Head-To-Head Comparison: Trinseo (TSE) vs. Rogers (ROG)

Trinseo (NYSE: TSE) and Rogers (NYSE:ROG) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Institutional and Insider Ownership

Get Trinseo alerts:

97.0% of Trinseo shares are held by institutional investors. Comparatively, 93.8% of Rogers shares are held by institutional investors. 0.3% of Trinseo shares are held by insiders. Comparatively, 1.5% of Rogers shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Trinseo has a beta of 2.3, indicating that its share price is 130% more volatile than the S&P 500. Comparatively, Rogers has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Valuation and Earnings

This table compares Trinseo and Rogers’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$4.45 billion	0.73	$328.30 million	$8.13	9.25
Rogers	$821.04 million	2.65	$80.45 million	$5.76	20.55

Trinseo has higher revenue and earnings than Rogers. Trinseo is trading at a lower price-to-earnings ratio than Rogers, indicating that it is currently the more affordable of the two stocks.

Dividends

Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. Rogers does not pay a dividend. Trinseo pays out 17.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Trinseo and Rogers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	0	2	4	0	2.67
Rogers	0	0	3	0	3.00

Trinseo presently has a consensus price target of $88.60, indicating a potential upside of 17.82%. Rogers has a consensus price target of $151.67, indicating a potential upside of 28.15%. Given Rogers’ stronger consensus rating and higher possible upside, analysts plainly believe Rogers is more favorable than Trinseo.

Profitability

This table compares Trinseo and Rogers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinseo	7.42%	59.08%	13.86%
Rogers	9.56%	13.71%	9.34%

Summary

Trinseo beats Rogers on 9 of the 16 factors compared between the two stocks.

Trinseo Company Profile

Trinseo S.A., a materials company, manufactures and markets synthetic rubber, latex binders, and plastic products in Europe, the United States, the Asia Pacific, and internationally. The company operates through Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks, and Americas Styrenics segments. The Latex Binders segment offers styrene-butadiene, styrene-acrylate, vinylidene chloride, and butadiene-methacrylate latex products for the commercial and niche carpet markets, as well as performance latex products for the adhesive, building and construction, and technical textile paper markets. The Synthetic Rubber segment provides styrene-butadiene rubber, emulsion styrene-butadiene rubber, nickel polybutadiene rubber, and neodymium polybutadiene rubber for use in tires, modifiers, and technical rubber products. The Performance Plastics segment offers engineered compounds and blend products for the automotive, consumer electronics, medical, electrical, and lighting markets. The Basic Plastics segment provides polystyrene, polycarbonate, acrylonitrile-butadiene-styrene, and styrene-acrylonitrile for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials. The Feedstocks segment offers styrene monomer, a basic building block of plastics. The Americas Styrenics segment provides styrene and polystyrene, as well as general purpose polystyrenes, high heat, high impact resin, and STYRON A-TECH polystyrene products. The company's products are also used in carpet and artificial turf backing, coated and specialty paper, and other markets. Trinseo S.A. was founded in 2010 and is headquartered in Berwyn, Pennsylvania.

Rogers Company Profile

Rogers Corporation designs, develops, manufactures, and sells engineered materials and components worldwide. The company's Advanced Connectivity Solutions segment offers circuit materials and solutions for connectivity applications in wireless communications infrastructure, automotive, connected devices, wired infrastructure, consumer electronics, and aerospace/defense. Its Elastomeric Material Solutions segment provides elastomeric material solutions for critical cushioning, sealing, impact protection, and vibration management applications, including general industrial, portable electronics, consumer goods, automotive, mass transportation, construction, and printing applications. The company's Power Electronics Solutions segment offers ceramic substrate materials for power module applications, laminated bus bars for power inverter and high power interconnect applications, and micro-channel coolers. Its Other segment provides elastomeric components for applications in ground transportation, office equipment, consumer, and other markets; elastomer floats for level sensing in fuel tanks, motors, and storage tanks; and inverters for portable communications and automotive markets. The company also manufactures and sells polytetrafluoroethylene, ultra-high molecular weight polyethylene films, pressure sensitive tapes, and specialty products for the industrial, aerospace, automotive, and electronics markets. Rogers Corporation was founded in 1832 and is headquartered in Chandler, Arizona.

