Facebook Instagram Twitter Youtube

Stocks Poised to Thrive Now That the Fed is Cutting Rates

By
Editorial Staff
-
0

The Federal Reserve’s recent decision to cut interest rates by half a point marks the start of a new easing cycle, a move that has historically been a game-changer for certain stocks. When rates drop, borrowing costs decrease, stimulating economic activity and often providing a tailwind for specific sectors, particularly technology and consumer stocks. By examining past rate-cutting cycles dating back to 1984, we can identify which stocks tend to perform best in the months following the initial cut. Some companies, especially those with strong fundamentals and strategic market positions, have consistently outperformed during these periods, demonstrating their resilience and growth potential even when economic conditions are uncertain.

This watchlist focuses on three standout names that have shown strong historical gains during previous rate-cut environments. As the market adjusts to this latest rate cut, these companies could be particularly well-positioned to capitalize on the lower borrowing costs, renewed consumer demand, and sector-specific tailwinds that often accompany such shifts. For investors looking to navigate this new landscape, these stocks represent a compelling blend of historical strength and future opportunity.

Apple Inc. (NASDAQ: AAPL)
Tech Giant Poised for Post-Cut Gains

Apple is the only megacap tech stock that made the list of top performers following a Fed rate cut, and for good reason. Historically, Apple has shown resilience in these scenarios, with a median gain of about 16% in the three months after an initial cut, and an average increase of nearly 9%. Despite a recent pullback due to concerns about weaker demand for its new iPhone 16, Apple remains up 12% this year.

The iPhone 16, which features advanced AI capabilities dubbed Apple Intelligence, was expected to drive new demand, but early reports suggest a slower start. Still, Apple’s track record following rate cuts suggests that any dip might be a buying opportunity. The stock has historically rebounded well, making it a solid pick as we head into this new rate-cutting cycle.

Western Digital Corp. (NASDAQ: WDC)
Storage Leader with Strong Rate Cut Performance

Western Digital stands out as one of the best performers after a Fed rate cut, boasting a median gain of over 26% in the three months following an initial cut. The digital storage company has already rallied nearly 26% this year, bolstered by ongoing AI tailwinds that drive demand for its data storage solutions.

The company benefits directly from increased storage needs fueled by AI and digital transformation trends. As the AI boom continues, Western Digital’s products remain essential for businesses, making it a strong contender for further gains in the coming months. Given its historical performance and current market position, Western Digital could see significant upside if the past is any indication.

Lam Research Corp. (NASDAQ: LRCX)
Semiconductor Equipment Leader Primed for Gains

Lam Research, a key player in the semiconductor equipment space, has also shown impressive historical performance after rate cuts, gaining more than 22% on a median basis in the three months following an initial Fed cut. The company’s growth is closely tied to the semiconductor industry, which benefits from lower borrowing costs as companies ramp up investments in new technologies.

With AI and other data-driven technologies driving increased demand for semiconductors, Lam Research’s role in providing the equipment that makes these chips possible positions it well for continued growth. The stock’s track record during easing cycles, combined with strong industry tailwinds, makes Lam Research a compelling choice for investors looking to capitalize on the Fed’s latest move.

Three Strong Conviction Buys for the Week Ahead

By
Editorial Staff
-
0

In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

Corebridge Financial (NYSE: CRBG) A Low-Profile Insurance Stock with Strong Buyback Potential

Corebridge Financial, a recently spun-off entity from AIG, is a solid stock to consider for its significant buyback potential and undervalued position. Despite its relative anonymity, Corebridge operates as a $15 billion retirement services and life insurance company, trading at approximately $28 per share. What’s catching our attention here is the company’s strong fundamentals and the ability to grow its book value significantly—up to $50 per share by 2025, according to our estimates, which would place it at four to five times earnings.

One of the most compelling reasons to consider Corebridge is its aggressive share buyback strategy. The company has the potential to repurchase 20% of its stock per year, which could help lift the share price even without widespread investor recognition. This approach allows the company to take matters into its own hands, reducing the float and boosting shareholder value over time. It’s not a name you’re seeing splashed across headlines, but that’s exactly what makes it intriguing—this is an under-the-radar stock with strong fundamentals and a solid plan to return value to investors.

If you’re looking for a value play outside the dominant tech sector, Corebridge offers a rare opportunity to get in on a stock that doesn’t need to rely on outside hype to grow its price.

