STOCK SELECTIONS
March 20, 2023
Stock Wealth Safely selects the regional bank USB.
USB (US Bancorp) is one of the largest and most profitable regional banks. It is broadly diversified, having largely complete portfolios in the banking, payments and trust business lines. USB is very efficient at operations and has a strong record of profits and ROE. It is growing through partnerships such as with State Farm and acquisitions such as Union Bank.
USB has easily exceeded earnings expectations for each of the last four quarters and estimates have been generally stable. The PE is 8 compared with an average annual value of 14. Dividend is very attractive. at 5.8%.
Technical signs are not relevant in this selection due to the recent turmoil in the banking sector and collapse in prices, especially of the regional banking sector.
We believe there has been a selloff in most regional banks, including USB, rather than the price drop being limited to those most at risk. As a result, USB, by many measures the strongest regional bank, is selling at a steep discount to its true value and this represents a good buying opportunity. USB closed March 20 at 34.45 and should soon start climbing towards its 54.61 consensus target.
March 24, 2023
Stock Wealth Safely selects the beverage company KO.
KO (Coca-cola) is the largest non-alcoholic beverage company in the world with more than 500 brands. It is expanding its non-sparkling product line to appeal to consumers who want a healthier image. It has acquired coffee maker Costa and sport drink maker BodyArmor to help its expansion in these categories. Through its established bottler and retail network, KO should be able to capitalize on emerging markets such as Asia and Latin American whose per capita beverage consumption is currently only about 15% of that in North America.
KO has met or exceeded earnings expectations for the last four quarters and estimates have increased over the last 90 days. PE is 24 compared with an average annual of 21. Dividend is attractive at 3%.
The 20 day simple moving average = 59.94, 50 day = 60.14, 100 day = 61.19 and 200 day = 61.04.
PSAR has been buy since March 13, the 4 day SMA is 60.30, 9 day SMA 60.29, ADX 8.5, ADX(+) 20.0 and ADX(-) 13.6. M12 is o.17 and M9 0.08. OBV is down.
KO’s stock price has dropped along with the market since the beginning of the year and has been fairly flat for the past month. It is a financially strong company with good growth prospects for the coming year. Technical indicators are starting to turn positive. This, along with the good dividend, suggest a good entry point for one of the best known companies in the world. KO closed at 60.90 on March 24 and should increase toward the 68.51 consensus target.
March 27, 2023
Stock Wealth Safely selects the technology company JNPR.
JNPR (Juniper Networks) sells a variety of routers, switches, Wi-Fi and network security products that are used by corporate and cloud customers. Demand for networking equipment is expected to grow rapidly both because of advances such as 5G networks as well as customer demand for more ability to work remotely and in different places. JNPR has reported strong operating results last quarter and a sizable backlog, especially in the Enterprise sector, suggests a good outlook for the coming year.
JNPR has exceeded earnings expectations in three of the last four quarters and estimate have been increasing over the past 90 days. PE is 22 compared with an average of 14. Dividend is strong for a technology company at 2.7%.
The 20 day simple moving average = 31.35, 50 day = 31.44, 100 day = 31.52 and 200 day = 29.84.
PSAR has been buy since February 16, the 4 day SMA is 32.25, 9 day SMA 31.86, ADX 12.4, ADX(+) 26.6 and ADX(-) 16.1. M12 is 0.30 and M9 0.05. OBV is has turned up.
After falling since December, technology stocks have become popular and JNPR has been rising this month. The growth of technology and networking requires companies that supply the infrastructure and JNPR is well positioned. This appears to be an opportunity to buy. JNPR closed at 32.80 on March 27 and is likely to increase towards its 38.14 52 week high.
March 16, 2023
Stock Wealth Safely selects the technology company VRSN.
VRSN (Verisign) is a leader in providing the infrastructure support for the internet to function. It supports the Domain Name System, operates some of the root servers that join the world together, and has exclusive registry contract for the hugely popular .com and .net domains. The field is likely to continue to expand with worldwide internet growth and VRSN to remain a dominant player.
VRSN has exceeded earnings expectations in the last four quarters and estimates have been rising over the last 30 days. PE is 30 compared with an average annual of 24. There is no dividend.