Will Rising Gas Prices Play a Role in Consumer Summer Travel Plans?

Summer vacations have never been cheap. Americans, as a whole, spent $100 billion on summer vacations in 2017, according to a report released by Allianz Global Assistance. While older generations are likely to spend more money on travel, even thrifty millenials spend on average $1,373 on summer travel. With this being the case, rising gasoline prices could influence summer travel plans starting this Memorial Day weekend.

This year, 41.5 million Americans plan to travel over the Memorial Day Weekend, according to the AAA. Nearly 37 million plan to drive to their destination. Currently, the average gas prices hover near $3 per gallon, and this could have an impact on how consumers plan to spend their vacation time.

Whether or not these high prices will affect the number of people who travel this summer is yet to be seen. GasBuddy predicted in their Annual Summer Travel Survey that the high prices will negatively impact travel, and that 24% fewer people will travel during summer 2018 than in 2017. Those who do travel may choose to stay closer to home and have shorter vacations than in previous years.

Andrew Challenger, Vice President of global outplacement and executive coaching firm Challenger, Gray & Christmas, commented:

Americans haven’t experienced prices like these in nearly three years, and it is possible that these prices could hold steady or continue to rise throughout the whole summer. One major cost associated with traveling might hurt summer travel this year – transportation. For those driving this summer, high gas prices present a growing concern.

ALSO READ: Gas Prices Rise, Summer Travel Plans Plunge

Predicting The Markets Is Tough But Worthy Task

&l;p&g;&l;img class=&q;dam-image getty size-large wp-image-959623612&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/959623612/960x0.jpg?fit=scale&q; data-height=&q;638&q; data-width=&q;960&q;&g; Bryan R. Smith/AFP/Getty Images)

Trying to predict the markets is a near-impossible task and those who attempt to do so almost always fail. Many investors who persist in attempting to untangle the many conflicting events and investor opinions, including the sophisticated players who earn a living investing in the stock market, readily admit that trying to accurately forecast market behavior is mostly a fool&a;rsquo;s game.

The stock market is, indeed, very difficult to diagnose because it is a conglomeration of human behavior influenced by world and local events. To put it simply, investors trying to forecast or beat the markets have to be attuned to the consistencies and inconsistencies of human nature.

The stock market, for the most part, is driven by humans and human judgment, fraught with inconsistencies and conflicting thoughts. But that hasn&a;rsquo;t stopped hordes of investors from making big bets on what they believe the market will perform at any given time.

&a;ldquo;The trick is to learn from the hits and misses of the forecasting process .&a;hellip; and first and foremost, current analysis requires a thorough grounding in the economic and financial data,&a;rdquo; says Ed Yardeni, president of Yardeni Research, who recently published the book, &a;ldquo;Predicting The Markets, A Professional Autobiography.&a;rdquo; The research firm provides global investment strategy and asset allocation analyses and recommendations. It also publishes for clients a daily report on its observations on what&a;rsquo;s happening in the stock, bond and commodity markets, as well as what&a;rsquo;s currently significant in various currencies.

If there is a Wall Street pro who is supremely qualified to make sense of the markets and who is particularly prescient as a successful investor and prognosticator of where they are likely to be heading, it is Yardeni. His career has spanned an extraordinary secular bull market in stocks, punctuated by plenty of nasty corrections and severe, wicked bear markets along the way.

Take a look at where the Dow Jones industrial average has been since Yardeni started his Wall Street career in 1978 &a;mdash; and where he landed through January 2017 as a stock market analyst: When he started working at the brokerage firm E.F. Hutton in 1978, the Dow had been trading at around 1,000. Then on Oct. 11, 1982, the Dow industrials finally climbed above 1,000. And by Nov. 21, 1995, the Dow had jumped five-fold, to 5,000.

