STOCK SELECTIONS
May 17, 2023
Stock Wealth Safely selects the parts manufacturer FOXF.
FOXF (Fox Factory) produces high performance suspension products used for bicycles, ATV’s, commercial and off-road trucks, snowmobiles and motorcycles. The demand for its products is strong and it acquired Custom Wheel House to expand into high performance wheels and tires.
FOXF has exceeded earnings expectations for the last four quarters and estimates have been generally stable for the past week. PE is 18 compared with average annual of 25. There is no dividend.
The 20 day simple moving average = 104.39, 50 day = 111.53, 100 day = 111.20 and 200 day = 102.47.
PSAR has been sell since April 5, the 4 day SMA is 97.50, 9 day SMA 96.56, ADX 27.0, ADX(+) 17.6 and ADX(-) 28.9. M12 is -6.67 and M9 -4.75. OBV is starting to rise along with price.
FOXF stock price has been dropping since early April with sharp drops April 5 and again May 5 that cannot be explained by fundamentals. FOXF is a strong company in the auto parts industry and growth prospects are good. The stock is now undervalued and technical indicators are starting to turn positive. FOXF closed May 17 at 99.88 and should increase toward the consensus target of 124.
May 15, 2023
Stock Wealth Safely selects the energy company MPC.
MPC (Marathon Petroleum) is the largest US oil refiner with operations across the country. It has focused on reducing cost of feedstock as well as improving its operating costs. It also has substantial earnings from transportation and marketing. Strong market conditions for its products should last through 2023.
MPC has exceeded earnings expectations for the past 4 quarters. PE is 3.5 compared with an average annual value of 15. Dividend is 2.3%.
The 20 day simple moving average = 117.19, 50 day = 124.33, 100 day = 123.27 and 200 day = 114.82.
PSAR has been buy since May 10, the 4 day SMA is 110.58, 9 day SMA 109.33, ADX 33.9, ADX(+) 12.6 and ADX(-) 28.9. M12 is -8.19 and M9 -6.93. OBV is starting to rise along with price.
The stock price of MPC has dropped sharply since early April with no fundamental changes to support this decrease. The company is strong and now markedly undervalued. Some technical indicators are starting to turn positive. This should be a good entry point. MPC closed May 15 at 110.63 and should increase toward its 52 week hi of 138.83.
May 10, 2023
Stock Wealth Safely selects the energy company VLO.
VLO (Valero Energy) is a large independent oil refiner. It is the lowest cost refiner in the industry and has paid down debt which has allowed it to pay an attractive dividend of 3.8%. Its complex assets allow flexibility to vary its feedstocks to optimize margins. Investments should result in increased pipeline volumes and Green Diesel production which should be attractive given the benefits of renewable fuels going forward.
VLO has exceeded earnings expectations for the past four quarters but estimates have been dropping. PE is 3 compared with an average of 12. Dividend is very good at 3.8%.
The 20 day simple moving average = 117.13, 50 day = 126.94, 100 day = 129.63 and 200 day = 124.36.
PSAR has been buy since May 10, the 4 day SMA is 108.46, 9 day SMA 109.56, ADX 41.7, ADX(+) 14.0 and ADX(-) 32.9. M12 is – 9.63 and M9 – 8.93. OBV is starting to climb.
VLO’s stock price has been dropping sharply since early April, apparently on the basis of reduced earnings estimates. We believe the stock is now oversold and is certainly undervalued based on its PE ratio. VLO’s strengths should continue to grow the company and this appears to be a good entry point. VLO closed at 111.01 on May 10 and should increase towards its consensus target of 154.
May 12, 2023
Stock Wealth Safely selects the financial company HIG.
HIG (The Hartford Group) is a market leader in financial services in North America and Europe. It is a multi-line insurance company and asset manager. It is best known for property and casualty insurance and is growing as an employee group benefits insurer. Growth should come from increased pricing power with increased insurance demand as well as planned cost reductions.
HIG has met or exceeded earnings expectations in three of the last four quarters and estimates have been stable for the past week. PE is 9.5 compared with an average annual of 10. Dividend is 2.5%
The 20 day simple moving average = 69.88, 50 day = 69.71, 100 day = 73.11 and 200 day = 70.88.
PSAR has been sell since May 4, the 4 day SMA is 69.93, 9 day SMA 69.77, ADX 16.5, ADX(+) 23.1 and ADX(-) 27.8. M12 is 0.09 and M9 0.07. OBV is flat.