The 20 day simple moving average = 198.06, 50 day = 207.16, 100 day = 201.29 and 200 day = 190.90.
PSAR has been sell since March 10, the 4 day SMA is 192.35, 9 day SMA 194.76, ADX 34.8, ADX(+) 19.8 and ADX(-) 32.4. M12 is -5.68 and M9 – 7.10. OBV is flat.
Technology stocks dropped substantially in February and now may be starting to turn around. VRSN is a strong company in a field that must continue to grow as more activity moves to the internet around the world. VRSN closed at 194.18 on March 16 and the price should increase towards the 240 consensus target.
March 6. 2023
Stock Wealth Safely selects the agricultural company CF.
CF (CF industries) is the largest nitrogen producer in North America. Most of its production is used for fertilizer which is mainly used for corn and corn production is expected to increase over the next year because high prices result in more planted acreage. It enjoys a cost advantage against imported products because of the low cost of natural gas and its distribution network.
CF has exceeded earnings expectations in three of the last four quarters. PE is 5 compared with average annual of 16. Dividend is 1.8%.
The 20 day simple moving average = 85.64, 50 day = 85.58, 100 day = 94.33 and 200 day = 95.37.
PSAR has been buy since February 28, the 4 day SMA is 85.76, 9 day SMA 84.96, ADX 17.8, ADX(+) 25.3 and ADX(-) 14.6. M12 is 0.44 and M9 0.40. OBV is flat.
CF is a leading company that is undervalued by historical standards. It should grow along with the prospects of its industry. The price has been essentially stable this year and technical factors are turning positive. CT closed at 86.01 on March 6 and the price should increase towards its 103 consensus target.
March 3. 2023
Stock Wealth Safely recommends the tractor manufacturer DE.
DE (Deere) is the leading manufacturer of agricultural equipment and is a major competitor in heavy construction and forestry as well. It provides a broad range of products known for their high quality and efficiency as well as providing cost effective ownership by helping its customers optimize each element their business. There should be strong demand for its products as high crop prices result in more crop production and increased infrastructure spending leads to more construction equipment purchases
DE has exceeded earnings expectations in three of the last four quarters. The PE is 15.6 compared with an annual average of 16. Dividend is 1.1%.
The 20 day simple moving average = 416.95, 50 day = 422.31, 100 day = 414,76 and 200 day = 378.13.
PSAR has been buy since February 13, the 4 day SMA is 422.65, 9 day SMA 423.14, ADX 14.6, ADX(+) 26.6 and ADX(-) 15.9. M12 is 3.72 and M9 1.05. OBV is flat.
DE is the dominant player in an industry that should experience significant growth this year. It is fairly valued at its closing price of 430.28 on March 3. It should climb towards its 471 consensus target.
February 27, 2023
Stock Wealth Safely selects the tower company AMT.
AMT (American Tower) is the world’s largest broadcast and wireless tower operator in the world. It has strong cash flow from its existing leases which have escalators to protect against inflation. As a result it has consistently increased its dividend yield and should be able to continue to do so. Future growth will come mainly from Asia and Africa where wireless buildouts are necessary to provide internet access to their growing populations. AMT plans to build another 50,000 towers to meet this demand, on top of its existing 200,000.
AMT has earnings expectations in last four quarters and estimates have been stable or rising over the past 60 days. PE is 20.5 Dividend is 3.1%
The 20 day simple moving average = 213.82, 50 day = 216.39, 100 day = 211,63 and 200 day = 232.68.
PSAR has been sell since February 10, the 4 day SMA is 198.01, 9 day SMA 205.63, ADX 21.2, ADX(+) 11.6 and ADX(-) 35.6. M12 is -6.64 and M9 -3.86. OBV is falling.
AMT is a dominant company in a growing field that is now undervalued. Although short term technical indicators are negative, this could be a good entry point. AMT closed at 195.08 on February 27 and its price is likely to climb toward its 248 consensus target, while paying a good dividend.
February 24. 2023
Stock Wealth Safely selects the brewing company TAP.
TAP (Molson Coors) is one of the largest brewers in the world and combines well established brands such as Miller, Coors and Carling with a focus on increasing share of profitable and expanding markets such as premium and craft beers and selzers. TAP has been able to increase prices and efforts to control costs should increase profits.
