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STOCK SELECTIONS

April 29, 2024

Overview

EXPE (Expedia) is one of the largest online travel companies in the world. It combines travel planning, purchases and experiences which results in a strong used base and network effect. All of its brands (eg TripAdvisor, VRBO, Hotels.com) share a single platform for ease of use. EXPE gets revenues both form merchants (EXPE markets a supplier to customers) and as an agency where customers book through EXPE which then transfers them to the airline etc for commission income. EXPE has a strong balance sheet, having removed close to 1 billion in costs over the past few years. Revenue growth will come from the general rebound in travel following the pandemic and an increased presence in Europe. The stock price dropped sharply after the earnings report February 8 and is starting to recover with some technical signals turning positive. EXPE is undervalued based on forward PE and P/S measures.

Earnings and Yield

EXPE exceeded expectations in the last three quarters and estimates have been climbing in the last 30 days. There is no dividend.

Valuation

PE is 18 compared with an average of 20 and forward PE is 14. PE/growth is 0.4. P/S for the company is 1.3 and the industry average is 1.6.

 

Technical

Simple MA:        

5day                      135.89

10 day                   132.60

20 day                   131.99

50 day                   134.30                  

100day                  141.10

200day                  126.00

 

PSAR                     BUY since April 24, 2024

ADX (14)                19.3 and stable

DI +                       28.2 and rising

DI –                        16.5 and falling

 

MACD (12,26)        negative 1.01

SMA (9)                   negative 2.07

               

OBV                       Above the 20 day MA and rising.

Prices

Close               67.84 on April 16                   

52 wk hi           90.89

Ave target       71

 

Summary

EXPE  is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

next 6 months.

May 3, 2024

Overview

TAP (Molson-Coors) is one of the largest brewers in the world with such well known brands as Coor, Molson, Carling, Miller and many others. It is expanding into hard selzers and ciders to further revenue growth. It wants its reputation for high quality and innovative products to make TAP the first choice for consumers. Sales and earnings have grown for several years and its last quarter results exceeded both top and bottom line expectations. TAP has a good balance sheet that provides the financial ability to continue to invest in growing its brands. Dividend growth and share repurchase are ongoing shareholder friendly action. TAP’s stock price dropped sharply after its strong earnings report and TAP is now significantly undervalued despite good growth prospects. Although technical factors are still negative, the price should be near a turnaround and could represent a good entry point.

Earnings and Yield

TAP exceeded expectations in the last four quarters and maintained strong guidance going forward. Next quarter estimates dropped last week. Dividend is 2.9%.

Valuation

PE is 10 compared with an average of 20 and forward PE is 10. PE/growth is 2.0. The current industry PE is 17.  P/S for the company is 1.2 and the industry average is 10.2.

Technical

Simple MA:           

5 day                     58.71    

10 day                   61.13

20 day                   63.33

50 day                   64.68

100day                  63.41

200day                  62.79

 

PSAR                     SELL since April 12, 2024

ADX (14)                31.2 and rising

DI +                       11.6 and falling

DI –                        36.4 and falling

 

MACD (12,26)       negative 2.70

SMA (9)                 negative 1.92

               

OBV                      Below the 20 day MA and falling

Prices

Close                     57.85 on May 3, 2024         

52 wk hi                 70.90

Ave target             65.00

Summary

TAP is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

May 6, 2024

Overview

AMD (Advanced Micro Devices) is a leading semiconductor chip manufacturer. It is the main competitor to INTC in the consumer and commercial PC desktop market. Acquisitions have helped it enter the data center and embedded markets. Finally, AMD’s development of Radeon chips has let it challenge NVIDIA’s lead in GPU chips used in gaming and AI. The latest models can run large language training models. AMD is expanding its presence in the public cloud and partnering with companies such as MSFT, META and GOOG. The AMD stock price dropped after last quarter's earnings release, even though it beat expectations in most areas. This is likely a classic case of market overreaction and we believe has created a good entry point.

Earnings and Yield

AMD exceeded expectations in the last four quarters and maintained strong guidance going forward. EPS revisions have been up over the past month. There is no dividend.

Valuation

PE is 75 compared with an average of 40 and forward PE is 57. PE/growth is 2.3. The current industry PE is 34.  P/S for the company is 10.4 . We believe these valuations are justified by the AMD’s growth prospects.