HIG is a market leader with good prospects for the year ahead. The price dropped in early March after initial earnings reports were disappointing. These were related to catastrophic losses that seem unlikely to be repeated while revenues should grow. The price has recovered somewhat and is now in a holding pattern but we believe it is undervalued. HIG closed at 69.52 on May 12 and should climb toward its 52 week high of 79.44.
May 1, 2023
Stock Wealth Safely selects the automotive company GM.
GM (General Motors) is the largest automobile manufacturer in North America and sells cars and trucks in 120 countries. It has made enormous progress in reducing its costs to reduce its break even point and has been able to maintain prices and improve margins. GM should be able to continue to produce profits even at the bottom of the economic cyle. New businesses including finance, insurance, selling data and subscriptions will provide additional revenue sources. GM is investing heavily in battery electric vehicles and will be introducing many in the next few years.
GM has exceeded earnings expectations in 3 of the last 4 quarters with a 35% positive surprise in the March quarter. Estimates have jumped over the past 7 days. The PE is 5 compared with an average annual of 7. Dividend is 1.1%
The 20 day simple moving average = 34.36, 50 day = 36.07, 100 day = 36.80 and 200 day = 37.11.
PSAR has been sell since April 10, the 4 day SMA is 32.87, 9 day SMA 33.37, ADX 21.2, ADX(+) 24.1 and ADX(-) 31.0. M12 is - 0.77 and M9 - 0.28. OBV is variable but overall is flat.
The GM stock price has been fluctuating over the past 6 months but now may be bouncing up from resistance point on April 27. Its fundamental outlook is strong. Although, technical factors have not yet turned positive, this may be a good time to get in at a price bottom in a company that should rebound. GM closed at 33.48 on May 1 and should climb back towards its 53 week high of 43.63.
May 8, 2023
Stock Wealth Safely selects the agricultural company AGCO.
AGCO (AGCO) is a pure agricultural equipment manufacturer focusing on Europe and North and South America. The market is good for farmers with strong prices and demand, especially in Asia. Increased farmer’s profits and pent up demand should result in them purchasing new equipment to modernize their machines. AGCO is investing in smart farming and precision agriculture which should increase market share and operating margins.
Earnings have been mixed over the past four quarters with an 11% miss in the January quarter corresponding to a drop in stock price. However, estimates have jumped in the last week. PE is 9 compared to an average of 13. Dividend is 0.8%
The 20 day simple moving average = 125.30, 50 day = 128.62, 100 day = 132.46 and 200 day = 123.03.
PSAR has been buy since May 2, the 4 day SMA is 125.92, 9 day SMA 125.08, ADX 14.8, ADX(+) 27.1 and ADX(-) 25.3. M12 is - 0.58 and M9 - 0.92. OBV is variable.
The earnings miss in the January quarter dropped the stock price of AGCO to an oversold and undervalued position. AGCO is a leading company in an industry that should do well this year. The stock price is starting to recover and estimates are rising. This should be a good entry point. AGCO closed at 126.96 on May 8 and should climb towards its 52 week hi of 145.53.
April 27, 2023
Stock Wealth Safely selects the REIT company VICI.
VICI (VICI Properties) is a REIT that spun out of Caesar’s bankruptcy in 2022 and has focused on gaming and entertainment properties in Canada and the United States. It has performed well in its short history and offers a strong dividend of 4.7%. The PE is 17.2.
The 20 day simple moving average = 32.72, 50 day = 32.67, 100 day = 33.07 and 200 day = 32.80.
PSAR has been buy since April 27, the 4 day SMA is 33.09, 9 day SMA 33.04, ADX 10.3, ADX(+) 20.8 and ADX(-) 17.5. M12 is 0.61 and M9 0.64. OBV is flat.
VICI closed at 33.29 on April 27 and the price should increase towards the consensus target of 51.21.
April 28, 2023
Stock Wealth Safely selects the cruise line RCL.
RCL (Royal Caribbean Group) is one of largest cruise companies that focuses on the upper end of the market. After struggling last year, it is now expecting to achieve 100% loads at higher prices to persist over the next year. It has been able to control costs and this should result in increased margins and profits.
RCL lost money last year as the pandemic still affected travel but is expected to return to profitability by the second quarter this year. It does not pay a dividend.
