Connect with us

Business

Journey to Príncipe, one of the most remote destinations in the world

Published

on

As baleias estão perto”; word goes around from the sailors to the guides. The whales are close today. The humpbacks swim around Príncipe’s nursery shores from mid-summer until October, keeping their calves away from the deeper, darker waters where the sharks cruise. We don’t see them as we zoom around the island in a dinky black fishing boat, but it’s enough to feel they’re in there. They’ve been known to breach just outside the island’s port, throwing their massive bodies into the air and crashing back down. It’s understood they use this to communicate: excitement, danger, dominance. 

Wildlife occupies the supreme position here on Príncipe, an island in the nation-state archipelago of São Tomé and Príncipe in the Gulf of Guinea. It is situated one degree north of the equator, so the year-round heat and frequent thunderstorms have nurtured a rich, thick jungle that spreads out of the forest line and onto the beach. Coconuts plummet unexpectedly from above and fallen palm trunks split up the beaches. From September to April, wet season, the rains beat down intermittently but forcefully. Nature is a benign ruler here, though. The island, just 20km long, and 200km from the mainland of Africa, was formed 31 million years ago by volcanic eruptions. Far from the reaches of predators, the plants and animals haven’t had to develop venom to protect themselves. They just jostle for space.

The restaurant at Bom Bom on Príncipe, one of the four properties operated by HBD Príncipe
The restaurant at Bom Bom on Príncipe, one of the four properties operated by HBD Príncipe © Julian Broad
The swimming pool at HBD Príncipe’s Sundy Praia tented village
The swimming pool at HBD Príncipe’s Sundy Praia tented village © Julian Broad
Jockey Cap Island seen in the distance from Nova Estrela in the east of Príncipe
Jockey Cap Island seen in the distance from Nova Estrela in the east of Príncipe © Julian Broad

Mark Shuttleworth, the South Africa-born, Isle of Man-based software mogul behind Canonical, touched down here in 2009 when he was looking for a place “to decompress”, and was instantly captivated by the island’s natural charms. “It’s just this extraordinary atmosphere,” he says. “It’s kind of primeval.” It’s also one of the least-visited countries in the world. He wondered what would become of it: “I thought I could either bottle that memory and never go back, never find out what happened to it, just pretend it was as it was when I first arrived there. Or I could try to create a sense of a future that would be interesting, that would preserve some of the things that I think people viscerally react to when they get there.” 

He began talking to the local government, and learnt about a potential deal with Agripalma, a palm oil company, that would see 1,000 hectares of land cleared on the north of the island. He offered an alternative: a hybrid luxury tourism and organic agriculture business. In 2010 he founded HBD Príncipe (“Here Be Dragons”).

Fourteen years (and more than $100mn) later, he now has four hotels, a farm that furnishes produce, cocoa and coffee for them, and a community initiative providing school supplies and funds to help people get to university, subsidised by a €25 per guest per night contribution. Bom Bom, a collection of bungalows originally built in the 1980s as an old fishing hotel, is nestled in the jungle on a strip of land laced on either side by white sandy beaches. Sundy Praia is made up of 15 implausibly luxurious tented villas in the jungle along another strip of beach; Roça Sundy is the white-pillared plantation hotel with a difficult past. The fourth hotel, Omali, is on (much larger) São Tomé, where the six-hour connecting flight from Lisbon lands. 

This year sees Shuttleworth reopen Bom Bom, his first hotel and first love on the island. From the clean white comfort of the bungalows – some directly above the sand, others higher up the hillside – you can lounge on the two beaches, one facing the sunset, the other, more sheltered, for swimming. Local guides take you down the coastline by boat, stopping at Praia Boi or Praia Banana, or to hike through the jungle to the Oquê Pipi waterfall or Ribeira Izé, a ruin of a plantation in the dark centre of the forest, now subsumed by palms, oca and almond trees. 