 

Technical

Simple MA:        

5 day                     151.04

10 day                   

20 day                   156.52

50 day                   174.92                  

100day                  166.75

200day                  138.08

 

PSAR                     SELL since May 1, 2024

ADX (14)                27.7 and stable

DI +                       23.5 and rising

DI –                        33.6 and falling

 

MACD (12,26)        negative 8.59

SMA (9)                   negative 10.08           

OBV                        Above the 20 day MA and both are falling

Prices

Close                      155.78 on May 6, 2024                   

52 wk hi                  227.30

Ave target              191

 

Summary

AMD is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

next 6 months.

May 27, 2024

Overview

UAL (United Airlines) is one of the major US carriers along with American and Delta. It has around 4800 flights daily, many of them long haul routes. As a result, UAL has more mileage per average flight than competitors and this increases profits. UAL has a United Next strategy to boost capacity and increase profits through more efficient planes as well as a strong customer loyalty program. All airlines have benefited from a stronger than expected post pandemic recovery in air travel demand, exceeding the capacity of the industry in the short term. UAL stock has suffered this year after it grounded its Boeing 373 MAX because of well publicized problems. However, a strong first quarter earnings report with good forward guidance resulted in analyst upgrades and a sharp jump in stock price. The pullback in the past weeks likely represents a retracement due to profit taking and the overall upward trend is likely to resume shortly.

Earnings and Yield

UAL exceeded expectations in the last four quarters and maintained strong guidance going forward. EPS revisions have been up over the past month. There is no dividend.

Valuation

PE is 5 compared with an average of 5.5 and forward PE is 5. PE/growth is 0.5.  P/S for the company is 0.3 compared to an average of 0.3. The industry value is 1.0.

Technical

Simple MA:           

5 day                     52.71   

10 day                   53.78

20 day                   53.06

50 day                   49.12

100day                  45.74

200day                  44.02

 

PSAR                     SELL since May 21, 2024

ADX (14)                27. 2 and falling

DI +                       26.8 and falling

DI –                        25.6 and rising

 

MACD (12,26)       0.65

SMA (9)                 1.82

               

OBV                      Below the 20 day MA and both are rising

Prices

Close                     51.73 on May 24, 2024         

52 wk hi                 58.23

Ave target             63.00

Summary

UAL is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

May 31, 2024

Overview

CNC (Centene) offers health care services to around 28 million members. It is the largest Medicaid managed care organization in the United States and its individual exchange program, which catches people pushed off Medicaid rolls, is growing rapidly. Its Commercial segment is also expanding. Combining both organic and inorganic (acquisitions) growth, revenues have increased for the past 20 years including a CAGR of 30% from 2015-2022. The company expects growth to continue in upcoming years.

Earnings and Yield

CNC exceeded expectations in the last four quarters and maintained strong guidance going forward. EPS revisions have been up over the past month. There is no dividend.

Valuation

PE is 11 compared with an average of 13.5 and forward PE is 11. Industry PE is 16. PE/growth is 0.9.  P/S for the company is 0.3 compared to an average of 0.3 The industry value is 0.8.

Technical

Simple MA:        

5 day                     71.68

10 day                   74.82

20 day                   75.73

50 day                   74.90                  

100day                  76.05

200day                  73.22

 

PSAR                     SELL since May 24, 2024

ADX (14)                21.1 and rising

DI +                       18.0 and falling

DI –                        44.4 and falling

 

MACD (12,26)        0.25

SMA (9)                  1.24           

OBV                        Below the 20 day MA and both are falling

Prices

Close                      71.59 on May 31, 2024                   

52 wk hi                  81.42

Ave target              89

 

Summary

CNC is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

June 17, 2024

Overview

ADSK (Autodesk) develops model-based software for customers in Architecture, Engineering, Construction, Manufacturing and Entertainment. Its products help create design, manufacturing and operations solutions. Revenue comes from sales, maintenance and service agreements for its products. Ongoing growth should come from increased demand for its cloud platform as well as a growing suite of software products. The stock price rose more than 6 % on June 17.

Earnings and Yield

ADSK exceeded expectations in the last four quarters and maintained strong guidance going forward. EPS estimates have been stable over the past month. There is no dividend.

Valuation

PE is 44 compared with an average of 50 and forward PE is 41. Industry PE is 16. PE/growth is 3.0.  P/S for the company is 7.6 compared to an average of 9.1 The industry value is 9.0.

