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STOCK SELECTIONS

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February 5, 2024

Stock Wealth Safely selects the financial payments company PYPL.

PYPL (Paypal) provides global technology platforms that allow digital and mobile payments from businesses and consumers. PYPL handles $1.5 trillion annually in over 200 markets. It holds a strong position in this expanding field although competitors are emerging. However, PYPL plans to use AI to improve its offerings and maintain leadership in the industry. Its business can be scaled which should allow margins to improve. Sales, payment volumes and earnings all increased in 2023 and it has a strong financial position.

PYPL has exceeded earnings expectations in three of the last four quarters. PE is 17 compared with an average of 30 and forward PE is 14. There is no dividend.

The 20 day simple moving average = 62.06, 50 day = 60.79, 100 day = 58.74 and 200 day = 62.58.

PSAR has been buy since January 18, the 4 day SMA is 61.83,  9 day is 6.25, ADX is 14.5, A(+) is 24.2 and A (-) is 22.3, MACD 12 is  1.18 and MACD 9 is 0.66. OBV is fluctuating around its 20d SMA which has been climbing.

PYPL is a leading company in a growing field that is now undervalued. It closed at $61.54 on February 5 which should be a good entry point. The stock price should climb $73 target.

February 13, 2024

Stock Wealth Safely is considering the shoe company CROX.

CROX (Crocs) makes a wide range of  shoes that are slip and odor resistant because of its patented technology. It has strong brand recognition and is growing, especially in North America and Asia. Finances are strong and will allow the investment needed to compete in the constantly changing fashion industry.

CROX has exceeded expectations the last four quarters and estimates are increasing. PE is 9 compared to an average of 10 and forward PE is 9. There is no dividend.

The 20 day simple moving average = 101.79, 50 day = 101.29, 100 day = 94.17 and 200 day = 101.39.

PSAR has been buy since February 9, the 4 day SMA is 105.48,  9 day is 101.95, ADX is 16.7 and flat, A(+) is 38.6 and rising and A (-) is 18.5 and falling, MACD 12 is  0.87 and MACD 9 is 1.67. OBV has been fluctuating around its 20d SMA which is slowly falling.

CROX’s stock price has declined over the past year despite record sales and profits and the stock is undervalued, as measured by both P/E and Price / free cash flow. Technical factor have turned positive for the past several weeks.

CROX closed at $106.94 on February 13. Its 52 week high is $151.32 and average target is $127.

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February 16, 2024

Stock Wealth Safely is considering the beverage company TAP.

TAP (Molson Coors) is one of the largest brewers in the world. It is poised to continue to gain market share for its well known brands such as Coors Light and Miller Light in Europe. TAP is moving into the premium market as well as whiskey and bourbon. These strategies, along with cost savings, should allow growth going forward.

TAP has exceeded expectations in two of the last four quarters and estimates have climbed in the past 30 days. PE is 11 compared to an average of 20 and forward PE is also 11. Dividend is  2.6%.

The 20 day simple moving average = 61.85, 50 day = 62.12, 100 day = 60.90 and 200 day = 62.90.

PSAR has been sell since January 23, the 4 day SMA is 61.74,  9 day is 61.17, ADX is 17.6 and falling, A(+) is 18.1 and rising and A (-) is 18.6 and falling, MACD 12 is  - 0.73 and MACD 9 is - .053. OBV has moved above  its 20d SMA which has been falling.

TAP’s stock price dropped sharply in early February but is starting to climb since the release of its last quarter results. TAP remains undervalued with a  PE of 11. It is a major company in an industry that is doing well.

TAP closed at $62.15 on February 16. The 52 week hi is $70.90 and the average target it $69.

February 21, 2024

Stock Wealth Safely selects the utility PNW.

PNW (Pinnacle West) is an Arizona electrical utility serving commercial and residential customers. It has a history of solid returns and dividend growth, corresponding to Arizona’s strong growth which shows no signs of slowing. It is investing in the infrastructure necessary to meet its renewable energy targets going forward. It is overdue for a rate increase as its return on equity has dropped below its usual value.

PNW exceeded expectations last quarter after missing the previous three quarters. Estimates have been stable over the past week. PE is 16 compared with an average 15.5 and forward PE of 14. Dividend is 4.8%.

The 20 day simple moving average = 68.58, 50 day = 70.88, 100 day = 72.26 and 200 day = 75.97.

PSAR has been buy since February 16, the 4 day SMA is 68.77, 9 day is 67.84, ADX is 30.3 and falling, A(+) is 22.5 and rising and A (-) is 20.4 and falling, MACD 12 is  - 1.01 and MACD 9 is – 1.27. OBV has jumped above  its 20d SMA which has been stable.

PNW price has been dropping for months but now shows signs of a rebound. Its growth prospects make the stock undervalued. The dividend is attractive and growing.

PNW closed at $70.17 on February 21. The 52 week high was $86.03 and average target $74.

January 29, 2024

Stock Wealth Safely selects the pharmaceutical company AMPH.

AMPH (Amphastar) is a drug company that makes both generic and proprietary medicines. It specializes in making pharmaceuticals that are hard to manufacture and deliver to the patient, as its products are typically delivered by intranasal, inhalation or injectable routes. The difficulty in manufacturing these products creates high barriers to entry.  Well known drugs include Primatine (sold over the counter for asthma), epinephrine (for allergy), glucagon (for hypoglycemia) and naloxone (used to treat overdoses). AMPH has a strong line of drugs in development and plans to increase the relative amount of proprietary drugs that it sells compared to generics.