TAP has exceeded earnings expectations in three of the last four quarters, including a 23% positive surprise for the last quarter. Estimates have been generally stable for the year. PE is 14 compared with an average of 20 and dividend is attractive at 3 %.
The 20 day simple moving average = 52.47, 50 day = 51.65, 100 day = 51.43 and 200 day = 52.74.
PSAR has been buy since February 21, the 4 day SMA is 53.48, 9 day SMA 52.58, ADX 19.2, ADX(+) 35.8 and ADX(-) 15.9. M12 is 0.11 and M9 0.56. OBV is flat.
TAP is a leading company in an industry that should grow as the economy recovers. The dividend is good. TAP is undervalued and has strong short and medium term technical indicators. TAP closed at 53.78 on February 24 and should increase towards its 52 week high of 60.12
February 23, 2023
Stock Wealth Safely selects the health benefits company HUM.
HUM (Humana) is a leading medical insurance company that has a leading position in Medicare Advantage plans. Demographics indicate that this should be one of the strongest growth areas in health insurance. HUM has the highest customer satisfaction in the industry which will drive demand for its services. HUM believes it can raise profits by helping its customers to become healthier and therefore lower its costs.
HUM has exceeded earnings expectations in the last four quarters and estimates are generally rising over the last 30 days. The dividend is 0.7%. PE is 23 compared with an average value of 18.
The 20 day simple moving average = 497.23, 50 day = 500.08, 100 day = 514.18 and 200 day = 492.37.
PSAR has been buy since February 17, the 4 day SMA is 506.94, 9 day SMA 503.78, ADX 16.3, ADX(+) 27.3 and ADX(-) 16. M12 is 3.34 and M9 1.05. OBV is rising.
HUM is a fairly valued company with strong growth prospects. It closed at 510.65 on February 23 and should climb towards its consensus target of 603.
February 17. 2023
Stock Wealth Safely selects the medical technology company DXCM.
DXCM (Dexcom) is a leading manufacturer of continuous glucose sensors used in the management of diabetes. It is widely acknowledged to produce the most accurate sensor and is dominating the type 1 diabetes market with its links to insulin pump makers to provide closed loop systems. Its newest G7 device is less expensive and should allow it to compete better with Abbott in patients with type 2 diabetes on insulin who require good control of their glucose levels. DXCM is also looking to expand into the currently untapped hospital market.
DXCM exceeded earnings expectations in the past two quarters and estimates are generally stable over the past 30 days.
The 20 day simple moving average = 110.34, 50 day = 111.84, 100 day = 108.79 and 200 day = 95.21.
PSAR has been buy since February 1, the 4 day SMA is 117.69, 9 day SMA 114.83, ADX 13, ADX(+) 23 and ADX(-) 22.3. M12 is 3.34 and M9 -.81. OBV is climbing sharply.
DXCM is the leading company in a growing field and both revenues and earnings should increase. DXCM closed February 17 at 114.76 and should increase toward the 132.05 consensus target.
February 6, 2023
Stock Wealth Safely selects the auto manufacturing company GM.
GM (General Motors), one of the most iconic companies in the world, has made enormous changes in the past few years. It has drastically reduced its cost base and is now competitive in all segments. It is able charge higher prices leading to increased profits in its current lines and is moving strongly into electric vehicle sales.
GM exceeded earnings expectations in three of the last four quarter including by 26.2% in the last quarter. Dividend in 0.9%. The PE is 6 compared with an average of 7.
The 20 day simple moving average = 34.88 50 day = 34.26, 100 day = 334.26 and 200 day = 34.31.
PSAR has been buy since January 26, the 4 day SMA is 36.21, 9 day SMA 35.70, ADX 20.1, ADX(+) 30.3 and ADX(-) 14.9. M12 is 0.72 and M9 0.63. OBV is climbing.
GM has better growth prospects than it has had in many years. Technical signs indicate an increasing price trend. GM closed at 41.34 on February 6 and should increase towards its 48 consensus target.
Stock Wealth Safely selects the bank BAC.
BAC (Bank of America) has become one of the strongest banks in the United States with leading roles in investment banking, retail networks, credit cards, commercial banking and brokerage (through its Merrill Lynch franchise). All of the platforms should be scalable and benefit from the large technology that BAC is making.
