I’m Bullish on Crypto, But Not on Marathon Patent Stock

I’m Bullish on Crypto, But Not on Marathon Patent Stock

TipRanks

When billionaire financier Ray Dalio makes a move, Wall Street pays attention. Dalio, who got his start working on the floor of the New York Stock Exchange trading commodity futures, founded the world’s largest hedge fund, Bridgewater Associates, in 1975. With the firm managing about $140 billion in global investments and Dalio’s own net worth coming at $17 billion, he has earned legendary status on Wall Street. Summing up his success, Dalio has three pieces of advice for investors. First, diversify. Keeping a wide range of stocks in the portfolio, from multiple sectors, is the surest way to invest well. Second, don’t think that rising markets will rise forever. This is Dalio’s variation on an old saw that past performance does not guarantee future returns. Dalio will tell you that all strong past returns really guarantee are current high prices. And finally, Dalio tells investors, “Do the opposite of what your instincts are.” Or put another way, don’t follow the herd, as such thinking frequently leads to suboptimal results. Looking to Dalio for investing inspiration, we used TipRanks’ database to find out if three stocks the billionaire recently added to the fund represent compelling plays. According to the platform, the analyst community believes they do, with all of the picks earning “Strong Buy” consensus ratings. Linde PLC (LIN) The first new position is in Linde, the world’s largest industrial gas production company, whether counting by revenues or market share. Linde produces a range of gasses for industrial use, and is the dominant supplier of argon, nitrogen, oxygen, and hydrogen, along with niche gasses like carbon dioxide for the soft drink industry. The company also produces gas storage and transfer equipment, welding equipment, and refrigerants. In short, Linde embodies Dalio’s ‘diversify’ dictum. Linde’s industry leadership and essential products helped the company bounce back from the corona crisis. The company’s revenues slipped in 1H20, but grew in the second half, reaching pre-corona levels in Q3 and exceeding those levels in Q4. In a sign of confidence, the company held its dividend steady through the ‘corona year,’ at 96 cents per common share – and in its recent Q1 declaration, Linde raised the payment to $1.06 per share. This annualizes to $4.24 and gives a yield of 1.7%. The key point here is not the modest yield, but the company’s confidence in the security of its positions, allowing it to keep a steady dividend at a time when many peers are cutting profit sharing. It’s no wonder, then, that an investor like Dalio would take an interest in a company like Linde. The billionaire’s fund snapped up 20,149 shares during the fourth quarter, worth $5.05 million at current prices. Assessing Linde for BMO, analyst John McNulty expresses his confidence in Linde’s current performance. “LIN continues to execute on its growth strategy to drive solid double-digit earnings growth, notably without requiring a further macro improvement. In our view, management’s 11-13% guide for 2021 remains conservative driven by its on coming projects, continued pricing, efficiency gains, and solid buybacks with its strong balance sheet and cash flows. Further, the solid FCF position provides them plenty of dry powder for M&A, de-caps, etc. We believe LIN is poised to continue to surprise investors and outperform the broader group even in a cyclical market. the largest global industrial gas company,” McNulty opined. In line with his bullish comments, McNulty rates LIN as a Buy, and his $320 price target implies an upside of ~28% for the coming year. (To watch McNulty’s track record, click here) Wall Street’s analysts are in broad agreement on the quality of Linde’s stock, as shown by the 15 Buy reviews overbalancing the 3 Holds. This gives the stock its Strong Buy analyst consensus rating. Shares are priced at $250.88, and their $295.73 average price target suggests they have ~18% growth ahead. (See LIN stock analysis on TipRanks) BlackRock (BLK) Next up is the world’s largest asset manager. BlackRock has over $8.67 trillion in assets under management. The company is one of the dominant index funds in the US financial scene, and saw $16.2 billion revenue last year, with a net income of $4.9 billion. BlackRock’s recent Q4 report shows its strength, as far as numbers can. EPS came in at $10.02 per share, a 12% sequential gain and a 20% year-over-year gain. Quarterly revenues of $4.8 billion were up 17% yoy. The full-year top line was up 11% from 2019. BlackRock achieved all of this even as the