Too often investors fall in love with a stock that looks cheap only to find out that the company is a “Value Trap”. Meaning there was good reason for the low price...its a poorly run company whose stock price will only head lower and lower.

One solution for value investors is to seek stocks that also have improving earnings outlooks. This increases the odds of success and makes shares more timely.

The 25 stocks below all have improving earnings outlooks. Plus each has at least 15% upside from current levels to reach the average target price set by Wall Street analysts. And each has a POWR Rating of A (Strong Buy) or B (Buy) which increases the timeliness of shares.

Value + Growth + Momentum = 25 stocks worth exploring now!

Here are links to 3 other popular destinations to make the best use of the POWR Ratings:

Full List of “A ”Rated Strong Buy Stocks

Upgrades/Downgrades

POWR Industry Rank

This is an impressive list of 50 stocks. Not only do they sport attractive dividend yields between 8.78% to 15.17%…but they are also enjoying a coveted POWR Rating of A (Strong Buy).

The POWR Rating is focused on stocks experiencing the best momentum. That timely price action is typically caused by an improvement in the fundamental outlook for the company. So when you add it all up we are talking about a list of 50 stocks blending strong fundamental and technical attributes while also providing ample income.

In total more than 100 stocks appear on the full list of POWR Rating “A” with yield over 5.96%. Check out the full list here.

Also here are links to 2 other popular destinations to make the best use of the POWR Ratings:

Full List of “A ”Rated Strong Buy Stocks

Upgrades/Downgrades

Not every stock is going to go up even in a strong environment as we enjoyed so far in 2019. However, as the rapid pace of gains slows down we all need to be more mindful of pruning stocks likely to underperform from our portfolios…like the one’s newly downgraded to a POWR rating of sell.

9 new stocks are now “F” Strong Sell rated

62 new stocks have faltered to a “D” Sell rating

The most notable name on the list are NVDA, MAT and SPOT. However, you probably should check the full list below to make sure you don’t have any of these stocks in your portfolio.

The POWR Ratings is a momentum based stock ranking system. In general, stocks don’t suffer this poor of price action unless the fundamental outlook has also become very weak.

Typically when both the fundamentals and price action head south…the stock continues to underperform into the future. The best strategy is to sell these shares and find better opportunities elsewhere. The place to look for greener pastures is our full list of ”A” rated Strong Buy stocks found here: https://stocknews.com/best-stocks/

As the son of a Certified Financial Planner, I got an early start on investing. Even as young as 12 years old I would go to my father’s office to help him with clerical work to make a few extra bucks…but along the way I couldn’t help being curious about all those big books; Value Line, Standard and Poor’s tear sheets and the in-depth research reports from his firm, A.G. Edwards.

Sure you could say it was in the blood as I got hooked right away. In fact, my very first investment was a copper mining stock, Asarco, that went up 30% in 3 months.

That was pure luck. But it set me on course to keep investing and keep learning so that my results weren’t a matter of luck. Rather it was about understanding how to stack the odds in my favor to enjoy greater investment success.

On Wednesday May 1^st I will be giving a full presentation on this topic with 9 lessons in all from my 40 year investing career. Then I will share how those lessons apply to today’s market to navigate a course to future outperformance.

(Not registered? Then do so now as space is limited: Free Webinar Registration)

Today, I want to give a preview of these insights by focusing on 3 of the lessons learned.

Lesson #1 = The Benefit of Value Investing

There are many different investment styles. Everything from day trading to buy and hold investing. Or a focus on fundamental vs. technical attributes. And then you have the ideas of value vs. growth vs. income vs. momentum approaches.

I have explored them all. And the one that makes the most sense to me is a focus on value. Meaning to find stocks that are trading at an ample discount to their fair value allowing an investor to enjoy outperformance as they rebound to their proper price. This is the approach favored by investing legends Benjamin Graham, and his famed mentee Warren Buffett.

However, value investing doesn’t mean the same thing to everyone. My twist is to avoid stocks with weak fundamentals like declining earnings. Too often they go from bad to worse. Instead you want a thriving company that has sold off allowing you to pick it up from the discount bin for 20-40% below fair market value. A portfolio of stocks with that spread will enjoy a marked advantage over other portfolios.

