is uber stock a good investment for your portfolio
uber technologies is looking to acquire its food delivery rival grubhub and
this comes after a 2.9 billion dollar loss for uber as its right held business
dropped 80% as the COVID-19 hit around the world but on the bright side Ubert Eats
soared 54% because more people look to order food online as they were staying
home on the lockdown now uber wants to expand on the division that made it the
most buck during the lockdown and it kind of made sense and investors are
excited about it and that excitement showed an uber stock price and Tuesday
once Wall Street Journal reported the acquisition rumor now the question is
will this acquisition really make Uber a buy right now? could we see a pullback
so that we can buy Uber stock at a lower price or will the price just go up
from here? if it could go down how low will it go
when should you take profit once you buy and what type of investor should even
consider uber for their investment portfolio? you got questions and I've got
answers today I'm going to analyze the uber stock from five points of my
signature Invest Diva diamond analysis that analyzes every asset from five
different points fundamentals technicals market sentiment your risk tolerance and
overall how it fits with your portfolio keep in mind that the uber stock is not
yet on my top long-term hold list that I share with our premium investing group
(PIG) members... and Who am I my name is Kiana Danial the founder of the Invest
Diva movement and a three-time author if you'd like to get more updates from me
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you can join the master class after you watch this video now let's get to the
Uber stock and analyze it so that we can see if it fits your investment portfolio
all right so first let's get out of the way that investing in the financial
markets involves a risk of loss and you should only trade the money and invest
the money that you can afford to lose I am NOT a financial advisor and
everything that I'm sharing here is simply my opinion on the markets now
let's get to Uber... back in February 2020 that seems like forever ago
we were expected to be profitable by the year's end but the reality had and Uber
lost two point nine billion dollars last quarter which was a massive loss even
for uber's famous cash burns but even though gross bookings for uber each sort
54% ubers write hail business plummeted eighty percent in April but around
two-thirds of burrs quarterly loss was actually caused by its tanking
investments an Asian write services diddy and grab on the bright side what
really sets over aside from his competition Lyft is a fact that they're
expanded over different categories rather than just being a ride hailing
companies also Uber likes investors to believe that they are in fact a data
and tech company not a ride-hailing company they have been investing in
artificial intelligence and self-driving cars for a while but from what I've
heard at least around a year ago their systems are majorly flawed at the moment
and not even close to the competition on that end like Tesla regardless of all of
this many analysts believe that network effects and valuable intangible assets
in the form of user data give over a competitive advantage that will help
over become profitable eventually and generate excess returns on their
invested capital their market cap earn it's at 56 billion they do not pay a
dividend and we do not have enough data for a p/e ratio and beta now that we've
briefly taken a look at the fundamentals of market sentiment let's take a look at
the charts and analyze ubers price action this is the daily chart of uber
and this is what I wrote for our premium investing group members back in October
2019 We were looking for Uber to bottom out and we actually were expecting a
recession back then and what I said was that in a recession there could be a
higher supply of Uber drivers obviously at the time we didn't anticipate that
recession would come with a lock-down that people would not take drivers at
the time I was predicting that uber may end up compensating their drivers even
less which means because there's going to be more supply of drivers which meant
that they could make more money and for that reason I shared that in my opinion
a recession may not impact Uber as much now I was right that a recession did not
impact Uber as much but the reason for that and obviously the nature of the
recession that hit us has been different what I did predict was uber could
actually go below 28 and it so did now let's take a look at the prices this is
the Ichimoku cloud right here which as my go-to indicator on the charts I have
drawn Fibonacci retracement levels from the downtrend that we saw after
Covid 19 started in February and it traces the downtrend up to the lows back
in March now the price have slowly but surely start to go back up and this
pattern is actually very similar to that of the Dow Jones the Dow Jones
Industrial Average that tracks over 30 assets has a very similar pattern uber
now of course uber has a little bit more gains than the Dow Jones in general the
future cloud over here is bullish and the price actually broke above the Ichimoku
cloud back in April 22nd and normally what the cloud suggest is that after a
break above it we normally see a pullback which we did towards a 50%
