Weekly Stock Market Outlook 8/9/2020

Summer has flown by & we find ourselves in the second week of August already. August tends to see an uptick in volatility each year (I believe someone on Bloomberg said ~4% on average), which could make for some interesting trading conditions over the next three weeks.

S&P 500, NASDAQ & Dow Jones Are All Spreading Apart

As we are to be expecting an uptick in volatility, lets check in with the charts. Below is the chart for the S&P 500 for the last year, with the NASDAQ (Purple line) & Dow Jones Industrial Average (Aquamarine line).

The S&P 500, NASDAQ & DJIA are all recovering at very different rates, fueled by cap size & company type

The NASDAQ has recovered much faster & more aggressively, as it is being fueled by Biotech bets, and tech companies that are helping people work from home in the new age of COVID. Looking at February 2020, at their most spread apart point in the last year, these indexes were all much closer to one another in performance.

The VIX Performance For The Past Year

Looking at the VIX, it seems that things are taming down, but with a performance spread that far apart, there will likely be an ugly correction coming up in the future, as the VIX is still above where it was when the indexes were performing more in unison.

What We’re Watching For In The Market This Week

There are going to be a lot of diverse companies reporting earnings this week, which should add to the rocking of the boat. There are going to be companies in the tech & biotech sector who may be chopped down to size based on them growing at the rate of their peers (on speculation), and other companies in battered down sectors such as travel will be reporting what look to be dismal results.

Will the markets be looking ahead and past this bad quarter, or will the inevitable reality check come back to haunt us, reminding market participants that there things aren’t back to normal yet, and there is still a long road ahead of us for getting people back and actively involved in the economy.

US Job openings will be something to keep an eye on, as we look to see how many people are returning to work, after being surprised week-over-week by the numbers of jobless claims that have been reported. There are going to be a number of Fed speakers this week, and US PPI numbers will be Tuesday as well.

Inflation data & Mortgage application numbers should also be interesting, as despite the trying economic times, people are fleeing the cities to buy homes in suburban areas.

Crude oil stocks, jobless claims & retail sales & industrial production numbers will also be interesting to watch as they come in, to see if they are in line with what the market’s performance seems to be expecting.

Recent Options Bought – Ford $F Straddle, $REAL Puts, $PETS Calls

I’ve been studying options more of recent and began trading them a month and a half or so ago. Some of my recent purchases were $REAL $12.50 puts with a 12/18 expiration. I don’t see people having much demand for their products this year, especially given the fact that so many states are flip flopping on their COVID responses as infection rates fluctuate.

I also purchased some $PETS $35 calls with a 9/18 expiration after their drop on earnings. I liked the stock prior to that, as I had recently written about it in the stock research section of the site.

Also, I have a $F $6.50 ratio-straddle that expires on 8/28, with a ratio favoring the puts 3:1.

United Parcel Service, Inc. $UPS Stock Analysis

This weekend I had a look at United Parcel Service, Inc. stock, which trades under the ticker UPS. UPS closed for trading at $156.90/share on 8/7/2020, after experiencing a solid gap up at the end of July.

United Parcel Service, Inc. $UPS’s Fundamentals Broken Down

United Parcel Service, Inc.’s stock has a P/E (ttm) of 31.2, with a P/B of 31.02 and a 2.57% Dividend Yield.

United Parcel Service, Inc. UPS Stock Fundamentals Broken Down

UPS has a Beta of .84, making it less volatile than the general market, with a 66.4% % Institutional Ownership. UPS sports a Market Cap of $135.3B, with $9.2B in Total Cash (mrq) & a Debt/Equity (ttm) of 684.8.

Given the nature of their line of work, it makes sense that UPS’s Price to Book Value & Debt/Equity (ttm) are much higher than the typical stocks we post about here. UPS does not need as many resources to operate as most other companies, given that they are transporting goods, and with their high amount of cash & responsible debt rating we can feel safe with their higher Debt/Equity (ttm) compared to other companies that may have a similar level.

United Parcel Service, Inc. UPS Stock’s Technicals Look Strong

UPS’s stock price is currently $156.90, much higher than its 10-Day Moving Average of 138.29, its 50-Day Moving Average of 116.09 and its 200-Day Moving Average of 108.98.

United Parcel Service, Inc. UPS Stock's Technicals Are Very Strong

After a bullish gap up at the end of July and further growth into August, their RSI is currently 90, which shows signs of being overbought. However, this is temporary, as while they establish their new trading range their RSI will come back to a more reasonable level.