&l;!--nextpage--&g;

By Aug. 25, 2017, the Dow had zoomed to 20,000 &a;mdash; a 20-fold climb since Yardeni started his career on the Street. And by Nov. 30, 2017, the Dow closed well above that level, to 24,000. Today (May 24, 2018), the Dow industrial average is trading at around 24,800.

Yardeni stayed bullish most of the time during all those 40 years. &a;ldquo;I remained bullish during all the corrections. And I was bearish when the tech and housing bubbles burst. However, I saw both selloffs as buying opportunities, as selloffs within a secular bull market,&a;rdquo; said Yardeni.

His career also blossomed during those years. Yardeni received a Ph.D in economics from Yale University in 1976, after completing his undergraduate studies in international relations (magna cum laude) from Cornell University in 1968. On Wall Street, Yardeni pursued an active and productive career, becoming Chief Economist at Oak Industries, Prudential Equity Group, and Prudential Bank&a;rsquo;s US equities division in New York City. He also served as Chief Economist at investment firms CJ Lawrence, Prudential-Bach Securities, and EF Hutton.

Yardeni also taught at Columbia Business School and became an economist at the Federal Reserve Bank of New York, s position that&a;rsquo;s much sought after. He also held enviable positions at the Federal Reserve Board of Governors and the US Treasury Department in Washington DC.

In his book, Yardeni shares his professional insight into predicting the economy and financial markets. Here&a;rsquo;s how he described the jigsaw puzzle that could be compared with the stock market: Instead of being able to change the pieces you need to solve a jigsaw puzzle, the stock market is a more dynamic game in that the &q;picture changes as new puzzle pieces are constantly thrown on the table.&a;rdquo; The puzzle pieces consists mostly of economic news, including current events and data releases, which surely is a live streaming series of activities.

&a;ldquo;The job of a Wall Street economist and investment strategist is always interesting because we, along with investors and traders, are constantly monitoring the news events that might be relevant to the financial markets,&q; notes Yardeni. All financial markets, he points out, are affected by the business cycle and inflation, and they are all affected by interest rates. So in predicting the markets, they necessarily have to be part of the process of deciphering the puzzle.

So where is the stock market headed next? There are only two variables to predict, argues Yardeni: Earnings and the price-earnings ratio. &a;ldquo;They are not so easy to get right, given the myriad of factors collectively determine them,&a;rdquo; he cautions. The tougher of the two to divine is valuation as it is more subjective. But the earnings variable is determined by such factors as economic growth, inflation, and interest rates.

Valuation is affected by those same factors, but it is also subject to hard-to-assess psychological influences that affect investor behavior, such as confidence, fear and greed. And there is also the problem of investors having to assess earnings expectations and how much they are willing to pay for them.

What makes market forecasting even much more difficult is that so many variables align and often compete with one another at certain times. Yardeni goes through these various variables and enlightens investors about how they are important to pay attention to.

He thinks the essential issues and sets of events to be mindful of are &a;ldquo;Globalization and Geopolitics, Demography and Growth, Technology, Inflation and Productivity, Central Banks and Cryptopcurrencies, and Science and Prosperity.&a;rdquo;

So what does Yardeni foresees ahead? His principal predictions: &q;I predict that prosperity will prevail in our interconnected global economy long into the future. If so, then so should the bull market in stocks, as it has over the past 40 years.

Yardeni&a;rsquo;s 595-page finely written book is an amazing read for its wide-ranging perspective and insightful analyses of one of the most convoluted financial subjects to understand, much less elucidate on how the capitalist world functions, and succeeds.

It is certainly a thoroughly informative must-read book not only for investors but for those potential Masters of the Universe looking to conquer the challenging world of money and finance.

