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Tag: investment opportunity

  • African leaders push for climate investment at Ethiopia summit

    ADDIS ABABA, Ethiopia (AP) — African leaders met Monday in the Ethiopian capital for the second Africa Climate Summit, where they proposed a new way of thinking about climate adaptation funding and called for the continent to be viewed not as a victim, but as an investment opportunity.

    With a population of more than one billion, African countries have been hit hardest by climate disasters such as droughts and floods, which have made millions of people vulnerable. In 2023, at the inaugural summit in Kenya, African leaders made ambitious plans to increase renewable energy, but funding constraints have slowed implementation.

    This year’s summit aims to unlock climate financing and accelerate Africa-led solutions and adaptation.

    It is “time to replace climate aid with climate investment,” Ethiopian Prime Minister Abiy Ahmed said during the summit’s opening ceremony, which was attended by heads of state from African nations as well as business leaders, climate scientists, activists and other stakeholders.

    Amos Wemanya, a climate action campaigner with Greenpeace Africa, said the climate adaptation funding gap can be met by taxing polluters.

    “We need to tax the polluters and the super-rich to generate the resources needed to make them pay for the climate plunder they are causing the continent,” he said.

    Mahamoud Ali Youssouf, the chairperson of the African Union — a continental body of 55 member states and a co-host of the summit — proposed a framework of “climate justice” to help vulnerable countries grappling with the dual challenges of climate change and debt.

    The summit declaration, which will outline Africa’s priorities and proposed solutions, is expected to be finalized this week, during the three-day gathering. It will then be presented at COP30 in November. COP30 president, Ambassador André Corrêa do Lago, attended the Africa summit and expressed his solidarity.

    Ethiopia, the host of this year’s summit, will inaugurate the Grand Ethiopian Renaissance Dam project along the Blue Nile on Tuesday. It is expected to produce more than 5,000 megawatts, doubling Ethiopia’s current output, part of which will be exported to neighboring countries.

    In July, the country launched a national campaign to plant 700 million trees in one day as part of an ambitious conservation initiative that aims to plant 50 billion trees by 2026.

    ____

    AP’s Africa coverage at: https://apnews.com/hub/africa

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  • Shaq Refused To Pay $80,000 For Security And Made A Surprising Choice. He Invested In A Company Bezos Later Bought For $1 Billion

    Shaq Refused To Pay $80,000 For Security And Made A Surprising Choice. He Invested In A Company Bezos Later Bought For $1 Billion

    Shaq Refused To Pay $80,000 For Security And Made A Surprising Choice. He Invested In A Company Bezos Later Bought For $1 Billion

    Shaquille O’Neal is known for his dominance on the basketball court, but his business moves off the court are just as impressive. One of the most surprising stories about Shaq isn’t about a slam dunk or a championship win — it’s about how he turned a simple home security issue into a multi-million-dollar investment.

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    Shaq has three homes in Atlanta, where he’s lived for years, and he needed a new security system for one of them. When he contacted a security company, they quoted him $80,000. Even though he’s worth millions, Shaq knew that price was way too high. So, he did what many of us would do and looked for a cheaper solution. While shopping at Best Buy, he spotted some Ring cameras and decided to buy one.

    “The crazy thing about it is I hooked it up myself,” Shaq said, clearly proud of his DIY skills. He installed the camera, and then, while traveling in China, he realized just how powerful the system was. He could see and talk to someone at his front door from halfway around the world. That’s when it clicked for Shaq — this wasn’t just a good product but a game-changer.

    Trending: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?

    Excited about what he had discovered, Shaq decided to take things a step further. He tracked down the company’s booth at a tech conference and made a bold offer to the CEO. “I said, ‘Hey, my name is Shaquille O’Neal. I want to invest in your company, and you’re going to pay me to do commercials, and then whatever happens happens,’” Shaq recounted. The CEO agreed, and Shaq became an early investor in Ring.

    A few years later, Jeff Bezos bought Ring for $1 billion. Shaq’s decision to invest in this still relatively unknown company saved him money on his home security and made him a lot of money in return. How much exactly? He never disclosed.

