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Net asset value and tangible net assets

The value of a company’s net assets (or “NAV”) is the residual percentage in its assets when all of its liabilities have been discharged. In other words, NAV is the company’s capital and is seen as a buffer against which the company’s market capitalization should rarely fall below.
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“NAV” or “Share capital / number of shares” = “NAV to share” and should serve as a rough guide, below which the share price of a good company should not be traded. Sometimes, however, stocks trade below that ratio for a number of reasons … not all of them are good. Sometimes the market takes into account future losses or the flow of losses that will be reflected in the assets of the business, so trading below this ratio is not always a sign of a deal.

However, when looking at NAV, company accounts often include assets such as software, goodwill and / or capitalized contracts that may not be worth the same monetary value for which they were purchased (so accounted for). Most of these assets fall into the category of “intangible assets” (as defined by IFRS) and are excluded from total assets when calculating the value of net tangible assets or the value of net tangible assets (“TNAV”).

TNAV per share is a very strict measure of the absolute lower level, which should be traded any share in a profitable business, because it believes that all intangible assets are worthless. In a sense, TNAV can be seen as the liquidation value of a business (except for the accounting constraints explained below).

NAV and TNAV are balance-based ratios and depend on balance reliability. In turn, the balance sheet is subject to the same limitations and inconsistencies that plague the accounting system that creates it.
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Accounting inconsistencies are numerous and include the following main ones:

* Some assets are capitalized at historical cost and this is different from their resale / fair value and / or replacement cost. Which one is more important for NAV and TNAV …?

* Some assets are measured at fair value and others are not. So you are essentially using apples and bananas in the same proportions.

* Estimates are an integral risk for accounting. Accountants must estimate the useful lives of assets for depreciation, estimate the residual value for depreciation, evaluate guarantees and the profitability of reserves, etc. All of these estimates are susceptible to both manipulation and / or error, which adds to the unreliability of the final factor.

Thus, although NAV and TNAV are useful to watch, their limitations should be understood. In addition, although a business’s assets are important, its ability to generate profits is much more important from an investor’s perspective and should be emphasized before any liquidation costs.

A Complete Guide For Restaurant Real Estate Investments

Restaurants are a favorite commercial property for many investors because:

  1. Tenants often sign a very long term, e.g. 20 years absolute triple net (NNN) leases. This means, besides the rent, tenants also pay for property taxes, insurance and all maintenance expenses. The only thing the investor has to pay is the mortgage, which in turn offers very predictable cash flow. There are either no or few landlord responsibilities because the tenant is responsible for maintenance. This allows the investor more time to do important thing in life, e.g. retire. All you do is take the rent check to the bank. This is one of the key benefits in investing in a restaurant or single-tenant property.
  2. Whether rich or poor, people need to eat. Americans are eating out more often as they are too busy to cook and cleanup the pots & pans afterwards which often is the worst part! According to the National Restaurant Association, the nation’s restaurant industry currently involves 937,000 restaurants and is expected to reach $537 billion in sales in 2007, compared to just $322 billion in 1997 and $200 billion in 1987 (in current dollars). In 2006, for every dollar Americans spend on foods, 48 cents were spent in restaurants. As long as there is civilization on earth, there will be restaurants and the investor will feel comfortable that the property is always in high demand.
  3. You know your tenants will take very good care of your property because it’s in their best interest to do so. Few customers, if any, want to go to a restaurant that has a filthy bathroom and/or trash in the parking lot.

However, restaurants are not created equal, from an investment viewpoint.

Franchised versus Independent

One often hears that 9 out of 10 new restaurants will fail in the first year; however, this is just an urban myth as there are no conclusive studies on this. There is only a study by Associate Professor of Hospitality, Dr. H.G. Parsa of Ohio State University who tracked new restaurants located in the city Columbus, Ohio during the period from 1996 to 1999 (Note: you should not draw the conclusion that the results are the same everywhere else in the US or during any other time periods.) Dr. Parsa observed that seafood restaurants were the safest ventures and that Mexican restaurants experience the highest rate of failure in Columbus, OH. His study also found 26% of new restaurants closed in the first year in Columbus, OH during 1996 to 1999. Besides economic failure, the reasons for restaurants closing include divorce, poor health, and unwillingness to commit immense time toward operation of the business. Based on this study, it may be safe to predict that the longer the restaurant has been in business, the more likely it will be operating the following year so that the landlord will continue to receive the rent.

For franchised restaurants, a franchisee has to have a certain minimal amount of non-borrowed cash/capital, e.g. $300,000 for McDonald’s, to qualify. The franchisee has to pay a one-time franchisee fee about $30,000 to $50,000. In addition, the franchisee has contribute royalty and advertising fees equal to about 4% and 3% of sales revenue, respectively. In turn, the franchisee receives training on how to set up and operate a proven and successful business without worrying about the marketing part. As a result, a franchised restaurant gets customers as soon as the open sign is put up. Should the franchisee fail to run the business at the location, the franchise may replace the current franchisee with a new one. The king of franchised hamburger restaurants is the fast-food chain McDonald’s with over 32000 locations in 118 countries (about 14,000 in the US) as of 2010. It has $34.2B in sales in 2011 with an average of $2.4M in revenue per US location. McDonald’s currently captures over 50% market share of the $64 billion US hamburger restaurant market. Its sales are up 26% in the last 5 years. Distant behind is Wendy’s (average sales of $1.5M) with $8.5B in sales and 5904 stores. Burger King ranks third (average sales of $1.2M) with $8.4B in sale, 7264 stores and 13% of the hamburger restaurant market share (among all restaurant chains, Subway is ranked number two with $11.4B in sales, 23,850 stores, and Starbucks number 3 with $9.8B in sales and 11,158 stores). McDonald’s success apparently is not the result of how delicious its Big Mac tastes but something else more complex. Per a survey of 28,000 online subscribers of Consumer Report magazine, McDonald’s hamburgers rank last among 18 national and regional fast food chains. It received a score of 5.6 on a scale of 1 to 10 with 10 being the best, behind Jack In the Box (6.3), Burger King (6.3), Wendy’s (6.6), Sonic Drive In (6.6), Carl’s Jr (6.9), Back Yard Burgers (7.6), Five Guys Burgers (7.9), and In-N-Out Burgers (7.9).

