TOP PICK
Largest nitrogen producer in the world, with majority being in NA. The two price drivers are gas prices and higher crop prices. Gas in NA is $6, while it's $30+ in Europe, so they benefit from the differential. With supply coming off, they can sell into a strong market. Yield is 1.88%. (Analysts’ price target is $107.26)
chemicals
COMMENT
The bounce today holds hope that we could face a short-term bottom. Overall, he feels that things will get better. He's not a Fed dove; we need a big interest rate hike. The job market is strong enough to avoid a lot of layoffs, and we have made some progress with inflation. True, the june CPI data released today was hot, but commodities like grain have already fallen in price. Same with natural gas and oil. He suspects oil has peaked, though it won't plummet. July inflation will be lower than June. Meanwhile, metals like aluminum are crashing. Also, we're seeing a glut in clothing/apparel. Prices that have not come down: cars. High home prices are starting to price some people out. Watch bank reports starting tomorrow for confirmation. Inflation has peaked.
Unknown
RISKY BUY
It's profitable, but you're paying a fortune for it. Buy a half position. It's speculative. It hasn't fallen far enough to count as cheap.
Technology
BUY
They supply natural gas and electricity to 9 million in the south, east and midwest. They're transitioning away from coal into low-carbon energy as they target 5-7% annual earnings growth in the next five years. It's working. It's up 2% YTD, trades at less than 20x PE and pays a 5% dividend. Utilities are a nice place to hide--they're steady businesses that pay safe diviends.
electrical / electronic
COMMENT
The Euro The Euro is now on par with the US dollar. Many think the Euro won't recover. But it can play havoc with tech services companies. Commodities expert Carly Garner believes the Euro will recover. In 2008, the Euro was trading at $1.60, but within that year it collapsed to $1.23. The Euro has been $1.05-1.20 in the past 10 years. The Euro could fall a little more before rebounding. Garner predicts a swift rally when the direction shifts. Commodities and even bonds are finally starting to normalize and this will trickle into the Euro. He sees oversold signals. The higher the Euro goes, the stronger US companies can compete overseas; the Euro and S&P have a strong correlation. Also, seasonality points to a Euro low in early July (now) then rises to a high in early October. Also historically there are volatility spikes right before the Euro bottoms--and that is happening now.
Unknown
DON'T BUY
It can still go lower, because he doesn't think their next quarter will be that good. Maybe wait another quarter.
Technology
BUY
Went IPO last October, surging from $20 to $57 last November, but it pulled back to low-30s in December. Fundamentals are good. Today, it trades at $19. It's a beloved stock in the Chicago area, and the company is profitable.
food stores