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Crypto Made ✨ Simple ✨: What Can You Do With DeFi?
Last week, we went over Zerion, which is an app that allows you to see all your wallet activity in one place. This time, I want to go over how you can actually make a trade using a DeFi wallet.
To keep things simple, I’m going to use the Metamask wallet, as it’s the most commonly used wallet and the one I have the most experience with.
If you’re interested in downloading Metamask, make sure you also consider some alternatives like Coinbase Wallet, Trust Wallet, and XDEFI.
You can find a list of some more alternatives here.
Once you have your wallet downloaded, you should see the logo on your browser in the top right corner:
If you click on the icon, you’ll probably be prompted to enter your password. Once you enter it, you’ll see this if you’re using Metamask:
At the top, it specifies that you’re connected to the Ethereum blockchain (this is the default setting). Under that, it’ll have your account name with the address below.
In this case, the address ends in 0082. You can click on the address to copy it. You’ll need to paste that address into whichever exchange you’re sending your crypto from — whether it’s Coinbase, Kraken, FTX, etc.
For now, I’d recommend keeping it simple and only transferring coins like USDC and ETH. The reason for that is because the wallet you’re using may not be compatible with other cryptos.
For example, Metamask and many other DeFi wallets aren’t compatible with BTC.
We’ll get into this topic in more detail another time, but WBTC is the version of BTC that’s able to be used on the Ethereum blockchain. For a list of cryptos that you can transfer to Metamask, click here.
To the left of that, it’ll tell you when you’re connected with a DeFi app. In order to make a trade, you’ll need to connect. We’ll get to that in just a minute.
Keep in mind that to use the Ethereum blockchain, you need some ETH. Transaction fees are usually around $5 to $10, so make sure you take that into account when deciding on how much you want to trade.
Under your ETH balance, you’ll also see options to buy, send, or swap your coins. Metamask does have a built-in exchange, but from my experience, the fees are overpriced.
For this example, we’re going to use Uniswap. You can get there by clicking here. In the top right corner, you’ll see something prompting you to connect your wallet, like this:
It also says “Ethereum” there because it’s specifying that you want to connect to the Ethereum blockchain (which, in this example, we do). When you hit connect, you’ll see the following menu pop up:
If you’re using a Metamask or Coinbase wallet, then you can select that. If you’re using any other wallet, then you should select WalletConnect.
Once you’re connected, you should see your address in the top right, like this:
Also, when you click on your wallet icon in the browser, the part that said “not connected” should now say “connected.”
On Friday, I’ll continue this piece — and show you how to make your first DeFi trade!
Be sure to tune in!
Performance Update📈
Performance:
Disruptors Index: +4.08%
S&P 500: +3.18%
Nasdaq: +0.92%
Russell 2000: +6.16%
ARKK: +6.69%
Top 3 Performers:
Teladoc Health Inc. (NYSE: TDOC) +23.35%
Enphase Energy Inc. (Nasdaq: ENPH) +21.83%
Ethereum (ETH) +19.96%
Bottom 3 Performers:
Airbnb Inc. (Nasdaq: ABNB) -10.87%
The Trade Desk Inc. (Nasdaq: TTD) -6.48%
Uber Technologies Inc. (NYSE: UBER) -5.17%
It’s been a red-hot week for growth stocks and an ice-cold week for Big Tech!
As a result, ARKK was the winner for the week, outpacing our Disruptors Index by a couple percentage points. But we still edged out the S&P 500 and beat the Big-Tech-dominated Nasdaq by over 3%.
For a quick summary, watch the video below. 👇
We had some fantastic earnings reactions last week, with TDOC 0.00%↑, ENPH 0.00%↑, and PINS 0.00%↑ all up double-digits on the week.
The crypto market also rebounded as well, with BTC moving back above $20,000 and ETH up nearly 20% in the past week.
Disruptors Earnings
1. Cadence Design Systems Inc. (Nadsaq: CDNS) 💰
Highlights:
Sales are up 20.2% year over year, and EPS are up 32.5%.
Operating margin is up to 28.89% from 27.47%.
Profit margin is down to 20.64% from 24.96% due to higher taxes.
There are still relatively high margins — which is good in this type of economy.
As I explained here, CDNS 0.00%↑ is a critical company when it comes to innovation. It tends to stay under the radar, but it’s quietly contributing the technology that allows other companies to design, simulate, and create a wide variety of electronic products — everything from semiconductors to molecular diagnostics software.
Overall, the company had a great quarter. Despite 2022 being a trying year for many companies, CDNS 0.00%↑ actually raised its 2022 sales expectations for the third time in as many quarters.
Coming into the year, it expected to make about $3.35 billion in sales, and now that’s up about 5.7% to $3.542 billion. Even more impressive is that it’s upped the expectations for their operating margin from 38.2% to 40.2%.
It may not sound like a lot, but 2% is a ton of money when you’re bringing in billions of dollars per year! And with inflation acting like it has, it’s amazing that CDNS 0.00%↑’s expenses are actually going down relative to its sales.
2. Enphase Energy Inc. (Nasdaq: ENPH) ☀️
Highlights:
Sales are up 80.56% year over year.
Earnings per share (EPS) are up 108.33% year over year.
Operating margin more than doubled from 10.63% to 21.34% year over year.
Microinverter shipments are up 29.7%, from 3,348,553 to 4,342,805.
MegaWatts (MW) of direct current (DC) batteries are up 40.9%, from 1,213 to 1,709 quarter over quarter.
Solar continues to go through a major boom, which is abundantly clear when you look at ENPH 0.00%↑’s earnings. Quarter after quarter, it continues to put up absurd growth numbers.
