November could provide a great entry point for many investors who may have been waiting for confidence-boosting earnings releases. It will also undoubtedly highlight a few running scenarios like what we saw after a few big tech earnings releases in October that fell short of expectations. But let’s focus on the positives this month.
Two markets should be on every investor’s radar. And news about innovation, revenue prospects, and adopting a “the future is now” attitude all have the potential to produce millionaires even with the most average investors if they are willing to. take a long-term approach.
With that in mind, here are three predictions for the November markets.
1. The market opportunity of electric vehicles and autonomous driving technology will increase.
It’s easy to see the long-term growth potential of the automotive market when it comes to electric vehicles (EVs). Car manufacturers love You’re here are an obvious example. But also Charging points, which builds the world’s largest electric vehicle charging network, and my favorite turnaround game, Blackberry, with its increasingly popular QNX operating system for electric vehicles. With earnings results released this month and an initial public offering from electric truck maker Rivian kicks off next week, the hype over electric vehicles is expected to intensify further in November.
Supply chain constraints have raised concerns across the automotive market this year as, without the necessary raw materials and parts, especially semiconductors, unfinished vehicles remain on the back burner for components. In May, a shortfall of 3.9 million vehicles produced this year was expected. That number was revised up in September to 7.7 million, and it is expected to cost automakers around $ 210 billion this year.
But delays present opportunities. Eventually, the supply chain will correct itself, although it may take until early 2023. In these uncertain times, companies that best manage costs, optimize available resources and stay on track for growth will reward Investors.
To take Ford (NYSE: F), for example. The company released its third quarter results on October 27, beating consensus estimates of 9.8% and 89% on quarterly revenue and earnings, respectively. It also raised its full-year revenue forecast by 15% and supplemented its report with the announcement of a reinstated quarterly dividend of $ 0.10 per share effective December 1.
During the earnings call, Ford management said that although supply constraints persist, the third quarter was better than the previous quarter in terms of resource availability. This indicates growth even in the face of supply head winds, fueled by an ongoing revolution in the electric vehicle market. Analysts predict that the electric vehicle market will grow at a compound annual growth rate of 24.3% through 2028.
2. The metaverse will see big gains virtually and in terms of the market
Along with the growth of the hardware world of electric and autonomous vehicles is the digital world of virtual and augmented reality known as the metaverse. The companies that drive the future of the metaverse are in the holdings of the Roundhill Ball Metaverse ETF (NYSEMKT: META).
Our children may know the Metaverse better than we do. It is prominently featured in many video console games such as Fortnite, Minecraft, and Flight simulator, where players create virtual worlds, interacting with each other in these metaverse creations.
Microsoft announced earlier this week plans to expand its Microsoft Teams package by developing metaverse technology for collaboration using 3D avatars that represent meeting participants who are present but prefer not to be in front of the camera. This will eventually coincide or compete with developments in Meta-platforms (formerly known as Facebook) because it renames and expands its offerings in the same direction.
For long-term investors, these trends create an almost lossless scenario. As technological advancements project us into the future, demand will increase and income will be generated. And it will most likely be several companies that will reap the benefits.
Investors looking to take advantage of all of this can be well served by the Roundhill Ball Metaverse ETF. It was launched on June 30 and is rapidly gaining in trading volume. As of August, the ETF had $ 50 million in assets under management (AUM). In September, assets under management doubled to $ 100 million. Today, the number stands at $ 176 million, while the volume of ETF transactions has also increased. The average daily volume is 300,000, while more recently it has seen daily volume exceeding 1 million shares on some days.
Its top 10 titles are an impressive list: Nvidia, Microsoft, Roblox, Meta-platforms, Unity software, Immersion Corp., Autodesk, Limited sea, Amazon, and Tencent Holdings.
I wouldn’t be surprised to see the 20-day average daily volume double by the end of this month, combined with a 10% ETF share price gain for November.
3. Apple is still fresh and its inventory will hit 52 week highs
The smart electric vehicle market and the metaverse intersect in what has become a core business and core portfolio of securities: Apple (NASDAQ: AAPL). According to multiple sources, Apple is developing glasses for the Metaverse, while also working on autonomous driving technology and electric mobility to serve the vehicle market while potentially developing its own self-driving car.
The future of our tech world is upon us, and November could be a crucial entry point for investors in many of these stocks that will generate big gains for years to come.
When Apple came out with a lack of quarterly revenue in late October, management noted that supply constraints had impacted the company at a cost of $ 6 billion. But one thing that seems to continue to get overlooked on these earnings conference calls is that Apple’s revenue continues to grow year on year, whether consensus estimates are right or exaggerated.
The company continues to benefit greatly from iPhone sales, but unit sales are no longer even half of its total revenue. According to Statista, from 2012 to today, Apple has seen iPhone sales drop from 51% of total revenue to 49%. At the same time, service revenues increased from 6.5% to 21%. The gross margin on services is now 60%, while the iPhone’s profit margin is closer to 35%. So, as the business generates more service offerings and innovative technology advances, concerns about supply constraints and missed revenue will subside, and a clearer picture will emerge.
My November prediction is that Apple stock will surpass its 52-week high of $ 157.26 per share.
See the forest through the trees
October was a month of volatility and concern over supply constraints and profit warnings. But when these warnings lead to nervous sales based on short-term assumptions and fear of the unknown, the long-term investor is presented with an opportunity. And if history repeats itself, this month of November will be the stepping stone to that opportunity. The S&P 500 the average return is 1.57% in November, with 29 of the last 40 November being in positive territory, led by 2020 to 11.8%, the best November in history.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.