Quant Ratings Updated on 74 Stocks Dear Reader, Welcome to the fourth quarter!
There’s no denying that the third quarter was a tough one for Wall Street. The S&P 500 and NASDAQ slipped more than 3% and the Dow dipped more than 2%. Part of the broader market decline was due to the typical seasonal weakness in September, as well as several distractions like rising bond yields, the United Auto Workers (UAW) strike and fears of a government shutdown.
Luckily, we avoided a government shutdown, as Congress kicked the can down the road another 45 days to November 17. This was as I expected; Congress was simply playing a big game of chicken.
However, investors will probably remain a bit moody in the near term. The fact is that the debt ceiling debate remains a concern, and Treasury yields continue to trek higher. In fact, the 10-year Treasury cracked 4.7% this morning, and it is getting dangerously close to 5% across the entire yield curve.
That’s a big problem, and many are concerned that high Treasury yields could push the U.S. economy into a recession.
Now, as investors, the good news is October should be a strong month for the stock market. Yes, October got off to a rocky start, but I am confident this month will be a strong month for the market. The truth of the matter is October has been seasonally strong for the stock market – especially in the second half of the month – for the past three decades (with the exception of Black Monday in October 1987). The even better news is that the party should keep rolling into November, as November is an even stronger month for the stock market. Americans tend to be in a good mood as the holidays commence, and this cheery attitude tends to rub off on Wall Street and cheer up investors, too.
As always, the best way to prosper (and your best defense) in the current environment is a strong offense of fundamentally superior stocks. So, in today’s Market 360, I’ll reveal 10 stocks with weak fundamentals that you should stay away from. And then, I’ll share where to find the best fundamentally superior stocks . This Week’s Ratings Changes After taking a close look at the latest institutional buying pressure and each company’s financial health, I decided to revise my Portfolio Grader for 74 big blue chips. Of these 74 stocks, 15 were downgraded from a B-rating (Buy) to a C-rating (Hold), and 17 were downgraded from a C-rating to a D-rating (Sell).
I’ve listed the first 10 stocks to sell below, but you can find the full list – including the stocks’ Fundamental and Quantitative Grades – here.
Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly. | | | AZPN | Aspen Technology, Inc. | D | | BIIB | Biogen Inc. | D | | CF | CF Industries Holdings, Inc. | D | | COF | Capital One Financial Corp | D | | CRL | Charles River Laboratories International, Inc. | D | | DEO | Diageo plc Sponsored ADR | D | | EFX | Equifax Inc. | D | | ENB | Enbridge Inc. | D | | GOLD | Barrick Gold Corporation | D | | HPQ | HP Inc. | D | As an investor who focuses on fundamentals, my Growth Investor service is filled with fundamentally superior stocks… which is why my growth stocks outperformed the S&P 500 and Dow and my dividend stocks beat the Dow. In the first nine months of the year, the S&P 500 and Dow were up 11.7% and 1.1%, respectively. In comparison, my High-Growth Investments Buy List rallied 16%, while my Elite Dividend Payers Buy List climbed 4.4%.
I should also add that my Growth Investor subscribers had the opportunity to lock in several double-digit and triple-digit winners in the first nine months of the year.
Thanks to my stocks’ stunning fundamentals, I fully anticipate them to continue to exhibit relative strength in October and the final quarter of the year. The fact is that I’m very optimistic about the upcoming third-quarter earnings season, which will commence in mid-October.
Given my Growth Investor’s stocks superior fundamentals and positive analyst revisions – my Buy List stocks are characterized by 160.9% average earnings growth, and analysts have increased earnings estimates by an average 6.9% in the past three months – I expect them to post wave-after-wave of positive earnings surprises, which should continue to drive my Buy List stocks higher in the upcoming months.
So, if you’re not sure where to look, then join me at Growth Investor today and receive instant access to all my Buy List stocks… and more!
(Already a Growth Investor subscriber? Go here to log into the members-only website.) Sincerely, |
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