It’s Thursday, and you know what that means…
I’ll be highlighting stocks that have recently crossed the threshold into “Bullish” territory with a Green Zone Power Rating of 60 or higher out of 100.
It’s a diverse group this week, including everything from high-performance sports cars and branded water to children’s toys and jelly for your breakfast toast.
One sector that is distinctly underrepresented, though, is technology.
Most tech stocks are either already rated as “Bullish,” due in particular to their strong quality and growth factors, or… unfortunately… backsliding due to faltering value and momentum factors.
However, there are a few noteworthy tech names that made the cut.
Let’s jump into it starting with the New Bulls from 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:
Here are a few I’d like to highlight…
At the top of the list, jumping over 27 points, is toy and game company Hasbro (HAS).
Hasbro owns some of the most iconic toy brands, including Monopoly, Transformers, Nerf, Play-Doh and My Little Pony, and holds licensing rights for Star Wars and Marvel Comics.
Its most profitable unit is Wizards of the Coast, which makes Magic: The Gathering and Dungeons & Dragons and is growing its digital games business.
Hasbro rates exceptionally well on its quality factor with a “Strong Bullish” factor rating of 80. Given its monopoly position in its strongest brands, the company can charge premium pricing, which flows directly into its profit margins.
Admittedly, The J.M. Smucker Company (SJM), the maker of Smucker’s jams, Jif peanut butter and other popular food brands, isn’t a company I expected to see.
Consumer staples as a whole have been bludgeoned by relentless inflation and by consumers forced to cut back or switch to cheaper store-brand alternatives.
But here’s the thing…
Investors are getting jittery. And Smucker is a low-volatility stock that tends to be pretty recession-proof. The shares have been quietly pushing higher since April and currently rate a “Strong Bullish” 80 on their momentum factor.
If you’re looking for a place to hide, parking a little cash in SJM makes sense. And the shares pay a respectable 3.5% to boot.
I mentioned that the list this week was distinctly low-tech. But one exception is Teledyne Technologies (TDY).
Teledyne makes specialized sensors, cameras, and instruments for industrial, scientific, and – particularly – defense customers. And in a world where “AI is everything,” you could say that Teledyne makes the eyes that AI systems need to see.
And as the wars in Ukraine and Iran have proven, drones are the most important weapon in a country’s arsenal. Some of Teledyne’s most important work is in counter-drone technology.
It remains to be seen how much compute we actually need for the AI revolution. It’s possible that the massive onslaught of data center building will lead to major overcapacity.
But sensors?
That’s a different story.
If the next phase of the AI revolution is physical AI in the form of autonomous vehicles and robots, demand for sensors is set to explode higher.
New Bulls Outside the S&P 500
Now, let’s 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:
I’ll admit that I get a little nostalgic when I see National Beverage Corp (FIZZ) pop up on a screen. The maker of LaCroix sparkling water was one of my earliest picks in Green Zone Fortunes and, to this day, one of my most successful.
I recommended the stock on December 16, 2020 and then immediately sold it just 42 days later at a profit of just over 100%. That annualizes to a ridiculous 41,000% return!
I don’t expect FIZZ to repeat a performance like that this time around. That was only possible because of a short squeeze that forced short sellers to pile into the shares, sending them sharply higher.
Still, FIZZ has a truly wonderful business. Sparkling water is cheap to make, yet the company can charge a premium due to its branding. Not surprisingly, the shares rate a “Strong Bullish” 93 on quality.
If there’s one stock that gets every red-blooded car enthusiast’s heart racing, it would be high-performance Italian carmaker Ferrari NV (RACE).
One of the biggest criticisms of today’s economy is that it is extremely “top heavy.”
Wealthy and high-income earners – the kind who would have the means to buy a Ferrari – have never had it better, even while the average worker really struggles under stagnant wages and rising prices.
Well, we’re not going to fix that problem in a financial newsletter. But we can at least follow the money and profit from it.
Ferrari rates a “Bullish” 73 on its momentum factor and a “Strong Bullish” 96 and 87 on its quality and growth factors.
This is a company in the right place at the right time.
To good profits,
Adam O’Dell
Editor, What My System Says Today