ASML Holding (NASDAQ: ASML) Tech Giant with Strong Upside Potential

ASML, a leader in high-tech machinery for chip manufacturing, is a standout stock that’s currently “on sale.” The stock is down roughly 20% to 25% from its highs, presenting a buying opportunity in a company that sits at the heart of the global tech trade. ASML’s advanced lithography machines are critical for the world’s top chipmakers, making it a key player in the ongoing semiconductor boom driven by AI and advanced computing.

Year-to-date, ASML’s shares are up about 5.1%, but analysts see much more room to run. The stock has a consensus price target of 1,057.52 euros ($1,170), suggesting a potential upside of 46.2% from current levels. Out of 38 analysts covering ASML, 29 have a buy or overweight rating, highlighting strong market confidence in the company’s growth prospects.

With its cutting-edge technology and strategic position in the semiconductor industry, ASML is well-poised to benefit as AI continues to transform businesses worldwide. The current dip offers a great entry point for investors looking to gain exposure to a tech stock that’s essential to the future of chip manufacturing. If you’re looking for a tech name that combines innovation with a significant upside, ASML is one to keep on your radar.

DraftKings (NASDAQ: DKNG) Sports Betting Leader with Big Growth Potential

DraftKings is one of those stocks that many investors might be underestimating right now, especially given the current market environment. Despite the Federal Reserve’s recent rate cut signaling economic uncertainty, there are compelling reasons to consider adding DraftKings to your portfolio. Here’s why this online sports betting company is worth a closer look.

DraftKings’ stock is still trading well below its peak, down 46% from its 2021 highs and currently 16% off its 52-week high set in March. This pullback presents a unique entry point, especially considering that analysts are still optimistic. The average 12-month price target is $49.62, suggesting a potential upside of nearly 25% from current levels.

DraftKings isn’t just about sports betting anymore. The company has expanded into online casino games, offering another revenue stream that complements its sportsbook business. This move opens up a second profit center, providing a broader base for growth. The online casino market itself has been gaining traction, with revenues up 32.5% year-over-year as of July. Despite only being live in seven states, the online casino segment is already making a dent in traditional brick-and-mortar gambling, which could drive even more growth as more states consider legalization.

Growth prospects for DraftKings remain robust. Last quarter, revenue surged 26% year-over-year, and the company raised its full-year guidance, expecting revenue growth of 38% to 43% in 2024. DraftKings also anticipates EBITDA of between $340 million and $420 million this year, with a target of up to $1 billion next year. As DraftKings continues to establish itself in new markets, profitability tends to improve as marketing costs decrease and customer loyalty builds.

Looking ahead, the broader industry outlook is also promising. Goldman Sachs estimates that the U.S. sports betting market could grow from $10 billion today to $45 billion at its peak, while the online casino market in the U.S. is expected to grow to $13.7 billion by 2027, surpassing the U.K. as the world’s largest.

While DraftKings may not be a core holding for every portfolio due to its relative newness and volatility, it presents a strong growth opportunity for those looking to add some upside potential. With expanding markets, multiple revenue streams, and a stock that’s still trading at a discount, DraftKings is well worth considering.

Bear Watch Weekly: Stocks to Sideline Now

By
Editorial Staff
-
0

The right stocks can make you rich and change your life.

The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

They’re pure portfolio poison.

Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

But first, if you own any or all of these “toxic stocks,” sell them today…

Microchip Technology (NASDAQ: MCHP)

Time to Take Profits Amid High Valuation

Microchip Technology has had a solid run, but now might be the time to take some chips off the table. While the company’s fundamentals appear to have bottomed, the stock is currently trading at a historically high price-to-earnings (P/E) ratio, raising concerns about valuation. With the broader semiconductor sector facing a less optimistic outlook, MCHP’s premium valuation could limit further upside in the near term.

Truist Securities recently downgraded Microchip from Buy to Hold, slashing its price target from $89 to $80. This new target reflects a 24x multiple on revised 2025 EPS estimates of $3.33, down from $3.69. The downgrade highlights concerns that the recovery anticipated in 2025 is already priced into the stock, making significant gains from current levels more challenging.

Considering these valuation concerns and the tempered outlook on the semiconductor sector, it may be prudent to reduce exposure to Microchip Technology until there is clearer evidence of sustained growth.

