PAST SELECTIONS
Stock Wealth safely selects AAWW (Atlas Worldwide Holdings) as a company with strong prospects in the upcoming months.
AAWW is a leading provider of air freight services around the world. About 50% of air cargo has traditionally been handled by passenger planes but many of these have been grounded by the pandemic, leading to a capacity shortage. Shipping rates have increased as have revenues and profits for AAWW. The increase in e-commerce has benefitted the company and this will continue along with the need to ship supplies for the COVID pandemic, including vaccines. AAWW has agreements with major companies including DHL, Alibaba and Amazon.
AAWW has beaten earnings estimates for the last 4 quarters. Estimates have been increasing for the quarterly and annual results in December. AAWW does not pay a dividend.
The 20 day moving average is 59.24, 50 day – 61.06, 100 day – 56.78, and 200 day 43.74. The averages are converging and we expect the 20 days to soon cross the 50 day. Parabolic SAR is currently a sell but the OBV has been up since November 10. RSI is 39.55. There was a sharp drop in price on November 5 when the third quarter results were announced. We believe that this was an overreaction and the stock is starting to climb back to more
AAWW closed at 55.10 on November 16 with a 52 week high of 69.08 and consensus target 79.86. There was a sharp drop in price on November 5 when the third quarter results were announced. We believe that this was an overreaction and the stock is starting to climb back towards a more appropriate price, as shown by the rise in OBV. This is an attractive entry point given the growth prospects over the next year. ​
November 16, 2020
November 13, 2020
Stock Wealth Safely selects BK (Bank of New York Mellon) as an undervalued stock showing price momentum.
BK is a leading international asset management company. It has major positions in a number of areas in addition to its custody function. It is focusing on controlling costs and should continue to generate returns of 15% or more on tangible equity.
BK’s P/E is 8.5 and stable, well below its historical average annual value of 18. P/S also stable at 2.2. BK has beaten earnings estimates for the past 3 months. Estimates have been upgraded 13 times in the past 30 days and overall are stable. Dividend is attractive at 3.2%.
The 20 day moving average is 36.56, 50 day – 35.93, 100 day – 36.49, and 200 day 36.97. The 20 day crossed the 100 day on November 11 and the 50 day on October 22. Parabolic SAR has been a buy since November 3 and OBV fluctuating but generally trending up since November 3. RSI is 59.36.
BK closed at 38.71 on November 13 and we believe will continue to rise toward the consensus target of 44.03.
Stock Wealth Safely recommends GD (General Dynamics) because of solid growth expectations and an attractive price.
GD is a large aerospace defense company with most revenues from long term defense contracts, especially in submarines. It is continuing to win new contracts in a number of defense areas and these typically run for years. GD is also a lead manufacturer of large business jets and this busines should rebound as the COVID recession passes. Industrial stocks have lagged the recovery since March and should start to catch up. Defense spending is not dependent on the business cycle and will remains strong, even with a change in the administration. GD is focusing on reducing costs and has significantly reduced debt.
The P/E is 13.4 and stable, below the average annual value of 15.5. P/S is also stable at 1.14. GD has beaten estimates 3 of the last 4 quarters. Earnings estimates have had 7 upgrades in the past 30 days and are stable. Good dividend at 2.9%
The 20 day moving average is 140.08 and climbing, 50 day – 141.60, 100 day – 145.55, and 200 day 146.73. The averages are converging and we expect the 20 days to soon cross the 50 day. Parabolic SAR has been a buy since November 3 and OBV up October 29 through November 10 and RSI 64.95.
GD closed at 151.15 on November 13 and should move toward its 52 week high of 190.08.​
November 10, 2020
Stock Wealth Safely selects NTAP (NetApp) as a strong company with good growth prospects and
evidence of price momentum.
NTAP is a leading provider of data storage and management systems to a range of public and private
customers. It is growing in the all-flash storage model and is increasing its cloud based systems. This
area is expanding rapidly and NTAP is well placed to play a major role in this sector.
NTAP’s P/E is 13.6 and stable over the past year compared with the average annual value of 16. P/S is
1.95 and stable for the past 6 months. NTAP has beaten earnings estimates in 3 of the past 4 months
and the current estimates have been stable. Dividend is very attractive at 3.9%.
The 20 day moving average is 46.28, 50 day – 45.14, 100 day – 44.20, and 200 day 44.59. The 20 day
crossed the 200 day on October 23 and the 50 day crossed the 200 day on November 4. Parabolic SAR
has been a buy since November 5 and OBV trending up since November 4. RSI is 63.55.
The closing price on November 10 is 50.01 and we expect this to climb toward the 52 week high of
65.38. ​
November 3, 2020
Stock Wealth Safely selects ABBV (AbbVie) because of strong growth prospects and an attractive price.
ABBV is a pharmaceutical company focussed on research to develop new treatments. It has strong existing drugs such as Humira, promising new drugs in Rinvoq and Skyrizi and is successfully integrating Allergan with its Botox franchise. There also a number of promising immunology and oncology drugs in the development pipeline.
The trailing P/E has been climbing over the year and is now 19.8 compared to a long term average of 12.0. P/S is fairly stable at 3.8. Earnings estimates have been stable the past 90 days. ABBV has beaten the predicted earnings for the last 4 quarters. The dividend is very attractive at 5.6%.
The 20 day moving average is 85.25, 50 day – 88.11, 100 day – 92.33, and 200 day 88.74. Parabolic SAR is buy since October 30, OBV is trending up and RSI is 56.2.
