Why You Need to Avoid This Major Investing Mistake

Today, I’d like to focus on how a common way of thinking every investor runs into can impact your portfolio’s performance in a big way.

Now, if you’ve ever watched sports, you’ve undoubtedly seen reports or interviews with players – both the winners and losers.

When a team wins, they attribute their success to their efforts as individuals and as a team. You’ll hear all about how special the group is and how individuals worked harder than anyone else and were destined for success.

If, on the other hand, a team fails, it’s often the fault of the officials.

We see this type of thinking a lot in investing. We also have a tendency to congratulate ourselves for our brilliance when we succeed – but blame outside influences for our failures.

When a stock we picked goes up, it is because we are clever and made the right choice. When a stock we picked goes down, it is the economy, the Federal Reserve, the stupid broker, or those gosh-darned hedge funds that made things go wrong. We could not have possibly made such a bad choice.

In my office, we refer to this as “confusing a bull market for brains.” A potentially fatal side effect of this all-too-human trait is what happens when we get good results from bad decisions: We do the same thing again, usually to a bad outcome. Not only do we lose money; we lose the time we might have spent making improvements in our portfolio.

This tendency to attribute success to our efforts and abilities – and failure to outside circumstances – is known as Self-Attribution Bias.

The human brain is a marvelous tool for creating art, music, language, and engineering feats, but it’s a terrible tool for investing.

The more you know about the workings of your own mind, the “bugs” inside it, and how they work against our investment performance, the more you can develop strategies to mitigate the negative effects of those bugs.

That’s why I’d like to talk today about the challenge of Self-Attribution Bias, how it works, and how you can neutralize its negative effects.

Why Stocks Rise and Fall

“In the short term, the market is a popularity contest; in the long term it is a weighing machine.”

That’s a quote from one of the greatest investors of all time, Warren Buffett.

His method of investing focuses on choosing stocks solely based on their overall potential as a company; he looks at each as a whole and holds them as a long-term play.

He’s not chasing capital gain but seeks to own quality companies that can generate earnings.

I share Buffett’s dedication to fundamentals. In fact, fundamentals are one of two critical characteristics at the center of my stock analysis.

By fundamentals, I mean sales growth, earnings growth and the like. Growing companies are ones that are healthy and thriving. They have smart leaders who know how to run and manage a smart business.

If a company is struggling to sell its products or is spending more than it makes, it’s not a company that you want to own for growth.

The second characteristic I look for in any great stock is strong buying pressure. Think of this as “following the money.” The more money that floods into a stock, the more momentum a stock has to rise. And there’s no doubt about it, we all like stocks that rise!

I call this my Quantitative Grade.

These two factors, more than any others, determine whether a stock will rise or fall. And the great thing is that my system can spot laggards that are about to become winners.

Finding a Sporting Winner

Let’s look at Big 5 Sporting Goods Corporation (BGFV) as an example.

The company is a leading sporting goods store in the U.S., with about 430 locations across 11 states. Its retail stores offer traditional sporting goods and accessories, as well as indoor and outdoor athletic equipment; hunting, camping and fishing gear; winter and summer recreation products; and tennis, golf and roller sports gear.

But the stock was flat for 18 years. Most folks probably dismissed it. But not my Project Mastermind. It is a computer system. It doesn’t have biases. It just looks at the numbers. Sure enough, if you’d had Project Mastermind in your corner in late 2020, you’d have known something almost no one else did. The stock was about to break out.

Below you see a chart from before I recommended buying the stock in November 2020 to when I recommended selling it a year later. The stock had achieved a top score of “A” for its Quantitative Grade, and as expected, the flood of major institutional cash kept shares moving higher and higher.

I recommended BGFV when it was trading for $6.32 per share. A year later, it was benefiting from a surge in demand for its products with more folks turning to outdoor recreation and home fitness programs during the pandemic. The stock had surged over 433% to trade at about $33.72 per share.

However, on November 4, 2021, I told my subscribers it was time to lock in our profits.

But why did I recommend selling? Well, in the third quarter of 2021, BGFV revealed slowing earnings and sales momentum.