Plug Power (NASDAQ: PLUG)

Struggling to Turn Promise into Profits

Plug Power has been making headlines with its ambitious goal to build the first commercially viable market for hydrogen fuel cell technology. However, the financials paint a much bleaker picture. In the second quarter, Plug posted revenue of $143.3 million, a significant drop from $260.1 million in the same period last year. Even more concerning is the company’s continued struggle with profitability, reporting an operating loss of $244.6 million—slightly worse than the $233.8 million loss a year ago.

Plug’s losses came in at 36 cents per share, a sign that despite deploying over 69,000 fuel cell systems and establishing more than 250 fueling stations, the company is far from being a viable business. Their projected full-year revenue range of $825 million to $925 million suggests little to no growth compared to last year’s $891 million, highlighting just how challenging the path ahead could be.

PLUG stock has tumbled 54% this year, reflecting market skepticism about the company’s ability to turn its technology into a profitable business. Until Plug Power can demonstrate a clear path to profitability, it may be best to avoid or sell this stock.

Analog Devices (NASDAQ: ADI)

Valuation Concerns and Slowing Growth Expectations

Analog Devices is another semiconductor stock that looks overvalued given the current market dynamics. The company’s fundamentals are thought to have hit a low, with a recovery projected for 2025. However, much of this anticipated growth seems to be baked into the current stock price, which is trading at a lofty 28x CY25 EPS—close to peak levels for the company.

Truist recently downgraded ADI from Buy to Hold, reducing the price target from $266 to $233, based on a 28x multiple that reflects a traditional 7x discount compared to its analog peers. Analysts note that while a significant recovery in revenue and EPS growth is expected in 2025, the market is already forecasting this recovery, leaving limited room for upside.

With the broader semiconductor sector entering a period of slower growth and ADI trading near peak valuation multiples, this could be a good opportunity to trim positions. Waiting for a better entry point or clearer growth signals could be a more prudent approach for long-term investors.

Tesla’s Upcoming Catalysts: Time to Buy?

By
Editorial Staff
-
0

Tesla (TSLA) is gearing up for a series of key events that could significantly impact its stock price in the coming months. Despite facing challenges over the past few years, including compressed margins, intense competition, and corporate shake-ups, the electric vehicle leader has some major opportunities on the horizon that could shift the narrative. Here’s what investors need to keep an eye on as we move into October.

Robotaxi Event: A Potential Game-Changer

On October 10, Tesla will host its highly anticipated Robotaxi AI event, which has the potential to redefine the company’s future. Investors are eagerly awaiting the unveiling of Tesla’s purpose-built, fully autonomous vehicle prototype, known as the Cybercab. Elon Musk is expected to provide updates on regulatory approvals and timelines for rolling out the Robotaxi service, which could unlock a multitrillion-dollar market opportunity.

Estimates for the autonomous taxi market vary widely. MarketsandMarkets predicts the market will be worth $45.7 billion by 2030, but Cathie Wood of Ark Investment Management sees an even larger opportunity, projecting a market size between $8 trillion and $10 trillion. Wood believes Tesla could capture up to 50% of this market, potentially driving a tenfold increase in its stock price. While these figures may seem ambitious, Tesla’s ongoing advancements in Full Self-Driving (FSD) technology and its vast trove of driving data position it uniquely to capitalize on this growth.

Q3 Delivery and Production Numbers

Before the Robotaxi event, Tesla will report its third-quarter delivery and production data on October 2. Analysts expect the company to deliver approximately 460,000 vehicles, in line with current consensus estimates. This data will provide investors with insight into Tesla’s ability to maintain its production momentum amid rising competition from rivals like BYD.

Tesla’s Q3 results will also serve as a critical checkpoint for understanding how the company is managing operational challenges, including supply chain issues and recent price adjustments. Any positive surprises in the delivery numbers could act as a catalyst for the stock, while in-line results would keep the market’s focus on the upcoming Robotaxi announcements.

Interest Rate Cuts: A Tailwind for Demand and Margins

The Federal Reserve recently cut interest rates by 50 basis points, marking the first reduction since the pandemic began. Lower interest rates can be particularly beneficial for Tesla, as they reduce the cost of financing for consumers, making EV purchases more affordable. With further rate cuts expected in 2024, Tesla could see a boost in demand without needing to lower vehicle prices further, helping to improve its profit margins.

