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  • The Three Best Financial Stocks for Investment

    The Three Best Financial Stocks for Investment

    The financial stocks are expected to perform better in 2021.

    Since the evolution of the internet, the financial sector has grown and has become a much bigger and enhanced marketplace for payments and other financial services. Banks that are the bigger part of this industry haven’t had a good time in 2020, whereas, online banking services and payment firms have made gains.

    Analysts see financial stocks making a sharp rebound in 2021 and beyond with things getting better—in the longer run. But an investment in the market’s best financial stocks could pay off handsomely this year. So, let’s have a look at the three best financial stocks for investment in 2021.

    Goldman Sachs (GS)

    Goldman Sachs (GS) is one of the market leaders and is a strong financial firm that has some impeccable operations. The company has performed quite well compared to the rest of the industry firms.

    During the full-year 2020, the company remained focused on serving clients and executing strategic priorities and generated net revenues of $44.56 billion, up by 22% year-over-year. This marked the highest annual net revenues in 11 years, which is quite an achievement. While the diluted EPS was $24.74, the second-highest EPS reported by the company in its history.

    Goldman Sachs (GS) is well on track and this year things are expected to grow with continuous momentum. So, GS stock is for sure one of the best investment options in the financial sector.

    Nelnet (NNI)

    Nelnet (NNI) is a US-firm that deals in the administration and repayment of student loans and education financial services. Nelnet has been one of the top performers in the financial sector during the past year.

    As of the third quarter, the Company recorded GAAP net income of $71.5 million, which was higher than the prior year’s net income of $33.2 million. The increase in net income was primarily driven by the rise in loan spread and the recognition of a negative provision for loan losses during Q3 on Nelnet’s loan portfolio. Moreover, the company gained recognition from the sale of consumer loans.

    The company is continuing to perform well and has been making some strategic collaborations. The best part is that they have received customer-focused responses from their operating businesses during the pandemic, which has really boosted things up. In the long-term, the launch of Nelnet Bank and third-party investment received by ALLO will play a massive role in the firm’s growth. So, NNI is another prominent stock for investment.

    Credit Acceptance (CACC)

    Credit Acceptance (CACC) is an auto finance company that provides automobile loans and other related financial products. CACC operates its financial program via a network of national dealer-partners and the automobile dealers’ part of its programs.

    In the last quarter report, the company reported a net income of $166.3 million during Q4 2020, compared to $161.9 million in 2019. Whereas, for the full-year, the company recorded a net income of $421 million, on a lower side from last year which was $656.1 million.

    Recently, the company completed a $500 million asset-backed non-recourse secured financing. The company will use this financing to repay outstanding indebtedness. Earlier this year, Credit Acceptance completed similar financing worth $100 million.

    Credit Acceptance (CACC) shares have been on the downward side since mid-2020. However, with improvement in the Q4 results, thereis much upside expected as we head forward.

  • Shares of JPMorgan and Goldman Sachs: Are These Worth To Buy Now

    After successful stress tests, shares of the largest US banks soared. The findings of the second such study (since the beginning of the pandemic) have been announced by the Fed: the banking sector has proven to be sufficiently robust to endure a fall in income of up to $600 billion. And in each of the key scenarios: from a rapid reduction in credit payments in the short term, to a gradual and prolonged crisis. In this respect, the regulator relaxed the dividend payment limits, which were carried out following the results of the summer stress tests.

    JPMorgan Chase and Goldman Sachs shares went up dramatically following the news, which increased from 3 percent to 6 percent even before the start of the main session on Monday. According to the Fed, banks built loan loss reserves totaling $100 billion during the crisis, which is a multiple of the worst-case scenario. This made it possible for future payments to free up some of the money. In the first quarter of 2021, previously postponed dividends and buybacks are planned. At their own discretion, banks are permitted to set the payment bar. JPMorgan straightaway reported a $30 billion buyout in next year.

