Cryptocurrency mining describes the process by which persons and/or businesses with high-powered computers and servers compete against one another to solve highly complex mathematical equations that are the result of the encryption designed to protect transactions on a blockchain network. The first to solve a group of equations and verify that those transactions (known as a block) are true — i.e., that the same virtual token wasn’t spent twice — receives what’s known as a "block reward." This reward is paid out in tokens of the virtual currency that’s being proofed.
For example, bitcoin currently has a block reward of 12.5 tokens. This means that the first person, group of individuals, or business to validate a block of transactions will receive 12.5 bitcoin tokens. With the world’s most valuable cryptocurrency currently hovering just above $8,000 per coin, we’re talking about a more than $100,000 haul for cryptocurrency miners who are successful in beating others to the proverbial punch.
Though cryptocurrency mining has been profitable, it’s clearly not feasible for everyone. Nevertheless, there are ways investors can gain exposure to crypto mining, should they choose, through the stock market. Here are four top cryptocurrency mining stocks that have either direct or partial exposure, based on sales, to the industry.
Top 5 Undervalued Stocks To Watch Right Now: Amazon.com, Inc.(AMZN)
E-commerce behemoth Amazon helped round out another strong quarter for the FANG stocks last Thursday. The company reported adjusted earnings of $3.27 per share, crushing the Zacks Consensus Estimate of $1.22 per share. Meanwhile, total revenue was up 43% year over year and forecasted Q2 revenue was on the high end of our prior consensus estimate.
Amazon also notched net sales of $5.44 billion in its Web Services unit, marking growth of 49% from the prior-year period and coming in ahead of our consensus estimate. Further, the company reported first quarter physical stores sales of $4.26 billion, underscoring the scope of the Whole Foods acquisition.
Amazon is currently sporting a Zacks Rank #1 (Strong Buy).
Top 5 Undervalued Stocks To Watch Right Now: iRobot Corporation(IRBT)
Shares of iRobot are still reeling from a more than 34% single-day drop in early February, as the market reacted to seemingly disappointing forward earnings guidance from the Roomba maker.
During the subsequent conference call, however, CEO Colin Angle elaborated that the company is purposefully opting to foresake some near-term profits in order to invest in driving top-line growth and maintaining market share in these crucial early stages of its long-term story.
"This is a movement in time where over the next three years the true winners in the consumer robot industry are going to be determined for the next decade," Angle added. He also noted that household penetration in the robotic vacuum market — which comprises the vast majority of iRobot’s current sales — is still "extremely low," in the single-digit percent range, while strong economic conditions are driving healthy global growth for the category.
Even more important, iRobot knows that the consumer robotics industry will grow to represent much more than "just" robotic vacuums. In floorcare, the company is enjoying steady growth for its supplementary Braava jet floor mopping robots. With the help of their fortress-like patent portfolio and sophisticated mapping and navigation technology, management has also spoken at length of their plans to make iRobot’s products the central hubs for enabling smart homes to behave more intelligently in the future.
It’s also developing a robotic lawnmower, which would propel it into a new multibillion-dollar market in the coming years. And Angle has previously revealed that iRobot is further exploring consumer robotic solutions for laundry folding, bathroom cleaning, and loading and emptying dishwashers.
As it stands, iRobot is still a relatively small company with a market capitalization of under $2 billion. But if even a fraction of its ambitious plans come to fruition when our kids are grown, I think it will prove to be a stock that early investors will be more than happy to brag about.
Top 5 Undervalued Stocks To Watch Right Now: Advanced Micro Devices, Inc.(AMD)
Perhaps the most prominent names of the bunch are NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), which are best known for their graphics card and PC-based microprocessors, respectively. Neither company has exactly been forthcoming with regard to how much of their sales are tied to cryptocurrency mining, but each company has clearly benefited in recent quarters from the sale of graphics processing units (GPU). NVIDIA’s full-year results pointed to 41% year-over-year sales growth, with Advanced Micro’s sales up 25% on an annual basis.
