My friends, I have a confession to make…
Since we launched this newly revamped newsletter in March, I’ve been holding back some of the “New Bulls” opportunities I’ve been able to uncover.
See, I generally think of bullish opportunities as falling into one of three broad buckets:
- Large, well-known public equities.
- Small, lesser-known public equities.
- Private companies.
So far, my “New Bulls” report has only focused on bucket #1 — that is, only members of the S&P 500 index, which encompass the largest publicly traded stocks.
We wanted to keep things simple to start and show you the power of a data-driven stock rating system even when applied to the most widely followed and easily accessible stocks.
But we all know there are even better opportunities out there…
Next week, I’ll show you what a “New Bulls” screen in the small-cap space looks like. These will be publicly-traded companies, but ones you likely haven’t heard of.
This week, I have a special time-sensitive opportunity to access a private-market company. Ironically, it’s a company I’m almost certain you have heard of … and I’m willing to bet you assumed that, being a private company, an investment in it was reserved only for the wealthiest and well-connected private equity investors.
More on those details at the end of today’s issue…
All told, the point I’m trying to make is this: the S&P 500 is not the end-all, be-all. In fact, far better opportunities to make market-beating gains can often be found in no-name small-caps, as well as private equity deals, if you can get your hands on them.
Over time, the Money & Markets team is committed to expanding our “New Bulls” report to deepen your access to these high-potential opportunities.
We’re excited about that and we hope you are, too!
Now, with all that said, let’s get down to business…
A Shorter “Bullish” List This Week
Again, limiting our “New Bulls” screen to just S&P 500 stocks has produced just two opportunities for us to consider this week. These stocks are now poised to outperform the market by 2X to 3X based on our standard criteria:
- The stock must currently rate 60 or higher (that is, “Bullish” or “Strong Bullish”) in my Green Zone Power Rating system.
- The stock must have been rated less than 60 for each of the last four weeks.
In short, these two stocks were rated “Neutral” or worse … but now are rated “Bullish” or better:
Let’s have a closer look at these two large-cap “New Bulls”…
A “New Bulls” Breakdown
To start, I wanted to note the price action for each of these stocks.
Since hitting their April lows following the tariff-fueled sell-off, both Realty Income Corp (O) and Parker-Hannifin Corp (PH) have recovered nicely.
Parker-Hannifin stock has especially taken off, gaining almost 30% in roughly two months.
That said, there is a piece of qualitative (i.e., not quantitative) news we should all be aware of:
On Tuesday, it was reported that Davidson Instruments, a market leader in fiber optic pressure measurement systems, is suing Parker for alleged antitrust violations related to Davidson’s trade secrets. Davidson is seeking $900 million in damages.
Folks, this is why our “new bulls” screen is a fantastic starting point for further stock research…
My system isn’t going to adjust a stock’s rating automatically following a single, potentially negative headline. In fact, if investors shrug off this news and continue pushing the stock higher, its overall rating will reflect the market’s bullish sentiment and continue pushing PH’s Green Zone rating higher. Every stock’s Green Zone Power Rating is based on hard data, bucketed into three fundamental factors and three price-based factors. Headlines and vibes aren’t considered…
That said, I would say PH is definitely one to keep an eye on. The stock is handily beating the S&P 500 (a 29% gain versus 17% since PH’s April 4 low).
Moving over to Realty Income (O)…
While O’s stock momentum hasn’t totally wowed, a 7% gain in this volatile market is nothing to sneeze at.
What’s more, O’s Quality factor rating is trending in the right direction, gaining nine points to improve to 50. This is mainly driven by a much-improved debt score rising from 15 to 36.
Again, I wouldn’t expect O stock to start rocketing higher from here, but this REIT is gaining favor among investors, especially those seeking some stability (and yield) as volatility remains high.
All told, these are two S&P 500 stocks that are now looking better suited for this market, according to my Green Zone Power Rating system.
But as I said, the S&P 500 isn’t the only game in town.
Next week, I’ll show you how to spot New Bulls opportunities in stocks with market caps under $2 billion, the “small-cap” category cutoff.
As promised, this week, I’m eager to introduce you to an even more exclusive opportunity in the private equity market with my good friend over at Crowdability.
He’s truly the best I know at identifying small companies that aren’t trading on public markets (yet), and he wants to help you get access to this incredibly lucrative space.
In short, if you’ve ever wondered, “How can I invest in SpaceX?” I encourage you to go here and watch his presentation now. FYI, it’s time-sensitive.
Otherwise, have a great day!
To good profits,
Editor, What My System Says Today
