3 Companies Profiting from New Ways to Use Blockchain Technology

Many investors continue to think of blockchain as merely the technology that Bitcoin is based on. But it is rapidly becoming a lot more than that. . . . .

In this next article in my series on blockchain technology, I look at the ever-expanding uses some of the leading companies in the world are finding for the use of blockchain. Here is just a small sample I want to bring to your attention, emphasizing the practicality of blockchain in all sorts of businesses.

Fixing the Opioid Epidemic

One novel use for blockchain technology is being undertaken by Intel (Nasdaq: INTC) and the pharmaceutical industry – tackling the opioid epidemic.

Intel’s idea is to use blockchain to pinpoint where drugs “leak” out of the drug supply chain. The test began this spring when Johnson & Johnson and McKesson among others entered simulated data into new digital ledgers. The experiment will see how easy it is to track drugs as they travel from the manufacturer all the way to a patient’s home.

The effort would include using sensors and scanners to ensure that information is entered accurately. After a pharmacy issues a drug and scans it, the record will immediately appear on the blockchain. Each bottle, and even each pill, would be traceable all the way through the supply chain. And any ‘missing’ drugs could then be investigated.

The hope is the tests will lead to a live pilot project and possibly even a limited deployment by year-end. The ultimate goal is for all drug-related companies and their suppliers worldwide to be on an online ledger that can’t be erased. Then government agencies such as the FDA (Food and Drug Administration) could potentially plug into the blockchain and provide oversight.

It is hoped blockchain technology will also help detect “double doctoring”, where an addicted patient takes out more than one prescription from multiple doctors. There is already software that sift through prescription records from 45 states that detects potential opioid abusers that cross state lines to get their prescriptions filled.

Related: Buy This Blockchain Stock Keeping Our Food Safe

Insurance Industry Adopting Blockchain

In my last article on Blockchain, I told you how the world’s largest container shipping company, Moeller Maersk (OTC: AMKBY), was adopting blockchain to modernize global supply chains.

Maersk is also using blockchain to help decide how its ships will be insured if they are sailing through war zones. It has teamed up with the consultancy Ernst & Young, insurers XL Catlin and MS Amlin and the insurance broker Willis Towers Watson to create a system that Maersk hopes will lead to more efficient insurance policies that are more tailored to what it needs.

This  is just one of dozens of blockchain initiatives going right now in the insurance industry. The major insurance companies, including Axa, Allianz and AIG, are experimenting on how best to use blockchain. For example, one possible use of blockchain would be to store details of the possessions that policy holders want to insure.

The main benefit of blockchain adoption here would be to increase the efficiency of the insurance firms, making them more cost-efficient. That efficiency could take several forms. First, all parties to an insurance contract — from the insurer to the broker and the policyholder — will be able to see all of the documents in the same place, with changes being verified by all parties. That can save a lot of the time-consuming data re-entry that goes on across the insurance industry, and cut down on the risk of mistakes or misunderstandings in a contract. Blockchain could speed up the claims process too, especially if it is a straightforward claim.

Insurance is normally an industry very slow to change. But blockchain could be a real game changer for this staid industry.

Diamonds, Jewelry and Blockchain

This next industry that is adopting blockchain may be a surprise to you – it is the diamond industry. It is desperately in need of this, with such a murky supply chain that may include fakes, synthetic diamonds and so-called conflict diamonds getting into the mix.

The diamond mining giant De Beers said in May that it had successfully tracked its first diamonds all the way from its mines to jewelry retailers using its Tracr blockchain technology that it plans to roll out to the whole diamond industry later this year.

Tracr gives each diamond a unique ID that stores stones characteristics such as weight, color and clarity. To support the process, the system will also be using stone photos and planned outcome images. Its blockchain technology allows De Beers to show transactions to all participants, while keeping their identities and the values hidden. It is meant to give buyers confidence that the diamonds they are genuine and don’t come from conflict zones.

IBM (NYSE: IBM) is working on something similar (called TrustChain) for jewelry in general, following the supply chain from the mines to the jewelry store and that is based on its proprietary blockchain technology.

Supply chain verification for the jewelry industry is becoming increasingly essential because consumers are demanding transparency in the jewelry they buy. They want to be sure the diamond or precious metal in the jewelry was not mined by exploited labor and in a sustainable way. Research has found consumers are willing to pay more for such proof.

The goal is that, by next year, consumers will be able to pull a smartphone, scan a QR code on the diamond and see a visual of the entire supply chain right on their smartphone.

Blockchain Investment

I hope this look at some of the rapidly uses for blockchain brings home the point that it is a technology worth investing into. The only problem is that the highest-quality efforts in blockchain are just small parts of very large companies. Although IBM is probably the best play if you’re looking for an individual stock to invest into.

If you’re looking for a broader approach, there are a number of blockchain-centered ETFs to choose from. The best of these is the Reality Shares Nasdaq NexGen Economy ETF (Nasdaq: BLCN), which is down 7% year-to-date.  Among its top 10 holdings are: IBM and Intel as well as Square, Microsoft and  AMD.

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5 Earnings Reports to Watch This Week

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Earnings season is upon us again — and it’s a big one. The market has traded sideways for several months now, and a solid batch of earnings reports could be just the catalyst to move broad markets back to new all-time highs.