corona crisis flattened the economy in 1H20. In the first quarter of this year, BlackRock declared its regular quarterly dividend, and raised the payment by 13% to $4.13 per common share. At an annualized payment of $16.52, this gives a yield of 2.3%. The company has kept the dividend reliable for the past 12 years. Not wanting to miss out on a compelling opportunity, Dalio’s fund pulled the trigger on 19,917 shares, giving it a new position in BLK. The value of this new addition? More than $14 million. Covering BLK for Deutsche Bank, analyst Brian Bedell writes, “We view 4Q results as very good with strong long-term net inflows across its products which we expect to continue despite a one-time, $55bn pension fund outflow of low-fee equity index assets expected in 1H21 which mgmt. said would have a minimal impact on base fee revenue. Additionally, total net inflows drove annualized organic base management fee growth of 13%, a quarterly record, on annualized long-term organic AuM growth of 7%. We expect organic base fee growth to exceed organic AuM growth coming into 2021 driven by a flow mix skewed toward higher fee-rate products for now.” To this end, Bedell rates BLK a Buy and his $837 price target suggests the stock has ~18% upside ahead of it. (To watch Bedell’s track record, click here) The analyst consensus tells a very similar story. BLK has received 6 Buy ratings in the last three months, against a single Hold – a clear sign that analysts are impressed with the company’s potential. Shares sell for $710.11, and the average price target of $832.17 gives the stock a 17% upside potential. (See BLK stock analysis on TipRanks) AbbVie, Inc. (ABBV) AbbVie is a major name in the pharma industry. The company is the maker of Humira, an anti-inflammatory used in the treatment of a wide range of chronic illnesses including rheumatoid arthritis, Crohn’s disease, and psoriasis. The company’s other immunology drugs, Skyrizi and Rinvoq, were approved by the FDA in 2019 as treatments for psoriasis and rheumatoid arthritis, respectively, and saw combined sales of $2.3 billion last year. AbbVie expects that these drugs will ‘fill the gap’ in profits when the Humira patents expire in 2023, with up to $15 billion in sales by 2025. Humira is currently the main driver of AbbVie’s immunology portfolio, and provides $19.8 billion of the portfolio’s $22.2 billion in annual revenues, and a significant part of the company’s total sales. For the full year 2020, across all divisions, AbbVie saw $45.8 billion in revenues, with an adjusted diluted EPS of $10.56. In addition to its high-profile anti-inflammatory line, AbbVie also has a ‘stable’ of long-established drugs on the market. As an example, the company owns Depakote, a common anti-seizure medication. AbbVie also maintains an active research pipeline, with scores of drug candidates undergoing studies in the disciplines of immunology, neuroscience, oncology, and virology. For investors, AbbVie has a long-standing commitment to returning profits to shareholders. The company has an 8-year history of keeping a reliable – and growing – dividend. In the most recent declaration, made this month for a payment to go out in May, AbbVie raised the dividend 10% to $1.30 per common share. At $5.20 annualized, this gives a yield of 4.9%. Once again, we are looking at stock that embodies some of Dalio’s advice. Pulling the trigger on ABBV in the fourth quarter, Dalio’s firm purchased 25,294 shares. At current valuation, this is worth $2.66 million. Leerink analyst Geoffrey Porges covers ABBV, and is impressed with the way that the company is preparing in advance for the loss of US exclusivity on its best-selling product. “Between ABBV’s ex-Humira portfolio’s growth trajectory and a broad portfolio of catalysts across early-, mid-, and late-stage assets, it is hard to find a biopharma company that is better positioned, even with their looming LOE. ABBV is prepared for 2023, and has growth drivers to drive better than industry average top- and bottom-line growth in the period before (2021-2022) and after (2024-2028) 2023,” Porges opined. Porges gives ABBV an Outperform (i.e. Buy) rating, and sets a $140 price target that indicates room for a 33% one-year upside. (To watch Porges’ track record, click here) Overall, there are 10 reviews on ABBV shares, and 9 of those are to Buy – a margin that makes the analyst consensus rating a Strong Buy. The stock is trading for $105.01 and has an average price target of $122.60. This suggests an upside of ~17% over the next 12 months. (See ABBV stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Crypto price surge invites a torrent of crypto crime

