The stock market is partying like it’s 1999 once again. And investors are looking for new ways to participate. But one of the themes dominating the landscape is new technological solutions that pertain directly to finance.
The fintech space is poised as one of the leading areas of emerging technology, with ties to AI, machine learning, cloud computing, decentralized blockchain technology, and pure finance. The growth potential is enormous, and there is a recursive element here as well, as investors interested in the space will also be using it to achieve returns.
With that in mind, we take a look at a handful of the most interesting fintech stocks in play right now, including: Charles Schwab Corporation Common Stock (NYSE: SCHW), FDC Tech Inc. (OTC US: FDCT), and Lemonade Inc. (NYSE: LMND)
Charles Schwab Corporation Common Stock (NYSE: SCHW) provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates through two segments, Investor Services and Advisor Services.
The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor, retirement plan, and mutual fund clearing services. The Advisor Services segment offers custodial, trading, and support services; and retirement business and corporate brokerage retirement services.
Charles Schwab Corporation Common Stock (NYSE: SCHW) recently announced quarterly data that revealed net income for the fourth quarter of 2020 at $1.1 billion, compared with $698 million for the third quarter of 2020, and $852 million for the fourth quarter of 2019. Net income for the twelve months ended December 31, 2020 was $3.3 billion, compared with $3.7 billion for the year-earlier period.
The company’s financial results include TD Ameritrade from closing on October 6, 2020 forward, as well as certain acquisition and integration-related costs and the amortization of acquired intangibles. Together these transaction-related expenses totaled $429 million and $632 million on a pre-tax basis, for the fourth quarter and full-year 2020, respectively.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action SCHW shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Charles Schwab Corporation Common Stock (NYSE: SCHW) managed to rope in revenues totaling $3.9B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 41.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($90.7B against $0).
FDC Tech Inc. (OTC US: FDCT) provides innovative and cost-efficient financial technology and business solutions to OTC Online Brokerages and cryptocurrency businesses.
The Company’s products are designed to provide a complete solution for all operating aspects of customer’s business, including but not limited to trading terminal, back office, customer relationship management, and risk management systems. The Company provides business and management consulting, which includes management consulting and the development of customers’ B2B sales and marketing divisions.
FDC Tech Inc. (OTC US: FDCT) most recently announced that it had added PayPal – the leading payment gateway – to its Condor FX Pro Trading Platform. Consequently, FX/Crypto traders can fund their trading account with small to large payments instantly and securely while keeping transaction fees lower and following all regulatory policies, and adhering to strict international Anti-Money Laundering laws.
According to the release, FX/Crypto brokers widely offer PayPal to fund trading accounts. PayPal connects the trader’s forex account with their bank card or bank account. PayPal is used in over two hundred countries and has 346 million active accounts worldwide. PayPal’s announcement in October 2020 to allow customers by early 2021 to buy, sell and hold bitcoin and other virtual coins using the digital payments company’s online wallets may enable Cryptocurrency as a funding source for funding FX/Crypto trading accounts worldwide. The trend appears positive for FX/Crypto brokers as Cryptocurrencies tend to be volatile, making them attractive to speculators and margin traders.
The stock has been on fire over recent days, up something like 85% in that time.
FDC Tech Inc. (OTC US: FDCT) managed to rope in revenues during the company’s most recently reported quarterly financial data. However, the main commercial activity for the company is likely just starting up and the important numbers still lie ahead. The company appears to have the potential for significant traction, and we are clearly ramping up a retail investment driven market environment, which favors providers of tools and resources that cater to that context. And that makes FDCT worth a closer look.
Lemonade Inc. (NYSE: LMND) offers renters, homeowners, and pet health insurance in the United States, contents and liability insurance in Germany and the Netherlands, and renters insurance in France, through its full-stack insurance carriers.
Powered by artificial intelligence and behavioral economics, Lemonade set out to replace brokers and bureaucracy with bots and machine learning, aiming for zero paperwork and instant everything. A Certified B-Corp, Lemonade gives unused premiums to nonprofits selected by its community, during its annual Giveback. Lemonade is currently available for most of the United States, Germany, the Netherlands, and France and continues to expand globally.
Lemonade Inc. (NYSE: LMND) announced the pricing of the underwritten public offering of 3,300,000 shares of its common stock by Lemonade and 1,524,314 shares of its common stock by certain selling stockholders, at a price to the public of $165.00 per share.
According to the release, the Offering was upsized from the previously announced offering size of 4,524,314 shares. The underwriters will also have 30-day options to purchase up to an additional 723,647 shares of Lemonade’s common stock from Lemonade. The Offering is expected to close on January 19, 2021, subject to customary closing conditions.
Even in light of this news, LMND has had a rough past week of trading action, with shares sinking something like -6% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Shares of the stock have powered higher over the past month, rallying roughly 27% in that time on strong overall action.
Lemonade Inc. (NYSE: LMND) generated sales of $10.8M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -63.4% on the top line.
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