retracement level which actually pan out exactly this time around the upper band
of the Ichimoku cloud falls exactly on the 50% finish retracement level and that
act as a support and the price went up from there of course the fundamentals
and the acquisition rumors helped from here with the Ichimoku method we
normally see the price move up to the next Fibonacci Retrcament level which in
this case is 78% Fibonacci retracement level at 35 of course the recent high
still set at 41 right now we move all the excitement about the acquisition of
GrubHub and their earnings already being passed there is a good chance that we'll
see the gains continue at least to one of these key resistance levels before we
see a drop right now we were in a room or phase remember the phrase buy the
rumor sell the news plus there is a very good chance that as the economy's
open up around the world so we are going to see an increase in COVID 19 cases
which means that we could see yet another bearish hit to the markets in
general and uber may not be immune to that either considering so one of the
biggest business divisions is the ride hailing business in which case Uber
could actually revisit the lows of the previous drops before I get in to buy a
limit order ideas let me point out that uber because it doesn't pay any
dividends and because it is still a up-and-coming tech company it may not be
suitable for investors with low risk tolerance this is not yet an established
company and although it has promising aspects there is a lot of unknowns there
still so if you are in the later time frame of your life and you're looking to
retirement uber may not be the suitable investment
for your portfolio however if you're young and you can wait all the
rollercoaster rides out with uber then you could consider buying uber at an
optimal price I have marked the buy limit order ideas in purple here and the
lower it goes it is the buy limit orders will be suitable for investors with a
lower risk tolerance for example if you're a young person who does not have
enough and just wants to get started and is not
really crazy about uber either it's just interesting you could consider by
setting a buy limit order around 13 however if you're in love with uber
and you think uber is the future and you really really really want to get in to it
you do not want to risk missing out and uber stock price just jumping up without
you actually getting in on it then perhaps you could consider some of these
higher buy limit orders the reason why I like setting buy limit orders as opposed
to investing and buying at market price is because it gives me a lot more
flexibility to digest my analysis and also it gives me a better price when the
markets actually hit that there is no way I can be stuck to my screen all day
to check and see if the prices hit the level that is suitable for my investment
strategy this gives my broker a heads up that hey I want to buy at this price and
they were just executed no matter when it reaches that price three your time
which is really the purpose of investing anyway you want your money to work for
you and not the other way around right? so now that we've got the buy level
ideas out of the way let's talk about taking profit uber is a newly IPO the
company and normally what happens to new IPOs and new companies we do see a surge
at the beginning and then a drop within a year or so that is exactly what
happened to over and if normally if it is a established company well Luber
does have fifty six billion dollars capital we won't mark them as a small
cap obviously for that reason I would believe that over a medium to long term
period we could at least see the highest levels of price being revisited again so
if you already have the uber stock and are you looking to just get out of it
you could consider taking profit at either of these levels 41 or 47 now I'm
not going to put a timeline on this this could take anywhere from six months to
three years if you are a big believer in uber
then you could consider setting your profit taking orders at levels beyond
the old time highs we calculate those also using people-not retracement levels
and that brings the profit targets to these levels fifty five sixty and sixty
four at this point and again because Ober doesn't pay any dividends holding
it just long term for the sake of holding it may not make sense where is
suitable for investors who are looking for growth and opportunity well the last
thing you want to keep in mind is that holding a stock less than a year will
actually bring up the tax requirements for your capital gain higher so if
you're looking to pay lower tax on your investment then you might want to
consider holding your assets for over a year now again I'm not an accountant or
a tax expert and this is only true in the u.s. now I'd like to hear from you
are you willing to invest in uber or better yet have you already invested in
uber are you looking to take profit or would you buy more at the lower prices
head over to the comments section and let me know thank you so much for
joining and tuning in if you like this video please like it comment and share
it with your friends if you'd like to learn more about my investment methods
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I will add the link to this masterclass in the description area of
this video as well hopefully I will see you in the master class