Fast-food chains tend to detect new trends faster. For example, they are open as early as 5AM as Americans are increasingly buying their breakfasts earlier. They are also selling more cafe; latte; fruit smoothies to compete with Starbucks and Jumba Juice. You also see more salads on the menu. This gives customers more reasons to stop by at fast-food restaurants and make them more appealing to different customers.

With independent restaurants, it often takes a while to for customers to come around and try the food. These establishments are especially tough in the first 12 months of opening, especially with owners of minimal or no proven track record. So in general, “mom and pop” restaurants are risky investment due to initial weak revenue. If you choose to invest in a non-brand name restaurant, make sure the return is proportional to the risks that you will be taking.

Sometimes it is not easy for you to tell if a restaurant is a brand name or non-brand name. Some restaurant chains only operate, or are popular in a certain region. For example, WhatABurger restaurant chain with over 700 locations in 10 states is a very popular fast-food restaurant chain in Texas and Georgia. However, it is still unknown on the West Coast as of 2012. Brand name chains tend to have a website listing all the locations plus other information. So if you can find a restaurant website from Google or Yahoo you can quickly discern if an unfamiliar name is a brand name or not. You can also obtain basic consumer information about almost any chain restaurants in the US on Wikipedia.

The Ten Fastest-Growing Chains in 2011 with Sales Over $200 Million

According to Technomic, the following is the 10 fastest growing restaurant chains in terms of revenue change from 2010 to 2011:

  1. Five Guys Burgers and Fries with $921M in sales and 32.8% change.
  2. Chipotle Mexican Grill with $2.261B in sales and 23.4% change.
  3. Jimmy John’s Gourmet Sandwich Shop with $895M in sales and 21.8% change.
  4. Yard House with $262M in sales and 21.5% change.
  5. Firehouse Subs with $285M in sales and 21.1% change.
  6. BJ’s Restaurant & Brewhouse with $621M in sales and 20.9% change.
  7. Buffalo Wild Wings Grill & Bar with $2.045B in sales and 20.1% change.
  8. Raising Cane’s Chicken Fingers with $206M in sales and 18.2% change.
  9. Noodles & Company with $300M in sales and 14.9% change from.
  10. Wingstop with $382M in sales and 22.1% change.

Lease & Rent Guaranty

The tenants often sign a long term absolute triple net (NNN) lease. This means, besides the base rent, they also pay for all operating expenses: property taxes, insurance and maintenance expenses. For investors, the risk of maintenance expenses uncertainty is eliminated and their cash flow is predictable. The tenants may also guarantee the rent with their own or corporate assets. Therefore, in case they have to close down the business, they will continue paying rent for the life of the lease. Below are a few things that you need to know about the lease guaranty:

  1. In general, the stronger the guaranty the lower the return of your investment. The guaranty by McDonald’s Corporation with a strong “A” S&P corporate rating of a public company is much better than a small corporation owned by a franchisee with a few restaurants. Consequently, a restaurant with a McDonald’s corporate lease normally offers low 4.5-5% cap (return of investment in the 1st year of ownership) while McDonald’s with a franchisee guaranty (over 75% of McDonalds restaurants are owned by franchisees) may offer 5-6% cap. So figure out the amount of risks you are willing to take as you won’t get both low risks and high returns in an investment.
  2. Sometimes a multi-location franchise will form a parent company to own all the restaurants. Each restaurant in turn is owned by a single-entity Limited Liabilities Company (LLC) to shield the parent company from liabilities. So the rent guaranty by the single-entity LLC does not mean much since it does not have much assets.
  3. A good, long guaranty does not make a lemon a good car. Similarly, a strong guaranty does not make a lousy restaurant a good investment. It only means the tenant will make every effort to pay you the rent. So don’t judge a property primarily on the guaranty.
  4. The guaranty is good until the corporation that guarantees it declares bankruptcy. At that time, the corporation reorganizes its operations by closing locations with low revenue and keeping the good locations, (i.e. ones with strong sales). So it’s more critical for you to choose a property at a good location. If it happens to have a weak guaranty, (e.g. from a small, private company), you will get double benefits: on time rent payment and high return.
  5. If you happen to invest in a “mom & pop” restaurant, make sure all the principals, e.g. both mom and pop, guarantee the lease with their assets. The guaranty should be reviewed by an attorney to make sure you are well protected.

Location, Location, Location

A lousy restaurant may do well at a good location while those with a good menu may fail at a bad location. A good location will generate strong revenue for the operator and is primarily important to you as an investor. It should have these characteristics:

  1. High traffic volume: this will draw more customers to the restaurant and as a result high revenue. So a restaurant at the entrance to a regional mall or Disney World, a major shopping mall, or colleges is always desirable.
  2. Good visibility & signage: high traffic volume must be accompanied by good visibility from the street. This will minimize advertising expenses and is a constant reminder for diners to come in.
  3. Ease of ingress and egress: a restaurant located on a one-way service road running parallel to a freeway will get a lot of traffic and has great visibility but is not at a great location. It’s hard for potential customers to get back if they miss the entrance. In addition, it’s not possible to make a left turn. On the other hand, the restaurant just off freeway exit is more convenient for customers.
  4. Excellent demographics: a restaurant should do well in an area with a large, growing population and high incomes as it has more people with money to spend. Its business should generate more and more income to pay for increasing higher rents.
  5. Lots of parking spaces: most chained restaurants have their own parking lot to accommodate customers at peak hours. If customer cannot find a parking space within a few minutes, there is a good chance they will skip it and/or won’t come back as often. A typical fast food restaurant will need about 10 to 20 parking spaces per 1000 square feet of space. Fast food restaurants, e.g. McDonald’s will need more parking spaces than sit down restaurants, e.g. Olive Garden.
  6. High sales revenue: the annual gross revenue alone does not tell you much since larger–in term of square footage–restaurant tends to have higher revenue. So the rent to revenue ratio is a better gauge of success. Please refer to rent to revenue ratio in the due diligence section for further discussion.
  7. High barriers to entry: this simply means that it’s not easy to replicate this location nearby for various reasons: the area simply does not have any more developable land, or the master plan does not allow any more construction of commercial properties, or it’s more expensive to build a similar property due to high cost of land and construction materials. For these reasons, the tenant is likely to renew the lease if the business is profitable.

