Crowdstrike has 70% upside

In today’s top stories, Sainsbury’s and Just Eat announce a speedy grocery delivery deal, ‘buy now, pay later’ usage continues to rise, and Tencent sees its share price recover after a tumultuous 2022. Crowdstrike is tipped by analysts to have a 70% upside, while Morgan Stanley says the risk is now priced into Indonesian tech firm GoTo.

Sainsbury’s and Just Eat announce partnership

UK shoppers will soon be able to get Sainsbury’s [SBRY.L] groceries delivered to their door within 30 minutes of ordering, after the supermarket inked a deal with Just Eat [JET.L]. However, question marks exist regarding customer demand, given that Sainsbury’s already offers one-hour and same-day services. The grocery delivery app market in the UK and on the continent is struggling, according to a Wired news story last week.

Growth in BNPL sparks concerns

With the cost of living crisis eating into disposable incomes, some shoppers are tightening their purse strings and reducing their discretionary spending. Others are turning to ‘buy now, pay later’ (BNPL) as a way to maintain their purchasing habits. Thirty percent of those who’ve used BNPL have done so because they weren’t able to afford the full amount. “Resorting to credit to keep up with bills or essentials is unsustainable,” Richard Lane from debt charity StepChange told the Financial Times.

Tencent on the rise

China granted licences to foreign video game titles for 18 months in December, signalling a potential end to Beijing’s gaming crackdown and helping lift the Tencent [0700.HK] share price 86.4% from its 52-week low. “For Tencent and China tech generally, valuations still look reasonable even after the rally, as various geopolitical and domestic concerns have eased and the government looks supportive,” Vey-Sern Ling, managing director at Union Bancaire Privee, told Bloomberg.

Crowdstrike loved by analysts

IT spending could slow in 2023 as enterprises look to pare down their budgets in the face of macroeconomic headwinds. However, cybersecurity, which is often deemed recession-proof, is likely to remain resilient. In a CNBC screening of stocks that are trading at low multiples and are loved by analysts, Crowdstrike [CRWD] came out on top, with a 70% upside to its average price target. Palo Alto Networks [PANW] has a 55% average potential upside.

GoTo set for rebound

Indonesia’s hottest IPO of 2022, GoTo [GOTO.JK] has plunged 72.25% since launching last April, but the stock could be set for a rebound this year, thanks to “the continuing structural growth of this digital consumer and the cyclical recovery post Covid-19”, according to a Sunday note from Morgan Stanley analysts including Mark Goodridge, as seen by Bloomberg. Any risk should now be priced in.

Bridgewater ranks as top foreign hedge fund

Last year was equity-focused hedge funds' worst since 2018, according to data from Hedge Fund Research. However, Ray Dalio’s Bridgewater Associates managed to buck the trend with its multi-asset, all-weather investment strategy. Its main China fund outperformed the SSE Composite and the CSI 300 indices and had an annualised return of 15.6% between its launch in October 2018 and October last year.

Amazon to axe 18,000 jobs

Big tech layoffs continued in the first week of January with Amazon [AMZN] announcing it would be cutting around 18,000 jobs, including in the UK, where it will shutter three warehouses. The move is part of the ecommerce giant’s attempt to slash costs. In a December note, Needham analyst Laura Martin pointed out that its costs were almost equal to its revenue: “Why is [Amazon] running a not-for-profit?”

Bright outlook for uranium stocks

Rising energy uncertainty means demand for uranium will remain high in 2023 even if spot prices are volatile in the near-term.

The uranium spot price pulled back towards the end of 2022, causing the Sprott Uranium Miners ETF [URNM] to fall close to its 52-week low, set on 6 July. It has since recovered and is up 10.3% since the start of the year.

The Sprott Uranium Miners ETF offers investors exposure to companies that dedicate at least half of their assets to uranium mining, exploration, development or production, or that hold physical uranium. NAC ​​Kazatomprom [KAP.IL], Cameco [CCJ] and Sprott Physical Uranium Trust [UU.TO] are its top three holdings.

Sprott Asset Management CEO John Ciampaglia told BNN Bloomberg earlier this month that the firm remains “extremely bullish on uranium”, because energy security will be a dominant theme around the world in 2023.