The living room of one of Bom Bom’s beachfront bungalows
The living room of one of Bom Bom’s beachfront bungalows © Julian Broad
A fisherwoman repairing her nets at Praia do Abade
A fisherwoman repairing her nets at Praia do Abade © Julian Broad
Sunset at Bom Bom’s pool bar
Sunset at Bom Bom’s pool bar © Julian Broad

The completion of Bom Bom marks the beginning, in earnest, of the operation Shuttleworth is running here on Príncipe. His stated ambition is to leave a positive legacy on the island. “I’ve chosen not to have children,” he told the FT in 2019. “I’m interested in figuring out what impact I can have on the world, and I’ve chosen that this should be one of the places where I try to pull off the impossible.” Now the biggest employer on an island that a decade ago suffered from a nearly 80 per cent unemployment rate, he’s undoubtedly made a huge impact here. But the island is only relatively newly free from the Portuguese empire, which ruled until 1975 and continued the practice of indenturing workers on cacao and coffee plantations long into the 20th century. Its legacy is still felt and visible on the island. The ongoing challenge for Shuttleworth will be to show both visitors and locals that an outsider can come in and succeed in leaving a truly positive mark.

As far as the success of Bom Bom goes, the island and surrounding ocean have done a lot of the work for him. As you approach on the 35-minute connecting flight from São Tomé, Príncipe appears like a bouquet of greenery, with yellow beaches flowering along its shores. The air smells of wood smoke and, beneath it, a lower note of drenched vegetation. Wind plays in the palm trees. Storm clouds roll around. At about 5.30pm, standing on the wooden decking of a bungalow just above the sand at Bom Bom, you can watch the day turn from light to soft pink to sherbet orange to black in about 30 minutes.

A fisherman takes his boat out at Praia Seabra
A fisherman takes his boat out at Praia Seabra © Julian Broad
Inside a Seventh Day Adventist chapel on the road to Roça Sundy
Inside a Seventh Day Adventist chapel on the road to Roça Sundy © Julian Broad
A homestead on the road to Santo António
A homestead on the road to Santo António © Julian Broad

Riding west from Bom Bom on the boat, we trace the shape of the island, its mass of jungle occasionally punctuated by a fishing village, until we reach the Bay of Needles, a collection of towers of phonolite lava. One is table-flat; another is so tall its top is veiled in mist; still another pushes out of the earth like a long-nailed finger pointing up. We anchor next to a tiny beach to swim off the boat; warm air and cool sea. It begins to rain softly. I think of the big bodies of the whales swimming around, weightless, in the same water. Back on the boat there are slices of pineapple, which grows all year round here, along with guava, watermelon and coconut cake.

Over the next two days, after breakfasts overlooking the sea, I explore the land with HBD guide David Carmo. In the capital of Santo António, he drives me past painted wooden houses, the police station (“No one is in jail right now,” he reassures me), the government building and the market. He takes me to Tia Zinha’s, his favourite of the nine or so restaurants in town. Zinha cooks all of the food over a fire built from wood she collects herself; she serves mustard-yellow moqueca soup with red fish and herbs, rice and grilled fish with skin charred by the fire. A cold, malty Rosema, São Tomé and Príncipe’s national beer, comes in a brown glass bottle that has no need for a label (“because there is only one”, says Carmo).

Fishermen prepare their nets at Praia do Abade
Fishermen prepare their nets at Praia do Abade © Julian Broad
The entrance to the plantation hotel Roça Sundy
The entrance to the plantation hotel Roça Sundy © Julian Broad
A homestead on the road to Príncipe’s airport
A homestead on the road to Príncipe’s airport © Julian Broad

He stops the car every so often to show me things: a cinnamon tree with leaves that taste exactly like the powdered spice; bushes of black pepper, chilli, coffee, ginger, lemongrass, basil, and the island’s seven types of bananas. Little macaque monkeys leap and chatter in the trees. If you take a deep enough breath in the forest, Carmo says, you can tell if there are monkeys around because “you can smell them”.

Carmo describes animal behaviours as if they are decisions each species has made. Fly fish “don’t like to put their eggs in the sea, they like to put them in the roots of the mangrove”, he says, so “the eggs can stay safe”. The “mother whales” usually move closer to the island’s shores to keep their calves safe in mid-July, but “if she is pregnant earlier she will come earlier”. And he knows where to beat the wildlife at its own game: the fishermen use crushed acacia flowers to dye their nets blue-black so that when they’re in the sea, “the fish don’t know they’re there”.

Advertisement

 With its two beaches and wide, unbroken views over the ocean, Bom Bom is the ideal base for swimming, snorkelling, boating and lounging. Shuttleworth’s other hotels each offer their own, different vibe. Sundy Praia, designed by famed French architect Didier Lefort, gives seclusion, privacy and a higher degree of luxury. The tented villas are set deeper into the forest, and all have four-poster beds and huge carved stone baths looking straight out into the mass of greenery. Some have private pools; there’s a larger infinity pool positioned over the beach. The restaurant does fine dining: salads studded with citrus and chubby prawns, pink-roasted duck with orange sauce and Thai basil and melting chocolate souffle with coconut ice cream.