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;

&a;nbsp;&l;/p&g;

Euronet Worldwide (EEFT) versus Payment Data Systems (PYDS) Head to Head Analysis

Euronet Worldwide (NASDAQ: EEFT) and Payment Data Systems (NASDAQ:PYDS) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

Get Euronet Worldwide alerts:

This is a breakdown of recent ratings and recommmendations for Euronet Worldwide and Payment Data Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Euronet Worldwide	0	1	7	0	2.88
Payment Data Systems	0	0	1	0	3.00

Euronet Worldwide presently has a consensus target price of $109.43, suggesting a potential upside of 33.45%. Payment Data Systems has a consensus target price of $4.00, suggesting a potential upside of 136.69%. Given Payment Data Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Payment Data Systems is more favorable than Euronet Worldwide.

Risk & Volatility

Euronet Worldwide has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Payment Data Systems has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Institutional and Insider Ownership

1.1% of Payment Data Systems shares are owned by institutional investors. 7.4% of Euronet Worldwide shares are owned by company insiders. Comparatively, 46.6% of Payment Data Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Euronet Worldwide and Payment Data Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Euronet Worldwide	6.66%	20.77%	7.62%
Payment Data Systems	-21.43%	-29.43%	-5.18%

Valuation and Earnings

This table compares Euronet Worldwide and Payment Data Systems’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Euronet Worldwide	$2.25 billion	1.87	$156.84 million	$4.33	18.94
Payment Data Systems	$14.57 million	1.84	-$3.00 million	N/A	N/A

Euronet Worldwide has higher revenue and earnings than Payment Data Systems.

Summary

Euronet Worldwide beats Payment Data Systems on 8 of the 12 factors compared between the two stocks.

Euronet Worldwide Company Profile

Euronet Worldwide, Inc. provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers, and individual consumers worldwide. The company operates in three segments: Electronic Financial Transaction (EFT) Processing, epay, and Money Transfer. The EFT Processing segment provides electronic payment solutions, including automated teller machine (ATM) cash withdrawal and deposit services, ATM network participation, outsourced ATM and point-of-sale (POS) management solutions, credit and debit card outsourcing, card issuing, and merchant acquiring services. This segment also offers ATM and POS dynamic currency conversion, advertising, customer relationship management, mobile top-up, bill payment, fraud management, and foreign remittance payout services; and integrated EFT software solutions for electronic payments and transaction delivery systems. As of December 31, 2017, it operated a network of 37,133 ATMs; and approximately 248,000 EFT POS terminals. The epay segment provides distribution, processing, and collection services for prepaid mobile airtime and other electronic payment products; and vouchers and physical gift fulfillment, and gift card distribution and processing services. This segment operated a network of approximately 707,000 POS terminals. The Money Transfer segment provides consumer-to-consumer money transfer services primarily under the Ria, AFEX Money Express, and IME brands; account-to-account money transfer services under the HiFX and xe brands; customers bill payment services; payment alternatives, such as money orders and prepaid debit cards; check cashing services; foreign currency exchange and mobile top-up services; and cash management and foreign currency risk management services. The company was formerly known as Euronet Services, Inc. and changed its name to Euronet Worldwide, Inc. in August 2001. Euronet Worldwide, Inc. was founded in 1994 and is headquartered in Leawood, Kansas.

Payment Data Systems Company Profile

Payment Data Systems, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH processing services include Represented Check, a consumer non-sufficient funds check that is represented for payment electronically rather than through the paper check collection system; and Accounts Receivable Check Conversion, a consumer paper check payment, which is converted into an e-check. The company also offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a Website or retail services accessed through a physical terminal. In addition, it provides a proprietary Web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Further, the company creates, manages, and processes prepaid card programs for corporate clients to issue prepaid cards to their customer base or employees; and issues general purpose reloadable cards to consumers as an alternative to a traditional bank account. Additionally, it operates billx.com, a consumer Website that allows consumers to process online payments to pay other individual; and provides prepaid cards to consumers for use in as a tool to stay on budget, manage allowances, and share money with family and friends. The company markets and sells its products and services directly, as well as through non-exclusive resellers. Payment Data Systems, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Ashland (ASH) Reaches New 1-Year High and Low at $79.68

Shares of Ashland Inc. (NYSE:ASH) hit a new 52-week high and low on Tuesday . The company traded as low as $79.68 and last traded at $78.99, with a volume of 15166 shares traded. The stock had previously closed at $78.71.