Financing Considerations

In general, the interest rate is a bit higher than average for restaurants due to the fact that they are single-tenant properties. To the lenders, there is a perceived risk because if the restaurant is closed down, you could potentially lose 100% of your income from that restaurant. Lenders also prefer national brand name restaurants. In addition, some lenders will not loan to out-of-state investors especially if the restaurants are located in smaller cities. So it may be a good idea for you to invest in a franchised restaurant in major metro areas, e.g. Atlanta, Dallas. In 2009 it’s quite a challenge to get financing for sit-down restaurant acquisitions, especially for mom and pop and regional restaurants due to the tight credit market. However, things seem to have improved a bit in 2010. If you want to get the best rate and terms for the loan, you should stick to national franchised restaurants in major metros.

When the cap rate is higher than the interest rate of the loan, e.g. cap rate is 7.5% while interest rate is 6.5%, then you should consider borrowing as much as possible. You will get 7.5% return on your down payment plus 1% return for the money you borrow. Hence your total return (cash on cash) will be higher than the cap rate. Additionally, since the inflation in the near future is expected to be higher due to rising costs of fuel, the money which you borrow to finance your purchase will be worth less. So it’s even more beneficial to maximize leverage now.

Due Diligence Investigation

You may want to consider these factors before deciding to go forward with the purchase:

  1. Tenant’s financial information: The restaurant business is labor intensive. The average employee generates only about $55,000 in revenue annually. The cost of goods, e.g. foods and supplies should be around 30-35% of revenue; labor and operating expenses 45-50%; rent about 7-12%. So do review the profits and loss (P&L) statements, if available, with your accountant. In the P&L statement, you may see the acronym EBITDAR. It stands for Earnings Before Income Taxes, Depreciation (of equipment), Amortization (of capital improvement), and Rent. If you don’t see royalty fees in P&L of a franchised restaurant or advertising expenses in the P&L of an independent restaurant, you may want to understand the reason why. Of course, we will want to make sure that the restaurant is profitable after paying the rent. Ideally, you would like to see net profits equal to 10-20% of the gross revenue. In the last few years the economy has taken a beating. As a result, restaurants have experienced a decrease in gross revenue of around 3-4%. This seems to have impacted most, if not all, restaurants everywhere. In addition, it may take a new restaurant several years to reach potential revenue target. So don’t expect new locations to be profitable right away even for chained restaurants.
  2. Tenant’s credit history: if the tenant is a private corporation, you may be able to obtain the tenant’s credit history from Dun & Bradstreet (D&B). D&B provides Paydex score, the business equivalent of FICO, i.e. personal credit history score. This score ranges from 1 to 100, with higher scores indicating better payment performance. A Paydex score of 75 is equivalent to FICO score of 700. So if your tenant has a Paydex score of 80, you are likely to receive the rent checks promptly.
  3. Rent to revenue ratio: this is the ratio of base rent over the annual gross sales of the store. It is a quick way to determine if the restaurant is profitable, i.e. the lower the ratio, the better the location. As a rule of thumb you will want to keep this ratio less than 10% which indicates that the location has strong revenue. If the ratio is less than 7%, the operator will very likely make a lot of money after paying the rent. The rent guaranty is probably not important in this case. However, the rent to revenue ratio is not a precise way to determine if the tenant is making a profit or not. It does not take into account the property taxes expense as part of the rent. Property taxes–computed as a percentage of assessed value–vary from states to states. For example, in California it’s about 1.25% of the assessed value, 3% in Texas, and as high as 10% in Illinois. And so a restaurant with rent to income ratio of 8% could be profitable in one state and yet be losing money in another.
  4. Parking spaces: restaurants tend to need a higher number of parking spaces because most diners tend to stop by within a small time window. You will need at least 8 parking spaces per 1000 Square Feet (SF) of restaurant space. Fast food restaurants may need about 15 to 18 spaces per 1000 SF.
  5. Termination Clause: some of the long term leases give the tenant an option to terminate the lease should there be a fire destroying a certain percentage of the property. Of course, this is not desirable to you if that percentage is too low, e.g. 10%. So make sure you read the lease. You also want to make sure the insurance policy also covers rental income loss for 12-24 months in case the property is damaged by fire or natural disasters.
  6. Price per SF: you should pay about $200 to $500 per SF. In California you have to pay a premium, e.g. $1000 per SF for Starbucks restaurants which are normally sold at very high price per SF. If you pay more than $500 per SF for the restaurant, make sure you have justification for doing so.
  7. Rent per SF: ideally you should invest in a property in which the rent per SF is low, e.g. $2 to $3 per SF per month. This gives you room to raise the rent in the future. Besides, the low rent ensures the tenant’s business is profitable, so he will be around to keep paying the rent. Starbucks tend to pay a premium rent $2 to 4 per SF monthly since they are often located at a premium location with lots of traffic and high visibility. If you plan to invest in a restaurant in which the tenant pays more than $4 per SF monthly, make sure you could justify your decision because it’s hard to make a profit in the restaurant business when the tenant is paying higher rent. Some restaurants may have a percentage clause. This means besides the minimum base rent, the operator also pays you a percentage of his revenue when it reaches a certain threshold.
  8. Rent increase: A restaurant landlord will normally receive either a 2% annual rent increase or a 10% increase every 5 years. As an investor you should prefer 2% annual rent increase because 5 years is a long time to wait for a raise. You will also receive more rent with 2% annual increase than 10% increase every 5 years. Besides, as the rent increases every year so does the value of your investment. The value of restaurant is often based on the rent it generates. If the rent is increased while the market cap remains the same, your investment will appreciate in value. So there is no key advantage for investing in a restaurant in a certain area, e.g. California. It’s more important to choose a restaurant at a great location.
  9. Lease term: in general investors favor long term, e.g. 20 year lease so they don’t have to worry about finding new tenants. During a period with low inflation, e.g. 1% to 2%, this is fine. However, when the inflation is high, e.g. 4%, this means you will technically get less rent if the rent increase is only 2%. So don’t rule out properties with a few years left of the lease as there may be strong upside potential. When the lease expires without options, the tenant may have to pay much higher market rent.
  10. Risks versus Investment Returns: as an investor, you like properties that offer very high return, e.g. 8% to 9% cap rate. And so you may be attracted to a brand new franchised restaurant offered for sale by a developer. In this case, the developer builds the restaurants completely with Furniture, Fixtures and Equipment (FFEs) for the franchisee based on the franchise specifications. The franchisee signs a 20 years absolute NNN lease paying very generous rent per SF, e.g. $4 to $5 per SF monthly. The new franchisee is willing to do so because he does not need to come up with any cash to open a business. Investors are excited about the high return; however, this may be a very risky investment. The one who is guaranteed to make money is the developer. The franchisee may not be willing to hold on during tough times as he does not have any equity in the property. Should the franchisee’s business fails, you may not be able to find a tenant willing to pay such high rent, and you may end up with a vacant restaurant.
  11. Track records of the operator: the restaurant being run by an operator with 1 or 2 recently-open restaurants will probably be a riskier investment. On the other hand, an operator with 20 years in the business and 30 locations may be more likely to be around next year to pay you the rent.
  12. Trade fixtures: some restaurants are sold with trade fixtures so make sure you document in writing what is included in the sale.
  13. Fast-food versus Sit-down: while fast-food restaurants, e.g. McDonalds do well during the downturn, sit-down family restaurants tend to be more sensitive to the recession due to higher prices and high expenses. These restaurants may experience double-digit drop in year-to-year revenue. As a result, many sit-down restaurants were shut down during the recession. If you consider investing in a sit-down restaurant, you should choose one in an area with high income and large population.