The 20 day simple moving average = 62.73, 50 day = 65.57, 100 day = 62.92 and 200 day = 54.51.
PSAR has been buy since April 28, the 4 day SMA is 61.76, 9 day SMA 62.62, ADX 12.8, ADX(+) 28.0 and ADX(-) 19.8. M12 is - 0.08 and M9 - 0.02. OBV is flat.
RCL should rebound strongly this year as travel demand returns. Technical factors are starting to turn around and this is a good entry point. RCL closed at 65.33 on April 28 and should increase towards the 78.46 consensus target.
April 21, 2023
Stock Wealth Safely selects the energy company KMI.
KMI (Kinder Morgan) is a large North American energy transportation company. It focuses on natural gas (especially LNG) and has capacity to transport 40% of the entire average US gas consumption. KMI also transports oil and other refined products and terminals that handle a variety of commodities. KMI is well placed to benefit from the anticipated increased demand for carbon capture and storage via its experience with carbon dioxide pipelines.
After missing earnings expectations by 18% in September 2022, KMI met expectations in the December quarter and exceeded in March. Estimates have been stable for the last 60 days. PE is 15 compared with an average annual of 25. Dividend is very high at 6.4%.
The 20 day simple moving average = 17.51, 50 day = 17.39, 100 day = 17.86 and 200 day = 17.85.
PSAR has been sell since April 18, the 4 day SMA is 17.51, 9 day SMA 17.68, ADX 15.8, ADX(+) 17.0 and ADX(-) 26.7. M12 is 0.40 and M9 0.44. OBV is falling.
KMI is a strong company with good prospects that is undervalued. The price dropped from the beginning of the year but has started to recover after the release of the last quarter results and some technical signals now indicate this is a good time to buy. The high dividend should protect this stock against major downside risk.
April 24, 2023
Stock Wealth Safely selects the technology company NXPI.
NXPI (NXP Semiconductors) focuses on supplying analog and mixed signal chips to a variety of users, with about 50% of its sales to the automotive market . Its competitive advantage in part comes from high switching costs and growth should come from the increasing electronic functions required in cars. NXPI is also strong in the internet of things, 5G communications and payment technologies.
NXPI has met or exceeded earnings expectations in the last four quarters and estimates have been stable for the past 60 days. PE is 14.3 compared with an average annual of 18. Dividend is average at 2.4%
The 20 day simple moving average = 174.35, 50 day = 178.32, 100 day = 174.29 and 200 day = 168.82.
PSAR has been sell since April 6, the 4 day SMA is 170.53, 9 day SMA 171.88, ADX 14.3, ADX(+) 17.7 and ADX(-) 30.9. M12 is – 3.63 and M9 – 2.21. OBV is flat.
NXPI is a profitable company with competitive advantages in a growing market. The stock price has been dropping since early February and the company s now significantly undervalued. This appears to be a good entry point. NXP closed at 169.89 on April 24 and should increase towards it 196 consensus target.
April 17, 2023
Stock Wealth Safely selects the industrial company ROCK.
ROCK (Gibralter Industries) produces and distributes metal products serving residential and commercial customers in North America. There should be increased demand for its products, especially in the residential and infrastructure markets, offsetting weakness in renewables and agriculture demand. ROCK has been successful in growing through acquisitions that fit well into its business model.
ROCK has exceeded earnings expectations for the last four quarters but by a lower than expected margin last quarter. Estimates have been stable for the past 30 days. PE is 14 compared with an average of 17. There is no dividend.
The 20 day simple moving average = 47.41, 50 day = 50.80, 100 day = 49.90 and 200 day = 47.18.
PSAR has been buy since April 14, the 4 day SMA is 48.03, 9 day SMA 47.36, ADX 25.6, ADX(+) 21.8 and ADX(-) 28.1. M12 is 0.06 and M9 – 0.82. OBV is rising steeply.
ROCK’s share price dropped sharply after the release of its fourth quarter results which disappointed the market. However, its prospects have improved and its price is improving, although the company is still undervalued. The technical indicators are turning positive and the accompanying increasing OBV is a very good sign. ROCK closed at 48.60 on April 17 and the price should continue to increase toward the consensus target of 66.
April 12, 2023
Stock Wealth Safely selects the trucking company ODFL.
