CryptoCurrency
Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now
Don’t let the rallying market stop you from finding market bargains. There are still plenty of seemingly cheap stocks out there. I want to talk about a couple of them, and it doesn’t take a lot to get started in either position with both stocks currently trading in the $20s.
Sirius XM Holdings (NASDAQ: SIRI) and Carnival Corp. (NYSE: CCL) (NYSE: CUK) are absurdly cheap right now. Even a $500 investment can go a long way right now if investors wake up to the value in the shares. Let’s take a closer look.
1. Sirius XM
Warren Buffett warmed up to one of this year’s biggest losers last week, adding to his already substantial stake in Sirius XM. Berkshire Hathaway now owns nearly a third of its shares outstanding.
The only game in town when it comes to satellite radio in this country, Sirius XM has fallen on hard times. Its subscriber base may have peaked last year, after back-to-back quarters of sequential declines. Organic revenue growth has meandered in the single digits for the past decade, but now it has turned negative.
There are some good reasons why new car buyers aren’t paying up for satellite radio. Most cars make it easy to stream audio apps they already access on their phones through their car speakers. Folks aren’t driving as much on this end of the pandemic. There are also some sound reasons for the stock itself being out of favor after executing a reverse stock split following the consolidation of its tracking shares. Sirius XM has felt the pinch, and so have its shareholders. Despite moving higher this month on the Buffett share purchase, Sirius XM stock has been cut in half this year.
Sirius XM isn’t half the company that it used to be. The reverse split is now fading in the rearview mirror. There’s also no longer shareholder confusion about tracking shares that traded at a deep discount to the common stock. Fundamentally speaking, Sirius XM is also in the driver’s seat. Companies are calling people back to the office. Gas prices are now near three-year lows. The Federal Reserve orchestrating a cut in interest rates should make it easier for new car owners to get behind the wheel in a ride with factory-installed satellite radio.
The stock is also now historically cheap. Sirius XM is trading for less than 10 times earnings. Its high dividend yield of 3.9% is going to look even better as interest rates keep heading lower. Analysts also see a return to top- and bottom-line growth next year. It’s time to shift into drive here with this surprisingly cheap media stock that’s generating a ton of free cash flow and earnings even during this challenging stretch.
2. Carnival
Unlike Sirius XM, Carnival is an industry that has cruised back into market fancy. The shares have soared 55% since bottoming out two months ago, up 166% since the start of last year. It doesn’t mean that the world’s largest cruise line operator isn’t cheap.
Carnival is stronger now than it ever was before the pandemic. Customer deposits for future sailings have never been stronger than they have ever been at this point in the year. Revenue and adjusted earnings per share rose 15% and 62%, respectively, in its latest quarter. Customer deposits hit another high for this time of the year, a good sign that the next few quarters will also be strong.
Carnival is trading for just 16 times what it expects to earn for the fiscal year that ends next month. It’s trading for less than 13 times analyst profit targets for fiscal 2025, and Wall Street pros have been caught on the short end for some time. Carnival has topped analyst estimates for more than two years, coming through with double-digit percentage beats in each of the last five reports.
Debt was a problem for the industry, having to finance the operating lull for more than a year after the pandemic suspended sailings. It’s using its newfound profitability to tackle those demons. Carnival has repaid $7.3 billion of its debt since the start of last year. If the economy is able to score a soft landing, the waters should be just as inviting for the cruise lines.
Should you invest $1,000 in Sirius XM right now?
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Rick Munarriz has positions in Carnival Corp. and Sirius XM. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.
Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now was originally published by The Motley Fool
CryptoCurrency
Do millionaires keep their money in checking accounts?
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
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Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
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Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
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Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
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Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
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Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
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Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
CryptoCurrency
Lumen And Meta Join Forces To Boost AI With Flexible, On-Demand Network Solutions
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Lumen will report third quarter 2024 results on November 5, 2024.
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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CryptoCurrency
US election optimism fuels $2.2B inflows in crypto products
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European investors pour record $105B into US Bitcoin ETFs
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