Editor’s Note: Adam O’Dell’s Infinite Momentum Alert model portfolio is taking off in 2024, and he’s getting ready to refresh the portfolio next Friday, February 9. Now is the perfect time to join in, get settled and follow his guidance when that new batch of trades drops. Click here to see how to do just that.
A wild and unexpected headline threw a wrench in my plans.
I was set to walk you through the state of the economy after the Federal Reserve’s latest call to keep rates steady. But with Jerome Powell and crew holding rates steady that can wait because…
Lewis Hamilton, the GOAT of Formula One, in my humble opinion, is signing with Scuderia Ferrari after 11 seasons at Mercedes-AMG.
We won’t get to see Hamilton don the red jumpsuit until 2025, but I am beyond excited. An old head (and seven-time world champion) pairing up with Charles Leclerc, a young star with proven race-winning potential, is exactly what this sport thrives on.
This is like Wayne Gretzky being traded to the LA Kings after years of dominance in Edmonton, or Lebron James going back to Cleveland after an epic run in Miami…
I’m sure Netflix executives are popping champagne while the Toreador March plays in the background, too. Drive to Survive, or “The Real Housewives of Racing” per my wife, is going to be must-watch TV for these next couple of seasons, even if Max Verstappen runs away with the championship as everyone expects.
This news led me to revisit a stock I talked about last summer, in the midst of said Verstappen dominance.
Let’s see what Adam O’Dell’s Green Zone Power Ratings system says about Formula One stock now…
FWONK Stock Stalled Out
Back in August last year, I warned that while there is a ton of hype around Formula One, the stock didn’t stack up in Adam’s system.
The stock sported solid Growth ratings, and Momentum was helping it keep pace with the broader market. But its poor Value rating meant that investors had bid the stock’s price up to levels that weren’t sustainable. Here’s what I wrote six months ago:
These are telltale signs of a stock that investors have bid up banking on sustained growth. But if Formula One’s popularity and profits slow down, the stock is likely to hit the brakes as well.
For now, I’ll follow Green Zone Power Ratings, watch Verstappen’s dominance from the comfort of my couch and find a better place to invest my hard-earned cash.
And that’s played out since then. After months of up-and-down trading, the stock is 4% lower than where it was when I featured it last August. Meanwhile, the S&P 500 is up 9%!
That underperformance has dragged FWONK’s rating down as well. The stock now rates a “Bearish” 32 out of 100, which means it’s set to continue underperforming from here.
Ratings are roughly the same across the board except for one key factor: FWONK’s Momentum has dropped from 78 to 27! Months of sideways trading while the broader market rips higher will do that…
Last summer, I ran this stock through Green Zone Power Ratings because I was curious if the stock was investable. I was brought into the Formula One fold through Drive to Survive, and after months of obsessing over the sport, I wanted to know if this was a good stock to add to my own portfolio.
Within seconds, our system showed this was one to hold off on. And now, months later, that thesis has played out. It looks even worse, even!
A Green Zone Power Ratings Update
Before we close this out, a little housekeeping.
Looking up Green Zone Power Ratings on our homepage, www.MoneyandMarkets.com, is a little different as we continue to update the user experience on the site.
You can still search for thousands of stocks. Just look for this button on the homepage, or look for the magnifying glass:
After entering a stock name or ticker symbol, a page will show the results of your search. And from there, it’s as easy as clicking in to see how that stock rates!
That’s it for this week. If you have any questions about FWONK, or how to look up stocks in Green Zone Power Ratings, reach out to Feedback@MoneyandMarkets.com.
Until next time,
Managing Editor, Money & Markets