While Tesla continues to face competition in the EV space, it maintains a slight edge, having delivered 443,956 vehicles in Q2, narrowly outpacing BYD. With the benefit of rate cuts, Tesla can focus on maintaining its market leadership while exploring new growth avenues.

Expanding Energy Storage Business

Tesla’s energy business remains an underappreciated part of the company’s overall strategy. In the second quarter, Tesla reported record energy storage deployments and profits, with plans to further ramp up production at its U.S. facilities and a new Megapack factory in China. As demand for renewable energy storage solutions grows, Tesla is positioning itself as a leader in this space, which could add another layer of growth to its already diverse business model.

Valuation and Market Sentiment

Currently, Tesla’s shares trade at 8.8 times trailing-12-month sales, below the historical five-year average of 9.7x. While not the cheapest, the valuation is more reasonable given Tesla’s long-term potential and recent market correction. For investors considering whether to enter or expand their positions, these upcoming catalysts could serve as pivotal moments that drive the stock higher.

Bottom Line

Tesla is heading into October with multiple events and updates that could reshape investor sentiment. From the unveiling of new autonomous technologies to solid delivery figures and supportive macroeconomic conditions, the next few weeks will be crucial. For those looking to capitalize on potential stock movements, now might be the time to watch Tesla closely.

Three High-Yield Stocks for October and Beyond

By
Editorial Staff
-
0

With the Federal Reserve recently cutting rates for the first time in four years, dividend stocks are looking increasingly attractive. Lower rates make high-yielding stocks even more appealing, especially those with solid fundamentals like low debt levels and strong growth potential. We’ve identified a few standout names that not only offer generous payouts but also have the potential for significant price appreciation in the months ahead. Let’s dive into three high-dividend stocks that could benefit from the upcoming rate cuts.

Exxon Mobil (NYSE: XOM) Energy Giant with Strong Dividend and Growth Potential

Exxon Mobil stands out as a top pick in the energy sector, combining a solid dividend yield with low debt and significant upside potential. Currently, Exxon boasts a 3.37% dividend yield and one of the lowest debt-to-equity ratios in its peer group at 16%, highlighting the company’s strong balance sheet. Exxon’s stock has performed well this year, up 14% year-to-date, outperforming many of its energy peers.

Analysts see even more room for growth, with consensus price targets suggesting a potential gain of over 17% in the next 12 months. Morgan Stanley’s Devin McDermott, who recently maintained his overweight rating on Exxon, sees a potential upside of 28%, citing the company’s resilient operations and integrated business model that can weather lower commodity prices. Exxon’s global presence and diversified energy portfolio make it a reliable choice for dividend investors looking to hedge against economic uncertainties.

Devon Energy (NYSE: DVN) High Yield and High Upside Despite Recent Struggles

Devon Energy is another high-dividend name worth considering, particularly for those seeking higher yield opportunities. Devon’s dividend yield is the highest on our list at 5.05%, offering substantial income for investors. While the stock has struggled this year, down about 11% year-to-date due to operational missteps and integration challenges, analysts believe there’s significant upside ahead. Consensus estimates point to more than 40% potential gains, making Devon a compelling pick despite its recent hurdles.

Devon’s commitment to returning capital to shareholders through dividends remains strong, and the company’s robust capital return program helps offset some of the recent volatility. As the rate-cutting cycle begins, Devon’s high yield combined with its growth prospects could present a lucrative opportunity for investors willing to look past short-term setbacks.

Hewlett Packard Enterprise (NYSE: HPE) Steady Returns and Compelling Valuation

Stepping outside the energy sector, Hewlett Packard Enterprise offers a tech play with a solid dividend and growth outlook. With a 3% dividend yield and a forecasted upside of over 20% according to analysts, HPE provides a balance of income and growth potential that’s hard to ignore. The stock is up 6.2% this year and recently gained traction after Bank of America’s Wamsi Mohan upgraded it to a buy, citing an attractive valuation at current levels.

Mohan raised his price target to $24, implying nearly 39.3% upside, highlighting HPE’s potential to deliver steady returns even in a shifting economic environment. As the tech sector continues to benefit from a lower cost of capital due to rate cuts, HPE stands out as a reliable option for dividend-focused investors looking for exposure to technology.