Sale & Lease Back

Sometimes the restaurant operator may sell the real estate part and then lease back the property for a long time, e.g. 20 years. A typical investor would wonder if the operator is in financial trouble so that he has to sell the property to pay for his debts. It may or may not be the case; however, this is a quick and easy way for the restaurant operator to get cash out of the equities for good reason: business expansion. Of course, the operator could refinance the property with cash out but that may not be the best option because:

  1. He cannot maximize the cash out as lenders often lend only 65% of the property value in a refinance situation.
  2. The loan will show as long term debt in the balance sheet which is often not viewed in a positive light.
  3. The interest rates may not be as favorable if the restaurant operator does not have a strong balance sheet.
  4. He may not be able to find any lenders due to the tight credit market.

You will often see 2 different cash out strategies when you look at the rent paid by the restaurant operator:

  1. Conservative market rent: the operator wants to make sure he pays a low rent so his restaurant business has a good chance of being profitable. He also offers conservative cap rate to investors, e.g. 7% cap. As a result, his cash out amount is small to moderate. This may be a low risk investment for an investor because the tenant is more likely to be able to afford the rent.
  2. Significantly higher than market rent: the operator wants to maximize his cash out by pricing the property much higher than its market value, e.g. $2M for a $1M property. Investors are sometimes offered high cap rate, e.g. 10%. The operator may pay $5 of rent per square foot in an area where the rent for comparable properties is $3 per square foot. As a result, the restaurant business at this location may suffer a loss due to higher rents. However, the operator gets as much money as possible. This property could be very risky for you. If the tenant’s business does not make it and he declares bankruptcy, you will have to offer lower rent to another tenant to lease your building.

Ground Lease

Occasionally you see a restaurant on ground lease for sale. The term ground lease may be confusing as it could mean

  1. You buy the building and lease the land owned by another investor on a long-term, e.g. 50 years, ground lease.
  2. You buy the land in which the tenant owns the building. This is the most likely scenario. The tenant builds the restaurant with its own money and then typically signs a 20 years NNN lease to lease the lot. If the tenant does not renew the lease then the building is reverted to the landowner. The cap rate is often 1% lower, e.g. 6 to 7.25 percent, compared to restaurants in which you buy both land and building.

Since the tenant has to invest a substantial amount of money (whether its own or borrowed funds) for the construction of the building, it has to be double sure that this is the right location for its business. In addition, should the tenant fail to make the rent payment or fail to renew the lease, the building with substantial value will revert to you as the landowner. So the tenant will lose a lot more, both business and building, if it does not fulfill its obligation. And thus it thinks twice about not sending in the rent checks. In that sense, this is a bit safer investment than a restaurant which you own both the land and improvements. Besides the lower cap rate, the major drawbacks for ground lease are

  1. There are no tax write-offs as the IRS does not allow you to depreciate its land value. So your tax liabilities are higher. The tenants, on the other hand, can depreciate 100% the value of the buildings and equipments to offset the profits from the business.
  2. If the property is damaged by fire or natural disasters, e.g. tornados, some leases may allow the tenants to collect insurance proceeds and terminate the lease without rebuilding the properties in the last few years of the lease. Unfortunately, this author is not aware of any insurance companies that would sell fire insurance to you since you don’t own the building. So the risk is substantial as you may end up owning a very expensive vacant lot with no income and a huge property taxes bill.
  3. Some of the leases allow the tenants not having to make any structure, e.g. roof, repairs in the last few years of the lease. This may require investors to spend money on deferred maintenance expenses and thus will have negative impact on the cash flow of the property.

Top 5 blockchain projects in the telecommunications sector

  1. DENT:

DENT is a blockchain-based platform that works to create a global marketplace that allows everyone to buy and sell mobile data packages. DENT’s mission is tokenization, the release and democratization of mobile data and bandwidth. The company has developed a marketplace and mobile application that allows you to buy and sell mobile data packages using blockchain technology.

The platform runs on a blockchain based on Ethereum and creates a transparent and simple data pricing landscape.