ASH has been the subject of a number of recent analyst reports. TheStreet upgraded Ashland from a “c+” rating to a “b” rating in a report on Wednesday, May 2nd. Jefferies Group reiterated a “buy” rating on shares of Ashland in a report on Tuesday, January 30th. Credit Suisse Group set a $86.00 price target on Ashland and gave the stock a “buy” rating in a report on Friday, May 11th. Longbow Research upgraded Ashland from a “neutral” rating to a “buy” rating in a report on Monday, March 26th. Finally, Seaport Global Securities restated a “buy” rating and issued a $81.00 target price on shares of Ashland in a research note on Wednesday, January 31st. One analyst has rated the stock with a sell rating, three have issued a hold rating and ten have given a buy rating to the company. Ashland presently has a consensus rating of “Buy” and an average price target of $84.50.

Get Ashland alerts:

The company has a quick ratio of 1.49, a current ratio of 2.41 and a debt-to-equity ratio of 0.73. The company has a market cap of $4.85 billion, a P/E ratio of 32.33, a PEG ratio of 2.26 and a beta of 1.13.

Ashland (NYSE:ASH) last issued its earnings results on Tuesday, May 1st. The basic materials company reported $1.06 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.87 by $0.19. The company had revenue of $974.00 million during the quarter, compared to the consensus estimate of $955.39 million. Ashland had a positive return on equity of 5.77% and a negative net margin of 0.62%. During the same period last year, the business posted $1.71 EPS. equities research analysts forecast that Ashland Inc. will post 3.44 EPS for the current year.

The company also recently announced a quarterly dividend, which will be paid on Friday, June 15th. Stockholders of record on Friday, June 1st will be paid a $0.225 dividend. The ex-dividend date is Thursday, May 31st. This represents a $0.90 annualized dividend and a dividend yield of 1.15%. Ashland’s dividend payout ratio is presently 36.89%.

Ashland announced that its Board of Directors has approved a stock buyback plan on Tuesday, March 20th that permits the company to repurchase $1.00 billion in shares. This repurchase authorization permits the basic materials company to repurchase shares of its stock through open market purchases. Stock repurchase plans are generally an indication that the company’s board of directors believes its stock is undervalued.

In other Ashland news, VP Keith C. Silverman sold 1,678 shares of Ashland stock in a transaction dated Monday, March 26th. The stock was sold at an average price of $70.02, for a total transaction of $117,493.56. Following the completion of the transaction, the vice president now owns 1,358 shares in the company, valued at approximately $95,087.16. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Company insiders own 1.14% of the company’s stock.

A number of hedge funds have recently added to or reduced their stakes in ASH. State of Alaska Department of Revenue acquired a new position in Ashland during the 4th quarter valued at about $263,000. Patten & Patten Inc. TN lifted its position in shares of Ashland by 331.1% during the 4th quarter. Patten & Patten Inc. TN now owns 25,676 shares of the basic materials company’s stock worth $1,828,000 after buying an additional 19,720 shares in the last quarter. Boussard & Gavaudan Investment Management LLP lifted its position in shares of Ashland by 8.8% during the 4th quarter. Boussard & Gavaudan Investment Management LLP now owns 113,232 shares of the basic materials company’s stock worth $8,085,000 after buying an additional 9,138 shares in the last quarter. Mutual of America Capital Management LLC lifted its position in shares of Ashland by 1.4% during the 4th quarter. Mutual of America Capital Management LLC now owns 54,649 shares of the basic materials company’s stock worth $3,891,000 after buying an additional 770 shares in the last quarter. Finally, Zurcher Kantonalbank Zurich Cantonalbank lifted its position in shares of Ashland by 57.0% during the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 3,364 shares of the basic materials company’s stock worth $240,000 after buying an additional 1,222 shares in the last quarter. Institutional investors and hedge funds own 94.46% of the company’s stock.