ABBV closed November 3 at 87.96 and has a 52 week high of 101.28 and consensus target 110.11. The stock is currently significantly undervalued and should climb in the near future.
Stock Wealth Safely recommends MRK (Merck % Co) because of a recent positive earnings surprise and the likelihood of continued growth.
MRK is a global healthcare company with a strong focus developing new drugs. It has a blockbuster drug in Keytruda as well as strong market share with Januvia, Gardisil and vaccines. Developing drugs look strong in the immunology and oncology fields. Revenues suffered because of COVID but should recover, as shown by the better than expected second quarter earnings.
The P/E has been dropping and is now 16.8 compared with an average annual of value of 15. P/S is also the lowest in a year at 4.1. Earnings estimate have dropped slightly over the past 90 days but MRK has easily beaten estimates in the last three quarters. Dividend is good at 3.2%.
The 20 day moving average is 78.66, 50 day – 81.81, 100 day – 80.66, and 200 day 80.26. Parabolic SAR is a sell, OBV is starting to trend up and RSI is 38.77.
MRK closed November 3 at 76.92, well below the 52 week high of 92.64 and 95.35 target. This price is a good entry point for an attractive company. ​
October 5, 2020
Stock Wealth Safely recommends CI (Cigna) which has strong growth prospects and is starting to show signs of a price rebound.
CI is a large health services company that offers a range of insurance products, primarily to commercial and government clients. It has a strong record of growth in sales and profits over a number of years. Its recent merger with the large PBM Express Scripts should allow growth through cross selling among its different segments. Its goal of reducing the growth in health care costs by 50% over the next year should be appealing and attract enrollment growth, especially in the commercial segment. CI also plans to grow in the international and government markets.
CI currently has a PE (ttm) of 12, lower than its long term average of 13 and down from the last three quarters, as is its PS (ttm) of 0.39. CI has topped consensus earnings estimates the last four quarters. Estimates for the current quarter have been stable the last 60 days with the next earnings due November 5.
The 20 day moving average is 167.32, 50 day 173.96, 100 day 181.90 and 200 day 186.90. Although these trends are down, there are signs of a reversal with the Parabolic SAR turning to buy on September 30 and OBV trending up since September 29. RSI is neutral at 54.43.
CI closed at 172.22 on October 5, below its 52 week high of 224.64 and consensus target of 240.32. The price has been dropping since the middle of June. CI is a strong company with good prospects and this, combined with the recent early signs of price turnaround, make it a Stock Wealth Safely recommendation.​
October 2, 2020
Stock Wealth Safely selects KO (Coca Cola) as an undervalued stock whose prospects should improve in the coming months. KO is the largest non-alcoholic beverage company in the world with more than 500 brands. Its financial results and share price have not done well this year, in part because of concerns over its sales in public areas such as restaurants, theatres, arenas etc that typically account for about 50% of revenues.
KO currently has a PE (ttm) of 23 and P/S (ttm) of 6.1, both higher than the last two quarters. The average annual PE is around 21. KO beat consensus earnings estimates the last two quarters and met the consensus the two quarters before that. Earnings estimates have been stable for the last 90 days. Next earnings are due October 22.
The 20 day SMA is 49.81, 50 day is 48.83, 100 day is 47.43 and 200 day is 49.60. The 20 day crossed the 200 day on September 21. The OBV has been trending up since September 23, RSI neutral at 50.55, Parabolic SAR descending since September 21 but may be approaching reversal.
KO has a strong stable dividend at 3.3%. With COVID vaccines and treatments nearing approval, public venues should be opening in the near future. KO has benefits of scale with a huge marketing budget and the ability to expand into new areas such as ready-to-drink coffee.
KO closed at 49.63 on October 2 with a 52 week high of 60.13 and consensus target 53.90. We believe it should meet our goal of at least a 5% rise in the next 6 months.
September 13, 2020
Stock Wealth Safely selects PFE (Pfizer) because of its potential to be the first western company to have an approved COVID vaccine. PFE is a global pharmaceutical company whose stock price has dropped, in part because of removal from the DIJA. However, the potential profits from a COVD vaccine make this irrelevant in the short term. PFE is in the late stages of its phase 3 trial and has just announced that it wants to increase the numbers in this study. It would be unlikely to make this request if it did not have confidence in the drug. PFE has announced that is should have data released by the end of October and could be administering the vaccine by the end of the year. Its major competitor, the Oxford vaccine, has just had to pause enrollment because of an undisclosed illness in a subject, which should delay its release. PFE is currently priced at 36.07 and should easily exceed its 52 week high of 40.97 if the vaccine is effective. ​
August 24, 2020
SWS selects CTXS (Citrix systems) as a stock with good prospects at a reasonable price. CTXS is a software and cloud services company that is a major player in the desktop virtualization market which benefits from the current work-at-home environment. It is moving toward a revenue model based on subscriptions that should allow revenue and profit growth. The current price of 142.80 is significantly below the 173.66 target.​
August 18, 2020
Stock Wealth Safely selects TSN (Tyson Foods) as an undervalued stock with price momentum and growth potential. TSN is a leading processor of meat products. TSN has faced challenges during the pandemic but appears to be recovering and prospects are improving along with prices and demand. The current price of 63.67 is a good entry point and should climb toward the 73.41 target.
Stock Wealth Safely recommends SAIC (Science Applications) because of good prospects at a reasonable price. SAIC offers a range of technology services, primarily to the government, and has signed several large contracts with the US military. Its 84.69 price is well below the 96.80 target and should increase towards this value. ​