How does it work?

The work of the DENT platform is quite simple. All users who are registered in the DENT network, just need to exchange existing mobile data packages for more suitable and more economical for them. This platform will allow end users to easily interact with the telecommunications industry and thus lead to improved transparency and use of mobile data.

Partnerships

The DENT network operates successfully around the world through partnerships with several areas of telecommunications.

In the United States, the company works with AT&T and Verizon, in Mexico with Telcel, Nextel and Movistar, in Brazil with Oi and Vivo, in Bangladesh with Airtel, Robi, Grameenphone and Banglalink, in South Africa with Vodacom, MTN, and CellC, in Morocco. with Orange, Moroc Telecom and Inwi, in Spain with Vodafone, Orange and Yoigo, in Singapore with M1, Starhub and Singtel, in Sri Lanka with Airtel, Etisalat, Mobitel, Hutchison and Dialog, with Claro in Puerto Rico and Claro Costa , Tigo in Guatemala and Du in the UAE.

Road map

Launched in 2017, the DENT network has successfully managed to become the best blockchain-based telecommunications project with 3.5 million users worldwide. In the 3rd and 4th quarters of 2018, the company seeks to expand its partnerships with more countries and operators, as well as get on the list of more cryptocurrencies.

In 2019, the company focuses on launching a worldwide voice and SMS service, video calling, retail data bonuses, and gaining 15 million users in 70 countries by the end of the 2nd quarter of 2019.

Token value information

Total bid: 100,000,000,000 DENT

Current stock: 17,241,387,101 DENT

Market capitalization: 44,036,974 US dollars

ICO cost: $ 0.000639

Current price: $ 0.0025 USD

  1. QLINK (QLC):

Now known as the QLC Chain, Qlink is the first public blockchain for a decentralized network. QLC Chain is a system where users can buy a connection from their colleagues. That is, renting someone’s Wi-Fi access, selling unused data to other users, and receiving a cellular signal from a base station in someone’s home.

In a broader sense, the project is working to create a “Network as a Service” infrastructure that will implement smart contracts to facilitate PPP and other network functions and features.

Network QLC Chain tries to solve the problems of excessive network capabilities, lack of network access, centralized operations, etc. by decentralizing the telecommunications market and connectivity.

How does it work?

With the QLC Chain platform, anyone from anywhere in the world will be able to operate a small base station from their home, providing cellular services in the area. Each time a user connects to another user’s base station, a small percentage of their payment will be transferred to the base station operator.

The platform also accepts advertisers who can pay for the inclusion of their content in the Qlink network.

Partnerships

The QLC Chain team has partnered with more than 40 telecom operators around the world to provide decentralized mobile data services to 6 million of its customers. The network also has a partnership with NEO, as it is built on the NEO blockchain. Other network partners include Binance, Ontology, Block Array, Centro and intop.

Road map

Launched in December 2017, the QLC chain was aimed at developing a standard Wi-Fi exchange protocol and E2P SMS application. At the end of the 2nd quarter of 2018, access to data and distribution of content in the public chain were developed and deployed.

Towards the end of the 4th quarter of 2018 the network will launch a public chain QLC in the network and integrate with IPFS.

Token value information

Total supply: 600,000,000 QLC

Current stock: 240,000,000 QLC

Market capitalization: $ 12,239,064

ICO cost: $ 0.352 USD

Current price: $ 0.050

  1. TELCOIN (TEL):

Telcoin is the first cryptocurrency to work to improve the interaction between mobile telecommunications and blockchain technology. It is built on the Ethereum blockchain and can be used for payments anywhere, given that the mobile phone number is known.

Telcoin is a cryptocurrency that will be distributed exclusively by GSMA mobile network operators.

How does it work?

Telcoin will be distributed among mobile network operators, who will further sell it to their customers. This will facilitate efficient money transfers, access to cryptocurrency and crypto-card payments.

The work of the platform begins with end users, who with their crypto-wallet, fully integrated with the Telcoin API, will gain access to wallets with multiple signatures with three private keys. Telcoin will keep records of users’ mobile phone numbers, their public key and one encrypted private key.

Telcoin provides a cheaper and faster way to send and receive money, and even people who do not have a bank account can easily use Telcoin.

Partnership and road map

The Telcoin network was launched in 2017 and operated in the first quarter of 2018, identifying its potential partners around the world. In the second quarter, the company partnered with telecom operators in Europe, South Africa and Japan. In the same quarter, it also initiated applications for any necessary permits in India, Pakistan, the UK, Indonesia and other key markets.

In the 4th quarter of 2018, Telcoin will appear in Japan, and in the first quarter of 2019 will serve remittances in Europe, East Asia, Africa and Southeast Asia.

Token value information

Total supply: 100,000,000,000 TEL

Current stock: 32,034,497,783 TEL

Market capitalization: $ 20,304,392

ICO price: $ 0.0071 USD

Current price: $ 0.00063 USD

  1. BUBBLETONE (UMT):

BubbleTone is a blockchain-based telecommunications project that is working to eliminate roaming. The platform connects mobile network operators and end users worldwide in the marketplace using a blockchain. The project gives traveling users the freedom to become legitimate local customers of any foreign terrestrial operator in any country they travel to, without having to replace their SIM cards.

With BubbleTone users will be able to call and use data-based services worldwide at local rates with a direct connection to local operators. As for the operators, this platform provides an opportunity to reach the global level without the need for any complex network integration.

How does it work?

BubbbleTone aims to eliminate the problem of international roaming, which incurs unnecessary costs for both operators and users. With the BubbleTone blockchain, travelers can easily become verified local customers of the country they are traveling to, without the need to replace a SIM card.

The platform also has its own mobile application, which is primarily its marketplace that connects subscribers and LAN operators around the world.

The network is powered by UMT (Universal Mobile Token), which will be used in smart contracts to execute transactions. This token can also be used to replenish the balance of users to pay for the communication services they choose.

Partnerships

BubbleTone is currently collaborating with Crypto Vallley, REVESystems, CountryCom, Multi Digital Services, ShoCard and IDEMIA. In addition, the company works with telecommunications providers in more than 80 countries to provide unimpeded travel for users.