In fact, demand for GPUs has been so strong that the price of graphics cards, new and old, has been shooting higher. This actually creates a bit of a conundrum for NVIDIA and AMD, as Advanced Micro Devices is more commonly known. The core customers for both companies are avid gaming enthusiasts and enterprise clients. If crypto mining demand continues to pluck supply from the market, the high price for graphics cards could cause a rebellion among NVIDIA’s and AMD’s core customers. Then again, if these companies create a product specifically for crypto mining, they’ll drive down prices by increasing supply and squash the sales and margin boost they’ve recently experienced.
While both companies certainly have a lot going on beyond the cryptocurrency mining industry, it’s possible that their share prices could reflect the ebbs and flows of virtual currency token prices, so it’s something to keep in mind.
Top 5 Undervalued Stocks To Watch Right Now: Apple Inc.(AAPL)
You might be surprised to see that Apple (NASDAQ:AAPL), the world’s largest publicly traded company and a stock that the Oracle of Omaha, Warren Buffett, has come to fancy, was among the leading household names shown the door in Q1. David Tepper’s Appaloosa Management, which initially bought its first stake in Apple back in the third quarter of 2016, sold its entire position of nearly 4.59 million shares. Meanwhile, Larry Robbins’ Glenview Capital Management sold the entirely of its 1.26 million-share stake in Apple during Q1, which it had also held since the third quarter of 2016. As a whole, according to data from Bloomberg, large institutional investors sold 153 million Apple shares in the first quarter.
IMAGE SOURCE: APPLE.
Why no love for the king of all tech and consumer stocks? Investors’ angst primarily centers around the belief that Apple’s iPhone sales growth can’t possibly continue at the same torrid pace it’s been on for years. Though iPhone revenue jumped a healthy 14% on a year-over-year basis, to $38 billion in Q1 2018, total units sold rose by a mere 3%, to 52.2 million iPhones. The $1,000 price tag of the newly introduced iPhone X certainly helped push sales higher, but the slow crawl of physical-unit sales is a clear concern among Wall Street pundits.
Apple’s saving grace has been its incredible shareholder-return policy, which includes the biggest dividend in the world (in terms of total annual payout), and mammoth share buybacks. In fact, the company repurchased $23.5 billion worth of its own stock last quarter, all on the open market, and its board authorized the repurchase of an additional $100 billion worth of stock. These repurchases reduce the company’s existing share count, aiding earnings-per-share (EPS) growth and (presumably) making the company look more attractive from a valuation basis.
Given that Apple recently raised its dividend by 16% and is valued at only 14 times next year’s EPS, I believe pessimists will be proven wrong over the long run.
Top 5 Undervalued Stocks To Watch Right Now: Netflix, Inc.(NFLX)
Netflix, Inc. (NASDAQ:NFLX) has been on a mission, both in reality and in the stock market. The company’s goal is to become the leader in global streaming. With 125 million customers, it’s well on its way to fulfilling that leadership goal. Heck, its market cap is just $7 billion short of Walt Disney Co (NYSE:DIS).
That puts things in perspective a bit.
But NFLX stock has been even more impressive than the company. It’s up 132% over the past 12 months and 73% since the start of 2018. That’s paved a solid — if also explosive — uptrend for investors. Take note of the chart to see what I mean.
As you can see, Netflix stock has been a beast. Notice that when it started 2018, shares weren’t over $200 yet! Now we’re already over $300. The move has been intense, but so long as the trends stay in place it’s hard to bet against NFLX.
Over its previous highs and above $330, Netflix stock is basing nicely. Momentum is strong and the stock is not yet overbought (blue peaks on the chart). Should nearby support fail, investors would be lucky to gobble up the stock near $300. There should be support near this level, along with the 50-day moving average and a rising uptrend line of support.
Given that the company just beat earnings, revenue and subscriber estimates, as well as provided subscriber guidance that topped analyst estimates, I’d rather be a buyer on dips than a seller on rips.