Of late, investors have alternated between optimism toward a strong U.S. economy and fears about higher interest rates and potential trade wars. Moving the headlines to what should be at worst a solid earnings season could be good news for U.S. equities.

After all, there’s still a lot to like. Lower tax rates will help the majority of reporting companies. The economy looks like it’s at — or getting very close to — full employment. The effect of inflation in areas like labor and commodities bears watching, and could pressure margins and profit growth. But overall it seems like the majority of earnings reports should be good news.

This week kicks off the season — led by several key financials. But leaders in both the consumer and industrial spaces should also signal the health of their respective sectors. Strong reports from these five companies could send their stocks higher and also give investors reason for confidence heading into the next few weeks.

5 Earnings Reports to Watch: PepsiCo (PEP)

5 Earnings Reports to Watch: PepsiCo (PEP)

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Earnings Report Date: Tuesday, before market open

PepsiCo (NASDAQ:PEP) has had a roller-coaster 2018. As of late January, PEP stock traded at an all-time high. By early May, it reached a 29-month low. An ugly start to the year for consumer products stocks was a key culprit. Not even a solid Q1 report in April could stem the bleeding.

Pepsi stock has rallied into earnings, however, rising 14% from those May lows. It can keep the momentum going with another beat on Tuesday. But caution might be advised. CPG stocks have struggled this year — for good reason, as I wrote in May. The new Bubly line, meant to compete with LaCroix from National Beverage Corp. (NASDAQ:FIZZ), needs to be a win — and may not be. Declining soda consumption, particularly relative to diet varieties, presents another long-term headwind.

PEP has outperformed rival The Coca-Cola Co (NYSE:KO) for years now. It may still do so going forward. But given the pressures on the industry, that doesn’t necessarily mean PEP stock is going up … either on Tuesday or beyond.

5 Earnings Reports to Watch: Fastenal (FAST)

Should You Buy the Earnings Dip in FAST Stock? 3 Pros, 3 Cons

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Earnings Report Date: Wednesday, before market open

One sector that has been notably weak this year has been construction. Distributor Fastenal Company (NASDAQ:FAST) could buoy the space with strong results on Wednesday morning.

After all, FAST sales are a key data point relative to demand from builders and contractors. As such, it’s possible that a good quarter for Fastenal could do as much — if not more — to help other stocks than its own. Strong revenue results will suggest confidence from Fastenal’s suppliers and a continuation of solid growth in the industry.

And with those suppliers not threatened by Amazon.com (NASDAQ:AMZN), investors might see less risk in them. FAST does trade at a seven-month low, so a good report can help its own stock. But investors across the sector will be watching closely as well.

5 Earnings Reports to Watch: J.P. Morgan Chase (JPM)

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Earnings Report Date: Friday, before market open

After a huge post-election run, financials have weakened – and that includes J.P. Morgan Chase(NYSE:JPM). JPM actually trades at a seven-month low at the moment.

It’s difficult to see why. Fed rate hikes, which should help net interest margin for JPM and other banks, seem likely to be on the expected pace. Federal Reserve stress tests went well, leading Josh Enomoto to recommend JPM as one of three bank stocks to buy.

I agree with Enomoto; I recommended JPM myself back in March. I still like Bank of America (NYSE:BACbest in this sector, but investors can’t go wrong with JPM, either. And a strong earnings report on Friday should remind investors why this is a stock worth owning long-term.

5 Earnings Reports to Watch: Wells Fargo (WFC)

5 Earnings Reports to Watch: Wells Fargo (WFC)

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Earnings Report Date: Friday, before market open

For Wells Fargo (NYSE:WFC), Friday’s Q2 release will be less about what the company is doing right – and more about what it’s doing better. Wells continues to struggle with its past scandals, with the Fed deciding back in February to cap its asset growth as a result.

Strong numbers will help the stock’s cause. But the quarter — and the earnings call — will be more about restoring investor confidence. Wells Fargo’s largely new management will try and make the case that the bank is headed in the right direction.

On that front, I’m still skeptical. Particularly with JPM and BAC on sale, there are simply easier ways to make money in the financial space. It will take quite a bit from Wells Fargo’s Q2 report to suggest that past failures truly are behind the company.

5 Earnings Reports to Watch: Citigroup (C)

5 Earnings Reports to Watch: Citigroup (C)

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Earnings Report Date: Friday, before market open

Citigroup (NYSE:C) similarly has taken a hit of late. The stock actually touched an 11-month low last month before a modest rebound. And the low price sets up a potentially interesting report of its own on Friday morning.

After all, C stock looks like the cheapest of the big banks. It still trades below book value and at barely 9x 2019 EPS estimates. A recently boosted capital return program will add to buybacks and move the stock’s dividend yield to nearly 2.7%.

But Citi has its own regulatory issues to worry about. It still feels much more like a turnaround play than JPM or BAC. It’s not executing as well as those peers in either consumer or investment banking.

That leaves room for upside if Citigroup can improve its operations. That’s what investors will be watching for on Friday — and if they like what they hear, C stock could become a near-term out-performer.

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Source: Investor Place