Corn is 1 to 2 cents weaker starting the day session for the last day of January. After printing new contract lows in yesterday’s overnight trade, the rest of the Tuesday session saw corn futures rally 5 ¾ to 8 ¼ cents and close near the session highs. That resulted...
Wheat is trading back lower by 7 cents across the 3 U.S. classes on Wednesday morning. Wheat futures recovered most to more than all of the Monday drop on a Turnaround Tuesday rally. Chicago futures were up by 10 ¾ to 12 cents on the close. Preliminary open interest for...
A triple digit push left the front month hog futures 0.3% to 1.8% higher, though Feb closed up by just 57 cents for the day. April futures have settled higher on 5 of the last six trading days and are nearing the September 20 high at $86.05. Tuesday’s PM National...
Cotton futures were mostly in the black overnight, though March never traded more than +20 points. The AM prints are within 3 points of UNCH for old crop and are +10 to +13 in new crop. Tuesday’s cotton futures ended the session 17 to 52 points in the black led...
Soybeans are sitting 4 ¾ to 6 cents lower in early Wednesday market action. The overnight session for the March contract was entirely red and had gotten to -12c at the overnight low. Soy complex futures traded briskly higher on Tuesday with 1.3% to 2% gains for the beans, 2%...
What if booming U.S. stock markets are only getting started? After two years of catastrophizing about inflation, credit squeezes, debt, recession and conflict, investors have been blindsided by a serene U.S. expansion and record high stock indexes.
The launch of U.S. exchange-traded funds (ETFs) tracking bitcoin deepens ties between the volatile world of cryptocurrencies and the traditional financial system, potentially creating unforeseen new risks, some experts say.
Sony and Zee disagreed over more than 20 compliance issues, including the Indian firm's failure to dispose of some Russian assets and its $1.4 billion Disney cricket rights deal, before their India merger was scrapped, according to internal emails reviewed by Reuters.
Stanley Black & Decker, Inc. SWK is scheduled to release fourth-quarter 2023 results on Feb 1, before market open.The Zacks Consensus Estimate for Stanley Black’s fourth-quarter earnings has increased a penny in the past 60 da
After two years of catastrophizing about inflation, credit squeezes, debt, recession and conflict, investors have been blindsided by a serene U.S. expansion and record high stock indexes.
Energy producers and traders are weighing the higher prices of longer voyages around the Cape of Good Hope and using larger crude tankers to manage costs and risks, while buyers are demanding discounts to compensate for higher freight and war risk premiums.
CSX (NYSE: CSX) reported its Q4 results last week, with revenues and earnings slightly above the street estimates. However, we believe that CSX stock is appropriately priced, as discussed below. The company reported revenue of $3.7 billion, reflecting a 1% fall from the prior yea
Alaska Air (NYSE: ALK) recently reported its Q4 results, with revenues and earnings above the street estimates. The company reported revenue of $2.6 billion, reflecting a 3% growth from the prior year period and marginally above the $2.5 billion street estimate. Its adjusted earn
The launch of U.S. exchange-traded funds (ETFs) tracking bitcoin deepens ties between the volatile world of cryptocurrencies and the traditional financial system, potentially creating unforeseen new risks, some experts say.
Earnings reports this week from five of the so-called Magnificent Seven stocks are putting a renewed focus on risks from the group’s outsize weighting in the S&P 500, while their collective strength continues pushing U.S. equities to record highs.
Bitcoin (
BTC-USD
), the world’s largest
cryptocurrency, soared to a scorching 155.9% gain in 2023. Much of the gain was driven by excitement over the potential for the approval of
spot Bitcoin ETFs in the United States, which have now launched. But with this catalyst in the rearview mirror, there are still plenty of reasons to believe that Bitcoin could continue to climb higher in the months ahead.
I’m bullish on the top digital asset based on the strong demand these ETFs have generated, the potential for spot Bitcoin ETFs in Hong Kong, and Bitcoin’s upcoming halving in April.
The Bitcoin ETFs Are a Hit
A lot of excitement about spot Bitcoin ETFs was already baked into the asset's price, leading some to call their approval a “buy the rumor, sell the news” event. And to some extent, this was true, as Bitcoin’s price has declined since the ETFs launched.
But the ETFs look like a major hit based on demand so far, indicating strong interest in Bitcoin from both the general public and institutional investors alike. While money has flowed out of the Grayscale Bitcoin Trust (
NYSEARCA:GBTC
) (for a variety of reasons, including its higher fees and the end of its lockup period upon ETF conversion), lower-fee funds from big-name asset managers like BlackRock (
NYSE:BLK
), Fidelity, and ARK Invest are gaining serious traction.