AMPH has exceeded earnings expectations for the last four quarters and estimates have been stable for the past 30 days. PE is 19 compared to an average 22 and forward PE is 15. There is no dividend.

The 20 day simple moving average = 57.15, 50 day = 57.75, 100 day = 52.42 and 200 day = 51.50.

PSAR has been sell since January 8, the 4 day SMA is 54.43,  9 day is 55.19, ADX is 22.5, A(+) is 17.5 and A (-) is 26.0, MACD 12 is  - 3.04 and MACD 9 is – 2.18. OBV is starting to climb above its 20day SMA which has been falling.

AMPH stock price took a major drop from January 5 to 11 with no fundamental reason to do so. Earnings expectations have not changed and the stock generally remains well regarded by analysts. The stock is undervalued, especially based on its forward PE of 15. AMPH price may be nearing a bottom and represent a good entry point. AMPH closed at 55.39 on January 29 and should start climbing towards its consensus target of $65.

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January 19, 2023

Stock Wealth Safely selects the shoe company NKE.

 

NKE (Nike) is a worldwide leader in the athletic apparel market. It sells its products through a variety of channels including its own stores, a range of retail outlets and the internet. Its strong intangible brand asset allows it to maintain premium pricing. Sales have been below expectations for the current year (ends May 2024) and are projected to only increase 1% for the year ahead. NKE plans to preserve profits by cutting costs through simplifying product assortment, increasing automation and eliminating management layers.   

NKE exceeded earnings expectations in three of the last four quarters and estimates have dropped over the past 30 days. PE is 30 compared to an average 20 and future PE is 28. Dividend is 1.4%.

 

The 20 day simple moving average = 106.26, 50 day = 109.83, 100 day = 104.20 and 200 day = 108.60. 

PSAR has been sell since December 22, the 4 day SMA is 101.32,  9 day is 102.93, ADX is 36.5, A(+) is 19.3 and A (-) is 36.5, MACD 12 is -6.83 and MACD 9 is -6.7. OBV is below its 20 day SMA and both are falling.

 

The global sportswear market will continue to expand, especially in Asia and other developing areas and NKE should continue to be the leader in most of these regions. NKE stock price dropped 12% after the release of its second quarter results on December 21 and NKE was one of the worst performers in the DOW 30 in 2023. However, history shows that the “Dogs of the Dow” usually do better than average in the subsequent year. NKE closed at $101.78 on January 19. It is likely close to its bottom and should start climbing towards its consensus target of $126. 

January 22, 2024

Stock Wealth Safely selects the powersport company PII.

 

PII (Polaris) manufactures all-terrain vehicles, snowmobiles, motorcycles (Indian) and boats in North America and Europe and has the top market share in the United States. It has strong brand goodwill and a history of innovation, as well as the financial ability to acquire businesses that can increase profits. ROIC is exceptionally strong compared to other SP500 companies. Its market share continues to grow even as sales dropped. 

PII exceeded earnings expectations in three of the last four quarters but missed by 1 cent in the last quarter. Estimates have been generally stable for the past 30 days. PE is 11 compared with an average of 14 and forward PE is 9. Dividend is 2.8%. 

The 20 day simple moving average = 91.96, 50 day = 90.26, 100 day = 9.04 and 200 day = 105.78. 

PSAR has been buy since January 19, the 4 day SMA is 92.44,  9 day is 90.55, ADX is 15.7, A(+) is 30.0 and A (-) is 20.9, MACD 12 is – 1.64 and MACD 9 is – 0.20. OBV has started to move above its 20 day SMA.  

 PII has a long history of outstanding investor returns. PII’s stock price has dropped since last summer and again reporting a decline in sales in the last quarter. The price has fluctuated over a narrow range since then and the stock is significantly undervalued. The macroeconomic environment looks to improve in 2024 and this should provide customers the confidence to purchase large ticket items such as powersport vehicles. PII closed at $95.44 on January 22 and should climb towards its $110 target.  

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January 25, 2023

Stock Wealth Safely selects the technology company CSCO.

CSCO (Cisco Systems) is a leading provider of routers, switches and wireless access that move all types of data across networks of all sizes. It is evolving its focus to include public cloud capabilitiy. CSCO is also developing an increased number of services ,especially security, that will provide more dependable income that product sales. It should benefit from strong demand as Artificial Intelligence expands over the next few years. CSCO had good results last quarter but reported a softening of demand for its products. CSCO has sound finances and generates large amount of cash flow which it returns to shareholders.

CSCO has exceeded expectations by increasing margins for the past three quarters and estimates have increased over the past 30 days. PE is 14 compared with an average of 15 and forward PE is 15. Dividend is 3.1%.

The 20 day simple moving average = 50.69, 50 day = 49.80, 100 day = 51.90 and 200 day = 51.36.

PSAR has been buy since December 27, the 4 day SMA is 51.74,  9 day is 51.14, ADX is 16.3, A(+) is 30.1 and A (-) is 13.1, MACD 12 is  0.36 and MACD 9 is 0.30. OBV is above its 20 day SMA and both are rising.

CSCO shares dropped about 10% after the earnings report last quarter warned of decreased demand. We believe that this is temporary and reflects customers implementing the large product sales from 2023. Demand should pick up as 2024 progresses and long term outlook is good. Technical factors are now positive. CSCO closed at $52.33 on January 25 and is likely to continue to rise towards its 52 week hi of $58.19.

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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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