Roça Sundy, the old plantation, advertises itself as the “historic” hotel. It’s a dark history, though. São Tomé and Príncipe were reportedly uninhabited islands until the Portuguese colonised them in 1470. They brought tens of thousands of enslaved people from mainland Africa, along with Portuguese convicts and 2,000 Sephardic Jewish children, and put them into forced labour producing sugar, then cocoa and coffee. Slavery made the archipelago the world’s biggest producer of sugar at one point, and in 1908 it was the largest cocoa producer. Though slavery itself was abolished in 1875, the practice of forced labour, through the use of “contracts”, continued for decades. In 1953, triggered by a protest held by São Toméans, the Portuguese murdered and tortured hundreds of people, and sent others to forced labour camps. The country only won its independence in 1975. Earlier this year the government began drafting plans to ask Portugal for reparations. 

The pool at Bom Bom
The pool at Bom Bom © Julian Broad
HBD Príncipe guide David Carmo sits on a fallen Einstein tree at Roça Sundy
HBD Príncipe guide David Carmo sits on a fallen Einstein tree at Roça Sundy © Julian Broad
Santa Rita beach at Bom Bom
Santa Rita beach at Bom Bom © Julian Broad

At Roça Sundy, a crenellated wall runs around the perimeter of the central lawn, punctuated by watch towers with slit windows. Facing the house are the rows and rows of buildings, their windows gaping black holes, where the enslaved people lived. But there is no acknowledgement of the forced labour that happened here. The only history memorialised is a neat plaque marking the point where a telescope helped prove the theory of relativity. 

When I ask Shuttleworth how the history of the island has factored into his thinking about running his tourism operation here, given it has an extremely sad past, he queries this view: “Does it?” he replies. “Every history, every family has its darkness, right?” 

There is a dark and unspoken logic to the way history is treated in any plantation hotel, and this kind of tourism has undergone a reckoning in recent years. The philosopher Kwame Anthony Appiah, writing in his Ethicist column in The New York Times, advised a reader who was wondering whether it was OK to attend a plantation wedding that to do so is to idealise “lifestyles built directly on the unpaid labour of Black people who were treated as property and regularly abused”. It seems to me that running a former plantation as a hotel is no different.

Advertisement

There is no doubt that the arrival of a significant new employer on the island is having a positive economic impact. My guides tell me the company gives “a lot of opportunities”, and you can feel things moving with an energy. As Shuttleworth says, the new influx of visitors can’t help but react to the primordial mountains, overabundance of luscious fruits, the music and the dazzling wildlife. But in order to celebrate these things, there is work to be done in understanding and repairing the past.

Out in the waters close to the shore, the humpback calves lollop along, growing stronger every day; the mothers feed in the rich waters, occasionally surfacing. The locals and fishermen follow their movements each year, only for the wonder of seeing them. Just a handful of lucky visitors every year will have the privilege. 

Baya Simons travelled as a guest of Rainbow Tours, which offers seven nights in São Tomé and Príncipe, including two nights at Omali Lodge and five nights at Bom Bom, from £2,995pp, based on two sharing, and international and internal flights. hbdprincipe.com, rainbowtours.co.uk

Advertisement

Source link

Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Business

Starmer wields the knife after shaky 100 days in office

Published

on

Unlock the Editor’s Digest for free

After almost 100 days in office, Sir Keir Starmer on Sunday finally decided to get a grip on his stumbling administration. “Keir will always wield the knife when it needs to be done,” said one Labour MP. “Now he has.”

The departure of Sue Gray from her key role as Starmer’s chief of staff was the catalyst for Sunday’s complete overhaul of the Number 10 operation. Many were left wondering why it had taken the prime minister so long.

Advertisement

Starmer, who hired Gray in 2023 to help him prepare for government, had been loyal to his chief of staff in office, in spite of fierce internal criticism of her management style.

But those close to the prime minister say that a morose and fractious Labour conference in Liverpool last month convinced him he had to draw a line under the mis-steps that had dogged his first months in office.

“Keir came back from the conference pretty chastened,” said one Labour insider. “He realised he needed to get a grip on things.”