Its revenue is now up 16% from last year — and we’re only through three quarters! Not to mention the insane growth in microinverters and DC shipments in the past quarter.
Believe it or not, the growth that we’ve seen over the past couple of years does not fully reflect the total demand for ENPH 0.00%↑’s products.
Because of supply chain issues, it hasn’t been able to get orders consistently filled until the past couple quarters. And with China being a key player in solar — and also being in and out of lockdowns — ENPH 0.00%↑ has had to deal with uncertainties in the number of products it can actually deliver.
However, it’s clear that its supply chain is becoming much healthier now, and the way things are going, it looks like it’s got many more quarters of massive growth ahead.
3. Teladoc Health Inc. (NYSE: TDOC) 💉
Highlights:
Sales are up 17.2%.
$73.7 million in levered free cash flow (cash inflow after paying all financial obligations).
57.8 million paid members (last quarter, the company said it expected 56.5 million at most by the end of the year).
Gross margin is up to 69.64% (four-year high).
In my opinion, TDOC 0.00%↑ has been one of the most mistreated stocks in the entire market for the past 12 to 18 months. Back in April, the stock fell about 40% in a day after it reported its Q1 earnings, and since then I believe we’ve withstood the final leg of this crash.
That huge decline in April was mostly in response to something called a “goodwill impairment charge.”
Basically, “goodwill” is an intangible asset that reflects what the company thinks its brand, logo, etc. are worth. In TDOC 0.00%↑’s case, it decided in Q1 that because its stock had fallen so much, its brand wasn’t worth what it listed on its balance sheet.
Between Q1 and Q2, it decreased its goodwill by over $9.6 billion. That spooked investors quite a bit. However, it looks to be over as its goodwill value didn’t budge in Q3.
Meanwhile, the stock has been left in the dust, trading at 2.07X its sales over the past year.
That’s a great value, considering it has consistently positive cash flow, is still growing sales at 17% per year, is growing its customer base faster than anticipated, and has $900 million in cash with no debt due for three years.
4. Cameco Corporation (NYSE: CCJ) ☢️
CCJ 0.00%↑ is still working its way out of a prolonged uranium/nuclear bear market, so its current sales growth and margins are nothing to write home about.
Sales were down about 1% year over year, but it’s built up a nice $973 million stockpile of cash. And it has some of the most uranium-rich resources in the world.
The company also made a historically huge investment to acquire Westinghouse, which provides service to half of the world’s nuclear reactors (For more info, read my write-up on the acquisition here).
If you’re looking at CCJ 0.00%↑’s current situation to gauge the value of its stock, don’t. The demand that’s shown up for nuclear energy over the past few quarters has been astonishing, and it’s only growing stronger.
In Q3, CCJ 0.00%↑ added over 5 million pounds of uranium contracts to its backlog, giving it a total of 50 million pounds in locked contracts over the next six years.
On top of that, it has agreements in place (no contracts yet) to sell another 27 million pounds in the future.
If you don’t know, that’s an insane amount of uranium! For reference, the total global uranium production in 2021 was about 138 million pounds. CCJ 0.00%↑ is now likely to sell 56% of that total going forward, and the demand is growing exponentially.
The momentum in nuclear energy is getting stronger, and CCJ 0.00%↑ is ahead of the pack, as it keeps building up giant sales contracts.
5. Pinterest (NYSE: PINS) 📌
Highlights:
Monthly active users are up 2.8%, or 12 million quarter over quarter.
Average revenue per user is up 1.3% quarter over quarter, and 10.6% year over year.
Since switching CEO’s back in June, PINS 0.00%↑ has been prioritizing more personalized content for their users.
Put simply, there are some good and bad immediate effects of this. The good part is that it seems to be working already, as its user base grew by 12 million in Q3 — its biggest quarterly jump since Q1 2021.
In addition, users spent more on average as well. The bad part — at least in the short term — is that the company needs to spend a lot in order to do this. As a result, its operating margin of -10.13% was its worst since Q2 2020.
Thankfully, this shouldn’t be too much of a problem, as PINS 0.00%↑ is one of the most financially strong companies I’ve seen.
To start, it has now had seven straight quarters of positive levered free cash flow. During that time, it’s grown its overall cash balance by over $900 million.
Altogether, it has $2.67 billion in cash and virtually no debt. In fact, its cash balance is almost 5X its entire amount of liabilities, which is currently sitting at $547.7 million.
Hardly any companies have a balance sheet that’s as good as PINS 0.00%↑’s. Between that and its consistent cash flow, I think Pinterest is in great condition despite having some higher expenses in the near term.
If I could show you stocks with similar potential as PINS 0.00%↑ without overpromising — just transparent facts — would you take me up on that offer?
If so, check out our Platinum Membership ($19.99), which includes my options service as well as my crypto service.
But that’s not it! You also get access to five additional services that take different approaches to playing the market!
That’s it for me. Thanks for reading!
Disclaimer/Legal stuff written in plain English
What you read/watch/hear is OPINION, not financial/investment advice. Treat it no different than when you read/watch/hear your favorite author/YouTuber/podcaster. Despite our best efforts, we get things wrong and make mistakes. Investing is risky. There is no guarantee you will make money. Your investments may lose value. That’s RISK. We cannot give you personalized financial advice because we are NOT financial advisors. It’s on you to decide how much/when/what to buy/sell based on YOUR financial needs, plans, and risk preferences. It's your money and your responsibility.
Ian, Paul has a lot of mining companies in his different portfolio's.
ETH is not mined and with the upgrade made simple to follow / buy.
Can Bitcoin also be changed to system so mining is not required?
thanks for all your updates. john