If it didn’t do anything else, the latest move to shake up the market may have actually brought a bit of market turmoil with the old lineup of S&P 500 industry sectors. A major goal was to break up the information technology sector, which had ballooned in value to represent roughly 26% of the capitalization-weighted S&P 500 Index (SPX).
The old telecom sector has been renamed communications services, boosted by 23 stocks with a combined market cap of nearly $3 trillion, based on reports by CNBC and The Wall Street Journal. Of these 23 stocks, six were formerly in information technology, and 16 were in consumer discretionary, according to an earlier CNBC report. Most notable among the new communications services stocks are FAANG members Facebook Inc. (FB), Netflix Inc. (NFLX) and Google parent Alphabet Inc. (GOOGL).
5 Ways The Tech Shuffle Is Creating Market Turmoil
Alphabet and Facebook had represented roughly 15.6% of the value of technology sector ETFs, and now will exert even greater influence on the new communications services sector, per CNBC, which estimates that these two stocks will represent about 45% of the latter’s value. Meanwhile, Apple Inc. (AAPL) will increase to almost 20% of the tech sector’s value.
Are There Any Defensive Plays Left?
The old telecom sector had been a strong defensive play for investors, but the new communications sector is tech-heavy, with a dividend yield that is dramatically lower and a valuation that is grossly higher, as explained below. Neena Mishra of Zacks said this, on CNBC: “The telecom sector is traditionally seen as a defensive sector and a value play. The revamped communications services sector will be seen as a cyclical sector with much stronger growth prospects.”
As noted above, Facebook and Alphabet represent about 45% of the new communications services sector. Meanwhile, the two biggest stocks in the revamped tech sector, Apple and Microsoft Corp. (MSFT), combine for only about 30% of its value. Based on the 10 largest stocks in each sector, communications is more concentrated than either technology or consumer discretionary.
Overall, the new communications sector will be 52% tech stocks, 28% consumer discretionary, and just 20% telecom. Interestingly, the 61% proportion of growth stocks in communications services is greater than their 47% share of the post-adjustment tech sector, and the forward P/E is leaping from 11 times earnings for the old telecom sector to 28 times earnings for communications services, per research by State Street and CFRA cited by CNBC.
Lower Dividend Yields
The previous telecom sector led the S&P 500 with a robust 5.4% dividend yield. The revamped communications sector sees that plummet to 1.7%, below the 1.9% yield for the entire S&P 500.
Big Tech Still Rules
The reworking reduces the weight of the technology sector from 26% to 20% of the S&P 500, leaving it still the biggest sector. Also, the reclassification game does not change the fact that the five biggest S&P 500 stocks, all members of the FAAMG group, still account for about 15.6% of the value of the entire index.
Streaming Stocks Take Aim At Winning The Content War
The Rise Of New Services Has Created A Battleground For Streaming Stocks
Over the past half a decade or so, the world of entertainment changed dramatically with the emergence of video streaming service Netflix Inc (NASDAQ: NFLX). As cord-cutting grew, Netflix’s continued to corner more and more of the streaming market.
However, that is now going to change with the emergence of competing for streaming services from other corporate giants like Disney and it has been projected that the industry is going to be worth $124.57 billion by 2025. That being said, there may be ample opportunity for investors. Here is a look at a few tech stocks to watch that could be set to prove themselves on this new battlefield.
Fearless Films Inc. (FERL) Aims To Tackle Over The Top Content
Fearless Films Inc. (FERL) is a full-service production company with award-winning upper management. The company specializes in producing both short and feature films as well as scriptwriting and distribution.
Fearless Films has been developing its operations recently which has caught the interest of new investors. One development was a recent news press relating to an agreement with Victor Altomare, the Founder and President of Fearless. The company entered a Letter of Intent to acquire the rights of up to 12 movies from a library held by Mr. Altomare. The price of the acquisition is to be determined at a later date.
