Author: tgyawali

Buy ASML Holdings (ASML) : Stock Recommendations

Did you know that you’re able to read this article on your computer or mobile phone thanks, in part, to ASML? This is because the integrated circuit, a critical component of your device, was built by a machine that was probably built by ASML. ASML is a major global supplier of wafer fabrication equipment.

The first integrated circuit (IC) was built in the 1950s. It was a seminal moment that allowed the development of the IT industry as we know it today. Since then, scientists and engineers have made steady progress making the components of the IC smaller, more reliable, and better able to compute. It is due to these developments that everyday people like you and I can afford a computer, carry it in our pocket, and store more information more cheaply than ever before.

ASML has prospered with this industry. In 2020 it earned 14 billion euros in revenue and 4 billion euros in operating profit. Its largest customers are the world’s major foundries, primarily Taiwan Semiconductor Manufacturing (NYSE: TSM), Samsung, and Intel (NASDAQ: INTC). Its revenue comes from two sources: selling machines that make ICs and servicing those machines.

The demand for constantly improving ICs requires that ASML produce machines capable of building them. The next generation of machines will rely on technology called extreme ultraviolet (EUV) lithography, which allows the creation of even smaller components on the IC. We expect this to provide a boost to ASML’s sales as foundries upgrade their equipment over the next few years. In fact, ASML expects total net sales of between 3.9 billion euros and 4.1 billion euros this quarter (Q1 2021), a 60% increase from the prior-year period. This is anticipated to be an unusually good quarter — for the whole of 2021, the company predicts revenue growth of 12%.

ASML has a strong competitive moat due to its technological expertise, global installed base of machines, relationships with customers, and abundant income to support future R&D efforts. Macroeconomic trends are in its favor too, as humanity makes more and more devices “smarter.” These trends require ICs and ASML.

Must know things before investing $1 in stocks?

These are probably a few things you must have either read somewhere or heard from someone you know in the past 1-2 years

  • I made a lot of money in stocks.

  • My friend asked me to put all my money in stock, I am totally broke.

  • It will be cool to get rich and retire – looks like i need to invest in crypto.

  • You know, when this covid lockdown is over, stocks like Gamestop or AMC will make us rich. Put all the money there.

  • I put all my money in big tech companies like Amazon, Google, Apple s safe investment

  • No, I don’t want to take any risk. I put everything in Index funds. Even Warren Buffet says no one can beat the S & P index.

I don’t think any of the above statements are completely accurate or completely false. The main problem is that most of the people do not know the basics of investing and yet, all of them expect to grow their money very quickly. Well, in very simple and plain terms, that is known as “Being Greedy!”.  How can someone buy something without knowing or understanding what he or she is buying. When we buy something, don’t we ask simple questions like:

  • What does it do?

  • Is there a need to use it?

  • Does the price seem expensive?

  • How long does it last?

  • Do other people use it?

  • Is it a seasonal thing? E.g. is it relevant only during a particular season or holidays?

 And so on

 Unlike buying something from a store, investing is buying a piece of a business. Anyone who has an account (often called a brokerage account) can buy stocks of a publicly traded company. This means the individual just invested in a business. If the business (the company) does well, many more people would be interested to be part of and the stock price goes higher. If business does not do well, people do not want to be part of the business and sell the stock, then stock price goes down. Please keep in mind that stock price goes up and down on a daily basis based on how many buyers and sellers there are. Many times, even though the company does well, people may not be interested in the company because of various reasons such as the company may not have long term prospects, it may be seasonal, it may have too much debt etc. Based on this very first newsletter on this topic, we recommend that you consider the following before putting any money in stocks:

  • Make sure that you are investing (not trading, which is like gambling and mostly driven by luck). This means, you must know about the company, what it does and its products and services, leadership etc.

  • Business model – How does the company make money?

  • Stock fundamentals – Is this company already (or near future) profitable and returning money to investors? How does this compare with other companies in the same industry?

    • Price to sales

    • Price to Earning

    • Price to bookings

    • Market cap

    • Debt

    • Growth rate Y/Y

    • Growth, value, dividend, Spec

  • Long term prospects – Is this going to be a good business long term or not?

  • Trend and momentum – How much volume stock has been bought or sold? Is it going into a positive trend? 

  • Volatility – How much stock has been up and down recently and this past year? What are 52 weeks high and low?

  • Risks – Are there any major red flags in a company’s business from any publicly available information?

  • Overall conviction – Do you strongly believe this company’s business will do well in future without any major red flags?

 Yes, this is a lot of information to digest and it can be very stressful to put your money on something that you don’t understand well. While there are many financial advisors and investment managers to do this for you or guide you through investment decisions, they charge you a lot of money, as a percentage of your investment irrespective of your profit or loss. So, we would like to take a different approach by equipping you with the information that you need to make your own decision. We will develop a training course with a nominal fee in the future with all the useful information you need to make critical investment decisions. Until then, we will continue to send you these free newsletters. Hope you are able to get as much information from these and grow your wealth! 

Well, you might be thinking – can you then suggest what is a good company to invest in now? 

Here is the stock that you can consider investing in now.

Amazon (Ticker: AMZN)

What is Amazon? 

Products and Services

E-commerce and Cloud computing

 
Business model: Collect revenue per unit

 Stock fundamentals: Good

Long term prospects : Good
Advertising business

Trend and momentum: Good 

Volatility: Low

 
Conviction : Very High

Very important tip: if you are a beginner and just encouraged to try, you will probably invest into 1-2 companies which is very risky. It is entirely possible that you may lose a considerable amount of money even in the best companies short term because stock market depends on the overall economy such as employment data, inflation, political stability, new economic policies etc. So, we recommend that you invest in at least 5 companies that have good business and stock fundamentals, with less volatility and highest conviction.