Using our technical analysis rating formula, UPS scores 222.45, outperforming their sector peers’ average of 39.99, and their industry peers’ average of 131.39.

United Parcel Service, Inc. UPS’s Stock Fundamentals Vs. The Industrials Sector Averages

UPS stock’s P/E (ttm) is almost 36% lower than their average Industrials Sector peer, with a 15% better than average Dividend Yield.

While their Payout Ratio is 197% higher than average, at 47.7% it is still a safe & healthy dividend.

United Parcel Service, Inc. UPS Stock Vs. The Industrials Sector Average Fundamentals

UPS’s Market Cap is 2,162.5% higher than the industrials sector average, and their Total Cash (mrq) is 1,273% higher than average.

Their % Institutional Ownership is 11.8% higher than average, with a 456% advantage over their average peer in our Technical Rating.

As mentioned prior, their Debt/Equity (ttm) is above average (+478%) & their P/B is 560% higher than average.

Industrials Sector Average Fundamentals

United Parcel Service, Inc. $UPS’s Stock Vs. The Air Freight & Logistics Industry Average Fundamentals

United Parcel Service, Inc.’ stock has a 37% lower P/E (ttm) than their average Air Freight & Logistics Industry peer, and a 49% higher than average Dividend Yield.

United Parcel Service, Inc.'s Fundamentals Compared To Their Air Freight & Logistics Industry Averages

UPS’s Market Cap is 745.6% higher than their average Air Freight & Logistics peer, and they have a 557% higher than average Total Cash (mrq) .

UPS’s Technical Rating is 69% above average for the Air Freight & Logistics Industry.

Their Debt/Equity (ttm) is 279.8% higher than average, with a 14% lower than average % Institutional Ownership.

Air Freight & Logistics Industry Average Fundamentals

United Parcel Service, Inc. $UPS’s Stock Performance Vs. The S&P 500 & NASDAQ Since Its IPO

UPS’s stock first began trading on 11/10/1999, and has since grown by 129.89%. When we add in the dividends that were paid over that time, the total gain becomes 192.8%.

United Parcel Service, Inc. $UPS Stock Performance Vs. The S&P 500 Since IPO

In that time the S&P 500 has only grown 144% excluding dividends, while the NASDAQ has grown 248.9% in that same time period (also excluding dividends).

United Parcel Service, Inc. $UPS Stock Performance Vs. The NASDAQ Index Since Its IPO

United Parcel Service, Inc. $UPS Has A Solid Debt Rating From Moody’s

Moody’s rates United Parcel Service, Inc.’s Debt Rating an A2, which is considered Upper Medium Investment Grade.

United Parcel Service, Inc. $UPS's Debt Rating From Moody's Is A2, A Sign of Strength

This is an additional sign of strength, especially given that we have been discussing their Debt/Equity (ttm) being higher than what we would like to see. Moody’s sees UPS as being able to service its debt obligations.

Tying It All Together

UPS stock offers many advantages both from a trading & investing perspective. Their growth has been in line with the general market indexes since they IPO’d, and they have some solid fundamental advantages over many of their peers.

As they just experienced a large surge in price growth, I’ll be keeping my eyes out to see what new range they establish, where I can find an advantegeous entry point to build a position.

For A Full PDF Report:

*** I DO NOT OWN SHARES IN UPS STOCK ***

Escalade Inc. $ESCA Stock Analysis

This weekend I had a look at Escalade Inc. stock, which trades under the ticker ESCA. ESCA closed for trading on 7/31/20 at $15.35 per share, and offers a number of strengths from fundamental, technical & growth perspectives.

Escalade Inc. $ESCA Stock Fundamentals Look Strong

ESCA has a P/E (ttm) of 24.4, with a P/B of 1.73, and an attractive Dividend Yield of 3.26%.

Escalde Inc. ESCA Stock Fundamentals

Escalade Inc.’s Payout Ratio is high at 80.7%, but their Debt/Equity (ttm) is stellar compared to their peers, at 3.6. They have a Market Cap of $216.4M, with $6.2M in Total Cash (mrq), which makes them less likely to have a high percentage of Institutional Investors (28.7%)

Escalade Inc. $ESCA’s Stock Technicals Broken Down

ESCA’s 10-Day Moving Average is 15.11, and their 50-Day MA is 12.83, both showing signs of strength when their 200-Day MA of 9.92 is taken into consideration.