BAC exceeded earnings expectations in three of the last four quarter including by 11.8% in the last quarter. Estimates are falling over the past 30 days but stable for the past 7 day. Dividend is 2.7%. PE is 9.5 compared with an average of 13.
The 20 day simple moving average = 34.88 50 day = 34.26, 100 day = 334.26 and 200 day = 34.31.
PSAR has been buy since January 31, the 4 day SMA is 40.82, 9 day SMA 38.85, ADX 22.1, ADX(+) 35.1 and ADX(-) 12.6. M12 is 1.26 and M9 1.07. OBV is climbing sharply.
BAC is a leading bank that is currently undervalued. The price is rising and technical factors suggest this will continue. BAC closed at 36.37 on February 6 and should grow toward the 52 weeks hi of 50.11.
February 2. 2023
Stock Wealth Safely selects the financial company FIS.
FIS (Fidelity National Information Services) provides banking and payment technology solutions to over 14,000 banks and merchants internationally, providing a growing range of technology solutions. Its stable banking operations supply recurring revenue and the global shift to electronic payments should provide strong growth opportunities.
FIS just missed earnings expectations last quarter after slightly exceeding in the previous three. Estimates have been stable over the past 60 days. The PE is 40 compared with an average annual value of 27. Dividend is 2.7%
The 20 day simple moving average = 72.42, 50 day = 70.20, 100 day = 72.90 and 200 day = 85.27.
PSAR has been buy since December 13, the 4 day SMA is 76.01, 9 day SMA 75.26, ADX 18.8, ADX(+) 34.7 and ADX(-) 14.7. M12 is 2.95 and M9 2.24. OBV is climbing.
FIS stock price dropped sharply on November 3 after it missed its earnings estimate by one cent. We previously recommended the stock on January 9 and it achieved its 5% target rise. Today FIS reached a technical signal that predicts another 5% increase or more in the next 6 months with 80% certainty. FIS closed at 77.81 on February 2. The price should climb towards the 87 consensus target.
February 1, 2023
Stock Wealth Safely selects the bank JPM.
JPM (JPMorgan Chase)is probably the most dominant US bank operating in the investment, commercial, retail and credit card segments. It holds the leading share in most of these services leading to advantages of scale and room to grow. Its balance sheet and record in risk management is very strong.
JPM has beaten earnings expectations the last two quarters after missing the previous two. Estimates have been rising over the past 60 days. Dividend is 3.1%. PE is 10.5 and average is 11.
The 20 day simple moving average = 138.44, 50 day = 135.33, 100 day = 1126.92 and 200 day = 122.97
PSAR has been sell since January 19, the 4 day SMA is 139.75, 9 day SMA 1138.77, ADX 14, ADX(+) 26.1 and ADX(-) 21.2. M12 is 1.24 and M9 2.54. OBV is flat.
JPM is a high quality company at an attractive valuation. It closed February 1 at 139.71 and should approach its 157 consensus target.
Stock Wealth Safely selects the retail firm DG.
DG (Dollar General) is leading in the dollar store retailing segment because of its broad store network and distribution ability. It is often the main retailer in thinly populated areas and its low priced items make it hard for e-retailers to compete. It is increasing its use of digital technologies which should protect its thin margins and continue to maintain its excellence in execution which is essential with its multiple competitors.
DG beat earnings expectations in three of the last four quarters but missed by 8.6% last quarter leading to a drop in stock price. Estimates have been stable for the past 30 days. Dividend is 0.9%. PE is 20.7 compared with average 20.
The 20 day simple moving average = 235.78, 50 day = 243.22, 100 day = 244.10 and 200 day = 242.08
PSAR has been buy since January 26, the 4 day SMA is 234.55, 9 day SMA 234.40, ADX 24.9, ADX(+) 19.8 and ADX(-) 29.2. M12 is -5.62 and M9 -6.09. OBV is flat.
DG is a leading retailer in its field and should maintain its position. Its stock price has dropped since its poor earnings last quarter but appears to have hit its low point January 19 and is starting to recover. DG closed at 235.61 on February 1 and appears likely to grow towards its 266 consensus target.