In Liverpool party members expressed their concern at how Starmer had cut winter fuel payments for 10mn pensioners, then appeared unable to contain a row over his receipt of £32,000 in “freebie” suits and glasses.

Advertisement

Gray had become a lightning rod for discontent, with hostile internal briefings about her £170,000 salary and alleged “control freakery”. Labour special advisers, or Spads, claimed she was partly responsible for holding down their salaries.

Gray’s allies said all of this was grotesquely unfair on a hard-working and loyal member of the Starmer team, a view shared by many cabinet members.

But one senior minister told the Financial Times: “It was only a question of when, not if. Not everything was her fault, but the transition to government, the situation with the Spads and the unending freebies clusterfuck were all on her and made her position untenable.”

A person close to the discussions over the Downing Street shake-up said that after returning from Liverpool — via the UN General Assembly in New York — Starmer began lamenting the fact that Gray had “become the story”. 

Advertisement

Gray acknowledged she had become a “distraction”. She will now take up a role as an adviser to Starmer on relations with the UK’s devolved nations and regions, but her grip on the levers of power in Number 10 is over.

The former civil servant was also blamed for being a bottleneck in appointing people to key jobs, a problem that was rectified by the prime minister on Sunday as he announced a dramatic overhaul of his team. 

Morgan McSweeney, who was on the long march in opposition with Starmer, replaces Gray as chief of staff. It was McSweeney who helped to slay the threat of the Corbynite left and then masterminded Labour’s landslide election victory in 2024.

But some question whether he is cut out to be a chief of staff, especially given his lack of Whitehall experience. “Morgan is very popular with Labour staffers — this is like a players’ revolt in a football dressing room,” said one Labour veteran. “But he’s not the sort of person who puts things down on paper.”

Advertisement

There was a long-standing narrative at Westminster that McSweeney was part of a “boys club” around Starmer that was treated with suspicion by Gray. 

Starmer appointed two women to work as deputy chiefs of staff alongside McSweeney — Vidhya Alakeson and Jill Cuthbertson — a move seen by some Labour MPs as a riposte to any suggestion that the boys club had won.

Gray did not have any deputy chiefs of staff, an omission seen in Labour circles as contributing to a lack of grip at the centre and a sign of her unwillingness to share responsibility with others. “That was her choice,” said one ally of Starmer.

Advertisement

While Alakeson and Cuthbertson are highly regarded in Number 10 — the former is Starmer’s political director and the latter is a long-term Starmer lieutenant — Gray’s departure leaves the centre decidedly short of Whitehall experience.

In despatching Gray to the UK’s regions and nations, he has brought into his inner circle people who were already part of his trusted gang. “It’s a circling of the wagons,” said one person close to Starmer.

The exception is James Lyons, a former Sunday Times political journalist, NHS communications chief and TikTok media executive hired by Starmer to beef up his media team, which will continue to be headed by director of communications Matthew Doyle.

Lyons will have a strategic comms role, including oversight of Downing Street’s “grid” of future announcements. It is a common complaint of Labour staffers that the grid, previously under Gray’s control, has been chaotic.

Advertisement

Pat McFadden, cabinet office minister and part of Starmer’s inner circle, is said by party insiders to have played a key role in the shake-up, being close to both McSweeney and Lyons. 

The result of Sunday’s upheaval is that Starmer ends his first 100 days in office with what looks more like a functioning Number 10 operation. Many Labour MPs, privately, believe it is not before time.

Source link

Advertisement
Continue Reading

Business

Unholy row over Tesco plan for Sunday opening on Isle of Lewis

Published

on

Unholy row over Tesco plan for Sunday opening on Isle of Lewis
BBC Tesco in Stornoway with Tesco sign in background and a blue sign in the foregroundBBC

The Tesco store in Stornoway currently replenishes stock on a Sunday but does not open to the public

A Scottish island community is divided over a supermarket’s plans to open on a Sunday.

The Tesco branch on the Isle of Lewis in the Outer Hebrides has started holding consultations with staff and residents about opening seven days a week.

The island, which has a population of about 20,000, has a long tradition of observing the Sabbath day, meaning that some shops – including both supermarkets – currently keep their doors closed on a Sunday.

Over 700 people have now signed an online petition against the proposed change.

Advertisement

Many of the island’s residents are members of various protestant denominations that believe Sunday should be a day of rest.