    Statements were issued by JPMorgan and Morgan Stanley, saying they intended to restart share buybacks beginning next quarter. Citi and Goldman said that next year they plan to restart such purchases. Brian Moynihan, CEO of Bank of America, has said that his company plans to buy back stock as soon as it is permitted. According to Bloomberg, the six biggest U.S. banks could repurchase as much as $11 billion of stock in the first quarter under the current distribution policy.

    After a fresh wave of growth, the stocks of the largest U.S. banks remain undervalued. JPMorgan Chase is now worth $123, for instance, which is less than 1 percent of its fair value. Goldman Sachs looks more interesting: $250 with up to 6 percent upside. However, in our view, they can be purchased much cheaper on the horizon of the next quarter. We foresee a correction of at least 7 percent on the horizon in these shares before the end of winter.

  • Goldman Sachs Analysts Say Stocks Of EV Makers TSLA, Li Auto, NIO Could Rise

    Goldman Sachs Analysts Say Stocks Of EV Makers TSLA, Li Auto, NIO Could Rise

    The estimates of Wall Street analysts for renewable energy firms are improving as policymakers announce massive electrification and carbon reduction programs. US President-elect Joe Biden’s administration is expected to be more involved in terms of transport electrification initiatives and environmental protection policies.

    In a recent survey, Goldman Sachs (GS), the largest investment bank, said that, according to its estimates, global electric vehicle sales will hit 1.8 million units this year, up to 8.3 million units by 2025, and up to 34 million units by 2035. As a result, in 2030 and 29 percent in 2035, hybrid vehicles will account for 18% of global sales. At the same time, the United States and Western Europe will see the greatest growth, with the share of electric vehicles projected to hit 50 percent by 2035.

    Two electric car companies were listed by leading Goldman analysts, predicting that they will lead the way over the next four years. There is also a manufacturer that deserves recognition, but its shares are still receiving the “hold and see” recommendation.

    The Li Auto (LI)

    As of the first day of trading, China’s Li Auto (LI), which debuted on NASDAQ this summer, reported a solid 102.37% price rise on the back of strong demand for its electric vehicles in the domestic Chinese market.

    In November last year the first Li model, the Li ONE hybrid crossover, was released and the company had sold more than 22,000 units by October this year. Sales hit 3,700 in October, making the Li ONE the best-selling Chinese electric car brand.

    A stronger state policy of electrifying the transportation of the nation with incentive for carmakers and a population of 1.4 billion forms the largest electric vehicle market is China.

    Li cars also benefit from being plug-in hybrids and having a petrol engine, which is important since China is building charging stations in the process and its current network is small.

    FEI Fang, the Goldman Sachs analyst, rates the stock with a “buy” rating and a target price of $60, nearly double the closing price of $33.31 on Tuesday.

    Tesla Inc (TSLA)

    With a 676.76% rise since the beginning of the year and an upcoming addition to the S&P 500 index, Tesla (TSLA) shares, at least in the short term, look like the absolute winners of the electric car industry.

    In the last quarter, Tesla achieved record deliveries, revenue growth of 39%, and three consecutive quarters of profit.

    Market analysts have calculated the stable free cash flow of the automaker for the quarter at $1.4 billion.

    NIO Limited (NIO)

    Since the beginning of the year, Nio Limited (NIO) shares have outperformed Tesla by rising 1058%. The business undoubtedly deserves attention and observation, but Goldman experts rate their shares with a “buy” recommendation, although their target price of $59 is nearly 27% higher than the closing price of $46.56 on Tuesday.

    The Chinese electric car manufacturer announced a 146 percent rise in sales over the last quarter and a 2.5-fold increase in deliveries compared to last year. Its new electric Nio EC6 crossover is seen as a competitor in China to Tesla’s upcoming Model Y.

    Instead of direct buying, Nio has launched a new battery leasing programme, which lowers the list price of vehicles.

    Other Nio announcements include a 100-kilowatt-hour battery, which will expand the electric vehicle range to 615 kilometers, and plans to increase production and begin exporting to Europe by 2021.