Latest Stock Buy or Sell? Make More Informed Decisions!
Today, The Panic-Proof Portfolio (Stockchase Research) and John Hood commented about whether ZQQ-T, ZWB-T, HHL-T, HAC-T, BSV-N, ZWH-T, ZWA-T, ZWK-T, VV-N, VGG-T, HDIV-T, HDIF-T, ZWU-T, VA-T, XIN-T, WMT-N, TGT-N, DLTR-Q, XLP-N, LMT-N, STLD-Q, WCP-T, SHEL-N are stocks to buy or sell.
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COMMENT
Stockchase Research Editor: Michael O'Reilly The recent sell off in some key retailers (WMT and TGT, for example), are casting doubt on the strength of consumer spending -- a key driver in the US economy. Along with the threat of further interest rate increases, these concerns are signaling further market downside may be coming. It has never been more important to use a trailing stop to protect against sizable capital erosion that may take years to recover if a recession or stagflation take hold. We will continue to use the same metrics to identify good investment candidates (cash flow management; comparative valuation; earnings growth prospects; and good management strategy).
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TOP PICK
Stockchase Research Editor: Michael O'Reilly With the largest liquified natural gas portfolio and network of service stations, SHEL is ideally situated to benefit from global energy rebalancing caused by the conflict in Ukraine and is reiterated again as a TOP PICK. Recently reported earnings beat analyst expectations and support a good 14% ROE. It trades at only 1.25x book value. It pays a good dividend backed by a payout ratio under 35% of cash flow. We like how it has built up cash reserves while aggressively retiring debt and buying back shares. We continue to recommend a stop loss at $45, looking to achieve $69.50 -- upside potential over 28%. Yield 3.32% (Analysts’ price target is $69.39)
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TOP PICK
Stockchase Research Editor: Michael O'Reilly We again reiterate WCP as a TOP PICK. With a current cash flow breakeven level of $40 US, WCP expects to generate over $1.4 billion in excess cash flow after dividends. It should be debt-free by year end, analysts expect. It trades at 1.42x book value and pays a good dividend, backed by a payout ratio under 10% of cash flow. We continue to recommend a stop loss at $8.75, looking to achieve $13.50 -- upside potential of 34%. Yield 3.48% (Analysts’ price target is $13.54)
Oil and Gas (Integrated Oils)
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TOP PICK
Stockchase Research Editor: Michael O'Reilly STLD is expected to benefit from the trend towards "onshoring" -- security of supply for key infrastructure -- and is again reiterated as a TOP PICK. As one of the largest US steel producers, it will also benefit from the Biden Administration infrastructure focus to easy supply chain delays and boost automobile production. It trades at 4x earnings, compared to peers at 10x. Most recent earnings again beat analyst expectations and supports a ROE of 70%. Its cash reserves are relatively unchanged, while it aggressively buys back shares and retire debt early. We continue to recommend a stop loss at $68, looking to achieve $101.50 -- upside potential over 30%. Yield 1.81% (Analysts’ price target is $101.50)
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PAST TOP PICK
(A Top Pick Sep 14/21, Up 23.9%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with LMT has triggered its stop at $425. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 21%, when considering the previous buy recommendation.
Transportation
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PAST TOP PICK
(A Top Pick Mar 31/22, Down 5.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with XLP has triggered its stop at $72. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 1%, when considering the previous buy recommendation.
E.T.F.'s
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PAST TOP PICK
(A Top Pick Jan 27/22, Up 6.8%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with DLTR has triggered its stop at $138. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 30%, when considering the previous buy recommendation.
merchandising
lodging
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PAST TOP PICK
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PAST TOP PICK
(A Top Pick Dec 28/21, Down 4.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with WMT has gapped down through our stop at $145. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 4%, when considering the previous buy recommendation.
department stores
COMMENT
Volatility overblown? Realistically, the whole focus is on what's the Fed going to do. Are they going to overreact and plunge the economy into recession? He thinks highly unlikely. Even a hike to 3-5% would be historically low. Nor does he see a recession when there's a large demand for jobs. Some of the large investment houses are seeing modest growth, but not recession. Fed's learned a lot since high interest rates in 1990-91.
COMMENT
Best way to handle the wild ride? Main thing is to have a strategy for dealing with volatility. Most investors have the standard 60% equities to 40% fixed income. Fixed income has been a disaster this year, as the bond market has been clobbered. He took his clients out of fixed income and bond ETFs two years ago and went to cash. Though it's annoying to sit in cash and not make any money, it's better than losing 2.5-5% in bonds or bond ETFs. It's about preparation, not stock-picking or chasing returns.
COMMENT
Global ETF recommendation? If you're looking at a global ETF, remember that 60% of it's going to be US. For an Asian ETF, 52% is going to be Japan. People want diversification. To get decent global exposure, you're going to need to pick up a couple of ETFs, as just one can't do it all. One is XIN, which is mainly France, Germany, UK, and very little Far East. VA Vanguard Asia is primarily Japan, a good place to be, with exposure to other countries in Asia.
BUY
If you're looking at a global ETF, remember that 60% of it's going to be US. For an Asian ETF, 52% is going to be Japan. People want diversification. To get decent global exposure, you're going to need to pick up a couple of ETFs, as just one can't do it all. One is XIN, which is mainly France, Germany, UK, and very little Far East.
E.T.F.'s
BUY
If you're looking at a global ETF, remember that 60% of it's going to be US. An Asian ETF, 52% is going to be Japan. People want diversification. To get decent global exposure, you're going to need to pick up a couple of ETFs, as just one can't do it all. VA is primarily Japan, a good place to be, with exposure to other countries in Asia.
E.T.F.'s
COMMENT
Canadian utility ETF for steady income and capital preservation? Definitely look at ZWU. Yield is really high, around 7%. Remember that, for utilities, because prices are regulated by government, they can't respond as well to rate increases, and so they tend to underperform markets. When you put a covered call overlay on them, it reduces the upside a bit, but half of it is not covered.