BlackRock’s iShares Bitcoin Trust (
NASDAQ:IBIT
) has accrued over $2 billion in assets under management (AUM) within just a few short weeks of launching, while the Fidelity Wise Origin Bitcoin Trust (
BATS:FBTC
) is fast approaching the $2 billion mark as well after picking up $208 million in inflows on January 29 alone, single-handedly offsetting outflows from GBTC. These are huge numbers for ETFs that have existed for less than three full weeks.
The demand for these ETFs shows that Bitcoin is evolving into a mainstream financial asset. The continued success of these funds should lead to more buying support for Bitcoin as the funds add to their Bitcoin holdings.
Get Ready for Bitcoin ETFs in Hong Kong
Meanwhile, excitement about the potential for a similar rush for spot Bitcoin ETFs is brewing in Hong Kong, one of the world’s top financial centers.
Tencent News reports that The Harvest Fund, a major asset manager, has filed to launch a spot Bitcoin ETF with the Securities and Futures Commission (SFC), Hong Kong’s financial regulator. In December, the SFC announced it would start taking applications for these products, and it rolled out a list of requirements.
Harvest is hoping to get the green light for this ETF after China’s Lunar New Year. The filing could inspire a wave of additional filings, just like it did in the U.S.
Another firm, Venture Smart Financial Group (VSFG), has already unveiled its own plans to launch a spot Bitcoin ETF this quarter, with ambitions of growing to $500 million in AUM by the end of 2024.
Hong Kong news outlet Caixin has previously reported that up to 10 funds could try to launch spot Bitcoin ETFs in Hong Kong.
The launch of these spot Bitcoin ETFs in a major global financial hub (the Hong Kong Stock Exchange is the world’s sixth-largest stock market) could be another significant catalyst for Bitcoin, going forward.
The Halving Approaches
While spot Bitcoin ETFs have dominated the conversation, don’t forget that the Bitcoin halving is coming up in just a few short months. The next Bitcoin halving is anticipated to take place in April.
Bitcoin halving events take place every four years. During this time, the reward that Bitcoin miners receive for producing, or “mining”, a new block of Bitcoin is cut in half, hence the name.
Bitcoin miners like Marathon Digital (
NYSE:MARA
), Riot Platforms (
NASDAQ:RIOT
),
and Bitdeer (
NASDAQ:BTDR
) currently receive 6.25 new Bitcoins for each block they produce, but after the halving, this incentive will be reduced to 3.125 BTC.
The halving slows down Bitcoin’s inflation rate and makes Bitcoin more scarce over time, which should, in turn, increase its value.
Past performance is, of course, no guarantee of future results, but the previous halvings have often preceded significant moves to the upside. During years in which halvings have previously occured, Bitcoin's price has increased by an average of 128%.
Based on these results, it’s easy to get excited about the upcoming halving.
Plenty of Reasons to Remain Bullish
The rampant speculation about the approval of spot Bitcoin ETFs that drove prices higher is now in the rearview mirror, but there are plenty of catalysts moving forward and plenty of reasons to remain bullish. I’m bullish on Bitcoin and believe it can continue to move higher over the next few months based on the early success and demand for the new spot Bitcoin ETFs, the potential for the approval of a new slate of spot Bitcoin ETFs in Hong Kong, one of the world’s most active financial markets, and the upcoming halving in April, which has historically been a positive catalyst for Bitcoin prices.
Disclosure
March NY world sugar #11 (SBH24 ) on Tuesday closed up +0.38 (+1.61%), and March London ICE white sugar #5 (SWH24 ) closed up +0.60 (+0.09%). Sugar prices on Tuesday recovered from early losses and closed moderately higher as a weaker dollar sparked short covering in sugar futures after three...
A new actively managed growth ETF called the CastleArk Large Growth ETF (
NYSEARCA:CARK
) just launched in December. This new ETF looks promising based on its strong, concentrated portfolio of holdings, which feature Outperform-rated TipRanks Smart Scores, implying that the ETF can beat the market. Based on these factors, I'm bullish on CARK.
What is the CARK ETF’s Strategy?
CARK was launched by CastleArk in December and has accrued $324.8 million in assets under management (AUM) so far. CastleArk is new to the ETF world but has extensive experience in separately managed accounts and collective trusts. Its large-cap growth strategy for these vehicles, called CastleArk U.S. Large Cap Growth, has delivered an annualized 14.2% return, net of fees, over the past decade.
CARK is an actively-managed ETF in the same vein as this large-cap growth strategy. CARK seeks “long-term capital appreciation through a concentrated growth portfolio of predominantly U.S companies having market capitalizations greater than $4 billion at time of purchase.”
After starting with an initial investment universe of 1,000 stocks, the portfolio management team seeks to create a highly concentrated portfolio of 20-30 stocks. CastleArk says, “The investment team seeks to invest in businesses possessing a superior franchise, potentially making them more immune to disruption and possibly allowing them to generate sustainable growth, high profitability, and abundant free cash flow.”
