Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Larry Berman CFA, CMT, CTA and Brian Huen commented about whether IGM-T, GDXJ-N, BXE-T, TPR-N, DC.A-T, MCP-N, AGU-T, PG-N, QSR-T, KORS-N, NES-X, IMG-T, CFP-T, OGC-T, RET-T, SLV-N, POT-T, XWD-T, ZEB-T, IMG-T, AGU-T are stocks to buy or sell.
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Junior golds are extremely depressed. 25 year lows. Will persist for another 6-12 months. As long as gold is depressed, these stocks will not have a material upswing. $1300-$1350 should hold for the next few months. There is long term valuation for sure but that has been the case for 10 months.
Educational Segment. Is it time to sell-in-May-and-go-away? Year to date chart on the Dow. It crossed it’s 50 day average to start the year. It has been straight up generally but now we have a pause. Next chart has 7 Dow stocks and some have started to break down. IBM had a major break down recently. 3M – lower lows and lower highs. GE is starting to roll over now. At a market peak, the stocks start to roll over one by one. There’s lots of other signals, but this has been going into play for a couple of months. We are starting to see more and more of a decay. Go away, but where are we going down to? He is looking for a relatively minor correction – 5-10%. If the trend line from 2009 breaks then it will be different and we get a more significant correction.
Markets. Revenue growth is missing. Margin growth is expanding but can that continue. What is positive is that 70% of companies beat estimates. Stocks are not extremely expensive if you think the global economy is recovering. If top line comes in as it should you would see a lot of momentum. Materials are overweight. Recovering housing in the US and earnings momentum are catalysts. Seeing a little bit of risk-on but is it sustainable? What is happening to China? Can they support he materials and what they are producing? He is positive on gold and there was a bounce in copper prices. He is less cautious on the copper front but positive on gold.
9.8% Dividend yield. First red light is the high dividend. Company is paying out 100% of cash flows before capital expenditures and growth expenditures. Environment will continue to be difficult and a lot of American retailers are continuing to come into Canada. Does not think dividend is sustainable. Nordstrom is coming.
Markets. Spanish bond yields are dropping so investors are more confident in them. This is usually a sign that things are getting better, not that you’d know by the economic data there. Things are not fixed because we have an Italian government. Their long term debt problems are not addressed. Yields are not that far off 2008/9. Thinks we will get a market correction any time, the sell-in-May-and-go-away thing. Doesn’t think there will be a major uptrend, just a snap back from a correction.