term, FTHI's performance looks subpar, with a five-year annualized total return of just 4.5%. Keep in mind that these total returns take FTHI's dividend payments into account, so the performance has been pretty mediocre even with the dividend. It's difficult to compare FTHI to its aforementioned peers, as JEPQ and SPYI are fairly new ETFs, and JEPI has only been around for three years, but we can still compare it to JEPI over that time frame. FTHI leads JEPI both year-to-date and over the past year (with respective total returns of 15.1% and 9.5% versus JEPI's 7.3% and 8.1%) but JEPI beats FTHI over a three-year time frame, with a superior total return of 11.5% versus FTHI's 9.2%. Furthermore, FTHI has underperformed the broader market over time. The Vanguard S&P 500 ETF ( NYSEARCA:VOO) boasts one-, three- and five-year annualized returns of 12.9%, 13.7%, and 12.2%, respectively, beating FTHI over each time frame. The Takeaway  FTHI’s 8.5% dividend yield and monthly payout schedule are enticing, and the ETF offers investors ample diversification. However, the fund's performance over time doesn't do enough to justify its high fees. Additionally, for investors interested in monthly payouts and high yields, there are plenty of ETFs out there with similar strategies that feature both higher dividend yields and lower expense ratios, meaning that investors are likely better off with these alternatives.  Disclosure

These 3 Tech Stocks Are Building the Future

3 years 2 months ago
COVID-19 lockdowns in 2020 and 2021 forced countless businesses to move their work online, increasing demand for online services. Yet, even as the world opens up again, many companies have retained various aspects of working online.

DBMF Holds Steady While Tech, Agg Slip in August

3 years 2 months ago
The Nasdaq Composite closed down for the week in its third straight week of losses as broad equities slipped as well. Investors looking for portfolio diversifiers and stabilizers as tech and equities slide and yields rise in bonds in August should consider the iMGP DBi Managed Futures Strategy ETF (DBMF), given the fund’s performance month-to-date. [...] Read more at ETFtrends.com.

1 Top Tech Stock to Buy During a Recession

3 years 2 months ago
In order to curb soaring inflation, the Federal Reserve embarked on an aggressive path of raising interest rates that started in early 2022. The pace of rate hikes has been the fastest in history, and some market participants are still worried that a recession could be on the hor

Netflix Stock (NASDAQ:NFLX): The Growth Phase is Over. Time to Sell?

3 years 2 months ago
Netflix's ( NASDAQ:NFLX ) growth phase has undoubtedly come to an end. Not too long ago, Netflix stood out as one of Nasdaq's ( NDX ) fastest-growing companies. Yet, the substantial surge in competition in recent years has flooded the SVOD/streaming sector, halting Netflix's once-unbridled growth trajectory. Despite the now-oversaturated SVOD industry looking increasingly worse, NFLX stock has rallied more than 67% over the past year. This could be a strong selling opportunity. Thus, I am bearish on NFLX stock. Netflix's Growth Era is Likely Over Netflix's era of growth was truly spectacular, with the company's competitive offering disrupting the much less convenient and value-for-money cable TV. Impressively, its compound annual revenue growth rate (CAGR) between 2010 and 2020 was 20.7% -- a massive rate to sustain over such a prolonged period. Even in subsequent years, particularly during the COVID-19 pandemic, Netflix grew swiftly, capitalizing on the constraints imposed on out-of-home entertainment and solidifying its status as an essential service. Sadly, these days are now behind us. Not only has Netflix already captured a massive chunk of its addressable market, but the surge in competition over the past few years has completely blocked its growth prospects. Giants like Apple ( NASDAQ:AAPL ), Amazon ( NASDAQ:AMZN ), AT&T ( NYSE:T ), and Comcast ( NASDAQ: CMCSA ), alongside numerous smaller players, have penetrated the market, prompting consumers to subscribe to multiple services. In the meantime, all services have been hiking their prices rapidly. How is this different from cable TV, excluding the on-demand element? Therefore, it's no wonder that Netflix has an extremely hard time growing in the current market landscape. The consistent deceleration in revenue growth is proof of this. In its most recent Q2-2023 results, revenue growth came in at just 2.7%. This compares with 8.6%, 19.4%, 24.9%, and 26.0% achieved in equivalent periods of 2022, 2021, 2020, and 2019 respectively. The consistent year-to-year deceleration in revenue growth is unmistakable. Based on the current trajectory, it looks like Netflix is likely to experience declining revenues sooner than later. Don't forget that Disney+'s ( NYSE:DIS ) subscribers have been declining as well, as they fell by 12 million to 146.1 million quarter-over-quarter, according to Disney's Fiscal Q3 report, coming in way below the forecast of 154.8 million. This clearly illustrates the ongoing market havoc in the streaming industry. Netflix may prove more resilient due to its long-standing brand and staple-like nature, but for how long? Extended Rally Offers Opportunity for an Exit Given the less-than-rosy outlook for the streaming industry, it might seem logical for investors to be hastily divesting from Netflix stock. While shares are certainly trading well below their peak pandemic levels, they have still managed to record an impressive rally of more than 70% over the past year. This resurgence likely owes itself to the Nasdaq's broader recovery during this period, alongside the fact that investors might be gravitating toward the one profitable streaming company among the junk. This paradoxical event may offer investors a great opportunity to exit the stock, especially those who made some series gains during this rally. With growth having essentially ceased while the stock's valuation has once again ascended to astronomical heights, convincing reasons are not hard to come by. In particular, Netflix stock is currently trading at nearly 36 times this year's projected earnings. This multiple is utterly unjustifiable, with revenue growth down the drain and interest rates rising. One could argue that investors are betting on earnings growth, but ultimately, this is highly speculative. If anything, a halt in revenue growth could compress margins against rising costs, leaving shareholders with a stagnated company that trades at a very premium valuation. This sounds like the perfect formula for a significant share price plunge. It certainly doesn't like the place I would want to have my money invested. Is NFLX Stock a Buy, According to Analysts? Wall Street seems to have a different view on Netflix, as the stock has attracted a Moderate Buy consensus rating based on 19 Buys, 13 Holds, and two Sells assigned in the past three months. At $466.39, the  average Netflix stock forecast implies 15.1% upside potential. If you’re wondering which analyst you should follow if you want to buy and sell NFLX stock, the most accurate analyst covering the stock (on a one-year timeframe) is  Jason Helfstein from Oppenheimer, with an average return of 32.07% per rating and an 88% success rate. Click on the image below to learn more. The Takeaway Netflix's meteoric growth phase has undoubtedly concluded, marked by surging competition and a decelerating revenue trajectory. The streaming landscape, once ripe for disruption, has transformed into a crowded arena where established giants and nimble newcomers vie for subscribers' attention and dollars. While NFLX stock has displayed an unexpected rally, the underlying reality remains clear: the industry shift and valuation metrics are compelling signals for a prudent exit. Disclosure
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