The practice is derived from the Bible’s fourth commandment which states “Remember the Sabbath day, to keep it holy”.

Observance of the Sabbath was once so strict that play park swings were chained up at dusk on Saturday, and hanging out washing on a Sunday was frowned upon.

Restrictions have relaxed over recent decades, with the first Sunday commercial flight landing at Stornoway airport in 2002 and Sunday ferry sailings have operated since 2009.

Advertisement

But while petrol stations and some restaurants now open on Sundays, many local shops, including the only other supermarket, a Co-op, remain closed.

Council run-facilities such as swimming pools, soft-play areas and the island’s two-lane bowling alley are also shut, even though the local authority allows similar facilities to open on other islands.

Getty Images Stornoway HarbourGetty Images

Ferries now sail from the island on a Sunday

A petition against the Tesco proposals was started by Alasdair Macleod, who said “work-free Sundays” make people from Lewis the “envy” of many people living on mainland Scotland.

He said: “Many of us hold cherished memories of island Sundays as a guaranteed day of rest, relaxation and no work – a precious day of family time and worship.

Advertisement

“However, this simple yet profound day is at risk due to the concept of seven-day trading creeping into our culture.

“When stores and businesses open their doors on Sunday, it may seem like a convenience at first, but the resulting ripple effect leaves workers with less time to rest, less time for family, less time for church worship and invariably, a lower quality of life.”

Although the Tesco store is currently closed on a Sunday, some staff already work to replenish shelves.

The supermarket said that no staff member would be forced to work on the Sabbath if the plans go ahead.

Advertisement

Christian Davies, store director for Tesco in the Highlands and Islands, said: “We are confident we can carefully balance the demand for a seven-day opening while remaining respectful to local traditions and culture.

“While shopping on a Sunday is not for everyone, a store that is open seven days a week would significantly improve the shopping experience for all customers, by offering choice to those who do want to shop on a Sunday and reducing congestion during other days of the week, especially on a Saturday.”

Source link

Advertisement
Continue Reading

Business

Electric van owners ask mayor to keep discount

Published

on

Electric van owners ask mayor to keep discount
BBC Congestion charge zone marking - a white 'c' on a red circle painted on a road in London BBC

Electric van users currently pay nothing – but from Christmas the charge would be £15 a day

More than 40 businesses have signed an open letter to ask the mayor of London to extend the congestion charge exemption for electric vans.

Their special status means they currently pay nothing – but from Christmas the charge would be £15 a day.

Signatories, including Ocado, the AA and the Federation of Small Businesses, argue the charge – which would add up to £5,500 per vehicle per year – would undermine firms who had “taken on debt to invest in the air we breathe”.

City Hall said it was working with Transport for London to “see what more could be done to mitigate the effect of this phasing out and further incentivise businesses to make the switch to cleaner vehicles”.

Advertisement

‘Supported not hindered’

Supporters of the exemption have said waiving the fees for electric vehicles played “a fundamental role” in easing the cost of investing in environmentally friendly fleets and the prospect of it ending left them “deeply troubled”.

The letter adds: “Many of us have taken on debt to invest in our children’s future and in the air that we breathe. If this plan goes ahead then it will bring an astronomical cost to our businesses at a challenging time.

“Worse still, you will hamper the efforts of many businesses transitioning to cleaner transport.

Advertisement

“Countless business owners wish to move away from dirty diesel vans and to electric alternatives, they should be supported and not hindered doing so.”

‘Defies logic’

Oliver Lord, from Clean Cities, which is leading the campaign, said: “How is it right that a dirty diesel van pays the same as a cleaner electric vehicle in the most polluted part of the UK?

“This defies logic and the best international practice. Now is the time for the mayor to cement his efforts for change by maintaining the exemption and working on a broader package of support for green freight in the capital.”

Advertisement

City Hall, on behalf of the mayor, said it was also looking at initiatives including freight consolidation and cargo bike deliveries.

“We continue to work with government on national measures that could make a difference, including the extension of the plug-in van grant,” a spokesperson added.

Source link

Advertisement
Continue Reading

CryptoCurrency

The Smartest Electric Vehicle (EV) Stocks to Buy With $1,000 Right Now

Published

on

Motley Fool


With proper insight and timing, an investor could have profited mightily from electric vehicle (EV) sector in recent years. For instance, had you invested $1,000 into Tesla (NASDAQ: TSLA) when its shares went public in June 2010, you’d have more than $156,000 today. Nowadays, many investors are looking for the next Tesla. If that’s your goal, pay attention to the two companies on this list.

