Quant Ratings Updated on 119 Stocks | Editor’s Note: On Monday, February 19, the stock market will be closed for the Presidents Day holiday. The InvestorPlace offices and customer service department will also be closed on Monday. I hope you enjoy the long weekend! | | | Dear Reader, Last Friday marked an historic day for the S&P 500: It closed above 5,000 for the first time ever.
While there’s nothing special about the landmark number, it is important for psychological reasons. That’s because investors were in a pretty good mood.
Unfortunately, the same can’t be said for investors today. The major indices plunged more than 1% – the Dow posted its biggest drop this year so far – following this morning’s release of the disappointing Consumer Price Index (CPI) report for January.
The good news is that inflation is falling, just not as fast as Wall Street hoped. Headline CPI rose 0.3% in January and was up 3.1% in the past 12 months. That was higher than economists’ expectations for headline CPI to rise 0.2% month-over-month and for a 2.9% annual pace. However, it’s still down from December’s 3.4% annual pace. (I’ll share my in-depth review of the CPI report in this Friday’s Market 360, so keep an eye out for that!)
Now, on Thursday, we’ll get a fresh look at retail sales, and hopefully that will perk Wall Street up a bit. Economists are expecting retail sales to decline 0.2% in January. If retail sales fell, that’s notable because it could be a sign of a slowing economy. For context, retail sales came in much higher than expected in December, increasing 0.6%.
And finally, on Friday, we’ll get a look at data for the Producer Price Index (PPI). The PPI is important because it measures the price of goods at the wholesale level. It’s considered a good leading indicator for inflation.
Economists are expecting prices to rise 0.7% year-over-year. This report bears watching because we actually saw prices decline by 0.1% on a monthly basis in December. So, it will be interesting to see if we see more signs of deflation at the wholesale level.
It’s important to note that each one of these reports will factor into the Federal Reserve’s considerations for cutting key interest rates. And because of this, it could also be a volatile week in the markets.
So, I recommend you prepare for what could be a volatile week by positioning yourself in stocks with the best fundamentals.
So, with that in mind, in today’s Market 360, I’ll share 10 stocks that are likely to struggle in the current market environment, due to their weak fundamentals. And then, I’ll share where you can find fundamentally superior stocks that truly represent the crème de la crème of the market. This Week’s Ratings Changes After taking a closer look at the latest institutional buying pressure and each company’s financial health, I decided to revise my Portfolio Grader for 119 big blue chips. Of these 119 stocks, 40 were downgraded from a B-rating (Buy) to a C-rating (Hold), and 43 stocks 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 adjust accordingly. | AEP | American Electric Power Company, Inc.. | D | | AFG | American Financial Group, Inc. | D | | AVB | AvalonBay Communities, Inc. | D | | AVTR | Avantor, Inc. | D | | AZN | Astrazeneca PLC Sponsored ADR | D | | BA | Boeing Company | D | | BKR | Baker Hughes Company Class A | D | | BRKR | Bruker Corporation | D | | BXP | Boston Properties, Inc. | D | | CINF | Cincinnati Financial Corporation | D | Finding the Best of the Best With thousands and thousands of stocks to invest in, it can be hard to find fundamentally superior stocks set to prosper during a volatile market.
That’s where my Accelerated Profits service can help.
My current Buy List is characterized by 36.8% average forecasted sales growth and 204.6% average forecasted earnings growth. My Accelerated Profits stocks have also benefited from positive analyst revisions.
I fully expect the market to continue rewarding fundamentally superior stocks, just as it does during almost every earnings season. And that’s why we remain focused on these stocks in my Accelerated Profits service.
I remain convinced that we are invested in the crème de la crème over at Accelerated Profits, so our stocks should continue to rally strongly. But of course, I didn’t just pick these names out of a hat…
The system I use in Accelerated Profits helps me pinpoint companies that are primed to post strong earnings results – sending their stocks soaring as a result.
To learn how I use a series of AI algorithms to sift through massive amounts of data to find the best stocks, click here.
(Already an Accelerated Profits member? Click here to log in to the members-only website now.) Sincerely, |
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