Escalade Inc. ESCA Stock Technicals Overview

Their RSI is currently 63, which indicates that they are a little more overbought than average, which is expectable after seeing the recent growth that is shown on their chart.

Escalade Inc. ESCA Has Dramatically Outperformed the S&P 500 & NASDAQ Since It IPO’d

Escalade Inc.’s stock IPO’d on 3/16/1980, and has since grown over 12,004.5%, despite performing multiple stock splits over the years; growing by 16,413.1% total when we factor in Dividends collected over the lifetime of shares.

Escalade Inc. ESCA Has Dramatically Outperformed the S&P 500 Since Its IPO

The S&P 500 has only grown 3,098.8% in that time (excluding dividends), with the NASDAQ increasing by 7,591.7% (excluding dividends), making ESCA an advantageous long-term investment over the years.

Escalade Inc. ESCA Stock Has Dramatically Outperformed The NASDAQ Index Since Its IPO

Escalade Inc. ESCA Stock Fundamentals Are Stronger Than Their Consumer Discretionary Peers

ESCA trades at 73% less on a price-per-share basis than the average Consumer Discretionary Sector stock. Their P/E (ttm) is 59% lower than average, with a ~77% lower P/B.

Escalade Inc. ESCA Stock Compared To The Consumer Discretionary Sector Average Fundamentals

ESCA’s Dividend Yield is ~24% higher than averagem with a Debt/Equity (ttm) that is almost 99% lower than the sector average.

While their market cap is 98% less than average and their Total Cash (mrq) is 99.5% less than average, they only trail by 51% when we examine their % Institutional Ownership.

Consumer Discretionary Sector Average Stock Fundamentals

Escalade Inc. ESCA Stock Fundamentals Compared To The Leisure Products Industry Averages

ESCA’s P/E (ttm) is 18% lower than average for Leisure Products Industry stocks, and their P/B is 78% less than average. Pair this with a 79% larger than average Dividend Yield & a 99% lower Debt/Equity (ttm) and they stand out from the crowd, despite being 92% smaller by Average Market Cap.

Escalade Inc. ESCA Stock Fundamentals Vs. The Leisure Products Industry Averages
Leisure Products Industry Average Stock Fundamentals

Tying It All Together

Escalade Inc.’s stock has shown impressive growth since it IPO’d in 1980. Their fundamentals are all very appealing, especially when viewed through the lens of comparing them to their average peer, and their recent technical strength from their chart makes them worth considering for an investment. I will be eyeing an entry after seeing the next bit of price pull-back, with an eye specifically around the $13.50/share mark to see what the trend lines suggest.

For Full PDF Report:

*** I DO NOT OWN SHARES OF ESCALADE INC. ESCA STOCK ***

Watsco, Inc. $WSO Stock Analysis

This week I reviewed Watsco, Inc.’s stock, whose ticker is $WSO, which closed for trading on 7/24 at $227.32 per share.

Watsco, Inc. WSO Stock’s Appealing Fundamentals & Dividend

WSO stock has a P/E (ttm) of 37, with a P/B of 6.07. Their Dividend Yield is 3.12%, offering solid interest on your investment should you hold it for the long term.

Watsco, Inc. $WSO Stock Fundamentals

While WSO’s Payout Ratio (ttm) is high at 86%, their Debt/Equity (ttm) is 24.8, which looks quite appealing in market conditions with the high levels of uncertainty that we have now.

With a Market Cap of $8.7B & $79.6M in Total Cash, paired with a Beta of 0.68, it is no wonder that Watsco, Inc. has a 93.9% % Institutional Investors.

Watsco, Inc. WSO Stock Technicals Show Strength

Watsco, Inc.’s current price of $227.32 is well above its 10-Day Moving Average of 199.88, which is also stronger than its 50-Day Moving Average of 179.9 & its 200-Day Moving Average of 172.23.

Watsco, Inc. $WSO Stock Technical Overview Shows Signs Of Strength

While its current RSI of 87 is showing signs of being overbought, this is being impacted by a recent large gap-up day, when the stock opened far above where it closed on the previous day.

The RSI should decrease over time to a more normal level as time passes, and WSO’s technical levels are much higher than their Industry & Sector peers.

Our Technical Strength formula rates WSO’s stock at 167.7, much higher than its Industrials Sector peers at 7.17 & far superior to its Trading Companies & Distributors Industry peers average score of 0.53.