ODFL (Old Dominion Freight Line) is a large less-than-truckload carrier in North America that also offers logistics to provide an integrated approach to shipping. It has kept its pricing firm to protect its revenues and margins while continuing to expand its network capacity. E-commerce trends demanding retailers use local shippers to provide rapid delivery have benefitted ODFL more than its competitors. This advantage should continue to grow.
ODFL has exceeded earnings expectations in the last four quarters and estimates have been stable. Dividend is 0.4%. PE is 27 compared with an average of 18.
The 20 day simple moving average = 333.09, 50 day = 343.68, 100 day = 321.88 and 200 day = 298.58.
PSAR has been buy since April 11, the 4 day SMA is 335.15, 9 day SMA 333.66, ADX 11, ADX(+) 26.5 and ADX(-) 18.8. M12 is -1.37 and M9 -4.36. OBV is flat.
ODFL is an established company that is expanding its market share which should result in growing earnings. The price dropped significantly since a February 2 high and now appears oversold, with technical factors starting to improve. ODFL closed at 340.06 on April 12 and the price should increase toward the 52 wk high of 381.81.
April 13, 2023
Stock Wealth Safely selects the technology company CTSH.
CTSH (Cognizant Technology) is an IT services provider helping companies in a variety of industries transition to a digital environment. Companies will likely have to increase their spending as the technology environment becomes more complex. CTSH provides both technical and consulting support which provide additional opportunities for growth.
CTSH has essentially met earnings expectations for the last four quarters and estimates have been stable. The dividend is reasonable at 1.9%. PE is 13.7 compared with an average of 17.
The 20 day simple moving average = 59.75, 50 day = 62.23, 100 day = 61.23 and 200 day = 62.26.
PSAR has been sell since April 13, the 4 day SMA is 60.66, 9 day SMA 60.76, ADX 18.8, ADX(+) 16.9 and ADX(-) 29.9. M12 is 1.05 and M9 0.14. OBV is essentially flat.
The technology sector has done well over the past 3 months while CTSH has lagged behind. It is now undervalued and demand for its products show grow this year. CTSH closed at 60.04 on April 13 and this appears to be a good entry point. Its stock price should increase toward the 52 week high of 88.79.
April 11, 2023
Stock Wealth Safely selects the communications company CMCSA.
CMCSA (Comcast) is a worldwide media and telecommunications company with a variety of revenue streams. Cable is the biggest segment offering internet and pay TV services. This should provide slow but steady growth and strong cash flow as it gains market share from its phone company competitors with its broadband quality. NBC Universal has broadcast/cable TV/streaming services, Tv and film studios and popular Universal theme parks. Its unique content assets should allow expansion of its profitable amusement parks.
CMCSA has exceeded earnings expectations in the last four quarters and estimates are stable. PE is 10.3 compared with an average annual of 16. Dividend is attractive at 3%.
The 20 day simple moving average = 36.89, 50 day = 37.59, 100 day = 36.95 and 200 day = 36.23.
PSAR has been buy since March 16, the 4 day SMA is 38.06, 9 day SMA 37.78, ADX 16.8, ADX(+) 28.4 and ADX(-) 17,2. M12 is .73 and M9 .29. OBV is rising.
CMCSA is a strong company with good prospects. It is undervalued and technical factors are positive. It closed April 11 at 38.38 and should climb towards it consensus target of 43.84.
April 5, 2023
Stock Wealth Safely selects the beverage company KDP.
KDP (Keurig Dr Pepper) produces a large range of soft drinks, juices, coffee and other products. It diverse portfolio offers many choices to an expanding customer base. It as strong retail relationships and is the leading single serve brewer in North America. It is looking to add more third part beverages to its well established distribution platform.
KDP met earnings expectations for three of the last four quarters before missing the December quarter by one cent. Estimates have been stable for the past 30 days. Dividend is 2.3%. PE is 21 compared with an average annual of 30.
The 20 day simple moving average = 34.94, 50 day = 35.07, 100 day = 35.90 and 200 day = 36.75.
PSAR has been buy since March 27, the 4 day SMA is 35.36, 9 day SMA 35.22, ADX 12.5, ADX(+) 25.9 and ADX(-) 16.6. M12 is 0.21 and M9 .04. OBV is flat.
The stock price of KDP has been dropping for about 6 months but seems to have reached a bottom and is starting to rise along with some technical indicators. It is an established company that is likely to grow this year. KDP closed April 5 at 35.40 and should continue to increase towards its 39.61 consensus target.