Bitcoin soared past $50,000 per coin for the first time on Tuesday, and three days later its market cap surpassed $1 trillion. To say the cryptocurrency and altcoins have been on a tear is an understatement — especially after Tesla (TSLA) bought $1.5 billion in bitcoin earlier this month. And as the prices of these digital assets increase, so does the temptation to heist cryptocurrency.

The Justice Department unsealed an indictment Wednesday alleging North Korean military hackers schemed to steal money and cryptocurrency around the world as part of a larger plot involving Sony Pictures. That indictment spurred a warning from the FBI and Department of Homeland Security: Hackers are upping their games to steal cryptocurrency.

But it’s not just nation states stealing digital wallets worth millions. Cybercriminals are increasingly targeting individuals and businesses to surreptitiously mine cryptocurrency using unsuspecting victims’ computer systems in a cyberattack called cryptojacking.

[Read more: Tesla’s big bitcoin bet could come back to bite the EV maker]

“We’ve certainly seen in the past, a pretty reasonably good correlation between the price of bitcoin and the amount of cryptojacking activity,” Chester Wisniewski, principal research scientist at cybersecurity firm Sophos, told Yahoo Finance.

Experts say there are ways to reduce vulnerability to attacks by following basic and more sophisticated cybersecurity measures, starting with secure passwords.

International cybercriminals are stealing millions

North Korea and Iran, which are subject to U.S. sanctions, have leaned on cyberattacks against digital wallets to grow their coffers.

“North Korea’s operative, using keyboards rather than guns, stealing digital wallets and cryptocurrency instead of stacks of cash, have become the world’s leading bank robbers,” federal prosecutor John Demers told reporters this week after the indictment was unsealed.

Assistant Attorney General for National Security John C. Demers speaks during a virtual news conference at the Department of Justice in Washington, U.S., October 28, 2020. He announced the unsealed indictment against the North Korean hackers on Feb. 17, 2021. Sarah Silbiger/Pool via REUTERS

Prosecutors allege hackers working for North Korea’s government targeted cryptocurrency companies and stole tens of millions of dollars’ worth of cryptocurrency, including $11.8 million from a financial services company in New York in 2020. The hackers used malware called CryptoNeuro Trader as a backdoor into victims’ computers, stealing $24 million from an Indonesian cryptocurrency company in 2018, and $75 million from a Slovenian cryptocurrency company in 2017, according to the indictment.

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The malware provided a back door to steal private keys, the indictment said. The illegitimate software was marketed under names including Celas Trade Pro, WorldBit-Bot, iCryptoFx, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale.

“It appears that this malware is very sophisticated, in the sense in that it is impersonating a legitimate piece of software…which is a powerful concept,” says Yehuda Lindell CEO & Co-founder of Unbound Tech, which provides cryptographic infrastructure, including key management and protection.

[Read more: What is dogecoin? Elon Musk has sent the meme cryptocurrency soaring]

While crypto asset holders may avoid clicking on an unfamiliar link, Lindell said, they might be more inclined to install an update that appears to come from a trading platform.

“Once you have malware, that has access to whatever keys you have done, then obviously that malware can go ahead and do whatever it wants and steal your funds,” Lindell said. ”If somebody manages to steal your funds, there’s actually no way of getting them back, at all.”

Another problem is that not all cryptocurrency exchanges have the same security posture, compared to traditional banks, Lindell said. And when the incentive is so high, he said, the methods for theft become more sophisticated. “It’s direct money,” he said, unlike credit card number and password hacks that take added steps to convert to something of value.

According to a report from Amsterdam-based blockchain analytics firm Crystal Blockchain cited by Coindesk, hackers and scammers are known to have stolen $7.6 billion in cryptocurrency between 2011 and late 2020.

Rise in “Cryptojacking” targeting consumers, businesses

Beyond direct attacks on crypto wallets, cybercriminals are increasingly launching cryptojacking attacks against consumers and businesses to mine bitcoin and other cryptocurrencies. The criminals infiltrate and gobble up a target machines’ system resources, as a substitute for investing in their own computing power. Telltale signs of a cryptojacking attack can include sluggish performance and use of an unusually large amount of energy.

“Whenever you have something like this that is valuable, now all of a sudden more people are going to be willing to do things like…put little Trojan software and other things like this on people’s computers to mine this cryptocurrency,” NYU Tandon School of Engineering processor Justin Cappos told Yahoo Finance.

[Read more: MicroStrategy CEO sees an ‘avalanche’ of companies buying bitcoin]

For the average user, cryptojacking could mean a slowdown in their computer’s performance, or an increase in their electricity bill as hackers force victims’ machines to operate at full throttle to mine cryptocurrencies as fast as possible. More sophisticated cybercriminals, however, will go after large businesses that rely on cloud platforms like Amazon’s (AMZN) AWS or Microsoft’s (MSFT) Azure to mine cryptocurrencies, Cappos said.

A Bitcoin ATM sign is pictured in a bodega in the Manhattan borough of New York City, New York, U.S., February 9, 2021. REUTERS/Carlo Allegri

According to Wisniewski, cybercriminals install malware in businesses’ software running on AWS or Azure. The malware doesn’t touch AWS or Azure, but forces the business’s software to use a greater amount of computing resources from those services than they otherwise would to handle the intensive task of mining.

Such a dramatic increase in usage could add several thousand dollars to a company’s electric bill in a single month — and that high bill could be the only sign of an intrusion.