On October 31, Fearless Films (FERL) announced that further to its initial press release on the 16th, the Company has selected The Lunatic as the first film to be selected for appraisal and final negotiation. Fearless will engage an international accounting and advisory firm with a strong film industry practice to provide an independent valuation of the film, following which the company will enter into final negotiations on the purchase.
Companies like Fearless are looking to fill the content needs of companies streaming companies. Jeffrey Cole explained how Apple, for example, needs new content, “I think entertainment’s going to become a key element of Apple’s business. For them, spending $2 billion on [original content] is just dabbling. If they like what they see, I think they’ll have a $10 billion budget.” This is a massive market potential that Fearless Films is looking to capitalize on.
Walt Disney (DIS)
The first one to consider is the entertainment giant Walt Disney Co (NYSE:DIS), which is all set to launch its streaming service Disney+. Many analysts believe that Disney could prove to be one of the best stocks to pick when it comes to video streaming stocks and reasons are manifold.
The company owns one of the most extensive archives in the industry and has also acquired content steadily. Additionally, it owns a controlling stake in Hulu as well. The purchase of 21st Century Fox may have put a bit of pressure on its earnings. They went down by 6% in the first three quarters of the year. But it boosted Disney’s archives considerably. Its earnings announcement could be a major event this week.
The other company that is expected to go strongly over the coming years is Roku Inc (NASDAQ:ROKU). It offers a platform that can access all different streaming services. The company has grown impressively over the past year or so and that has continued into 2019. Roku might not have made a meaningful profit yet but it has grown considerably.
In Q2 2019, its revenues hit $250.1 million and recorded growth of 59%. Gross profit for the same period soared 47% to $114.2 million but at the same time, the company’s investments in research pretty neutralized the gains. The company has grown rapidly and it is reducing its losses progressively as well. Analysts estimate that the losses for Q3 are going to be $0.28 per share.
Pursuant to an agreement between Midam Ventures LLC and Fearless Films Inc. (FERL), Midam has been paid $94,980 by Fearless Films Inc. (FERL) for a period from October 1, 2019 to November 17, 2019. We may buy or sell additional shares of Fearless Films Inc. (FERL) in the open market at any time, including before, during or after the Website and Information, to provide public dissemination of favorable Information about Fearless Films Inc. (FERL). Click Here For Full Disclaimer.
3 Defense Stocks to Watch in November
Over the years it has become abundantly clear that defense spending is going to rise every year and hence, defense stocks have naturally emerged as some of the safest investments in the market. However, the current unstable geopolitical situation in different corners of the world could lead to even more defense spending, if a Bank of America analyst is to be believed.
Ronald Epstein of Bank of America stated that in 2020, defense companies could generate revenue growth in the high single digits. Hence, it is worthwhile to have a look at these 3 penny stocks that could prove to be good investments.
Liberty Defense Holdings (SCAN.V) (LDDFF)
There have been more mass shootings this year in the United States than there have been days in the year. Over 330 mass shootings , to be exact. This is becoming a huge issue that is costing precious lives and could see billions of dollars spent to fix this situation.
Liberty Defense (TSX: SCAN.V) (OTC: LDDFF) plans to address this issue using HEXWAVE, a next-generation high-tech security scanning system. It will use advanced, low-power radar, 3D-imaging, and Artificial Intelligence (AI) to screen people at public gatherings such as sports games, unobtrusively. The company itself has been making paramount progress this quarter.
Most recently the company signed a collaboration agreement with Port Tampa Bay to beta test HEXWAVE. Between the years 2007 and 2017, total cruise ship passenger capacity grew by 25 percent in North America, with the following 10 years estimated to see a further 41 percent increase, according to a 2017 report. So this move could prove to be well-timed for a company like Liberty Defense (TSX: SCAN.V) (OTC: LDDFF).
Also, keep in mind that they’ve also got agreements in place with FC Bayern Munich’s Allianz Arena in Germany, Rogers Arena in Vancouver, British Columbia, Maryland Stadium Authority’s Camden Yards Complex, and in the state of Utah. There’s also projects with the Virginia Division of Capitol Police, in Sleiman shopping centers, in a Hindu temple, in the Metro Toronto Convention Centre, in Toronto Pearson International Airport, and with the University of Wisconsin Police Department. To say that they’ve laid the groundwork may be an understatement and results of these beta tests are highly anticipated by the company.