Small-Cap Stocks Set to Benefit from the Fed’s Rate Cuts

By
Editorial Staff
-
0

With the Federal Reserve recently cutting interest rates by an oversized half-percentage point, small-cap stocks are positioned to outperform. Lower rates make borrowing cheaper, particularly benefiting companies with high levels of floating-rate debt. This dynamic has already started to lift small-cap indexes, like the Russell 2000, which rose 2.1% in the past week alone. We’ve identified three small-cap stocks that not only have significant upside potential but also stand to gain the most from this new rate environment due to their high debt loads and solid analyst support.

Civitas Resources (NYSE: CIVI) Undervalued Energy Stock with Cash Return Potential

Civitas Resources is an energy producer that has faced some challenges in 2024, with the stock down about 21% year-to-date. However, the company’s fundamentals remain solid, and nearly all analysts covering Civitas are optimistic about its prospects—94% rate it as a buy. The company’s total debt stands at 79% of its equity, positioning it to benefit from reduced borrowing costs as rates decline.

Analysts see Civitas trading at a discount compared to its peers, which could mean significant upside ahead. JPMorgan recently initiated coverage with an overweight rating and set a price target of $67, implying a potential 23% gain from current levels. One of the key attractions of Civitas is its revamped cash return program, which now prioritizes share buybacks, potentially boosting the stock’s valuation and providing a pathway for further gains.

Chart Industries (NYSE: GTLS) Energy Equipment Manufacturer Poised for a Rebound

Chart Industries, a manufacturer of engineering equipment for the energy sector, has seen its stock fall 10% this year, but the outlook remains positive. The company’s debt load—1.4 times its equity—makes it a prime candidate to benefit from the recent rate cuts. Analysts are upbeat, with 74% rating the stock a buy and forecasting an average upside of 49%.

Morgan Stanley recently upgraded Chart Industries to overweight, highlighting its attractive valuation and strong positioning in the natural gas, energy transition, and renewables markets. Analyst Devin McDermott sees the stock climbing to $175, which would represent a 43% increase from current levels. Chart’s exposure to high-growth energy sectors and its ability to benefit from lower interest rates make it an intriguing pick for investors looking to capitalize on the evolving energy landscape.

Sarepta Therapeutics (NASDAQ: SRPT) Biotech with Big Upside on New Drug Launch

Sarepta Therapeutics, a biotechnology company specializing in gene therapies, is one of our top picks in the small-cap space. The stock has gained 32% this year, and analysts see even more potential ahead. Sarepta’s total debt is currently more than one-and-a-half times its equity, meaning it stands to benefit significantly from lower interest rates.

Analyst sentiment is highly favorable, with four out of five analysts rating it a buy, and a consensus price target suggesting a potential upside of 52.5%. A key catalyst for Sarepta is its recent launch of Elevidys, a gene therapy for Duchenne muscular dystrophy. While expectations for the drug’s ramp-up have been adjusted to 2025 and beyond, Evercore ISI recently upgraded Sarepta, citing a good entry point for the stock. Analyst Gavin Clark-Gartner set a price target of $179, approximately 41% higher than current levels, underscoring Sarepta’s potential as a strong growth story in the biotech sector.

Three Strong Conviction Buys for the Week Ahead

By
Editorial Staff
-
0

In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

Exxon Mobil (NYSE: XOM)
Solid Dividend and Strong Upside Potential

Exxon Mobil is one of the standout picks in the energy sector, particularly as the Federal Reserve kicks off its rate-cutting cycle. The stock combines an attractive dividend yield of 3.37% with a low debt-to-equity ratio of 16%, making it a reliable choice for investors seeking both income and growth. Exxon’s stock has gained 14% this year, outpacing many of its energy peers, and analysts are bullish on its future prospects, with a consensus price target suggesting more than 17% upside in the next 12 months.

One of the key reasons to consider Exxon is its resilience in volatile markets. The company’s strong balance sheet, integrated global operations, and focus on cost management provide a cushion against lower commodity prices. Morgan Stanley’s Devin McDermott remains particularly optimistic about Exxon, maintaining an overweight rating and forecasting a potential 28% upside. McDermott notes that Exxon and other major energy companies offer more stability thanks to their diversified business models, which help mitigate the impact of market fluctuations.