Lesson #7 = Growth and Value Are Not Opposites

Too many investors imagine that there is a singular spectrum for stocks with value on one end and growth on the other. That is rubbish!

They are separate concepts that blend incredibly well together. In fact, my two best investments of all time come from this camp.

• Amazon @ $8.65 back in 2001 after the tech bubble burst
• Priceline @ $14.62 also in 2001

And yes, I have owned those shares for a long, long time enjoying robust returns. There is simply no way that these stocks, that were originally in the value camp, could keep outpacing others unless they were also incredible growth companies.

Long story short, why settle for boring value stocks when you can enjoy exciting growth companies trading at discount prices?

Lesson #9 = Algos & HFTs Have Changed EVERYTHING!

We all know about the rise of computer based trading. Algos and High Frequency Traders dominate the investment landscape. Some firms have gained such an unfair advantage that they can go an entire year without having a single losing session.

Here is the sad truth: WE CAN’T BEAT THEM!

At least not at their own game. They simply have more money, experience, PhD mathematicians and technological firepower than we ever will. Thus, we need to carve out a different path. And that is to play the role of the counter puncher.

Like in boxing you aggressively respond to overreactions by your opponent. As it applies here, when the best growth stocks get beaten down by the computer traders…then you buy the stock on the cheap to enjoy outsized gains as they bounce back.

What are the Other 6 Lessons?

The answers will be on full display at the 5/1 free webinar where I go deeper on the topics above plus insights on these vital topics:

• How to use economic data to understand market direction
• Value investing pitfalls
• The power of EER
• Importance of timeliness
• When to sell
• And how to use all these lessons to beat the market now

Please join me for this webinar 40 years in the making. Spaces are limited, so register now by following the link below.

Free Webinar Registration

Steve Reitmeister

…but my friends call me Reity (pronounced “Righty”)
CEO, Stock News Network

The POWR Industry Rank  covers 123 different industries and over 4,000 individual stocks. With the surge in the market this year you would expect a more growth oriented group to be leading this momentum based rating system. Amazingly the #1 industry is the steady as you go Insurance- Property & Casualty Group.

Of the 55 stocks in this group there are 25 sporting a POWR Rating of “A” Strong Buy.  Heading that list are well known companies like Berkshire Hathaway (BRK.A), Chubb (CB), Progressive (PGR), Allstate (ALL) and more. See the rest below.

Not all the stocks in this group are looking so bold. There are actually 11 parked in Neutral and 9 downcast with Sell ratings. Make sure you don’t own any of those stocks by checking the full list here: Insurance- Property & Casualty Group.

Also here are links to 2 other popular destinations to make the best use of the POWR Ratings:

Full List of “A ”Rated Strong Buy Stocks

Upgrades/Downgrades

This is an impressive list of 50 stocks. Not only do they sport attractive dividend yields between 8.79% to 15.08%…but they are also enjoying a coveted POWR Rating of A (Strong Buy).

The POWR Rating is focused on stocks experiencing the best momentum. That timely price action is typically caused by an improvement in the fundamental outlook for the company. So when you add it all up we are talking about a list of 50 stocks blending strong fundamental and technical attributes while also providing ample income.

In total more than 100 stocks appear on the full list of POWR Rating “A” with yield over 4%. Check out the full list here.

Also here are links to 2 other popular destinations to make the best use of the POWR Ratings:

Full List of “A ”Rated Strong Buy Stocks

Upgrades/Downgrades

Restaurants are thriving these days. No shock when you consider that the US un-employment rate is at a 50 year low, inflation is nearly non-existent and we are still enjoying the benefits of the 2018 tax breaks.

This leads to an expanding consumer wallet and waste band as they spend more money on small luxuries like eating out more often. McDonald’s and Starbucks head up this list of 15 restaurant stocks enjoying a POWR Rating of Buy. See the full list of these stocks below.

Did you not see your favorite restaurant stock on this list? Well 33 of them did not emerge as Buy rated. In fact, 18 of them are actually Sell rated. Check out the full list of restaurant stocks here.

If you are not familiar with the POWR Rating system, then now is a good time to learn more. About POWR Ratings.