Watsco, Inc. WSO Stock’s Fundamentals Performance Compared To The Industrials Sector

WSO’s P/E (ttm) is 7% less than that of its Industrials Sector peers, and its Dividend Yield is 27% higher than average. Watsco, Inc.’s Market Cap is 55% higher than their sector average.

Watsco, Inc. WSO Stock Fundamentals Vs. The Industrials Sector Averages

Their Debt/Equity (ttm) is 76% better than average & their Beta is almost 50% lower than average, which contributes to their 57% higher than average % Institutional Ownership.

While their P/B is much higher than average (+55.6%) & their Total Cash (mrq) is lower than average, they still offer many interesting advantages to their sector peers.

Industrials Sector Average Fundamentals Overview

Watsco, Inc. WSO’s Fundamentals Vs. The Trading Companies & Distributors Industry Averages

Watsco’s Market Cap is 200% larger than the average Trading Companies & Distributors Industry Average, and they offer a 70% lower Debt/Equity (ttm) level, with a 47% stronger % Institutional Investors & a 60% lower than average Beta.

Watsco, Inc. WSO's Fundamentals Vs. The Trading Companies & Distributors Industry Averages

These strengths combined with their stronger than average technicals enable us to look past their higher than average P/E (ttm) (+21%), P/B (+154%) and 9% lower than average Dividend Yield.

Trading Companies & Distributors Industry Average Stock Fundamentals

Watsco, Inc. WSO Has Dramatically Outperformed The S&P 500 & NASDAQ Since IPO

Since their IPO on 6/7/1984, Watsco, Inc.’s stock has grown by 10,640.9%, for a total adjusted gain of 13,357.4% when their consistent Dividend Yield is factored into the calculation .

The S&P 500 has only grown 1,975.7% excluding dividends in that same time period.

Watsco, Inc WSO Stock Performance Has Dramatically Outperformed the S&P 500 Since It's IPO

WSO Stock has also dramatically outperformed the NASDAQ in that time, which has only grown by 4,220% in that same time span, excluding dividends.

Watsco, Inc. WSO Stock Has Dramatically Outperformed The NASDAQ Since It IPO'd

Tying It All Together

Watsco, Inc. WSO’s Stock is worth taking a closer look at from an investment & trading perspective. Their strong fundamentals & technicals, combined with their lifetime growth performance show that they have many advantages over other stocks.

Being able to grow at the rates that they have since 1984, drastically outperforming the market, while also having responsible & manageable levels of debt gives them big leg up the the modern day’s competition, particularly in market environments like we are in now.

I’ll be looking at the charts to see if there is a good entry point coming up, as after their recent gap up on the 23rd there is no established clear support level within a reasonable range to work with.

For Full PDF Report:

*** I DO NOT CURRENTLY OWN SHARES IN WSO ***

PetMed Express Inc. $PETS Stock Analysis

This weekend I had a look at PetMed Express Inc. stock, which trades under the ticker $PETS. PETS closed at $37.99/share on Friday 7/10, with the P/E (ttm) of 29.4 and a P/B of 6.01. They offer an attractive Dividend Yield of 4.47%.

PetMed Express Inc. PETS Stock Fundamental Analysis

PETS is a small cap stock, with a Market Cap of $785M, with $103.7M in Total Cash, and a low Debt/Equity (ttm) of 0.08. These fundamentals & their growth have led them to an 85.2% % Institutional Ownership, despite their small cap size.

PetMed Express Inc. PETS Stock Technical Analysis

PetMed Express Inc. Stock has a 10-Day Moving Average of 36.58, with a 50-Day MA of 36.02 & a 200-Day MA of 27.89.

This signals technical strength, and their RSI of 56 shows that they are not overbought yet, and implies future growth.

PetMed Express Inc. PETS Stock Technical Analysis On A One Year Chart

PetMed Express Inc. PETS Stock Vs. The S&P 500 & NASDAQ Indexes

Since their IPO on 4/26/1999, PetMed Express Inc. PETS Stock has grown by 346.9%, and when we combine their historic dividend yield they have grown by 461% since their IPO.

The S&P 500 has only grown 138.55% & the NASDAQ Index has grown by 317.54% in that same time, excluding their dividends.

PetMed Express Inc. PETS Stock Performance Vs. The S&P 500 Index Since Their IPO

This shows that their growth outpaces the indexes, despite their small cap status.