Road map

The initial version of the network’s smart contracts was ready in the first quarter of 2018. The second quarter saw the launch of a Web-API to integrate mobile operators and service providers in more than 80 countries. By the end of the third quarter of 2018, the company plans to obtain the approval of the International Telecommunication Union with the subsequent expansion of the list of mobile operators and service providers with which they cooperate, until the 4th quarter of 2018. In the first quarter of 2019, the company will sign agreements with all operators and launch the first prototype of the global SIM chip for embedding in mobile devices.

  1. BLOCKSIMS (SIM):

BLOCKSIMS is a decentralized payment gateway that works to solve problems related to traditional telecommunications using blockchain technology. The platform aims to completely eliminate the fees charged by data and voice service providers, and provides users with rewards and invoices created through digital advertising.

The platform is working to ensure the smooth dissemination of information through the development of new revenue channels, which eliminates intermediaries in the telecommunications process.

The BLOCKSIM platform uses the Ethereum blockchain to provide a level of transparency while encouraging users to accept and use the platform.

How does it work?

BLOCKSIM cooperates with leading telecommunications industries around the world and makes international SIM cards available through its SIM token. This will give BLOCKSIM users unlimited voice and data services worldwide, and users will receive a promotion of up to $ 100.

Each SIM token holder will have a LOCKED SIM card that will be valid for life, including unlimited and free data and voice services.

Partnership and road map

The BLOCK SIM and SIM tokens were conceived in April 2017, after which research and development was conducted, culminating in the launch of the BLOCKSIM ICO in March 2018. The ICO ended in April 2018, and in October the world will see the introduction of the BLOCK SIM with the mobile app. for Android and iOS. The company aims to have at least 15% of BLOCK SIM card users in the world by 2020.

The "Experts" Everything is getting wrong

Bitcoin peaked about a month ago, on December 17, at a high of nearly $ 20,000. As I write, the cryptocurrency is less than $ 11,000 … a loss of about 45%. It’s more than $ 150 billion in lost market capitalization.

The crypto-commentary has a lot of wringing of hands and gnashing of teeth. It is, but I think the “I-I-told-you” crowd has an advantage over the “excuses”.

Here’s what: if you just haven’t lost your shirt on bitcoins, it doesn’t matter. And most likely, the “experts” you may see in the press are not telling you why.

In fact, the collapse of bitcoin is great … because it means we can all stop thinking about cryptocurrencies altogether.

Death of bitcoin …

In a year or so, people won’t talk about bitcoin in the queue at the grocery store or on the bus like now. That’s why.

Bitcoin is a product of justified disappointment. Its designer explicitly said that the cryptocurrency was a reaction to the government’s abuse of fiat currencies such as the dollar or the euro. It was supposed to provide an independent peer-to-peer payment system based on virtual currency, which could not be reduced, as they were limited.

This dream has long been abandoned in favor of crude speculation. Oddly enough, most people care about bitcoin because it seems like an easy way to get more fiat currency! They don’t own it because they want to buy pizza or gas for it.

Aside from the fact that it’s a horrible way of electronic transactions – it’s painfully slow – the success of bitcoin as a speculative game has made it useless as a currency. Why would anyone spend it when it is valued so quickly? Who will accept it if it depreciates quickly?

Bitcoin is also a major source of environmental pollution. Only one transaction requires 351 kilowatt-hours of electricity, which also emits 172 kilograms of carbon dioxide. That’s enough to provide food for one family in the U.S. for a year. The energy consumed by all bitcoin mining to date can power nearly 4 million U.S. households during the year.

Paradoxically, bitcoin success is as old-fashioned speculative game – not its intended libertarian use – attracted government repression.

China, South Korea, Germany, Switzerland and France have introduced or are considering bans or restrictions on bitcoin trading. Several intergovernmental organizations have called for concerted action to contain the obvious bubble. The U.S. Securities and Exchange Commission, which once seemed to approve financial derivatives based on bitcoins, now seems to be hesitant.

And according to Investing.com: “The European Union is introducing stricter rules to prevent money laundering and terrorist financing on virtual currency platforms. It is also considering restrictions on cryptocurrency trading. ”

Someday we may see a functional, widely recognized cryptocurrency, but it won’t be bitcoin.

… But an incentive for cryptocurrencies

Good. Overcoming bitcoin allows us to see where the real value of crypto-assets lies. Here’s how.

To use the New York subway system, you need tokens. You can’t use them to buy anything else … though you do could sell them to someone who would like to use the subway more than you.

In fact, if subway tokens were in limited quantities, a lively market could emerge for them. They can even trade much more than they cost initially. It all depends on how many people I want to enjoy the subway.

This is, in a nutshell, a scenario for the most promising “cryptocurrencies” other than bitcoin. They are not money, they are tokens – “crypto-tokens”, if you will. They are not used as a common currency. They are good only within the platform for which they were designed.

If these platforms provide valuable services, people will want these crypto tokens and this will determine their value. In other words, crypto-tokens will have value to the extent that people appreciate what you can get for them from their associated platform.

It will make them real assets, з intrinsic value – because with their help you can get what people value. This means that you can reliably expect a stream of revenue or services from owning such crypto tokens. Importantly, you can measure this future earnings flow against the crypto-token price, just as we do when calculating the value for money (P / E) of a stock.

Bitcoin, on the other hand, has no value of its own. It has only a price – a price that is set by supply and demand. It can’t generate future revenue streams, and you can’t measure anything like a P / E ratio for it.

One day it will become insignificant because it will not give you anything real.

Ether and other cryptocurrencies are the future

Ether crypto-token for sure it seems as a currency. It is traded on cryptocurrency exchanges under the code ETH. Its symbol is the Greek symbol Si. It is extracted by the same (but less energy-intensive) process as bitcoin.

But the air is not a currency. Its developers describe it as “the fuel for Ethereum’s distributed application platform. This is a form of payment that customers of the platform make to machines that perform the requested operations.