Ashland Company Profile

Ashland Global Holdings Inc provides specialty chemical solutions worldwide. Its Specialty Ingredients segment provides products, technologies, and resources for solving formulation and product-performance challenges. It offers solutions using natural, synthetic, and semisynthetic polymers derived from plant and seed extract, cellulose ethers, vinyl pyrrolidones, and acrylic polymers, as well as polyester and polyurethane-based adhesives.

This Is the One Stock I Would Own Forever

Tim Melvin

Every now and then, I'm asked a common – yet somewhat annoying – question by friends and fellow market experts alike…

If I could only own one stock for the rest of my life, which one would it be?

It can be an irritating question, because even though the askers often have good intentions, they unwittingly expect a stupid answer.

They expect me to say Amazon.com Inc. (Nasdaq: AMZN), Alphabet Inc. (Nasdaq: GOOGL), or any other popular tech giant trading at multiples so high that owning the stock probably gives you vertigo…

…or a biotech company that could "change the world," even though the odds of successfully betting on a biotech firm hitting that jackpot are extremely small…

…or a driverless car company, or a drone manufacturer, or some other firm making a device that everyone expects to be ubiquitous in a few years…

Which of these super sexy and exciting stocks would I buy now and hold forever?

None of them.

I would instead pick a company that will rent those super sexy firms their office and warehouse space. My company will supply electricity, sell fuel, provide water, and dispose of wastewater for those "super sexy" companies and whoever ends up replacing them over the next few decades.

The First Step on Your Road to Millions Starts Here: All you need is a computer or smartphone and just 10 minutes of "work" to potentially put $1 million in your bank account faster than you ever dreamed. Read more…

I'll admit I'm not smart enough to know which tech company will dominate the next 50 years. Or which will be replaced by three guys in a garage experimenting on a gaming system in Toledo. But I am smart enough to know that, no matter which tech company wins, it will always need infrastructure, power, water, and other basics.

Much like Levi Strauss getting richer than any miner during the California Gold Rush, I will get rich and stay rich selling those basics to the explorers.

This stock also has a�Money Morning�Stock VQScore�⒙�of 4 – indicating that it has strong growth potential in addition to its solid financials.

And the company I'm showing you today does all of that, boasting one of the most profitable and uniquely diverse businesses I've ever seen…

The Massive Global Reach of My "Forever Investment"

Join the conversation. Click here to jump to comments…

Tim Melvin

About the Author

Browse Tim's articles | View Tim's research services

Plugging In With The First 'Cold Wallet' Device For Your Smartphone

&l;p&g;&l;img class=&q;size-full wp-image-787&q; src=&q;http://blogs-images.forbes.com/andrewrossow/files/2018/05/xeedaaaa.jpg?width=960&q; alt=&q;&q; data-height=&q;756&q; data-width=&q;750&q;&g; Xeeda&s;s &s;cold wallet&s; device which plugs directly into the user&s;s smartphone

If the blockchain space were to have a theme song, Katy Perry&a;rsquo;s &a;ldquo;&l;em&g;Hot N Cold&a;rdquo; &l;/em&g;song may just be the winner. In the world of &a;lsquo;hardware wallets&a;rsquo;, there are some very important features that need to be identified and explained to those investors breaking into the space.

&l;strong&g;Understanding Hardware Wallets&l;/strong&g;

With over 1,200 cryptocurrencies in existence, and growing, it is essential for investors and those breaking into the space to understand how to secure their digital currencies and investments properly.

The first question to ask is how you&a;rsquo;re going to store your funds. The answer is simple, so you think&a;mdash;you need a wallet or some platform to hold your funds. Sure. But what kind? Yes, there are variations as to the kind of wallet and why one may be favorable over another, depending upon the transaction you are engaging in.