PetMed Express Inc. PETS Stock Performance Vs. The NASDAQ Index Since Their IPO

PetMed Express Inc. PETS Stock Fundamentals Vs. The Consumer Discretionary Sector

PetMed Express Inc. PETS is a member of the Consumer Discretionary Sector. Their shareprice is 29% lower than the average Consumer Discretionary stock share price, and their P/E (ttm) is 50% less than average, with a 20% less than average Price/Book, signaling fundamental strength.

PetMed Express Inc. PETS Stock Fundamentals Vs. The Consumer Discretionary Sector Average Fundamentals

PETS Stock offers a 60% higher Dividend Yield than the average Consumer Discretionary stock, despite being 93% smaller than their average peer within this sector.

Much of this is attributed to their 99.97% lower than average Debt/Equity (ttm), which helps attract their 43% higher than average % Institutional Ownership.

While their Payout Ratio is 77% and is 51% higher than average, they still offer many strengths compared to their Consumer Discretionary Sector peers.

Consumer Discretionary Stock Sector Average Fundamentals

PetMed Express Inc. PETS Stock Fundamentals Vs. The Internet & Direct Marketing Industry

PETS Stock costs 66% less per share than the average Internet & Direct Marketing Industry average, with a 42% lower P/E (ttm) & a 33% lower P/B. When compared with their 39% above average Dividend Yield, their fundamentals look very attractive compared to their peers.

Their Payout Ratio is only 4% higher than their industry peers, despite being 98% smaller than average by Market Cap.

Despite this, their Debt/Equity (ttm) is 99.9% less than average & as a result of this and their strong fundamentals & growth performance PETS has a 68% higher than average % Institutional Investors than their average Internet & Direct Marketing Industry peer.

Internet & Direct Marketing Retail Industry Average Fundamentals

Tying It All Together

PETS stock has many attractive fundamental & technical advantages to other stocks, including their Sector & Industry peers. Despite their higher than preferred Pay Out Ratio, they offer a healthy Dividend Yield, and due to their very low Debt/Equity (ttm) this does not look to be threatened.

Their technical strength of their charts also has me interested in looking for an entry point somewhere in the coming days-to-weeks, especially in the current market conditions where stocks with good cash:debt ratings & NASDAQ stocks tend to be performing best.

*** I do not own any shares of PETS ***

For Full PDF Report:

TFI International Inc. $TFII Stock Analysis

On Monday I purchased some shares of TFI International stock, which trades under the ticker of TFII. After the close on 7/2, TFII stock traded for $36.44/share.

TFII’s P/E (ttm) is 9.2, and their P/B is 2.41, both attractive looking numbers when paired with their 2.09% Dividend Yield.

TFI International Inc. TFII Stock Fundamentals Broken Down

TFII’s Market Cap is $3.17B, with $92.49M in Total Cash & A Debt/Equity (ttm) of 137.8.

TFI International’s % Institutional Ownership is 35.2%, and it is a member of the Industrials Sector.

TFI International Inc. TFII’s Stock Technical Overview

TFI International TFII Stock Technical Overview For The Last Year

TFI International trades at $36.44, with a 10-Day Moving Average of 34.2, a 50-Day Moving Average of 30.37 & a 200-Day Moving Average of 29.71, showing signs of strength.

TFII’s RSI on the one year chart was 76 at the time of this being written.

TFI International Inc. TFII Stock Fundamentals Compared To The Industrial Sector Averages

TFII’s P/E (ttm) is 74.6% less than the Industrials Sector average, and their P/B is almost 37% lower than average.

TFI International TFII Stock Fundamentals Vs The Industrials Sector Averages

Their Market Cap is 41% less than the sector average, which is reflected in their 42% lower than average % Institutional Ownership. Their Dividend Yield is 17% less than average for the sector, but their Payout Ratio is only 4.5% lower than average. Given the size & age of the company vs. its peers, it is understandable that it has less cash and a higher Debt/Equity Ratio than average.

Despite the lagging areas, their current technicals make them interesting when combined with their fundamentals.

Industrials Sector Average Fundamentals

TFI International Inc. TFII Stock Vs. The Road & Rail Industry Average Fundamentals

TFII has a 53% better P/E (ttm) & a 34% better P/B than the Road & Rail Industry averages. Their Dividend Yield is almost 14% better than average, with a 13% better Payout Ratio (ttm).

TFI International TFII Stock Fundamentals Vs. Roal & Rail Industry Averages

TFII has a 47% lower Debt/Equity (ttm) than the average for Road & Rail stocks, which is important when making the comparison to their peers, given that they’re 76% smaller by Market Cap.