Essential tokens give you access to one of the most sophisticated distributed computing networks in the world. It’s so promising that big companies are rushing at each other to develop it virtually in the real world.

Since most people who trade it don’t really understand and care about its true purpose, the price of ether in recent weeks has bubbled and frothed like bitcoin.

But eventually, ether will return to a stable price based on the demand for computing services that it can “buy” for people. This price will represent real cost which may be assessed in the future. This will be done by the futures market and exchange traded funds (ETFs) because everyone will be able to estimate its base price over time. Just like we do with stocks.

What will this value be? I have no idea. But I know it will be much more than bitcoin.

My advice: get rid of bitcoin and buy ether on the next drop.

Stock screening – how to do it right

The stock verification process can be broken down into clear and effective stages that will quickly lead you to new trading and investment opportunities. Here’s how it works:

First, you need to capture all the relevant data in the stock screening software. If you’re a fundamental guy, obviously you’ll need the last 5 years of annual financial reporting as well as the last quarterly. If you are a price-oriented trader, you are probably interested in price models, candlesticks or researching technical indicators on more short-term data. Therefore, you need to select the data set to which the filtering rule will be applied.

Second, you need to develop filtering rules that you want to use in your stock validation tools. If you’re a fundamental investor, your rule might look something like this: tell me about all the stocks on the Toronto Stock Exchange that have a market capitalization of less than $ 100 million, debt-to-equity ratios of less than 2, and average quarterly cash flow growth over recent 3 quarters at least 10%. This screen will select stocks with a small capitalization with low leverage and increased cash flow – a good indicator of financial health. If you are a technical trader, your rule may be this: tell me all stocks on the Toronto Stock Exchange with a closing price of less than 50 and more than 5, with an RSI of more than 50, a moving average for a period of 50 and a 3-day period. rollback in price. This screen will select all stocks that are on an uptrend, with relatively strong internal strength, but which had a short-term rollback, which may be an opportunity to buy.

Third, you should be able to detail and further analyze stocks that have discovered an app to test stocks across the entire stock universe. As a fundamental investor, you want instant access to other financial data for each stock selected on the screen. As a technical trader, you want to see price and volume on a time series chart, possibly with a few extra indicator overlays.

Once you have conducted further detailing and analysis, you can select stocks to trade or invest. This process should be carried out constantly to make sure you are always considering the best options available that fit your method or strategy. In a nutshell, here’s how you properly do stock screening.

Enrich your financial portfolio with the right measures

If you are dealing with the stock market for the first time or even choosing a particular broker to take care of your stock market investments, there is still a very high chance of taking a huge risk if all the money you have invested could go to the throw. There are many investment or stockbrokers who have a unique style of work, and each broker is different. This is a fact that has been known for a long time and there is nothing you can do about it.

If you’ve been thinking about this for so long, it’s time for you to think differently. Yes, you can do something about it, after all, it’s your money that is invested, and the ultimate goal is to get the right amount of profit over time. Wondering how you can fix the current situation and what you can do? Well, you can learn about three different capitalization options for companies in the market and direct your stockbroker to invest in the companies you deem appropriate.

First, you need to understand that companies are classified into companies with high capitalization, medium or medium capitalization and low capitalization. A company with a high capitalization, according to many brokers, is the riskiest and safest investment plan. Although in many cases the opposite has been proven, we will assume that this is the case. If the company is considered high-cap, the return on investment or growth is very slow or minimal. On the other hand, a low-capitalization company may be a small company with a lower market value of its shares. True, such companies actually have higher growth potential, which brings in more profits, but dealing with them is also quite risky.

If you look at the stock market, you can easily spot high-cap companies with better stability and low-cap companies with better growth. In such cases, it is best to invest in companies that are considered mid-cap because they have the right balance of stability and growth. As an answer to your question about what you can do, you can now tell your broker to look for mid-cap stocks and invest in them.

Organic growth versus acquisitions

If company management decides to grow organically or through acquisitions; they need to think carefully about their strategy. Organic growth increases the turnover of the company’s existing business or brings in the profits generated within the company. Organic growth represents real growth for the company’s core. This is a good indicator of how well management has used its internal resources to increase profits. Organic growth also determines whether managers have used their skills to improve business.

Compare this strategy with a company that is growing through the acquisition of other companies. Last year Naspers went to trial for the acquisition, but due to limited opportunities this year decided to grow organically. Naspers management believes that online ratings have become inflated and it is difficult to find a good price. However, growth through acquisitions still has more benefits and is often seen as a faster and cheaper option with less risk.

Reunert operates a number of companies focused on electrical engineering, office systems and services and security electronics. Reunert is once again on a path of acquisition to raise revenues that seem to have stagnated. The company wants to bring the IT business into the field to complete the transformation of its communications division. The share seems inexpensive to trade on historic PE at 11.1 times and 2.3 times its NAV. Accordingly, we recommend investors to buy a stake. The share is supported by a historical dividend yield of 5%. The stock price is trading below the 200-day moving average and slightly above the 10 and 30-day moving averages. The trend is moving sideways with a bearish bias. Wait until the price rolls back and confirm the trend change before buying.

Naspers is a multinational media group with major operations on online platforms, pay-TV and related technology and print media. Based on the current market price, we estimate that the group’s operations excluding investments in Tencent (listed on Hang Seng) and Mail.ru (listed on the London Stock Exchange) are traded on historical exchanges about 3.5 times. These two investments currently account for 93% of the group’s market capitalization and remain key drivers of future growth. We believe the stake is fairly valued and encourage investors to hold their shares. Nasper’s stock price is trading above the moving average, and the trend remains bullish, albeit sideways in the medium term. Wait until the price re-tests the support level on the R351, or for a break above the resistance level on the R406 before buying.

For an investor, rapid growth looks good, but companies can get into trouble if they grow too fast because they can’t sustain that growth rate and their stock prices suffer. When evaluating companies with aggressive growth policies, investors should carefully determine whether these policies have more disadvantages than advantages.

Filter on a large list of penny stocks

Thanks to modern technology, we live in an era when exchange trading pennies is taking on a new dimension. Finally, the art and science of penny stock trading is viewed in a more favorable light.