RADA Electronic (RADA)
One of the defense stocks that has been on fire since as far back in August is that of RADA Electronic Ind. Ltd. (NASDAQ:RADA). Since the early days of August, the stock has gained consistently and currently, it gains stand at 58% till date. It goes without saying that it is a handsome return and the reason behind the rise lies in the new contracts that the company has managed to sign.
On October 10, the company revealed that it had received order worth as much as $6 million for both August and September. More importantly, RADA has managed to rake in as much as $41 million worth of order this year so far and has emerged as one of the stocks to watch.
Kratos Defense & Security (KTOS)
The other defense stock to watch closely is that of Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), which released its financial results for the third quarter on Wednesday this week. The company managed to deliver a highly impressive performance as it grew its revenues year on year and also managed to beat analysts’ estimates for earnings.
Kratos managed to deliver earnings of 9 cents per share, which is higher than the analysts’ estimates of 7 cents a share. It is a significant development and has made Kratos one of the defense stocks to be in focus this week.
Disclaimer: Pursuant to an agreement between MIDAM VENTURES, LLC and Liberty Defense Holdings Inc. Midam was hired for a period from 06/1/2019 – 9/30/2019 to publicly disseminate information about Liberty Defense Holdings Inc. including on the Website and other media including Facebook and Twitter. We were paid $250,000 (CASH) for & were paid “0” shares of restricted common shares. We were paid $75,000 (CASH) by Liberty Defense Holdings AND HAVE EXTENDED coverage for a period from 11/1/2019 – 11/30/2019. We may buy or sell additional shares of Liberty Defense Holdings Inc. in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. For previous compensation see our FULL DISCLAIMER HERE.
Liberty Defense (SCAN.V) (LDDFF) Achieves Significant Product Milestone with Active Real-Time 3D Imaging
VANCOUVER and ATLANTA , Nov. 6, 2019 /CNW/ – Liberty Defense Holdings Ltd. (“Liberty”) (TSXV: SCAN, FRANKFURT : LD2, OTCQB: LDDFF), a leading concealed weapons detection company, is pleased to announce that the company has achieved active real-time 3D imaging functionality with it’s proprietary threat detection system, HEXWAVE. The real-time 3D imaging represents the latest significant step forward as the company progresses to completion of alpha testing by year-end.
Bill Riker , Liberty’s CEO, commented: “Our team continues to deliver against our aggressive development timeline and the achievement of active real-time 3D imaging is yet another significant accomplishment. We look forward to continuing to deliver against our stated objectives in the coming months.”
How HEXWAVE works:
Figure 1 depicts how HEXWAVE works, emitting a low-power signal, 200 times less than Wi-Fi. It then captures the reflections to create an active real-time 3D image, which is interpreted by AI.
Figure 1: Better Data = Better Detection (CNW Group/Liberty Defense Holdings Ltd.)
Figure 1: Better Data = Better Detection (CNW Group/Liberty Defense Holdings Ltd.)
On June 6, 2019 , Liberty provided an in-depth understanding of HEXWAVE and its four subsystems:
Antenna Array and Transceiver (captures real-time data)
3D Radar Image Generation (converts captured data into 3D radar images)
AI and Deep Learning (interprets the data and 3D radar images to detect threats)
Smart Interface Functionality (provides connectivity to existing security systems)
Following the completion of the HEXWAVE prototype, which was demonstrated at Liberty’s Center of Excellence in Atlanta, GA , on September 26 , the company has continued to advance the speed and efficiency of the real-time 3D imaging. The achievement of active real-time 3D imaging, created from 400,000 data points in the Liberty Defense labs using the HEXWAVE prototype, is a significant milestone. Machine learning models are trained using this 3D imaging and data to make its prediction about the weapons or non-threatening objects. The completion of hardware systems (Antenna Array, Transceiver, CPU/GPU) and software for acquiring the data used to create real-time images further de-risks HEXWAVE’s program.
