Today is Thursday, and you know what that means.
We’ll be examining stocks that recently crossed into “Bullish” territory by scoring a 60 or higher in my Green Zone Power Ratings system.
This week’s group of New Bulls has a distinctly “old school” feel.
With only a few exceptions, these companies have been in business since well before the 1990s Internet Revolution.
That’s not a bad thing.
The broader market has been experiencing a healthy sector rotation as investors lock in profits from some of the market’s biggest technology winners and redeploy that capital elsewhere.
That doesn’t mean we should avoid tech altogether.
My system continues to uncover opportunities across the new economy, and my Infinite Momentum Tech Titans portfolio has absolutely knocked the cover off the ball over the past two years by focusing on semiconductor leaders and the AI infrastructure buildout.
And one of the strengths of Infinite Momentum is that it doesn’t rely on a single corner of the market.
The All Market portfolio has enjoyed some fantastic wins of its own… and historically has performed well when the Tech Titans are struggling.
At the end of May, I added five new positions to the All Market portfolio, and all five remain open today.
Four are currently sitting on gains, while two – HF Sinclair Corporation (DINO) and International Seaways (INSW) – are each up more than 25% at a time when the broader market has mostly traded sideways.
That’s exactly how the system is designed to work – following momentum wherever it emerges instead of chasing yesterday’s winners.
If you’d like to see how the strategy identifies these shifts before they become obvious, I’ll be hosting a LIVE presentation today on my Infinite Momentum system, where I’ll walk through the process and share where I’m finding opportunities right now. You can reserve your spot here.
Now, let’s get back to this week’s New Bulls for the week, beginning with companies in the S&P 500 Index.
S&P 500 New Bulls
I ran my usual screen for S&P 500 companies that popped up as “Bullish” this week, and this is what I came up with:
Delta Air Lines (DAL) has made regular appearances on this list over the past year.
At a time when Americans are struggling with stubbornly high inflation and tight budgets, Delta has avoided the financial strain weighing on many of its peers.
So, how did the company manage that?
It started with pivoting its business to focus on wealthier and higher-income customers. It was a transition two decades in the making, but this year marked a critical breakpoint.
Earlier this year, revenue from first class, business class and the airline’s co-branded credit cards surpassed revenue from its “main cabin” economy seats.
This doesn’t mean that Delta is recession proof, of course.
Should we see a real bear market or a deep recession, even Delta’s jetsetters might start to pull back. But for the time being, the airline couldn’t look better.
Apart from its “Bullish” overall rating, the stock rates exceptionally well on its momentum, value, quality and growth factors, with the growth factor in particular standing out with a “Strong Bullish” rating of 94.
Wall Street is well represented this week, as megabanks JPMorgan Chase (JPM) and Bank of America Corp (BAC) made the cut.
If high interest rates are making life difficult in the real economy, you’d never know it from looking at the banks’ performance.
JPM just posted the biggest-ever quarterly profit by a bank, and the company is closing in on a trillion-dollar market cap.
New Bulls Outside the S&P 500
Let’s cast the net a little wider and look at the newly “Bullish” stocks outside of the S&P 500. I ran a screen for the top 20 stocks with the largest score increases over the past month, and this is what popped up:
Barnes & Noble Education (BNED) made the cut this week for the first time in a long while. The company operates physical and virtual campus bookstores for hundreds of colleges, universities, and K-12 schools across the United States.
Apart from textbooks, the stores sell school-branded apparel and convenience items… and are often a good place to grab a coffee and study.
BNED shares have been rallying hard since February and rate as “Strong Bullish” on their size and value factors. This is consistent with a broader trend we’ve seen in recent months of small-cap stocks outperforming their megacap peers.
The iShares Russell 2000 ETF (IWM), a standard benchmark for small caps in general, has absolutely smoked the S&P 500 this year, up 21% compared with 11% for the S&P 500.
Is it a coincidence that college bookstores and beer brewers are showing up on the same “Bullish” list?
I’ll let you draw your own conclusions there. But I’d note that Anheuser-Busch InBev (BUD) made the cut this week.
Large megabrewers have really struggled in recent years, as the market is saturated and overall alcohol consumption has fallen due to increased health consciousness and competition in many states from legal marijuana products.
Unsurprisingly, BUD rates poorly as a growth stock, with a growth factor rating of just 31.
BUD rates as “Bullish” on its value factor and earned a “Strong Bullish” rating on its momentum and volatility factors.
This implies that investors are rotating into sectors of the market they see as more stable and less susceptible to AI disruption.
To good profits,
Adam O’Dell
Editor, What My System Says Today
