InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

These contrarian stocks thrive in good markets and bad

These contrarian stocks thrive in good markets and badIn my new profit guide, I reveal a group of super-safe stocks that don’t behave like regular stocks during market downturns. In fact, these rock-solid beauties historically SKYROCKET and THRIVE during the worst of times. During the last three market busts, stocks in this contrarian sector soared 42%… 135%… and even 200%. Do yourself a favor. Check out my free profit guide today.

 

Is The Post-Election Honeymoon Over?

By Linda McDonough on February 21, 2017

February is among the unkindest winter months in the Northeast. When a nor’easter hits, the icy wind can feel like a slap across the face.

And yet in past years, despite the daunting cold during the Presidents’ Day holiday, I’ve typically seen quite a few American flags hanging over doorsteps. I’m also accustomed to seeing rows of small fluttering flags planted along the snow-banked roads of local towns.

Not so much this year, which makes me wonder if public sentiment and with it investor optimism are turning sour.

Perhaps it’s coincidental, but when measured by the robust “Not My Presidents’ Day” rallies this past weekend across the country, it seems fair to say President Trump’s brief honeymoon is over.

The forced resignation of National Security Advisor Michael Flynn, conflict with the courts over a travel ban, and a dearth of ideas to replace the Affordable Care Act are forcing investors to reconsider how quickly even the aggressive new president can implement change.

Although the S&P 500 and Dow Jones Industrial Average have continually reached new highs, faint cracks are starting to appear in investor exuberance. Among the universe of companies that I follow, I’ve heard from a handful about order delays late in the fourth quarter due to uncertainty over Trump’s fiscal policies.

Meanwhile, other industry groups that had been under pressure because of expectations that the Trump administration would impose heavy-handed regulation are now rising as this fear dissipates.

In both cases, stocks had been pushed too far based on little more than fear or hope. But as the post-election dust settles, the return to a rational center offers investors many great buying opportunities.

I’ve got a few stocks in the Profit Catalyst Portfolio that are on my “hope to buy soon” list, correlated to such industries as construction and drug manufacturing. While most investors dislike down days for the stock market, I’m happy to see some red on the names that I’ve been eager to buy at lower prices.

Many analysts say the market as a whole is overvalued and I agree that many stocks have run too far on froth. I’m waiting patiently for some to dip down into what I consider appealing buy zones and will be ready to pounce when they do.

The flip side is that certain sectors that had been decimated by unwarranted worries over new Trump policies are starting to pop. Notably, many biotech stocks took it on the chin last year because of Trump’s “populist” promises during the campaign to crack down on supposed drug price gouging.

However, it’s increasingly apparent that the Trump administration will adopt a hands-off policy toward many industries, including biopharmaceuticals. Two of my newest positions for Profit Catalyst Alert are in the drug industry and they’ve jumped almost 10% in just three weeks.

Conversely, many stocks whose run had been inflated by the rebuilding of America theme are pressing the pause button. Construction heavyweight MDU Resources Group (NYSE: MDU) noted a drop in backlogged orders for the most recent period and paving supplier Vulcan Materials (NYSE: VMC) pointed out a drop in demand in late December.

To be fair, supplying large construction projects has always been a lumpy business. Those that rely on government funding must deal with extra uncertainty, in the forms of red tape and budgetary vagaries. In addition, outdoor construction projects can be upended by severe weather, an unpredictable but significant risk.

That said, investors wading into the pharmaceutical group must be careful, too. Drug firms relying only on price increases versus higher usage of their drugs remain vulnerable. Big companies with blockbuster drugs that must contend with encroachment from generics also face pressure.

As always, I research every name carefully before inclusion in the Profit Catalyst Portfolio, to selectively pinpoint stocks with inherent strengths rather than blindly buying into a particular sector. I prefer to focus on the long-term fundamentals, rather than the fleeting passions of a honeymoon.

 


You might also enjoy…

 

Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.