Latest Top Picks

Stock Opinions by Josh Brown, CEO, Ritholtz Wealth Management

BUY ON WEAKNESS
Microsoft Corp

This is the best day for MSFT stock since last Nov. 11 when it came off the bottom. The difference with today is that MSFT was already climbing going into yesterday's report. Now, the stakes are so high that it will be hard for MSFT to keep surprising to the upside. It's trading on a 20x on EV to EBITDA, within the three-year median, but above the 5-10-year average. Can MSFT keep delivering upside beats? Don't enter this stock today, but wait for a lower price. Kudos to long-term shareholders of which he is not one. Today is a spectacular move for a megacap. That said, we're going to have an AI bubble later this year. Money managers consider MSFT the safe way to play AI.

computer software / processing
WEAK BUY
Alphabet Inc

The Google cloud will likely outgrow Microsoft's because the latter's is mature. Google has room to grow. If OpenAI becomes a force, then Alphabet's internet search will be threatened, but data doesn't signal this happening now. Reaction to their earnings today sucks. The CEO soft-pedaled AI, a mistake. Now, they must catch up by using Deep Mind and Google Brain more, by incorporating those two into the entire Google suite of apps and software like Gmail. They must do this, but are hesitant to really dive into AI. This is reflected in the share price. However, internet search revenues remain solid. They've saved money through layoffs, but that won't be reflected until the next quarter.

Technology
HOLD
Amazon.com, Inc.

They report this week. He's long this name, but worried more about this than Meta. Laying off 20,000 workers among 1.5 million doesn't compare to Meta's cutbacks. Amazon has not performed like Microsoft; it's far below its high.

specialty stores
DON'T BUY
First Republic Bank
Shares are tanking again after reports that the government won't rescue it

Either the FIDC steps in or FRC becomes a zombie bank. Even if it survives as a zombie, FRC will pay so much interest that there won't be profits.

Financial Services
COMMENT

Their woes are not unique and effect all financials, which all face 5% interest rates and investors seeking yield beyond these stocks.

investment companies / funds
BUY
NVIDIA Corporation

No matter what happens, tech giants will continue to buy from Nvidia.

computer software / processing
BUY ON WEAKNESS

Boeing is the second-largest holding in this ETF. Today's announcement won't have a major impact. Use this dip to buy or enter. They just announced production delays.

Unknown
PARTIAL SELL
NVIDIA Corporation

Up 80% YTD and the valuation is stretched. The price has far outrun any change in fundamentals. Take profits. The share price rise reflects the outlook 5-10 years ahead.

computer software / processing
BUY
Newmont Mining (US)

Bought it because he expects gold to break-out. He could be wrong. He doesn't buy many commodities. This business is managed well.

precious metals
BUY
NextEra Energy
It's on the verge of a major breakout. He just bought it $93. This breakout will be 9 months in the making, if it happens. It's the big regulated utility in Florida. They changed their name a decade ago when they got into renewables. Renewables has been absolutely on fire. They are building solar or wind projects in dozens of states. Morgan Stanley just upgraded NEE this week for it benefiting big from Washington's latest legislation to promote green energy. NEE earnings should be solid and pays a modest dividend. They have offence and defence which makes it very attractive. They will breakout above $92.
electrical utilities
BUY
Southwest Gas
Carl Icahn is a genius, having kicked out the CEO and is now the 3rd-biggest shareholder. They're doing work for other utilities in infrastructure. SWX may spin off their infrastructure business. There are many different ways to win here. Icahn tried to buy at $75/share--that's the floor. At $81, he doesn't see much risk. Is paid 3% to wait. The upside will come with a spin-off--the reward can be huge if they let Icahn take control of the company.
Utilities
STRONG BUY
Uber
It has not gone above its 200-day moving average, but is threatening to now. He urges anyone to listen to the early-August conference call. Buyers held on during the recent tech sell-off and in fact are still buying. They are now cash-flow positive and offer growth. They are gaining with Uber Eats while competitors fade. They sold off weak non-core assets. You can start appreciating its fundamentals. It is showing growth as it adds rides and deliveries. He's very bullish.
Technology
COMMENT
The 10-year yield peaked on June 14, the day before the stock market bottomed--not a coincidence. That yield is now ripping higher and heading to where the 2-year yield already is. When that happened before, markets were even worse. So, when these yield meet again, will the market tolerate it better. Possibly. That's the number-one thing to watch.
Unknown
COMMENT
This equally weighted ETF of semis has a forecast PE of 16x. Some semi stocks have a forward PE north of 25x. Is this realistic? He doesn't think so.
E.T.F.'s
HOLD
Not a cheap stock and that's why it hasn't performed even after a flawless quarter. Their business model and growing dominance over the entire Fortune 500 will be more meaningful than a discounted PE. Will stick with this.
Technology
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