Also here are links to 2 other popular destinations to make the best use of the POWR Ratings:

Full List of “A ”Rated Strong Buy Stocks

Upgrades/Downgrades

Nobody likes to be given a grade of F in school…or in stock ratings. Yet, these stocks have shown such poor price action recently that they have fallen to this lowly state of a POWR Rating of “F” Strong Sell.

Aphria is the most well known of the companies found on this list. This once high flying medical marijuana stock has tumbled of late. BelGene, Hecla and Mallinckrodt and Malink are other notable additions. Check out the full list of upgrades below.

All of these stocks were recently downgraded to a POWR Rating of “F” Strong Sell. The POWR Ratings is a momentum based stock ranking system. In general, stocks don’t suffer this poor of price action unless the fundamental outlook has also become very weak.

Typically when both the fundamentals and price action head south…the stock continues to underperform into the future. The best strategy is to sell these shares and find better opportunities elsewhere. The place to look for greener pastures is our full list of ”A” rated Strong Buy stocks found here: https://stocknews.com/best-stocks/

We have 50 new stocks upgraded to a POWR Rating of “A” Strong Buy.

IBM is the largest stock represented on the list. Plus we have H&R Block looking ripe this tax season. Other notable tickers include BX, JCI, SHW and ZEN. Check out the full list of upgrades below.

All of these stocks were recently upgraded to a POWR Rating of “A” Strong buy. You can learn more about the POWR Rating system at https://stocknews.com/powr-ratings/.

Or check out the full list of stocks Strong Buy stocks here: https://stocknews.com/best-stocks/

Back in early March a grim view of the economy started to emerge. That’s when the coveted GDP Now model estimated US growth in the first quarter was barely above 0%. That is precisely when this ferocious post-correction bounce came to a screeching halt.

Gladly it didn’t take long for investors to find that things were better than feared. That’s because the next slate of economic reports showed a healthier perspective on the rate of growth. That picked up major speed this past week with a much stronger than expected Retail Sales report helping lift GDP Now to +2.8%.

I’ll be honest. I don’t believe that final GDP is going to end up that strong. Please realize that the Blue Chip Consensus (a panel of economists) has a projected growth rate of +1.5%. Anywhere between that and GDP Now would be considered better than previously expected and a feather in the cap for the stock market.

How About Earnings?

This brings us around to another important investment factor that was previously looking sour. I am referring to Q1 earnings estimates that pointed to a negative growth rate, which is a far drop from the 20% pace of last year.

We talked about this backdrop in last’s weeks commentary: K.I.S.S. for Stock Investing

The key section of that article is shared here:

“Earnings for S&P 500 companies are expected to fall 4% year over year in Q1. That is a pretty grim outlook, and yet stocks have been rising boldly in the face of this news.

Why?

It’s not really as bad as it sounds. You have to remember that Q1-2018 is when the new corporate tax cuts kicked in and earnings exploded 24.9% higher. So really stocks are suffering from tough comparisons.”

Early Earnings Results are Promising

At this stage only 15% of the S&P 500 companies have reported. The rate of earnings beats is 79.2%, which is above average while the overall earnings growth stands at +0.2%. (Courtesy of my long time friend, Sheraz Mian at Zacks Investment Research)

Yes, that growth is not impressive on an absolute basis. However, it is markedly better than the -4% decline that was expected. This “better than feared” outcome explains why the market has reacted favorably to earnings thus far.

The next 2 weeks is really the heart of earnings season. If the current trends remain in place I expect stocks to finally take out the old highs of 2941 on the way to a test of 3000.

At that stage we should all be prepared for an extended consolidation period…and maybe a 3-5% pullback. That would seem to be a very rationale reaction given how far stocks have come from the Christmas Eve low of 2346. Meaning that after running a marathon you have to rest up before the next race.

So keep a bullish posture my friends. Just make sure to load up investments likely to outperform. These articles and resources from StockNews.com and ETFDailyNews.com will you on the right track:

Best Performing Small Cap Stocks

Top Stock Industry Categories Performance

Best ETFs List using SMART Grades

ETF ratings Upgrades/Downgrades

Steve Reitmeister

…but my friends call me Reity (pronounced “Righty”)
CEO, Stock News Network