    Trending: These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends

    But this wasn’t Shaq’s first smart investment. In 1999, while still in his NBA prime, Shaq’s agent introduced him to Ron Conway, a top venture capitalist. During a lunch at the Four Seasons, Conway pitched him on investing in a little-known company called Google. Shaq invested $250,000, which grew significantly as Google became a tech giant.

    He said, “We had a meeting with them and it looked good, and I put some money in and forgot about it.”

    Shaq’s portfolio doesn’t stop there. He’s also invested in companies like Lyft, Apple and Vitaminwater. With Lyft, he jumped in just a year after it was founded, and when the company went public in 2019, it was valued at $22 billion.

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    This article Shaq Refused To Pay $80,000 For Security And Made A Surprising Choice. He Invested In A Company Bezos Later Bought For $1 Billion originally appeared on Benzinga.com

    © 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • 1 Magnificent Stock Up 89% in 2024: Is It a Once-in-a-Generation Investment Opportunity?

    1 Magnificent Stock Up 89% in 2024: Is It a Once-in-a-Generation Investment Opportunity?

    In the past five years, Chipotle has crushed it for shareholders, skyrocketing 340%. The Tex-Mex fast casual concept is still expanding rapidly, while posting incredible profitability. It makes sense that investors seeking the next big industry winner are now taking a closer look at Cava (NYSE: CAVA), a much smaller chain.

    This surging restaurant stock is already up nearly 90% year to date. Does this powerful momentum make Cava a once-in-a-generation investment opportunity?

    Big growth plans

    Cava focuses on Mediterranean food, using a similar model to Chipotle that allows hungry patrons to build their own salads, grain bowls, or pitas. Clearly, this is catching on with consumers. Management points to a growing interest from the general public in making healthy food choices as a key tailwind, and Cava’s fast-casual approach only increases accessibility and convenience for its customers.

    Despite inflationary pressures and general economic uncertainty, Cava continues to put up strong growth figures. In 2023, revenue jumped 59.8%, boosted by 72 new store openings and a 17.9% same-store sales growth. Last year’s sales figure of $729 million was 518% higher than five years ago in 2018.

    Businesses that are investing aggressively in growth initiatives typically aren’t profitable, so it might be surprising to learn that Cava bucks this trend. It registered $13.3 million in net income last year after posting a $59 million net loss in 2022. The hope for shareholders is that consistent and rising earnings will become the norm.

    By 2032, the executive team believes it can have 1,000 locations open across the U.S., up from 309 (as of Dec. 31, 2023). This growth potential is probably what investors are most excited about.

    High expectations

    It should come as no surprise that investors hope Cava can mirror the long-term success of Chipotle. Even with 3,500 existing locations, the fast-casual leader is expanding at a blistering pace with 271 store openings last year. Shares have been a huge winner for investors, thanks to the strong revenue and earnings growth that show no signs of slowing down.

    The resulting expectations for Cava are high, and the stock trades at a price-to-sales ratio of 11.1, a 30% premium to Chipotle. I’m not sure if this steep multiple is warranted.

    Cava’s valuation implies that management’s long-term target of opening 1,000 stores is a virtual certainty, perhaps at an even faster pace than the leadership team’s 2032 deadline. But I’m not as confident.

    Growth is already forecast to slow dramatically. The company plans to open 50 net new locations (at the midpoint of guidance) in 2024, a meaningful drop from last year. Even worse, same-store sales are only set to rise 3% to 5%, an extremely disappointing outlook given the company’s double-digit growth last year. For comparison’s sake, Chipotle is projecting mid- to high-single-digit comparable-sales growth this year, even though it’s already a much bigger enterprise that’s further penetrated in the U.S.

    Competition is a critical factor investors can’t ignore. The restaurant sector is perhaps the most competitive in the world, and finding lasting success is extremely difficult. Cava has to constantly win over diners who are overwhelmed with options  — even the Mediterranean category is crowded with lots of choices. Without an economic moat, I have my concerns about the company’s success over the next decade and beyond.

    To its credit, Cava is developing name recognition that people are excited about, but that’s not enough to make it a once-in-a-generation investment opportunity right now.

    Should you invest $1,000 in Cava Group right now?

    Before you buy stock in Cava Group, 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 Cava Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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    Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends Cava Group. The Motley Fool has a disclosure policy.

