The market may be bouncing... but investing "death traps" are still out there.
You Still Need to Avoid Some Big-Name Stocks
By Vic Lederman, editorial director, Chaikin Analytics
The market may be bouncing... but investing "death traps" are still out there.
You see, the S&P 500 Index has soared more than 18% since its bottom on April 8. And 54 stocks in the index are either making new highs or are within 5% of a new high.
But there's a dubious list of names that investors need to avoid, too...
I'm talking about the kinds of stocks that can spell financial ruin for investors. And it might shock you to know that many of them are household names.
In fact, this list is also made up entirely of S&P 500 stocks. But these aren't the names you want in your portfolio right now.
In fact, all but one of them have dramatically underperformed the broad market so far this year. And they've all underperformed the S&P 500 over the past month.
It's no surprise that the Power Gauge is warning investors to stay away from these names.
So today, let's look at an example from this list. And I'll explain how to avoid names like this going forward...
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Folks, I'm specifically looking at S&P 500 names that are within 5% of their 52-week low.
There are only 13 of them. And each one shows signs of weakness in the Power Gauge. In fact, none of the names on the list earn a "bullish" or better rating in our system right now.
Specifically, four of the names are in "neutral" territory. And the other nine are firmly "bearish" or worse.
Take Conagra Brands (CAG), for example. The company has a portfolio of well-known food brands like Marie Callender's frozen chicken pot pie, Hunt's tomato sauce, Reddi-wip whipped cream, and Orville Redenbacher's popcorn.
Conagra is a staple provider in just about every major grocery store. Despite that, its stock is plummeting.
CAG shares have fallen about 18% this year. And they're down roughly 27% over the past 12 months.
Today, Conagra earns a "very bearish" rating from the Power Gauge...
The company's revenue has barely grown 9% since 2020. On the other hand, according to the U.S. Bureau of Labor Statistics, inflation has soared around 24% since the beginning of that year.
Whatever it is that Conagra is doing... it's not working.
Will the company turn around eventually? I would certainly expect so...
But this isn't the kind of name you want in your portfolio right now. It's dragging down your returns. And it has been for the past year.
Remember, the other 12 names I found also look grim in the Power Gauge.
But avoiding names like this doesn't have to be hard. The Power Gauge flashed "bearish" warnings on Conagra all the way back at the end of June 2023.
Remember, as investors, we're not only looking for the best opportunities... It's also our job to avoid the worst outcomes.
No matter how you do it, you need a system for steering clear of wealth destroyers.
Good investing,
Vic Lederman
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.64%
11
10
9
S&P 500
+0.66%
123
247
134
Nasdaq
+1.52%
33
50
17
Small Caps
+0.37%
487
929
471
Bonds
-0.41%
Information Technology
+2.16%
31
31
7
— According to the Chaikin Power Bar, Small Cap stocks have become somewhat more Bullish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Consumer Discretionary
+8.97%
Information Technology
+8.87%
Energy
+6.52%
Industrials
+5.85%
Financial
+3.91%
Materials
+2.87%
Communication
+2.6%
Utilities
-1.08%
Real Estate
-1.2%
Consumer Staples
-1.73%
Health Care
-1.83%
* * * *
Industry Focus
Insurance Services
20
28
5
Over the past 6 months, the Insurance subsector (KIE) has outperformed the S&P 500 by +1.09%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #8 of 21 subsectors and has moved down 7 slots over the past week.
Top Stocks
HIG
The Hartford Insuran
KMPR
Kemper Corporation
AXS
AXIS Capital Holding
* * * *
Top Movers
Gainers
FSLR
+22.66%
SMCI
+16.02%
PLTR
+8.14%
VST
+6.1%
PSX
+5.81%
Losers
UNH
-17.79%
ELV
-9.91%
HUM
-9.48%
CVS
-6.65%
CNC
-6.2%
* * * *
Earnings Report
Earnings Surprises
STOK Stoke Therapeutics, Inc.
Q1
$1.90
Beat by $1.99
IGT International Game Technology PLC
Q1
$0.09
Missed by $-0.19
LOAR Loar Holdings Inc.
Q1
$0.20
Beat by $0.03
* * * *
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Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation.
This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.
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