With the energy sector lagging the broader market by about 10% in the third quarter, Exxon’s defensive characteristics and solid dividend make it an appealing option for investors looking to hedge against potential economic slowdowns. As the Fed’s rate cuts start to impact the market, Exxon’s combination of income and growth potential positions it well for continued gains.

Chart Industries (NYSE: GTLS)
Strong Upside Potential as Rates Fall

Chart Industries is an interesting small-cap play that stands to benefit significantly from the Federal Reserve’s recent rate cut. The company, which manufactures equipment for natural gas, energy transition, and renewable energy applications, has seen its stock drop about 10% this year. Despite this pullback, there’s a lot to like about Chart’s potential upside in the current market environment, especially as lower interest rates make it cheaper for companies like Chart to manage their floating-rate debt and refinance at better terms.

The optimism around Chart is supported by a positive outlook from analysts, who see an average upside of 49% for the stock. Currently, about 74% of analysts covering Chart rate it a buy, reflecting a strong belief in the company’s ability to rebound and capitalize on its core markets. Morgan Stanley recently upgraded the stock to overweight, highlighting its attractive valuation and positive risk-reward profile. Analyst Devin McDermott set a price target of $175, which implies a potential gain of 43% from recent levels.

What makes Chart particularly compelling is its diversified portfolio, focused on growth areas like natural gas and renewables. This strategic positioning aligns well with the broader shift towards energy transition and could drive long-term value for shareholders. As the rate-cutting cycle kicks in, companies like Chart that are positioned within growth markets and have the potential to refinance debt more cheaply could see significant tailwinds, making this a stock worth watching.

Best Buy (NYSE: BBY)
Benefiting from Rate Cuts and Competitive Pricing

Best Buy is looking like an attractive pick right now, especially as the Federal Reserve begins its rate-cutting cycle. The stock is up 24% this year, and there are several factors that make it a standout in the retail sector. As interest rates drop, we expect to see increased demand for big-ticket items like appliances, which tend to sell better when consumers feel more confident and housing turnover picks up.

What sets Best Buy apart is its ability to compete effectively with e-commerce giants like Amazon. According to a recent pricing study, Best Buy’s prices are within 1% or better of Amazon’s on nearly nine out of every ten items, particularly in key categories like televisions, home theater, and accessories. This competitive pricing strategy helps Best Buy maintain market share against online retailers while continuing to drive foot traffic into its stores.

Additionally, Best Buy’s shares remain undervalued compared to its sector peers, which offers an intriguing buying opportunity for investors looking to capitalize on the company’s robust positioning. As the rate cuts begin to take effect, Best Buy is poised to benefit from both improved consumer sentiment and increased spending on big-ticket electronics, making it a solid addition to any portfolio in the current environment.

Bear Watch Weekly: Stocks to Sideline Now

By
Editorial Staff
-
0

The right stocks can make you rich and change your life.

The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

They’re pure portfolio poison.

Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

But first, if you own any or all of these “toxic stocks,” sell them today…

Dollar Tree (DLTR)

Dollar Tree (NASDAQ: DLTR) has had a tough year, and the stock’s recent 22% drop following a cut in its full-year outlook has raised even more concerns. The retailer blamed weaker sales for its downgraded guidance, and analysts have taken note. In 2024, Dollar Tree is down nearly 53%, making it a prime candidate for tax-loss selling.

With half of the analysts covering Dollar Tree rating it as a “hold,” there’s not much optimism for a near-term turnaround. BMO Capital Markets recently downgraded the stock, citing the company’s uncertain outlook and dropping its price target to $68, offering only about 7% upside. Given these factors, Dollar Tree could face continued selling pressure as the year winds down. If you’re holding DLTR, now might be the time to consider cutting your losses and moving on to stronger opportunities.

ZoomInfo Technologies (ZI)

ZoomInfo Technologies (NASDAQ: ZI) is another stock that has struggled in 2024, with shares down 42% year-to-date. Despite the company’s long-term potential, analysts are cautious about its near-term outlook. More than half of those covering the stock have rated it as a “hold,” reflecting concerns about continued revenue headwinds.

Mizuho Securities recently flagged issues around downsells and renewals that could keep weighing on the stock in the short term. While there’s hope for a rebound in the longer term, ZoomInfo’s current challenges make it a potential candidate for tax-loss selling. Investors may want to consider exiting the stock before further declines.