Aman Bhardwaj , COO and President of U.S. Operations, commented: “This represents a significant step forward in HEXWAVE’s development. The ability to now generate active real-time 3D imaging using the HEXWAVE prototype will enable the team to continue its rapid development of HEXWAVE with the goal of completing the alpha testing by the end of the 2019. After this milestone the focus of development will shift from transferring and developing the technology to training, testing and improving the design for production and commercialization. We are very excited to have been able to achieve this milestone given the significant changes that have occurred to the underlying subsystems since the technology behind HEXWAVE was first developed in MIT Lincoln Lab.”
Liberty continues to make strides to meet the initially disclosed aggressive timeline, and is well on its way to the completion of alpha testing by year end, as noted in its June 24, 2019 release.
Liberty has announced 11 high calibre beta test partners to-date, including Port Tampa Bay , the University of Wisconsin , Pearson International Airport, the Metro Toronto Convention Centre, and the Maryland Stadium Authority, and is looking forward to commencing the building of its initial beta units upon completion of the system integration phase of the alpha testing.
HEXWAVE is occupying a new and unique segment in the security market, set apart by nine distinct discriminators that identify it from other security systems on the market. These discriminators include:
Metallic & non-metallic detection
Indoor & outdoor installation
Patented real-time scanning
Smart functionality & capability to interact/integrate with existing security systems
Covert & overt installation
Routine software & AI updates
High throughput (>1,000 people/hour)
Operational agility; portable & mobile design
No privacy concerns; no personally identifiable information is collected
On Behalf of Liberty Defense
CEO & Director
About Liberty Defense
Liberty provides security solutions for concealed weapon detection in high volume foot traffic areas and has secured an exclusive license from Massachusetts Institute of Technology ( MIT ), as well as a technology transfer agreement, for patents related to active 3D radar imaging technology that are packaged into the HEXWAVE product. The system is designed to provide discrete, modular and scalable protection to provide layered, stand-off detection capability. This is intended to provide a means to proactively counter evolving urban threats. The sensors with active 3D radar imaging and Artificial Intelligence (AI)-enhanced automatic detection are designed to detect metallic and non-metallic firearms, knives, explosives and other threats. Liberty is committed to protecting communities and preserving peace of mind through superior security detection solutions. Learn more: LibertyDefense.com
When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although Liberty believes, in light of the experience of their respective officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in the forward-looking statements and information in this press release are reasonable, undue reliance should not be placed on them because the parties can give no assurance that such statements will prove to be correct. The forward-looking statements and information in this press release include, amongst others, information relating to the functionality of HEXWAVE. Such statements and information reflect the current view of Liberty. There are risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the interfacing with existing secuirty systems and future testing. These fluctuations may adversely affect the price of the Liberty’s securities, regardless of its operating performance. There are a number of important factors that could cause Liberty’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses; and general developmenty, market and industry conditions. The parties undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of their securities or their respective financial or operating results (as applicable).
Liberty cautions that the foregoing list of material factors is not exhaustive. When relying on Liberty’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Liberty has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of Liberty as of the date of this press release and, accordingly, are subject to change after such date. Liberty does not undertake to update this information at any particular time except as required in accordance with applicable laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/November2019/06/c2288.html
Disclaimer: Pursuant to an agreement between MIDAM VENTURES, LLC and Liberty Defense Holdings Inc. Midam was hired for a period from 06/1/2019 – 9/30/2019 to publicly disseminate information about Liberty Defense Holdings Inc. including on the Website and other media including Facebook and Twitter. We were paid $250,000 (CASH) for & were paid “0” shares of restricted common shares. We were paid $75,000 (CASH) by Liberty Defense Holdings AND HAVE EXTENDED coverage for a period from 11/1/2019 – 11/30/2019. We may buy or sell additional shares of Liberty Defense Holdings Inc. in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. For Full Disclaimer Click Here.
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