Road & Rail Industry Average Fundamentals

TFI International Inc. TFII Stock Vs. The S&P 500 & NASDAQ Indexes

TFI International TFII Stock Performance Vs. The S&P 500 Index since IPO

TFII’s stock has grown by 127.47% since it IPO’d in 2005, and overall has grown +174.22% including all dividends they have offered over the year (per their investor relations site).

The S&P 500 has increased by 154.7% & the NASDAQ has increased by 366.8% over the same time period since the day of TFII’s IPO.

TFI International TFII Stock Performance Vs. The NASDAQ Index since IPO

Tying It All Together

Overall, I purchased these shares because I liked the blend of TFII’s fundamentals & their current technicals. While they may not have as many green comparison percentages as other stocks I post, their size & age vs. the rest of their sector puts them in a unique position.

I certainly think that they’re worth taking a look into for further review.

Full PDF Report Here:

*** I own shares of TFII, as stated in the article’s intro ***

7-7-2020 Weekly Market Outlook & Review

Back after taking some time off to relax, and I’ve got a few things to review. Markets have continued to climb up slowly & steadily, yet the Vix is staying relatively flat/creeping up every so often. Most of the major market reports this week are outside of the US, showing that Virus fears & recovery prospects have a better than average chance of swaying markets locally in the US.

Over The Last Two Weeks, I Purchased Shares Of MGA, WCLD, TFII & STX Stock

I have been a longtime fan of Magna International stock ($MGA), as they offer steady performance with a sustainable dividend yield, while providing exposure to the Auto Parts & Equipment Industry.

WCLD also provided a unique way to build upon a position in the Cloud Computing space via SKYY, as their recent performance has been ~2x that of SKYY, and their share price is ~50%. This enabled me to add to my cloud exposure, without muddling the existing levels of SKYY profits I have.

Seagate Technologies stock ($STX) is another purchase I made, as they offer a strong dividend, healthy fundamentals & Information Technology Sector exposure, but from a more value-oriented perspective than most of it’s peers.

TFII is another name that I purchased shares in yesterday. Their fundamentals & technicals have both been quite strong recently, and they provide me with exposure to the Road & Rail Sector & Trucking Industry.

Buying Options – GE, CSU & CHEF Puts & SQQQ Calls

During the last week I also purchased some General Electric GE $6 Puts, with an expiration of 11/20.

General Electric $GE Stock Chart For The Last Year

I also purchased some $2 Capital Senior Living Corporation, $CSU Puts, with a 12/18 expiration.

Capital Senior Living CSU Stock Performance For The Last Year

Chef’s Warehouse $CHEF has $15 Puts that expire on 1/15/2021, which I also purchased.

Chef's Warehouse $CHEF Stock Performance For The Last Year

Additionally, I picked up some SQQQ $9 Calls that expire on 1/15/2021 for some extra protection from any uncertainty around the NASDAQ in the meantime.

Tying It All Together

Today is a market down day based on what the futures are saying (writing this before the open), and I’ll be keeping my eyes peeled for some deals on a few other names that I like in the longs & calls.

It’s interesting watching how people are starting to become much less certain of the strength of the markets now vs. a few months ago when not much has changed.

As a result, I’ll be still purchasing strong positions, and pick up some hedging options along the way until it appears that the markets are ready to take off.

Stock Market Weekly Review – 6/14/2020

Last week we saw a lot of market action. Powell paid for us all to come out to dinner, and then the check came come Thursday… Will Mnuchin leave a big enough tip for our tab to keep the party up?

Last week was a big gainer, I sold a lot of $UXVY, $SPXS & $SQQQ calls I had been building up over the previous weeks, and had a 57%+ week.

I have some short & long options on the table still, and have trimmed a lot of long positions to pivot them into existing yield-plays & new value/growth opportunities, some of which I outlined in my other posts today, with Magna International Inc, MGA & Cummins Inc., CMI and a handful of other names.

I also picked up some Hertz $HTZ puts last week, which have already turned a slight profit. I am interested in seeing how their restructuring/new offering plays out, but I don’t see any magic share-price recovery based on the existing options they have.

What I’m Watching For The Market This Week

It’s safe to say we all know that civil unrest is causing domestic issues in the US, and attracting international ridicule (although mostly as a deflection tactic when we look at the main aggressors).