Rivian Automotive (RIVN)

Rivian Automotive (NASDAQ: RIVN) has been a high-profile player in the electric vehicle space, but it’s also been one of 2024’s biggest underperformers. With shares down significantly this year, Rivian could see additional selling pressure as investors look to lock in tax losses.

While Rivian’s future in the EV market remains promising, the company is still in the early stages of growth and faces significant competition. The stock’s performance this year makes it a candidate for trimming before the year ends, especially if you’ve held it through its rough 2024 run.

Billionaires Are Dumping Nvidia Stock and Buying These Supercharged AI Stocks

By
Editorial Staff
-
0

With Nvidia’s meteoric rise amid the artificial intelligence (AI) boom, many investors are wondering if it’s time to take profits. Some of the world’s top hedge fund managers are already making moves, cutting back their Nvidia stakes and shifting capital into other AI-driven opportunities. Surprisingly, they’re betting big on a few resilient stocks that are well-positioned to benefit from the continued AI revolution. Let’s dive into three of these supercharged picks and why they’re catching the attention of some of the most successful investors.

CrowdStrike (NASDAQ: CRWD) Cybersecurity in the Age of AI

CrowdStrike might not seem like an obvious AI play at first, but its services are essential in the increasingly digital and AI-driven world. As businesses rely more heavily on cloud infrastructure and artificial intelligence, the need for robust cybersecurity solutions only grows. CrowdStrike, a leader in endpoint security and threat detection, plays a critical role in this ecosystem.

During the brief COVID-19 recession in 2020, CrowdStrike’s revenue growth accelerated as companies scrambled to protect their networks and data amid the shift to remote work. Fast forward to today, and the demand for its services is stronger than ever. Despite facing challenges like a recent software update glitch that caused IT outages, CrowdStrike quickly implemented strategies to retain customers and minimize the impact, forecasting only a $60 million revenue headwind out of its $3.9 billion in annual recurring revenue.

CrowdStrike’s ability to weather multiple economic disruptions and maintain robust growth makes it a standout AI play. With AI-driven cybersecurity becoming a necessity, this stock is well-positioned to continue growing even in tough economic environments.

Microsoft (NASDAQ: MSFT) A Recession-Proof Powerhouse with AI Upside

Microsoft has long been one of the most reliable tech companies, with a track record that shows resilience even during recessions. During the 2007–2009 financial crisis, Microsoft’s revenue and profitability remained strong. In fact, it actually grew its sales during most quarters of the downturn, highlighting its ability to adapt and innovate even when the broader economy is struggling.

Fast forward to today, Microsoft has evolved far beyond its origins in PC software. Now a leader in cloud computing with Azure, it’s also integrating AI capabilities across its platforms, including its flagship product Microsoft 365 and even its gaming division with AI-powered tools. This diversification, combined with its strategic AI investments, has allowed Microsoft to capitalize on the AI revolution without being overly dependent on any one segment.

Given Microsoft’s proven ability to thrive during uncertain times and its leadership in AI, it’s easy to see why fund managers are flocking to this stock. Billionaire investors are betting on Microsoft’s long-term growth potential as AI transforms industries globally.

Invesco QQQ Trust (NASDAQ: QQQ) Diversifying AI Exposure Through a Tech-Focused Index

While Nvidia has been a top AI play, billionaire investors like Ken Griffin and Israel Englander are shifting capital into the Invesco QQQ Trust (QQQ), which offers exposure to a broad range of tech stocks that are also benefiting from the AI boom. The QQQ tracks the Nasdaq-100 index, which is heavily weighted toward technology companies that are leveraging AI to drive future growth.

These billionaires aren’t completely abandoning Nvidia, but they are diversifying by reallocating significant capital into the QQQ. This move provides exposure to not only Nvidia but also other AI-driven companies like Microsoft, Alphabet, and Amazon, all of which are core holdings within the index. For investors looking to gain broad exposure to AI technology without the risks of holding individual stocks, QQQ presents an excellent option.

In fact, during the second quarter of 2023, billionaire hedge fund managers Cliff Asness, Steven Cohen, and Ken Griffin each made substantial increases to their QQQ positions—some by over 500%. Their decision reflects a strategic approach to capitalize on AI’s long-term potential while spreading out risk across multiple high-growth tech companies.

