It seems the Iran war may drag on…
In his televised speech last night, President Donald Trump promised additional operations over the next two to three weeks, putting to rest any hopes of a quick end.
At least, that’s how it appears right now…
As the past month has shown, Trump’s plans can change quickly.
Regardless, Wall Street didn’t like what it heard, and stocks were lower in early trading.
So… what should we do about it?
To use a baseball analogy , we need to keep our eye on the ball.
It’s a mistake to try to guess what direction the war takes.
As I’ve said repeatedly since the hostilities broke out, you and I have no edge here. We don’t have spies in the White House feeding us play-by-play intel.
I only invest when I’m confident that I have an edge… which is why I depend on my Green Zone Power Ratings system.
Investing in stocks that rate well on the six factors that make up the composite has been proven, through decades of research, to produce market-beating returns over time.
So, I’ll leave the war prognostication to others. I’ll happily stick to my system… and focus on identifying stocks that are statistically likely to outperform.
Today, as we do every Thursday, I’ll be reviewing stocks that have officially crossed the threshold into “Bullish” territory this week, meaning their Green Zone Power Rating is 60 or higher.
Let’s jump into it.
S&P 500 New Bulls
I ran my usual screen for S&P 500 Index companies that popped up as “Bullish” this week, and this is what I came up with:
It’s a short list this week with just two new bulls: dental and medical supplier Henry Schein (HSIC) and steelmaker Nucor Corp (NUE).
You’ve probably never heard of Henry Schein, but I guarantee your doctor and dentist have. It’s the go-to company for virtually everything they need to do their jobs.
Imagine you’re a dentist. You need drills, gloves, x-ray supplies, toothpaste samples, software to manage patient appointments, etc. Instead of hunting down dozens of different suppliers, you just order from Henry Schein, and the company delivers everything you need.
Henry Schein serves more than 1 million dentists, doctors and clinics around the world – offering over 300,000 different products. It also sells software to help medical offices run their businesses.
Last year, the company raked in $13.2 billion in sales, so it’s a very big deal in the health care world, even if most regular people have never heard of it.
It’s the kind of quirky business that mostly flies under the radar, has limited competition and tends to generate consistent profits. It should come as no surprise that it rates a very solid 79 on my quality factor.
Given the strength in materials stocks this year, it’s also no surprise to see Nucor popping up as “Bullish.” After energy, the materials sector is the best-performing sector in the S&P 500, up 10% year to date.
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:
If you enjoy a good Negroni from time to time, you might savor the shares of Italian spirits company Davide Campari-Milano (DVCMY). Its namesake Campari liquor is a key ingredient in the Negroni, the Boulevardier and several other popular cocktails.
Apart from Campari, the company owns the Aperol, Wild Turkey bourbon, Grand Marnier and Courvoisier cognac brands, among others. Overall, it owns more than 50 brands and has about 4,700 employees worldwide.
Importantly, at a time when the Iran war is roiling global markets, Davide Campari scores a “Strong Bullish” 82 on its volatility factor. Stocks with a high volatility score exhibit low volatility, meaning their share prices tend not to bounce around all that much.
For another newly “Bullish” low-volatility stock, keep your eye on Canadian alternative energy leader Boralex (BRLXF).
Boralex specializes in wind, solar and hydroelectric projects. BRLXF shares had been trending higher since December… and then exploded higher following the onset of the Iran war.
They rate a “Strong Bullish” 90 on their volatility factor, but that doesn’t mean they’re stodgy and boring. They also rate a “Strong Bullish” 82 on their momentum factor.
To good profits,
Adam O’Dell
Editor, What My System Says Today