COVID-19 is alive & thriving, although now hospitals seem to at least be resourced enough to get by and take regular patients who have issues that need to be seen.

I want to see how the numbers of COVID move, in relation especially to the areas of protesting, given that most of these folks are not socially-distanced, and not wearing masks.

It will be especially interesting for the sake of assessing where we are at with COVID to learn how it is impacting residents & police/front-line workers in these areas, as well as people in the new “CHAZ commune”.

Powell speaks this week, and Japan announces rates, pair this up with Trump/Mnuchin comments, and increasing international tensions, I’m not really sure where we go.

Retail Sales & Building Permits numbers will also be interesting to see, especially with how they relate to the new Unemployment Numbers on top of the existing trend.

My Week’s Market Plans

As previously mentioned, I’m not certain where I am sitting for tomorrow. I will be watching the futures all night, as it is tough to gauge the reaction to an overinflated market that has gapped down on a Thursday with a filled-green candlestick on Friday…

Almost as if there was overnight dip-buying in futures, which carried over early, and then gains began being tapered off immediately Friday.

I still have some short index ETF & long VIX calls I’ll be working with, and am planning to build upon my existing longs & some call positions, but how I balance everything will depend on how the week goes.

I don’t see markets going to the March lows, but I am eyeing S&P 500 at 3,000 as well as at the 2,900-2,950 range. The NASDAQ is more likely to move based on virus vaccine & tech movements, so S&P seems to be a better gauge at the moment, especially given how they’ve diverged this year.

Cummins Inc. $CMI Stock Analysis

This weekend I took a look at Cummins Inc.’s stock, which trades under the ticker $CMI. Cummins Inc. closed for trading on 6/12 at $167.08/share.

They offer an attractive 12.3 P/E (ttm), with a 3.49 P/B.

Cummins Inc. $CMI Stock Fundamentals

Cummins Inc. has a 3.14% Dividend Yield, with a low 38.2% Payout Ratio. Their Market Cap is $26.65B, with $2.03B Total Cash (mrq) & $3.84B Total Debt (mrq), for a Debt/Equity (ttm) of 40.73.

CMI has a 80.58% Institutional Ownership percentage, which is one of their many advantages over their Industrial Sector Peers

Cummins Inc. $CMI Stock Fundamentals Vs. The Industrials Sector

Cummins Inc $CMI Stock Fundamentals Vs The Industrials Sector

CMI’s P/E (ttm) is 64% less than the average Industrials Sector stock, and their P/B is only 3.6% higher than average.

With their 21.7% higher than average Dividend Yield, they look very attractive from an investment standpoint.

CMI’s Market Cap is 367% higher than the Industrials Sector average, with 270% more Total Cash & a 52% better Debt/Equity (ttm) ratio.

They also have 38% more Institutional Investors than average.

Industrials Sector Stock Fundamentals Overview

Cummins Inc. $CMI Stock Fundamentals Vs. The Machinery Industry

Cummins Inc.’s stock also has many clear advantages over their peers in the Machinery Industry. CMI’s P/E (ttm) is 77% better than average, and 3.6% better than the average Machinery Industry stock.

CMI’s Dividend Yield is ~36% better than average, with a safe Payout Ratio, which is essential for collecting interest.

Cummins Inc $CMI Stock Fundamentals Vs The Machinery Industry Averages

CMI is 438% larger than average based on their Market Cap, with 365% more Total Cash & 51% better Debt/Equity, which is especially important in this investing & trading environment.

CMI also has 18% higher Institutional Investment.

Cummins Inc. CMI’s Stock Technicals

CMI is trading at $167.08, with a 174.64 10 Day Moving-Average.

Their 50 Day M/A is 157.68 & their 200 Day M/A is 162.98, showing strength vs. other stocks in turbulent times.

Cummins Inc. $CMI Stock Technicals

Cummins Inc. $CMI Vs. The S&P 500 & NASDAQ Indexes Since IPO

Cummins Inc. has grown by 3,078.41% since it IPO’d on 2/21/73. It has grown 4,225.06% since then with consideration to historic dividends.

In that time, the S&P 500 Index has only grown by 2,551.77%, excluding dividends.

The NASDAQ Index has grown by 7,558.52% over the same time period, excluding dividends.

Cummins Inc $CMI Stock Performance Vs. The NASDAQ Index Since IPO

Cummins Inc. $CMI Has A Great Debt Rating

Moody’s rates CMI’s debt A2. which is Upper-Medium Investment Grade debt. As more & more companies begin to get into trouble, having access to credit will become a luxury, and these guys are in good standing.