Looking for the next Tesla? Here it is.

While many investors are looking for the next Tesla, it’s fair to mention that it’s still possible to invest in the original Tesla today. The company has a gargantuan $850 billion market value, but that shouldn’t stop you from jumping in.

There are two reasons to believe the stock still has plenty of long-term upside. First, shares are cheaper today than they have been in years. That’s due to a massive dip in revenue growth. Earlier this year, Tesla actually experienced a decline in companywide revenue. As a result, Tesla’s price-to-sales ratio has fallen from the mid 20s to under 10. To be sure, that’s still expensive, but it’s a bargain relative to the company’s history.

Advertisement

A cheap valuation on paper, however, is only attractive if you believe the company is about to turn the corner. Take note of the chart below. Tesla has experienced massive dips in revenue growth before, with its valuation usually following suit. A huge reason that things turned around was a jump in electric vehicle sales, as well as the introduction of new models like the Model 3 and Model Y — both of which resulted in sales spikes that persisted for several years.

According to Bloomberg, “Electric vehicle deliveries have been essentially flat since early 2023, and that’s not likely to change anytime soon.” But fortunately, Tesla has something else up its sleeve. “Tesla’s robotaxi event next week,” Bloomberg reports, “will see Musk lean even harder into the narrative of self-driving vehicles, artificial intelligence and robots.”

Am I buying into Tesla’s robotaxi hype? Not just yet. But Musk has dreamed big before. Sometimes he delivers, and sometimes he doesn’t, but it’s often a smart move to back the horse with a winning track record. And despite the company’s recent missteps, Tesla is still the company to bet on if you’re bullish on EV stocks in general. But if you’re looking for the most upside potential possible, the next stock on this list is for you.

TSLA PS Ratio Chart

TSLA PS Ratio Chart

This EV stock has huge growth potential

While Tesla is still a great stock to bet on for those bullish on the EV space, its shares are still expensive and the company’s biggest days of growth are likely behind it. Rivian Automotive (NASDAQ: RIVN) is in the opposite situation. Its biggest days of growth are very much ahead of it, and shares aren’t as expensive as you’d think.

Advertisement

Earlier this year, for example, Rivian was posting revenue growth rates above 80% year over year. Those growth rates came at a time when Tesla’s revenue base was actually shrinking. And while Rivian’s growth rates have converged with Tesla’s more recently, most of that has come from industry pressure and the maturation of its models.

This year, EV sales forecasts have been repeatedly trimmed industrywide, and Rivian’s two existing models, the R1T and R1S, have already been on the market for several years. But that’s all about to change.

TSLA PS Ratio Chart

TSLA PS Ratio Chart

Earlier this year, Rivian announced three new models: the R2, R3, and R3X. All are expected to be priced under $50,000 — the magic price point that EV makers need to sell beneath in order to market to mass audiences. Also, while EV sales in general have slowed this year, most long-term forecasts still predict massive growth in the years to come. Passenger EV sales are expected to surpass 30 million by 2027, according to a recent report from Bloomberg. And this figure should grow further to 73 million per year by 2040.

Rivian’s new models aren’t expected to hit the streets until 2026. That gives plenty of time for market conditions to improve as most forecasts predict. And in the meantime, investors can lock in a market capitalization of just $11 billion. That results in a price-to-sales (P/S) ratio of only 2.1 for Rivian versus Tesla’s premium P/S multiple of 8.8.

Advertisement

You’ll need to be comfortable with volatility as Rivian attempts to ramp up its manufacturing capabilities, as well as market new models to a consumer base still skeptical of EVs. But if you truly want to invest in the next Tesla, Rivian has all the characteristics you’d want to see.

Should you invest $1,000 in Tesla right now?

Before you buy stock in Tesla, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tesla wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $765,523!*

Advertisement

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Advertisement

The Smartest Electric Vehicle (EV) Stocks to Buy With $1,000 Right Now was originally published by The Motley Fool



Source link

Continue Reading

CryptoCurrency

S&P’s $8 Trillion Rally Will Be Tested by Tricky Earnings Season

Published

on

S&P’s $8 Trillion Rally Will Be Tested by Tricky Earnings Season


(Bloomberg) — Traders are staring down a series of risks after the stock market’s torrid start to the year, from economic fear, to interest rate uncertainty, to election angst. But perhaps the most important variable for whether equities can keep rolling returns to the spotlight this week: corporate earnings.