Protecting your digital wallet

To stave off an attack on a digital wallet or platform, Lindell advises individuals and entities to invest in professional security. Protecting cryptocurrency the same way as protecting your bank account, he said, “That’s not going to cut it.”

Experts say the best way to think about the abstract concept of cryptocurrency funds, is to consider the funds and the account holder’s secret key as one and the same. How those keys are stored can vary, depending on how the assets are held.

Among three models, one is a custody model where an entity, such a cryptocurrency trading platform like Coinbase, holds and is responsible for protecting the key, and the asset holder uses a password to access funds associated with that key. A second model is one where the asset holder independently holds and is responsible for the key.

“Both of these models are dangerous for different reasons,” Lindell said.

A third model adopts a hybrid solution where two parties share the key, making it more difficult for hackers to infiltrate an account because no single point of attack could breach the key. Large institutions and major holders of cryptocurrencies also protect keys using “cold wallets” that store keys in physical vaults.

For consumers with an insignificant percentage of their assets held in cryptocurrency, the best bet may be to use secure passwords for email, messaging and other apps. Experts say it’s also critical to remain vigilant about opening email attachments, and steer clear of risky websites.

It doesn’t appear that the temptation to cryptojack or steal cryptocurrencies will go away anytime soon. On Friday, bitcoin was up 7.6% just after 4:30 p.m. ET, valued at nearly $56,000 a coin.

Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney. Follow Alexis Keenan on Twitter @alexiskweed. Daniel Howley is the tech editor for Yahoo Finance.

Got a tip? Email Daniel Howley at dhowley@yahoofinance.com over via encrypted mail at danielphowley@protonmail.com, and follow him on Twitter at @DanielHowley.

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A crypto frenzy in open defiance of our ban plan

When strangers start offering stock tips, went the old saying, it is time to exit a frothy market. With Bitcoin punts, online advice could soon be at that point in India, as a crypto frenzy fed by federal easing of fiat money plays out globally, and bets on its value are confidently spoken of as one-way wagers. Yet, this cryptocurrency is not just another item on a ticker tape of crawling scrip prices, and, froth or not, it also appears to hold appeal among real investors, those who weigh risk against expected return. The local risk of owning Bitcoin was raised by a recent legislative proposal of the government to ban private cryptocurrency. News of clamps in the works broke just before our budget of 1 February. But Indian crypto exchanges have reported a surge of sign-ups since then. CoinSwitch Kuber, a crypto-only platform launched last year that claims 3 million users, said it saw both users and trades rise rapidly this month. WazirX, a crypto exchange with 1.5 million claimed users, reported five times as many new users in February than January. Others platforms saw upshifts too. This is remarkable.

Greed for a fast buck could be a big motive out there, and that would presumably include the efficient kind that is said to work, clarify and cut through markets, as extolled in Oliver Stone’s Wall Street (1987). Bitcoin has shot up 60% this month so far, and achieved $1 trillion in global market value on Friday. Such quick gains off speculation can be heady. Already at a dizzying $55,000 apiece, many reckon it can still go higher by virtue of its growing fame and pre-set scarcity amid asset inflation around the world. Over 88.7% of its 21 million tokens have been mined, and its adoption has zoomed. Its use has the approval of MasterCard, PayPal, Apple and BNY Mellon. A fortnight ago, it got the endorsement of Tesla, too, which declared it had parked $1.5 billion in Bitcoin, perhaps as a kind of reserve, and said it would accept this crypto as payment for its cars. If a taxman’s nod was missing, it got that when Miami’s mayor said local tax could be paid in it. Adding a dash of intrigue, Twitter chief Jack Dorsey and American rapper Jay-Z said they have Bit-funded an endowment for its “development". All this highlights the upside of a punt on Bitcoin. But with the Centre ready to curb or outlaw cryptos, it still sounds reckless.

Perhaps a large fraction of crypto holders in India do not expect an outright ban. If the Centre does enact one, some may have calculated that they would be given a few weeks to unwind their holdings, and even if taxes or a penalty must be paid, they can sell off just in time and book profits. Another wager seems to be that crypto ownership is easy to hide, given the dark web’s existence, and so restrictions would be hard to effect. Even technically, it is unclear if online tokens can be jammed without collateral damage to their underlying technology, blockchain, which has worthy uses in various fields. The ‘crypto’ part also explains why they are seen as a place to stash money away. Recall how Bitcoin was held up as ‘digital gold’ in the aftermath of demonetization back in 2016. To the extent that our purchases of it involve rupee conversion into global e-money, it can willy-nilly serve as a vehicle of capital flight. So, yes, Indian authorities do have good reason to be wary of cryptocurrency. But its complexities are such that a crackdown would be a clumsy response.

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