While many growth funds look to invest in "disruptors," CARK's portfolio managers favor large and established firms and believe that the market often overestimates the potential of new, early-stage incumbents to disrupt these established leaders.
The key drivers that CARK is looking for in the businesses it invests in are profitability, industry structure, and free cash flow generation. It believes that these factors play a bigger role than revenue growth in driving medium- to long-term performance. CARK also prizes firms with leading market positions that possess characteristics including robust brand loyalty, proprietary technology and patents, high switching costs, logistical advantages, substantial capital requirements, economies of scale, network effects, and more.
Essentially, CARK isn't going to invest in every hot
growth stock that comes along that may be a flash in the pan, but it will invest heavily in established market leaders that demonstrate sustainable, profitable growth over the long term, such as Microsoft (
NASDAQ:MSFT
) and Nvidia (
NASDAQ:NVDA
), which we'll delve into further in the portfolio section.
Portfolio Management Team
The portfolio is managed by an experienced team of three investment managers. This includes Jerome Castellini, the co-founder and co-CIO of CastleArk, who has over 40 years of investment experience and has been with the firm since 1999; CastleArk co-CIO Dan Becker, CFA, who has over 30 years of investment experience; and Quentin Ostrowski, CFA, who has over 35 years of investment experience and more than 20 years at CastleArk.
A Portfolio of Top Notch Smart Score Stocks
CARK holds just 25 stocks, and its top 10 holdings account for nearly two-thirds of the fund, so this is not a very diversified ETF. However, in fairness to CARK, diversification is not really the point of the fund, as it is a concentrated, actively-managed bet on large growth leaders. Below is an overview of
CARK’s top 10 holdings using TipRanks’ holdings tool. One thing you’ll immediately note about CARK’s holdings is that they collectively feature fantastic Smart Scores across the board.
The
Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. The score is data-driven and does not involve any human intervention.
Six of the eight market factors that are incorporated into the Smart Score calculation are unique to TipRanks. The factors include Wall Street analyst ratings, corporate insider transactions, financial blogger opinions, individual investor sentiment, news sentiment, hedge fund manager activity, technicals, and fundamentals. A score of 8 or above is equivalent to an Outperform rating.
Remarkably, all 10 of CARK’s top 10 holdings feature Outperform-equivalent Smart Scores of 8 or higher. Alphabet (
NASDAQ:GOOGL
), Meta Platforms (
NASDAQ:META
), Dexcom (
NASDAQ:DXCM
), and Eli Lilly (
NYSE:LLY
) all feature 'Perfect 10' Smart Scores, while Microsoft, Nvidia, Amazon (
NASDAQ:AMZN
), and Mastercard (
NYSE:MA
) all feature Smart Scores of 9.
While none of these
mega-cap growth names are exactly what one would call diamonds in the rough, CARK features some interesting, less ubiquitous names (as far as large-cap stocks go) outside of its top 10 holdings.
These include stocks such as Lam Research (
NASDAQ:LRCX
), ASML Holding N.V. (
NASDAQ:ASML
), and Applied Materials (
NASDAQ:AMAT
), all of which have strong moats as makers of
semiconductor manufacturing equipment, and all of which boast Outperform Smart Scores as well. Lam Research and ASML both enjoy 10 out of 10 Smart Scores, while Applied Materials scores an 8.
Other strong holdings include medical device makers Stryker Corp. (
NYSE:SYK
) and Intuitive Surgical (
NASDAQ:ISRG
), which feature Smart Scores of 9 and 10, respectively.
CARK itself features a venerable ETF Smart Score of 9. This puts CARK in rare company as one of just 14 ETFs out of the 3,300+ in
TipRanks’ ETF database with an ETF Smart Score of 9 or better.
Is CARK Stock a Buy, According to Analysts?
Turning to Wall Street, CARK earns a Moderate Buy consensus rating based on 25 Buys, one Holds, and zero Sell ratings assigned in the past three months. The
average CARK stock price target of $33.30 implies 9.7% upside potential.
What Is CARK's Expense Ratio?
CARK has an expense ratio of 0.54%. While this isn’t great, it isn’t out of line with other actively managed ETFs, and many are more expensive than CARK. This expense ratio means an investor will pay $54 in fees annually on a $10,000 investment in CARK. Assuming the fund maintains this expense ratio moving forward and returns 5% per year going forward, an individual investing $10,000 into the fund would pay $173 in fees over a three-year time frame.
Investor Takeaway
CARK is new, so it hasn’t established a track record of performance yet, which will be important to watch over time. However, it looks promising, and I’m bullish on the concentrated ETF based on its strong portfolio of holdings, which all feature top-notch Smart Scores.
Disclosure
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