Children can practice sports early

Most of us (adults) wonder how some kids can play sports very well in early age. Well, some of them may be gifted ones but for most of them, it is all about practice. It is important to understand that it may not be easy to introduce children to every sport and we do not know which sport your child would be interested to play for long. We all know this by giving them exposure to as many sports we can and encouraging them everyday.

Buy Square (SQ) : Stock Recommendations

Buy Now (March 2021)
Square (SQ)

Company overview
Many people recognize the company Square with a small credit card reader attached to a mobile phone. Square’s mission is to allow businesses to accept any form of payment a customer wants to use, and thanks to its array of user-friendly card readers, it’s become one of the top payment processing players in less than a decade. Square’s long term vision is much further than that. It wants to enable every small business to thrive. This company is led by founder and CEO Jack Dorsey, who is also the CEO of other innovative company Twitter.

Stock fundamentals
Square’s forward PE ratio is 190 and market cap is $110B.  Square’s stock valuation is quite rich. Its stock price has come down a lot this past week. It is a high growth company and these companies are valued higher than typical companies with slower growth. Square also has added bitcoin asset in its balance sheet and allows its customers to transact crypto assets through its popular mobile application CashApp.

Long term potential
Square is a disrupting company. Starting with a portable credit card reader, it has just announced the opening of its first physical bank. So, we can see this company being one of the largest banks in future. Though short term fundamentals are also looking good, stock can be more volatile (go up and down) in the short term. However, long term potential for Square looks very promising. 

Why buy now?
Square has been delivering robust results every quarter for the past two years and analysts predict that it will continue to deliver consistently in future. Most of these companies have stock priced for much long term growth. Stock price, though a little pricey, is not very expensive when considering where it will be after five years. Also, price has come down 20% from its recent high. Square’s business model has proved during the COVID crisis that it has potential to grow during adverse economic conditions as well. If you do not already have this in your list, we strongly recommend to add this now. 

In 5-10 years, Square has a potential to return your investment at least 2-3 times.  

Risks and when to sell?
Fintech is a very competitive field and it is getting crowded all the time. There are so many other players like Paypal, Affirm and other banks like JPMC and Bank of America also are trying to transform to become more modern FinTech organizations. Though we do not expect to happen in the next 2-3 years, we should continue to watch the growth of Square. If growth stalls or decelerates, it may start losing its market share and we as investors will have to assess the risk of owning the stock at that time.

Primary care tips for everyday

 Here are a few tips for healthy lifestyle – physical, emotional and mental. 

  • Get enough sleep (adults 7-8 hours and children 9-10 hours minimum) 
  • Some form of physical activity like walking, jogging in fast pace (6000 steps/day minimum)
  • Some form of meditation for inner peace (30 minutes minimum)
  • Balanced food (Less carbohydrate, more protein, lots of vegetable and fruits, enough water)
  • Entertainment, connecting socially and a feeling of love (With family, friends and community every week)
  • Staying engaged than idle (Physical exercise, learning or doing some work)

Here are a few primary care tips and information that is useful for every family at home.

FEVER

Causes :

Fever is the most common symptom and can be caused for many reasons.

What can be done at home:

  • Cold Compress
  • Antipyretic: Tylenol/Motrin
  • Plenty of fluid: 
  • Rest

When to take to doctor’s office: Very high fever

 DIARRHEA

Causes:

Types:

  • Infectious
  • Non infectious

What can be done at home:

  • Plenty of water/Gatorade. make sure to urinate at least 3 times a day. 
  • High in simple carb e.g. rice
  • Avoid fat/protein/fiber which is difficult to digest 

When to take to doctor’s office: fever, very weak, unable to eat/drink, Stool with blood mix

 
Vomiting (stomach bug) 

Causes:

What can be done at home: do not eat for about 2 hours after vomiting, after 2 hours, start by drinking water/clear liquid, progress slowly to easy to digest food.

When to take to hospital: very frequent vomiting, very weak, no urine for 8 hours, fever

 

Cold /cough

Causes: viral (more common), bacterial, allergic

How to know common cold vs flu?

Common cold: starts slowly, low grade fever, mild lethargy, mild body ache

Flu: start suddenly: fine at one moment and suddenly you become very sick ( lethargy, severe muscle ache, high fever (more than 101) 

What can be done at home: Rest, drink plenty of water/fluid, take Tylenol, Motrin for fever/body ache, make sure you urinate at least 3 times a day

When to go to hospital: Difficulty with breathing, high fever, nuchal rigidity, confusion, 

 

Sore throat

Bacterial vs viral?

Bacterial: Starts suddenly, high fever, very sick

Viral: starts slowly, low grade fever, mildly sick

For teen agers: Mononucleosis

What can be done at home: Tylenol/Motrin, rest, plenty of fluid

When to go to hospital: if bacterial, need to go to dr’s office to rule out Strep throat, if strep throat, very important to get treated esp for children as it carries complication like: kidney disease or rheumatic heart disease) 

 

Mononucleosis ( kissing disease)

symptoms: sore throat, fatigue, fever

Cause: air born, kissing

what can be done at home:

When to take to hospital:

 

Pneumonia:

not itself contagious

Types: viral, bacterial

What can be done at home: rest, plenty of fluid intake, Tylenol/motrin for feverTreatment: needs antibiotics