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US Markets: 10 Stocks to Consider Ahead of Possible Stumble in November

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For now, all indicators say the bull move could extend a lot longer than people think.

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Given that view, how do we invest with the potential for a stutter-step in November? Well, one place to start is with the 10 S&P macro sectors. Currently, the S&P 500 is trading at 16.4x this year's bottom-up operating earnings estimate. Looking at the P/E ratios of the 10 macro sectors shows that only the financials (13.4x), energy (13.8x), and utilities (16.1x) are trading at a discount to the S&P 500. On the energy theme, only three stocks in Raymond James' research universe have a Strong Buy rating from our fundamental analysts, and screen bullishly using my proprietary models: Enterprise Products Partners (NYSE:EPD), Memorial Production Partners (NASDAQ:MEMP), and Valero Energy (NYSE:VLO).

Raymond James covers many Strong Buy-rated names in the financials complex, and these seven also screen well by my system: EverBank Financial (NYSE:EVER), Huntington Bancshares (NASDAQ:HBAN), Lakeland Financial (NASDAQ:LKFN), New York Community Bancorp (NYSE:NYCB), PrivateBancorp (NASDAQ:PVTB), Webster Financial (NYSE:WBS), and Wintrust Financial (NASDAQ:WTFC). would put these names on your watch list for potential purchase.

The call for this week: Last week just about all of the indices I monitor made new all-time highs except for the Dow and the Nasdaq (INDEXNASDAQ:.IXIC). Likewise, seven of the S&P's 10 macro sectors made new all-time highs with the exceptions being consumer staples, telecommunications, and utilities. Moreover, despite predictions of imminent disaster for stocks, there is little evidence suggesting a sudden collapse is at hand. Indeed, the Buying Power Index is above its September highs, while the Selling Pressure Index recorded a new low last week, and all of the Advance/Decline Lines I look at rose to new highs. Accordingly, the short-term "buy signal" that occurred on October 10 remains in force. Surprisingly, given last week's strength, the McClellan Oscillator became less overbought. And don't look now, but 63.5% of companies reporting earnings have beaten the estimates and 54.4% have beaten revenue estimates. This morning there are more stories about no tapering by the Fed this year, a stance I have taken since last August. That sense is what buoyed stocks late last week and it is having the same effect this morning.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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