🤖📈 Top Trade Ideas for June 27

Including an undervalued bank with a hefty dividend, a short of Coinbase, and more

Author

Connor Van Ooyen
June 27, 2023

👋 Hello!

Our AI read and summarized 181 articles today from all over the internet to find the best trade ideas to help you make more money in the stock market.

What you’ll find in this email:

  • 🏦 An undervalued bank with a hefty dividend

  • 🐻 The bearish v bullish case for Shell

  • 📱 [Premium] Investment manager goes short on Coinbase

  • 🤖📈🚗📱 Much more…

*If you missed yesterday’s email, you can read it here

💰 Today’s Featured Trade Ideas

The three best trade ideas our AI tool found today. Make sure to vote on your favorite!

🥇 Amazon: Weighing The Long-Term Generative AI Opportunity Against Near-Term Headwinds (link)

Ticker: $AMZN | Current Price: $128.54 | Price Target: $169 (+32%)

Click here to read the full article.

🤖 AI | ☁️ Cloud | 📈 Long Idea

The article discusses the potential for Amazon's AWS to benefit from the rise of generative AI solutions and LLM solutions. Despite being slightly behind Azure and GCP, AWS is able to compete meaningfully due to its large market share, high switching cost, commoditization of LLMs, and AI chip advantage. The author predicts that AWS will see acceleration in the second half of 2023, particularly in the fourth quarter when its generative AI products and solutions like Bedrock will be rolled out generally. Near-term concerns around AWS continue to be about cloud spend optimization, but the author believes this is temporary and industry-wide. The retail segment is holding up well despite macroeconomic headwinds and driving near-term operating margin upside for the overall business until AWS demand stabilizes. The author is bullish on Amazon's retail segment and expects significant margin expansion from North America Retail going forward as efficiency has improved. The author's 1-year price target for Amazon is $169, meaning that there is a 35% upside potential

🥈 Shell: Don't Fear Declining Oil Prices (link)

Ticker: $SHEL | Current Price: $60.14 | Price Target: $144 (+140%)

Click here to read the full article.

🛢️ Oil/Gas | ⚡️ Energy | 📈 Long Idea

The author of the text disagrees with bearish theses on Shell and believes that the company has ample oil reserves, a promising renewables business, and favorable economics that have led to total returns of 11% per annum since 1984. Shell is moving away from being a cyclical commodity company and is involved in LNG, oil & gas, chemicals, biofuels, EV charging, retail stores, carbon capture, green hydrogen, and electric utilities. The author believes that Shell's normalized earnings power is around $21 billion, and the company deserves a higher multiple. Shell is a global leader in electric vehicle charging and has a competitive advantage with its world-leading network of gas stations. Increasing sums of money are flowing into Shell's renewables segment, and the company plans to spend $10-15 billion on low-carbon energy solutions between now and 2025. Shell plans to increase the Q2 dividend by 15%, buy back $5 billion of stock by year-end, and distribute 30-40% of operating cash flow year-in and year-out, making it a shareholder-friendly company. The author projects total returns of 13% per annum for Shell in the decade ahead, with a year 10 price target of $144. The author maintains a "Strong Buy" rating on Shell.

🥉 M&T Bank: 4.5% Yield, Solid Deposit Franchise, 18% Discount To BV (link)

Ticker: $MTB | Current Price: $118 | Price Target: N/A

Click here to read the full article.

🏦 Banking | 💰 Dividend | 🏷️ Undervalued | 📈 Long Idea

M&T Bank is a well-run regional financial institution with an expansive branch footprint in the Mid-Atlantic and Northeastern regions. The bank has suffered from increased risk-aversion in the regional banking market in the first-quarter, which creates an opportunity for investors. M&T Bank is a promising rebound candidate in the regional banking market, largely because the bank has not seen atypical deposit outflows in the first-quarter, has very limited exposure to office real estate, and the bank’s large discount to book value implies downside protection. M&T Bank declared a stable dividend for the second-quarter in May which means investors are getting paid a 4.5% yield. The bank has suffered a 22-39% decline in market cap year-to-date and is trading at a price-to-book ratio of 0.82X, which is the second-lowest in the industry group. M&T Bank is an attractive investment for investors looking for a decent dividend yield with appreciation potential if regional banking market conditions improve.

Which featured trade idea was the most compelling?

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Yesterday’s Poll Results (link):

🟩🟩🟩⬜️⬜️ - TSM Semiconductor ($TSM) [54%]

🟨🟨⬜️⬜️⬜️ - Duolingo ($DUOL) [27%]

🟥⬜️⬜️⬜️⬜️ - Adobe ($ADBE) [20%]

Your Thoughts:

  • 🤖 br*** ($ADBE): because the FireFly generative AI tool looks like it could be on the cusp of major adoption for content creators looking for a state-of-the-art image generation tool.

  • jer*** ($TSM): is the same play as NVDA but way cheaper

  • emo*** ($TSM): With a semiconductor shortage a proxy is necessary and TSM fits.

How were today's trades?

Your feedback is super helpful!

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🐻 Bearish v 🐂 Bullish

Company: Shell ($SHEL)

Bullish Reasons:

  1. Investments in Renewable Energy: Shell is making significant investments in renewable energy, which could provide growth opportunities as the world shifts towards cleaner energy sources

  2. Cost Reduction Initiatives: Shell is implementing cost reduction initiatives, which could help improve the company's profitability and financial performance

  3. Strong Cash Flow: Shell has a strong cash flow position, which could provide the company with the financial flexibility to invest in growth opportunities and return capital to shareholders

Bearish Reasons:

  1. Environmental Regulations: Shell is subject to stringent environmental regulations, which could result in increased compliance costs and potential liabilities. The company has recently faced a $1.5 billion environmental fine, which could impact its financial performance

  2. Debt Levels: Shell's total debt has increased by 20% compared to the same period last year, which could put pressure on the company's financial health if not managed effectively

  3. Uncertainty in Renewable Strategy: The overall uncertainty of Shell's renewable strategy and industry keeps it from being considered moatworthy at this time. As more players enter the space, returns are likely to come under pressure

Are you bearish or bullish on $SHEL

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Yesterday’s Results for $TSM (link):

🟩🟩🟩⬜️⬜️ 🐂 Bullish (70%)

🟨🟨⬜️⬜️⬜️ 🐻 Bearish (30%)

Your Thoughts:

  • 🐻 ry***: I don’t see a strong buy until the stock stops reacting to the rising interest rates.

  • 🐂 sil***: The most important semiconductor player in the world

💰📈 Winning Trade from a Previous Email

NewtekOne: The Moat And The Plan (link)

Ticker: $NEWT

Date Published: 2023-05-12

Return: +45% ($10.96 → $15.92)

📈 Premium Trade Ideas

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