BGFV reported third-quarter earnings of $24.1 million, or $1.07 per share, on $289.6 million in sales. That was down from earnings of $28.4 million, or $1.31 per share, and sales of $305 million in the third quarter of 2020. The consensus estimate had called for earnings of $1.13 per share and revenue of $314.6 million.

And it was a good thing I recommended selling, as the stock has dropped over 50% since…

You see, my Project Mastermind uses these data points to signal when it’s time to get out. If you bought BGFV at the time of my original recommendation, and sold when I recommended, you achieved a 433% gain, including dividends.

It can be difficult to let this kind of stock go. A pick going up 433% makes you feel awfully smart.

But we didn’t let our biases control us. We used cold, hard facts to tell us when it was time to get out. And as you saw, the stock didn’t do much after we sold. So, it was nice to have that capital freed up. Now we’re deploying this system for even better gains in less time with my Project Mastermind.

Project Mastermind

Through hundreds of hours of research, I discovered how an elite type of stock consistently outperformed the broad market, year in and year out. After extensive analysis, I isolated the eight key qualities that these super-performing stocks shared… and I developed a system for riding them.

On Tuesday, I hosted a special event where I unveiled my latest research from Project Mastermind and revealed the stock I rated number-one based on insights from Project Mastermind – ticker symbol and all. I’m really excited about the project, and I made sure to record the kickoff for you to review, if you couldn’t make it.  Click here to watch now.

Sincerely,

Signed:

Louis Navellier

P.S. Besides the stock you’ll hear about in my presentation… My Project Mastermind research system just uncovered another explosive stock that could hand you 100% gains in no time. And I’ll be adding it to my recommendation list on Monday. To learn how to access my new recommendation – and all of Project Mastermind’s recommendations for the next year – click here.

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

 

Reviewing the FAANG’s Earnings Announcements

A crop of outstanding earnings reports this quarter for fundamentally superior companies helped send the S&P 500 to its 57th and 58th all-time highs on Tuesday and Thursday, respectively, and rose 1.2% for the week.

The Dow also reached a new all-time high on Tuesday and is up 0.3% for the week, while the NASDAQ reached a new record high on Thursday and climbed just under 2.5% this week.

But the markets woke up on the wrong side of the bed Friday morning after digesting disappointing earnings announcements from Apple Inc. (AAPL) and Amazon.com Inc. (AMZN).

The companies’ reports represented the last of the quarterly earnings announcements of the FAANG stocks, which also include Facebook Inc. (FB), Netflix Inc. (NFLX) and Google parent company, Alphabet Inc. (GOOG).

There’s lots of news to digest from these earnings reports, including Facebook’s branding reboot, so let’s use today’s Market360 to dig in.

Facebook (FB) – Announced October 25.

Facebook’s third-quarter revenue rose 35% year-over-year to $29.01 billion but was lower than Wall Street consensus estimates for revenue of $29.52 billion. Earnings climbed 19% year-over-year to $3.22 per share. Analysts were calling for earnings of $3.18 per share, so the company topped expectations by 1.3%.

Chief Financial Officer David Wehner noted that the company faces continued headwinds in the fourth quarter from privacy changes to Apple’s iOS 14 that gives users more control over privacy and has already put a dent in Facebook’s advertising revenue, which is a huge part of the company’s revenue.

Monthly active users rose 6% to 2.91 billion, which was just shy of analysts’ expectations for 2.92 billion. Non-advertising revenue almost tripled year-over-year to $734 million.

The company also noted plans to separate out its virtual reality business into a separate revenue segment next quarter it’s calling Facebook Reality Labs. Meanwhile, the company is investing big on the segment and expects it to reduce overall operating profit this year by about $10 billion.

CEO Mark Zuckerberg has said he’s interested in the company becoming a leader in the metaverse — a set of virtual reality spaces where you can create and explore with others who aren’t in the same physical space. To that end, the company has even decided to change its name to “Meta” to fall more in line with its goals for the metaverse.

“Today we are seen as a social media company, but in our DNA we are a company that builds technology to connect people, and the metaverse is the next frontier just like social networking was when we got started,” CEO Mark Zuckerberg said.

