Let’s start today with some good news: No one stole our gold!
Senator Rand Paul just toured Fort Knox to inspect America’s gold reserves. It turns out that all 147 million ounces are present and accounted for.
I’m certain that the Kentucky senator is far too busy to count the gold bars brick by brick. (I’m also certain the visit was less of an audit and more of a photo op. He’s a politician, after all…)
But Paul brought up some valid points. By the senator’s math, the dollar has lost 85% of its value since the U.S. left the gold standard in 1971… and 97% since the creation of the Federal Reserve in 1913.
You don’t have to be an economist to see it, either. A simple trip to the grocery store is all it takes to realize the doesn’t go nearly as far as it used it. Inflation has been remarkably hard to kill. And given that our government still adds about $2 trillion per year to the national debt, the people in charge have every incentive to make sure that debt is repaid in cheaper dollars… if it’s repaid at all.
For you and me, there’s really only one solution for inflation.
We need to make more money.
So, let’s get to it…
Today is Thursday, which means we’ll be looking at stocks that recently crossed into “Bullish” territory by earning a Green Zone Power Rating of 60 or higher. Decades of research show that “Bullish” rated stocks outperform the S&P by 2X. Come what may with the dollar, that’s enough to keep us ahead of inflation.
Let’s start with the newest additions 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:
There are a couple noteworthy names I’d like to highlight.
The first is Sandisk Corp (SNDK), one of the most explosive stocks in the AI hardware trade. Shares are up an almost ridiculous 3800% over the past year, though price have retreated significantly from the highs they hit earlier this summer.
Why all the excitement? Because running large language models requires keeping massive amounts of data accessible. That makes Sandisk’s flash memory indispensable.
The company traditionally suffered from wild cyclical swings in demand. But its evolution into a core component producer for AI datacenters has fundamentally changed its risk profile.
Travel site Expedia (EXPE) has popped up as “Bullish” various times this year as well. The company scores exceptionally well on its growth and quality factors, with “Strong Bullish: factor ratings of 99 and 87, respectively. It also rates as “Bullish” on its momentum and value factors, and the shares have come close to tripling over the past two years.
But there’s a bigger story about the U.S. consumer here.
Yes, inflation is taking a major bite out of American budgets. But a significant portion of the population is still making travel a priority. And sites like Expedia help them do so more economically.
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:
This time last week, we saw movie theater chain Cinemark Holdings (CNK) pop up as “Bullish.” Well, this week Canadian theater chain Cineplex (CPXGF) joins the ranks.
Of course, it’s far too early to celebrate a new golden age of film.
But it does appear that the movie studios have finally found their footing after several rough years following the pandemic. Successes like Spider-Man: Brand New Day and The Odyssey prove that patrons will still show up for a blockbuster movie, even when competing with Netflix and a comfortable couch at home.
So much of the bullish narrative this year has centered around AI infrastructure. The major hyperscalers are pouring hundreds and hundreds of billions of dollar into building new datacenters.
So, I wasn’t surprised to see Manitowoc (MTW) make the cut this week. Manitowoc makes construction cranes. The boom in datacenter construction has led to a boom in heavy equipment sales. We played this trend in Green Zone Fortunes by investing in Caterpillar (CAT). I recommended the shares in November 2024, and we’re already up 111%.
Manitowoc is a much smaller and more specialized company. But it benefits from the same megatrend of AI datacenter construction.
To good profits,
Adam O’Dell
Editor, What My System Says Today