Small-cap stock trading is no longer an evil stock of the stock market, but has become an investment where there is amazing profit potential for the experienced investor. The patterns observed in penny stocks as well as in stocks with higher capitalizations are also repeated over and over again.

These models can be easily used to get a reward higher than the profits in the market. Being able to view a list of pre-scanned, filtered and selected cheap stocks and invest in them takes us to a new dimension of investing.

This is a great opportunity today to be able to reap the benefits of this new dimension in the small-cap stock market. Having huge time savings at your fingertips, as well as having other entities that research stocks with a small capitalization for you, makes penny stocks fun. What a wonderful time technology we live in, what a wonderful chance to reap great benefits, I can’t wait!

We live in a time when traders have to think a little out of the ordinary. To succeed in this very turbulent market, you need to be prepared to fight the blows. Gone are the days of buying and holding garden stocks “blue chips”. The stock market has evolved and so should you. This is the essence of trading.

Is the bull market early or the bear market?

For virtual currency investors, the more important question is whether this round of rising currency prices is a restart of the bullish market or a bearish trap.

Last night the price of bitcoin rose in just an hour. The price has risen from violence to about $ 6,800 to a high of $ 8,100. During the day it grew by almost 20%. Bitcoin-led other virtual currencies have also led to a strong rebound, with profits from a single currency even exceeding 50%. Faced with the collective warming of the virtual currency market, many investors have shouted that the “bull market is back”.

According to CoinMarketCap, the market value of bitcoin rose by almost $ 20 billion during the day, and the entire virtual currency market also experienced overall market growth. There was no “search” effect. According to the daily volume of bitcoin transactions, which exceeds 9 billion US dollars, billions of additional funds should enter the market yesterday, not equity funds.

In fact, during the Bitcoin boom, Bitfinex, a digital currency trading platform, also recorded a number of major purchases. With the increase in bitcoin purchases, many shorts were forced to close their positions, which further broadened the trend of market growth. Nick Kirk, director of Cypher Capital, also praised the phenomenon. At the same time, he also believes that this sharp rebound is likely to be a response to the removal of early regulatory pressure.

Pantera Capital Management, one of the world’s largest digital currency hedge funds, said bitcoin has hit rock bottom. $ 6,500 is the lowest point for the bitcoin bear market. For most of this year, bitcoin will be above that price and may even exceed a record high of $ 20,000 last year.

Fundstrat founder Tom Lee also expressed confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other figures are almost the same as in the bear market at the end of 2014, and has formed an important technical correction. Based on this, he said that the value of bitcoin could more than triple this year and rose to $ 25,000 later this year.

Historical data show that bitcoin did grow in the second quarter of the calendar year. In the second quarter of 2011, bitcoin rose by as much as 1964%, 36.25% in 2012 … 61.98% in 2016 and 131% in 2017.

Of course, the volume of Bitcoin OTC is also showing signs of market recovery. Since March, bitcoin trading in Canada, Europe, Vietnam, Mexico and Vietnam has grown and reached record highs.

With the consistent admission of major financial institutions such as the hedge fund giant Soros and the leading financial group of the Rockefeller family, the financial size of the virtual money market will be further expanded.

However, it should be noted that although bitcoin is currently experiencing strong growth, it is still in the downtrend channel and has not yet been effectively broken. It remains to be seen whether the virtual currency market has really changed. Investors should always be vigilant and pay attention to position management.

More importantly, major global Bitcoin markets, including the US, have sought to create a regulatory framework. Uncertainty of regulation will inevitably have a greater impact on the short-term development of the virtual currency market. In the long run an orderly, healthy market can go even further.

Don’t worry, go fishing

While most of us like to chase higher returns by moving and leaving stocks, ETFs and mutual funds, a few, perhaps smarter investors create a diversified portfolio and just let it work.

It is human nature to try to outperform the market by trying to pick ten tenants or connect to economic growth in India or Brazil. Undoubtedly, high returns are achievable, and the gloomy performance of broad indices such as the S&P 500 has disappointed most passive investors over the past few years.

Although we offer investors six model ETF portfolios, one of the most popular is our “Gone Fishing” portfolio, which was part of our Starter Kit ETF and hasn’t changed at all. It contains 14 ETFs ranging from iShares COMEX Gold (IAU) to an ETF that tracks the S&P Global 100 (IOO).

30% of the portfolio is allocated to three fixed income ETFs such as iShares Lehman Aggregate (AGG), 20% to broad and regional international ETFs such as iShares MSCI Pacific Ex-Japan (EEP). 20% of the portfolio is allocated to U.S. stocks, well balanced between small-cap, medium-cap and mega-capitals.

How did you manage with this simple and balanced portfolio? In 2005, it rose 11.43% against less than 5% for the S&P 500, and this year it rose 6.3% vs. 2.97% for the S&P 500. The key, of course, is the right combination ETFs, so failures are likely to be offset by sectors on fire.

ETFs provide investors with the best tools to build a “Gone Fishing” portfolio because they are low in cost and tax. The weighted annual portfolio fee is 0.58%, and there has been no allocation of capital gains for the iShares family of ETFs for the past four years.

But for those adventurous souls who crave thrills and profit from the pursuit of higher returns with commensurate risk, ETFs are also a good tool. Country-specific ETFs are often highly concentrated due to market capitalization weights, and ETF sector funds also offer exciting but challenging opportunities. ETFs can also be short, and options are available for many.

The Chartwell Global Tactical Asset Allocation ETF service and portfolio ($ 1995 per year) contains a more limited number of ETFs and closed-end funds and does not shy away from risk. Thailand (TF) and Brazil (EWZ) are the two current holdings, and the portfolio grew 23% this year, surpassing the S&P 500 index by a 7 to 1 advantage.

Whether you are a fishing investor or more aggressive and trading-oriented, ETFs should be in your set of investment instruments and can complement stocks and mutual funds well. Make sure you spend most of your portfolio on a diversified conservative portfolio to protect your capital and always have time to fish throughout the day.