As Gold Breaks Records, Here’s a Smart Way to Trade It

By
Editorial Staff
-
0

Gold recently reached a new record high of around $2,610 per ounce, more than ten times its low of just over $253 per ounce back in 1999. This surge comes at a time when the U.S. government is projected to spend a record $1.2 trillion on interest payments in 2024, marking the first time interest payments have surpassed military spending. It’s no coincidence that both events are happening simultaneously.

For those who are long-term investors, gold’s rise isn’t just about short-term fluctuations—there’s a strong fundamental case supporting this trend. But it’s important to understand why gold is performing the way it is, and how to navigate potential opportunities, especially if you’re thinking of using options rather than buying physical gold directly.

Why Gold Is Rising

Gold has long been viewed as a safe-haven asset, one that tends to benefit when economic and geopolitical uncertainties are high. It also has a low correlation with other asset classes, making it an effective hedge in times of market volatility. Carter Braxton Worth from Worth Charting recently emphasized on CNBC’s Fast Money that during significant declines in the S&P 500 (specifically, drops of over 20%), gold has almost always risen, except for one instance. This highlights gold’s unique role as an uncorrelated hedge.

For investors who hold physical gold, this asset is typically held through market fluctuations. Unlike stocks, which are often sold during volatile periods, physical gold holders tend to stick with it, contributing to its stability in times of stress.

Central Bank Activity and Its Impact

One particularly interesting development is the recent behavior of central banks, especially Saudi Arabia. Historically, Saudi Arabia has been a key player, buying gold when prices dipped and selling when prices rose. However, the country has continued to buy even as prices have soared, which could indicate a shift in their long-standing strategy. Given Saudi Arabia’s pivotal role in global energy markets and the dollar’s reserve currency status, this is a noteworthy change.

On a broader scale, central banks worldwide have been amassing gold at impressive rates. In 2023, central banks purchased 1,037 metric tons of gold, with China buying 225 tons, marking its largest purchase since 1977. These strong purchasing trends have continued into 2024, with central bank activity in the first quarter ranking fourth in the past two years. For context, one metric ton is 1,000 kilograms or about 1.1 U.S. tons.

Is Gold Overbought?

Despite these positive fundamentals, there are signs that gold may be slightly overbought in the short term. Over the last 20 years, the average 30-day return on gold has been about 79 basis points (0.79%). However, when the 14-day RSI (Relative Strength Index) exceeds 70, that average drops to 37 basis points.

As of the most recent close, the RSI for gold stood at 69.147, which suggests it’s nearing overbought territory. While this doesn’t mean gold will immediately drop, it’s a signal for investors to proceed with some caution in the near term.

A Potential Trade Using Options

If you’re looking for a way to capitalize on gold’s momentum without directly buying the metal, you might consider an options strategy on the SPDR Gold Shares (GLD), which tracks gold prices. One potential approach involves purchasing a longer-dated call option while selling a nearer-dated strangle to offset decay.

Here’s how that trade could look:

  • Sell an October 18 GLD $228 put
  • Buy a January 17 GLD $240 call
  • Sell an October 18 GLD $255 call

This strategy allows you to participate in gold’s upside while managing time decay, though it comes with the risk of having to buy GLD at a price about 5% lower than its current value if the price drops. The good news is that declines of more than 5% in gold over a 30-day period are relatively rare, occurring less than 10% of the time.

Final Thoughts

Gold’s recent surge has caught the attention of many investors, especially as we move into a period of heightened economic and political uncertainty. While physical gold remains a strong asset for many, options can provide another way to benefit from gold’s movement without requiring the upfront cost of buying the metal itself.

As always, it’s important to stay informed and weigh the risks, but with central banks continuing to buy and volatility on the rise, gold remains a strong contender in today’s market. Whether you’re holding the metal itself or trading options on GLD, gold’s record highs offer intriguing possibilities for investors looking for a hedge in uncertain times.

1...232425...67Page 24 of 67

Popular Posts

My Favorites

Rising Stars: These Tech Disruptors Could Make Millionaires Out of Everyday...

Editorial Staff - 0
Imagine being among the fortunate investors who had early access to the groundbreaking journey of Google, the search-engine startup, when its stock went public...

Corporate America’s Bitcoin Revolution: Why Fortune 500 Companies Could Become the...

Insiders Are Buying These Stocks – Should You?

The Exit Strategy: Stocks Showing Critical Warning Signs

© Newsmag WordPress Theme by TagDiv