    1 Magnificent Stock Up 89% in 2024: Is It a Once-in-a-Generation Investment Opportunity? was originally published by The Motley Fool

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  • How the market’s forgotten stocks could lead a ‘once-in-a-generation’ buying opportunity

    How the market’s forgotten stocks could lead a ‘once-in-a-generation’ buying opportunity

    Getty Images / Scott Olson

    • A once-in-a-generation opportunity is coming for the stock market, according to investment chief Richard Bernstein.

    • That’s because profits are about to accelerate for companies throughout the stock market.

    • It could usher in a decade of sagging returns for current market leaders, and huge gains for the rest of the market.

    Brace for a big investing opportunity that’s about to come for stocks — and not in an area of the market investors may be expecting.

    That’s according to Richard Bernstein, the CIO of Richard Bernstein Advisors, a $16 billion asset manager.

    He argues that while the Magnificent Seven mega-cap firms have dominated the S&P 500’s gains in 2023, less high-profile stocks are now primed to see big returns over the next decade.

    That coming pendulum swing in market leadership is a “once-in-a-generation” buying opportunity brewing among forgotten and under-loved areas of the market, Bernstein says. Speaking with Insider, Bernstein said he sees it similar to a period like the 2000s, when the biggest leaders in the S&P 500 shed value while underdog sectors like energy and emerging markets saw “monster returns.”

    “Despite profits growth becoming more abundant, investors generally continue to focus on the so-called Magnificent 7 stocks. Such narrow leadership seems totally unjustified and their extreme valuations suggest a once-in-a-generation investment opportunity in virtually anything other than those 7 stocks,” he wrote in a note this week.

    So what makes this time different from other periods of changing market leadership?

    Bernstein — who was previously the chief investment strategist at Merrill Lynch — says his expectation for a stock boom isn’t to be mistaken with something like the two years of the pandemic market rally, which featured narrow leadership by so-called reopening names, similar to what’s now happening with the Magnificent 7. His thesis hinges on a broader swath of the market getting a lift by a resilient economy and surging corporate profitability.

    “Are there really only seven growth stories in the entire global equity market? And then, the second way to say it is, are these seven really the best growth stories in the entire global equity market? The answer to both of those questions is no,” he said.

    Of the 130 US companies that saw at least 25% earnings growth in the 12 months through October 15, Amazon was the only Magnificent 7 stock represented.

    Just 1 Magnificent 7 firm posted more than 25% earnings growth as of October.Just 1 Magnificent 7 firm posted more than 25% earnings growth as of October.

    Just one Magnificent 7 firm posted more than 25% earnings growth as of October.Richard Bernstein Advisors

    Meanwhile, profits at companies throughout the rest of the market are on the rise, which puts investors in a position to ditch super-expensive mega-cap stocks for more attractively priced shares. Corporate profits look to have hit a trough in 2023 and are heading up into 2024, according to MSCI All Country World Index data.

    Profits have troughed and look on track to accelerate into 2024.Profits have troughed and look on track to accelerate into 2024.

    Profits have troughed and look on track to accelerate into 2024.Richard Bernstein Advisors

    “Because growth is starting to accelerate, it makes less and less sense to pay a premium for growth. History suggests that investors become comparison shoppers for growth as it becomes more abundant, so a movement toward the broader and cheaper market seems consistent with history,” RBA added in the note.

    Bernstein predicts the enormous gains enjoyed by mega-cap stocks will be whittled down as investors flock to more attractively priced areas of the market, such as small-cap and mid-cap stocks. The Magnificent Seven firms wiping out 20%-25% of their value while the Russell 2000 gains 20%-25% over the next decade would be realistic, in his view.

    “They’re so depressed on the other side of the seesaw that you can get huge returns,” Bernstein said, adding that RBA was overweight in virtually every area of the market other than the Magnificent Seven stocks.

    Bernstein isn’t alone in his bullishness. Other forecasters are pointing to big gains ahead for the broader market. In a note this week, Bank of America analysts said that an indicator with a nearly 100% track record is flashing signs that the S&P 500 is in for a 16% gain in 2024. Historical trends also point to strong profits ahead of investors as the stock market sees a rare bullish pattern of gains and losses this year.

    Read the original article on Business Insider

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