Most Read from Bloomberg

The S&P 500 Index has soared roughly 20% in 2024, adding more than $8 trillion to its market capitalization. The gains have largely been driven by expectations of easing monetary policy and resilient profit outlooks.

Advertisement

But the tide may be turning as analysts slice their expectations for third-quarter results. Companies in the S&P 500 are expected to report a 4.7% increase in quarterly earnings from a year ago, according to data compiled by Bloomberg Intelligence. That’s down from projections of 7.9% on July 12, and it would represent the weakest increase in four quarters, BI data show.

“The earnings season will be more important than normal this time,” said Adam Parker, founder of Trivariate Research. “We need concrete data from corporates.“

In particular, investors are eager to see if companies are postponing spending, if demand has slowed, and if customers are behaving differently due to geopolitical risk and macro uncertainty, Parker said. “It is exactly because there is a lot going on in the world that corporate earnings and guidance will particularly matter now,” he said.

Reports from major companies start arriving this week, with results from Delta Air Lines Inc. due Thursday and JPMorgan Chase & Co. and Wells Fargo & Co. scheduled for Friday.

Advertisement

“Earnings seasons are typically positive for equities,” said Binky Chadha, chief US equity and global Strategist at Deutsche Bank Securities Inc. “But the strong rally and above-average positioning going in (to this earnings season) argue for a muted market reaction.”

Obstacles Abound

The obstacles facing investors right now are no secret. The US presidential election is just a month away with Democrat Kamala Harris and Republican Donald Trump in a tight, fierce race. The Federal Reserve has just started lowering interest rates, and while there’s optimism about an economic soft-landing, questions remain about how fast central bankers will reduce borrowing costs. And a deepening conflict in the Middle East is raising concerns about inflation heating up again, with the price of West Texas Intermediate oil rising 9% last week, the biggest weekly gain March 2023.

Advertisement

“The bottom line is that revisions and guidance are weak, indicating lingering concerns about the economy and reflecting some election year seasonality,” said Dennis DeBusschere of 22V Research. “That is helping set up reporting season as another uncertainty clearing event.”

Plus, to make matters more challenging, big institutional investors have little buying power at the moment and seasonal market trends are soft.

Positioning in trend-following systematic funds is now skewed to the downside, and options market positioning shows traders may not be ready to buy any dips. Commodity trading advisers, or CTAs, are expected to sell US stocks even if the market stays flat in the next month, according to data from Goldman Sachs Group Inc. And volatility control funds, which buy stocks when volatility drops, no longer have room to add exposure.

History appears to side with the pessimists, too. Since 1945, when the S&P 500 gained 20% through the first nine months of the year, it posted a down October 70% of the time, data compiled by Bespoke Investment Research show. The index gained 21% this year through September.

Advertisement

Bar Lowered

Still, there’s reason for optimism, specifically a lowered bar for earnings projections that leaves companies more room to beat expectations.

“Estimates got a little bit too optimistic, and now they’re pulling back to more realistic levels,” said Ellen Hazen, chief market strategist at F.L.Putnam Investment Management. “It will definitely be easier to beat earnings because estimates are lower now.”

In fact, there’s plenty of data suggesting that US companies remain fundamentally resilient. A strengthening earnings cycle should continue to offset stubbornly weak economic signals, tipping the scales for equities in a positive direction, according to Bloomberg Intelligence. Even struggling small-cap stocks, which have lagged their large-cap peers this year, are expected to see improving margins, BI’s Michael Casper wrote.

Advertisement

Friday’s jobs report, which showed the unemployment rate unexpectedly declined, quelled some concerns about a soft labor market.

Another factor is the Fed’s easing cycle, which has historically been a boon for US equities. Since 1971, the S&P 500 has posted an annualized return of 15% during periods in which the central bank cut rates, data compiled by Bloomberg Intelligence show.

Those gains have been even stronger when rate-cutting cycles hit in non-recessionary periods. In those cases, large caps posted an averaged annualized return of 25% compared with 11% when there was a recession, while small caps gained 20% in non-recessionary periods compared with 17% when there was a recession.

“Unless earnings are a major disappointment, I think the Fed will be a bigger influence over markets between now and year-end simply because earnings have been pretty consistent,” said Tom Essaye, founder and president of Sevens Report Research. “Investors expect that to continue.”