Cummins Inc. $CMI's Debt Rating From Moody's Is A2, Upper-Medium Investment Grade Debt

Tying It All Together

Cummins Inc.’s stock shows many advantages both from a long-term investment & short term trade perspective. They are in solid business shape, offer a strong yield & can weather the current market storms.

I am beginning to look for entries, although I am debating between whether I buy puts & the buy long when I cash in, or by buying longer-term calls in the meantime.

That will be dictate by external market factors that I see this week, but overall it offers many advantages for both long & short term performance.

*** I do not own any shares of CMI stock when this was written ***

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Magna International, Inc. ($MGA) Stock Analysis

This weekend I reviewed an old favorite stock, Magna International, which trades under the ticker MGA. As of the 6/12 close, MGA traded at $44.16 per share. From an investor’s standpoint, their 14.9 P/E (ttm) & 1.28 P/B look appealing, especially when combined with their 3.62% Dividend Yield.

MGA Stock Fundamentals Show Great Value

Magna International $MGA Stock Fundamentals

In addition to these great numbers, Magna International has a healthy Payout Ratio of 46.4%, with a Market Cap of $13.18B & $1.26B in Total Cash (mrq). MGA has $4.92B in Total Debt (mrq), with a Debt/Equity ratio of 47.15, and a 56.66% Institutional Ownership.

When compared to its peers in the Consumer Discretionary sector, MGA’s appeal becomes even more apparent.

Magna International $MGA Stock Fundamentals Vs. The Consumer Discretionary Sector

Magna International’s P/E(ttm) is 72% lower than their sector peer, and their P/B is 79.55% lower than average.

Magna International Inc. $MGA Stock Fundamentals Vs. the Consumer Discretionary Sector Averages

While their Beta is 14% higher than average, the rest of their fundamentals look fantastic. They have a 31.6% advantage over their average peer’s dividend, and have a safe Payout Ratio at 46.4%, which is 1.76% better than average.

MGA’s Market Cap is 38.6% larger than their average Consumer Discretionary peer’s stock, with 10.56% more Total Cash (mrq) & 86% better Debt/Equity (ttm).

They have 5% less Institutional Ownership than the average peer.

Consumer Discretionary Sector Stock Fundamental Overview

Magna International Also Outperforms The Auto Components Industry Averages

Magna International $MGA Stock Vs. The Auto Components Industry Average Fundamentals

MGA’s P/E (ttm) is 29% lower than the Auto Components Industry Average, with a 45% better P/B than their average peer. Their 58.8% better yield makes them a more attractive buy, which looks to be safe based on their Payout Ratio.

MGA’s Market Cap is 521% larger than their average peer in their industry, with 192% more Total Cash.

Magna International $MGA’s Stock Technicals Overview

MGA has a current price of $44.16, with a 10 Day Moving Average of 45.48. MGA’s 50 Day M/A is 39.63, and their 200 Day M/A is 47.47.

Magna International $MGA Stock Technicals Overview

With an RSI of 56, they look prime to perform well, especially during these turbulent times in the market.

Magna International $MGA Stock Vs. The S&P 500 & NASDAQ Indexes

Since they began being traded on 10/4/1984, MGA stock has increased by 1,208.44%.

When you factor in their historic dividend yields, that figure comes out closer to 2,050.5% in gains.

During that same time period, the S&P 500 has only posted 1,769.5% gains, excluding dividends.

Magna International $MGA Stock Performance Vs The S&P 500 Since IPO

The NASDAQ in that time has grown by 3,767.32%, excluding dividends.

Magna International $MGA Stock Growth Vs. The NASDAQ Since IPO

Magna International $MGA Has A Solid Debt Rating

MGA is rated A3 at Moody’s which is Upper-Medium Grade Investment Level Debt. This is becoming more and more important, as many businesses are under increasing distress due to 2020’s market turbulence.

Magna International $MGA Stock's Debt Rating From Moody's Is A3 - Upper-Medium Grade Debt

Tying It All Together

I have owned Magna previously, and loved it for its fundamentals. I am beginning to revisit them due to their strength of business, safe dividend yield, and growth potential.

I plan to begin rebuilding a long position in MGA over the coming weeks, but my entry point will be dependent upon external market conditions as the week progresses.

For Full Report:

*** I do not currently own MGA, although I am beginning to look at their stock for an eventual entry ***