Let&a;rsquo;s talk about the only wallets you need to know about&a;mdash;hardware wallets.

For those investors looking for long-term cryptocurrency storage, it is recommended to divide funds into &a;ldquo;hot&a;rdquo; and &a;ldquo;cold&a;rdquo; wallets. Many investors in the space who hold digital assets and currencies utilize both hot and cold wallets for different storage purposes.

&l;strong&g;Hot Wallets&l;/strong&g;

&a;ldquo;Hot wallets&a;rdquo; are &l;a href=&q;https://www.blockchain-council.org/cryptocurrency/hot-wallet-vs-cold-wallet/&q; target=&q;_blank&q;&g;comparable&l;/a&g; to your bank&a;rsquo;s checking account&a;mdash;where they are used for the everyday spending of cryptocurrencies, typically holding only small amounts of any fund(s). It&a;rsquo;s similar to the physical wallet we carry on us on a daily basis. The biggest feature to know about these types of wallets is that they are almost invariably connected to the Internet in order to be readily usable. You can see where this may cause concern when it comes to security and vulnerabilities.

&l;strong&g;Cold Wallets&l;/strong&g;

On the other hand, &a;ldquo;cold wallets&a;rdquo; are comparable to your average savings account, used for long-term secure storage of your cryptocurrencies, typically holding larger sums of monies that are not intended to be touched or used very frequently. Unlike hot wallets, cold wallets are not &l;em&g;actively &l;/em&g;connected to the Internet. By &l;em&g;actively&l;/em&g;, I mean that there may be some battery or Wi-Fi enabled feature that could allow it to connect to the internet.

For security purposes, it is &l;a href=&q;https://www.forbes.com/sites/rachelwolfson/2018/04/25/security-officials-weigh-in-on-protecting-cryptocurrencies-following-myetherwallet-hack/2/#7f68ec0f3424&q;&g;smarter&l;/a&g; to keep the majority of your assets in a cold wallet, while a smaller portion of your funds are kept in the hot wallet for purchasing and sales transactions. Why? A cold wallet makes it much more difficult for hackers to steal your funds, because it&a;rsquo;s not connected to the Internet, or any Wi-Fi enabled services.

While the current wallets out there are functional, they are still difficult to use, as many of the features leave the user exposed to hacking attempts. One company, &l;a href=&q;https://www.xeeda.io/&q; target=&q;_blank&q;&g;Xeeda&l;/a&g;, has had made it its mission to change the way in which users access their wallets and allowing for trading, exchanging, and other transactions that may come along.

&l;strong&g;If We Are On The Go, How Can We Take Our Wallets and Funds With Us?&l;/strong&g;

Moving past the structural aspects of the wallets, we next turn to security, convenience, and accessibility. When it comes to hardware wallets, there isn&a;rsquo;t a &l;em&g;truly mobile&l;/em&g; wallet out there that allows you to plug into your smartphone. Recognizing that it isn&a;rsquo;t the first on wallets, Xeeda is the first in developing a hardware wallet that connects directly to the smartphone,&a;rdquo; said Kevin Maloney, CEO of Xeeda. The &l;a href=&q;https://www.nasdaq.com/press-release/xeeda-partners-with-zencash-to-launch-worlds-first-cryptocurrency-hardware-wallet-designed-solely-20180404-00609&q; target=&q;_blank&q;&g;Nasdaq&l;/a&g; described Xeeda in a report as a simple, secure, and convenient way to access, exchange, and manage bitcoins and other digital currency assets directly from a smartphone.

Maloney told me that the company believes that three-quarters of the audience will benefit from having that mobile access because most of these folks are very comfortable with their mobile devices and are always on the go. &a;ldquo;They prefer to transact on the market, whether up or down, through the convenience of their mobile device,&a;rdquo; says Maloney.