Advertisement

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.



Source link

Advertisement
Continue Reading

CryptoCurrency

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now

Published

on

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now


The Federal Reserve’s pivot to lower interest rates will have ripple effects throughout the economy and send investors looking for passive income to new places. As yields fall in vehicles like high-yield savings accounts, investors could turn to high-quality, high-yield dividend stocks. Consumer spending and healthcare are two pillars of the U.S. economy, and great places to look for such stocks.

I’ve identified three stocks with generous yields and the financials to afford their payouts. These companies also boast durable business models that should thrive through recessions, giving income-focused investors peace of mind.

1. Pfizer

Current yield: 5.8%

Pharmaceutical giant Pfizer (NYSE: PFE) was a big winner during COVID-19’s height due to its vaccine and treatment products, which created a temporary growth wave. However, the tide has gone out over the past couple of years, and the stock has plunged to multi-year lows as revenue and earnings contract.

But the company is poised to resume growth, with analysts anticipating 8% to 9% annual earnings growth for the next three to five years. Pfizer has pivoted its business to focus on oncology, using its pandemic profits to acquire Seagen for $43 billion last year.

Advertisement

Management raised Pfizer’s dividend by 2.4% last December, a sign of confidence the payout is safe. The payout ratio is also getting healthier. The dividend is approximately 64% of estimated 2024 earnings, so Pfizer seems poised to continue extending its streak of 15 years of increases. The stock trades at only 11 times its estimated 2024 earnings, a sharp discount to the broader market and an attractive price for a business with high single-digit earnings growth.

Pfizer represents a rock-solid income investment with the potential for capital appreciation ahead.

2. Altria

Current yield: 8%

Tobacco companies are renowned dividend stocks, and Altria (NYSE: MO) is an excellent example, having showered shareholders with cash for decades. The company sells Marlboro cigarettes and leading brands of cigars, chewing tobacco, and smokeless products in the United States. The company is also a Dividend King, meaning that it has raised its dividend for more than five decades, a testament to how durable the tobacco industry is despite declining smoking rates.

The dividend remains in good financial health, with a payout ratio of 80% of estimated 2024 earnings. That dividend is backed by an investment-grade balance sheet and a multi-billion-dollar stake in Anheuser-Busch, which the company could liquidate as needed.

Advertisement

Altria’s cigarette shipments decline almost annually, but a combination of price increases and share repurchases continues inching earnings higher. Analysts estimate that the company will grow earnings by an average of 3% to 4% over the next three to five years, which means the dividend will continue inching higher, too.

Shares trade at 10 times Altria’s estimated 2024 earnings, but I’d hesitate to call the stock a bargain due to its low growth. However, you don’t need much when getting an 8% dividend yield. Those ultimately concerned with investment income will struggle to find a similarly safe yield this high.

3. Realty Income

Current yield: 5%

Real estate is one of society’s oldest industries, and real estate investment trusts (REITs) like Realty Income (NYSE: O) enable people to invest in real estate without directly owning property. REITs acquire and lease real estate, and then distribute most of their income to shareholders. That makes Realty Income an excellent dividend stock.

Advertisement

The company has paid and raised its dividend for 29 consecutive years, and the payout ratio is still just 75% of this year’s estimated funds from operations (FFO). Plus, Realty Income pays a monthly dividend, a perk for investors who want regular cash flow to help pay their bills.

Realty Income has thrived through economic ups and downs because it focuses on renting to retail businesses that people use regardless of what the economy is doing. Think grocery stores, restaurants, convenience stores, and pharmacies. Realty Income leases over 15,000 properties, so it’s a vast and diverse portfolio that generates steady rental income for the company.

Lower interest rates are a bonus for REITs like Realty Income because they often borrow to fund their property acquisitions. Cheaper borrowing costs should make Realty Income more profitable.

Realty Income trades at almost 15 times its estimated 2024 FFO, a fair price given the company’s bright outlook and reliable and growing dividend.

Advertisement

Should you invest $1,000 in Pfizer right now?

Before you buy stock in Pfizer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $765,523!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Advertisement

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer and Realty Income. The Motley Fool has a disclosure policy.

3 High-Yield Dividend Stocks That Are Screaming Buys Right Now was originally published by The Motley Fool

Advertisement



Source link

Continue Reading

Trending

Copyright © 2024 WordupNews.com