Technical

Simple MA:           

5 day                     224.80   

10 day                   220.24

20 day                   216.27

50 day                   219.24

100day                  238.03

200day                  228.54

 

PSAR                     BUY since June 3, 2024

ADX (14)                18.9 and stable

DI +                       34.6 and rising

DI –                        24.0 and falling

 

MACD (12,26)       negative 1.47

SMA (9)                 negative 2.55

               

OBV                      Above the 20 day MA and both are rising

Prices

Close                     240.51 on June 17, 2024         

52 wk hi                 279.53

Ave target             267.00

Summary

ADSK is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

April 16, 2024

Overview

GIS (General Mills) is a manufacturer of many well-known consumer foods that are marketed mainly in North America. Cereals include Cheerios and Wheaties, baking products such as Betty Crocker and Bisquick, Mexican (Old El Paso) and snack foods (Haagen-Dazs ice cream). These product lines now make up about 50% of sales with snack foods the leading category. Other growth areas are pet foods (Blue Buffalo) and convenience meals. GIS has been able to manage cost effectively even in challenging environments and as a result has steady cash flow generation. The processed food industry is highly competitive but GIS has generated steady growth in sales and earnings over the past 10 years and its efforts to support its brands are designed to maintain its dominant position going forward.

Earnings and Yield

GIS has exceeded expectations in the last four quarters and estimates have been stable for the past 30 days. Dividend is 3.6%

Valuation

Trailing PE is 14 compared to an average 16.5 and forward PE is 15. PE/growth is 2.3. The industry median is 16.5. P/S is 14 compared with a 5 yeat average 16.4 and current industry value of 16.5.

 

Technical

Simple MA:        

5day                      67.44

10 day                   68.66

20 day                   69.01

50 day                   66.38                    

100day                  65.56

200day                  66.97

 

PSAR                     SELL since March 26

ADX (14)                25.1 and falling

DI +                       24.5 and falling

DI –                        23.6 and rising

 

MACD (12,26)        0.56

SMA (9)                   1.53

               

OBV                       Above its 20 day MA which has been rising.

Prices

Close               67.84 on April 16                   

52 wk hi           90.89

Ave target       71

 

Summary

General Mills’ stock price has traded in a narrow range since October despite strong financial results. It is well below its 52 week high and average target price. GIS is slightly  undervalued and has a good dividend. The stock has fallen with the rest of the market this past week but increased April 15 despite an overall market decline. This could prove to be a good entry point.  

GIS is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

April 19, 2024

Overview

PFE (Pfizer) is a major pharmaceutical manufacturer of a wide range of drugs and vaccines. Over the past few years it has divested its consumer and generic products and acquired a number of focused biotechnology companies. This was largely funded by profits from its COVID vaccine and treatment. As a result, PFE received a record nine drug and vaccine FDA approvals in 2023. Notable products include an RSV vaccine adults as well as products focusing on immune and oncology indications. A number of similar medications are in late stage development and expected to receive approval soon. The pipeline is projected to provide consistent growth through the rest of the decade.

Earnings and Yield

PFE exceeded expectations in  the last four quarters but earnings were much lower than the previous year because of the loss of COVID product revenues. The stock price has dropped consistently over the past year after each earnings release. It now appears to have reached a bottom and is starting to recover. Dividend is very high at 6.4% and should provide downside protection against significant further declines.

Valuation

PE is 14 compared with an average of 12 and forward PE is 11. The median PE for the industry is 20. P/S for the company is 2.5 and the industry average is 7.1.

Technical

Simple MA:           

5 day                     25.68    

10 day                  

20 day                   26.70

50 day                   27.11

100day                  27.73

200day                  30.74

 

PSAR                     SELL since April 4, 2024

ADX (14)               16.7 and rising

DI +                        32.3 and stable

DI –                        23.8 and rising

 

MACD (12,26)       negative 0.82

SMA (9)                 negative 0.51

               

OBV                      Above the 20 day MA and rising

Prices

Close                     136.66 on April 29, 2024         

52 wk hi                 160.05

Ave target             155.00

Summary

PFE is an attractive stock to purchase with the goal of gaining  ≥ 5% within the next 6 months.

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Stock Wealth Safely does not provide investment advice. This site simply lists the stocks we have chosen for our investment portfolio and shows how they have performed over time. Past performance is not a predictor of future results. Individual investment results may vary. All investing involves risk of loss.

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