Xeeda&a;rsquo;s Chief Revenue Officer, Scott Jackson, added that in an already established space, there is still an imbalance when it comes to ensuring compliance, security, and peace of mind for all users. &a;ldquo;Right now, there is a lack of a &l;em&g;truly&l;/em&g; mobile solution for a hardware wallet that is designed specifically for smartphones.&a;rdquo;

&l;em&g;Ensuring Compliance and Regulation&l;/em&g;

&a;ldquo;We aren&a;rsquo;t storing anyone&a;rsquo;s cryptocurrency, instead, we are storing their &l;em&g;personal access keys&l;/em&g;&a;mdash;the public and private keuys that allow them to access their funds in the blockchain.&a;rdquo; Having an ecosystem that provides a convenient solution with minimal retainment of personally identifiable information as well as financial information is vital especially in recent months following the Equifax and Facebook data breaches.

&l;em&g;How Does A &a;lsquo;Mobile&a;rsquo; Hardware Wallet Work&l;/em&g;

I was curious as to the structure of Xeeda&a;rsquo;s &a;lsquo;truly mobile wallet&a;rsquo;, as there is no AC adapter and no ethernet or wired cables. Maloney walked me through their structure:

&l;strong&g;#1 &a;ndash; It Needs To Be Truly Mobile&l;/strong&g;

As we learned earlier when it comes to hot and cold wallets, for a truly mobile solution, users need to understand that if they are using a cold wallet for offline storage, then that device shouldn&a;rsquo;t have any potential to connect to the Internet or any third-party servers or services.

In other words, you won&a;rsquo;t find a battery or Wi-Fi enabled means to connect the device to the Internet. Both Maloney and Jackson told me that their device has no such battery or means in which it can be connected to the internet, because &a;ldquo;it&a;rsquo;s just not necessary and defeats the entire purpose of mobility and security.&a;rdquo;

&l;strong&g;# 2&a;mdash;Plug N&a;rsquo; Pin&l;/strong&g;

Upon connecting the device directly into the smartphone, the application still needs to verify that the user is the intended user connecting. Thus, the need to create and/or enter a pin is required. Again, this is something the user would need to write down, offline, in the event they forget it.

&l;strong&g;#3 &a;ndash;Master Key&l;/strong&g;

Like all cryptowallets out there, the user is required to set up a &a;ldquo;master key&a;rdquo; or catchphrase. Xeeda calls it &a;lsquo;master seeds&a;rsquo;, or sets of randomly generated words, which the user must write down and store in a safe place, offline. Typically, this would be in a safe or jewelry box.

Once the master seed or key is generated, you don&a;rsquo;t really need that again unless you lose the device&a;mdash;while these devices are intended to be shockproof and waterproof, they aren&a;rsquo;t safe as against you losing your key. Thus, you can still access your funds in the blockchain as long as you have the master seed.

&l;strong&g;#4 &a;ndash;Authentication&l;/strong&g;

When it comes to a user plugging the device into the phone, there still needs to be a way to ensure that the person connecting it to the phone, is the holder of the funds. Thus, Xeeda allows for &l;a href=&q;http://pr.report/dRbLmhPN&q; target=&q;_blank&q;&g;biometric scanners&l;/a&g; and authentication, via facial recognition or fingerprint scanning. This allows the holder of the funds to make the mobile application accessible to them and only them, regardless of who plugs the device in.

&l;strong&g;#5 &a;ndash;Start Trading&l;/strong&g;

From the application, you are able to pull down any/all supported currencies, coins, altcoins that you have from your cold wallet/storage and transact small amounts by selling/exchanging goods, or putting them into your hot wallet, which is connected to the Internet through an app.

As users of digital currencies become more mainstream, businesses need to find new, innovative ways in which to provide convenient and secure mobile access to these currencies and their users across the globe.

Platforms need to offer ways in which users can toggle between exchanges, coins, and fee structures that they are most intrigued by. Xeeda has identified this major issue and is already acting on the solution, providing users with a new, yet secure experience in how they invest and trade.

&l;!--donotpaginate--&g;&l;/p&g;