Facebook’s stock ticker will change to MVRS on December 1, which means the FAANG moniker may need an adjustment. MAANG anyone?

Facebook stock ticked up Thursday in advance of the new name change but is now down 4% since reporting earnings. The company also continues to face an onslaught of media reports about internal Facebook documents that reveal internal research identifying harmful effects from its products. The Wall Street Journal said on Wednesday that the Federal Trade Commission has begun looking into the company’s internal documents.

Amazon (AMZN) – Announced October 28

Amazon shares took a beating in extended hours trading Thursday after the company reported it missed on both top- and bottom-line estimates from Wall Street for its third quarter.

Revenue of $110.8 billion climbed 15% from last year, but missed analysts’ estimates for $111.6 billion. Earnings of $6.12 per share decreased from $12.37 per share a year ago and badly missed Wall Street’s expectations for $8.92 per share. That means Amazon missed analysts’ expectations by 46%.

Online store sales increased 3% from a year prior to $49.9 billion and physical store sales grew 13% from a year ago to $4.3 billion. Third-party seller revenue jumped 18% to $24.3 billion.

The company’s services segment, which brought in $55.9 billion overall, saw sales beat its retails sales segment for the first time in Amazon’s history. Amazon Web Services revenue came in at $16.1 billion, up 39% from a year ago and topping analysts’ forecast for $15.5 billion.

Shares started climbing modestly Monday ahead of the company’s earnings announcements but are up just under 6% on the year.

Alphabet (GOOGL) – Announced October 26

Google reported earnings of $27.99 per share, up 70.6% from a year ago and topping analysts’ estimates by $4.74 per share, or a 20% earnings surprise.

Revenue of $65.1 billion rose 41% from a year ago and beat Wall Street’s estimates for the quarter by $1.8 billion.

Google’s advertising revenue increased 43% year-over-year to $53.1 billion, while YouTube ad sales climbed 43% from a year ago to $7.2 billion. The company has been more insulated from the changes to Apple’s operating system than Facebook as it owns the Android operating system.

The company’s cloud division sales jumped 45% from a year ago to just under $5 billion as Alphabet continues to place significant investments in the segment.

Shares popped over 6% after reporting earnings and are up over 66% so far this year.

Apple (AAPL) – Announced October 28

Apple announced its fourth-quarter earnings of $1.24 per share, which was up 70% from a year prior and in line with Wall Street’s consensus expectations.

Sales of $83.4 billion were up 29% from a year ago but missed analysts’ expectations by $1.62 billion. That means Apple had a revenue miss of 1.9%. The disappointing report marked the first time the company hasn’t beaten earnings estimates since April 2016 and the first time it hasn’t topped revenue estimates since May 2017.

CEO Tim Cook blamed supply chain constraints including semiconductor shortages and COVID-related manufacturing disruptions in Asia on lagging iPhones, iPads and Mac sales, which cost the company about $6 billion.

iPhone sales climbed 47% year-over-year, but still missed Wall Streets estimates, while iPads revenue increased 21% from a year ago, despite supply side constraints.

The company hasn’t provided forward guidance since the pandemic began, but Cook said he expects to see solid year-over-year revenue growth in the coming quarter even though the company expects supply constraints to worsen.

The company’s services business, which includes music and video subscriptions and sales from the App Store, shined for the quarter and was up 26% on the year and higher than Apple expected. Apple now has 745 million paid subscriptions, up 160 million year-over-year, and up five times in five years.

Shares have climbed about 7% from a low on October 13 and are 12% higher so far this year.

Netflix (NFLX) – Announced October 19

Streaming video leader Netflix announced earnings of $3.19 per share, up over 83% from a year ago and beating Wall Street’s consensus estimate for $2.56 per share by 24.6%.

Sales of $7.5 billion increased 16% from a year ago and just topped analysts’ estimates by $0.16 million.

The company added 4.4 million new paid subscribers, beating analysts’ calls for 3.84 million. Netflix said it now anticipates adding 8.5 million subscribers in the fourth quarter.

“We have so much content coming in Q4 like we’ve never had, so we’ll have to feel our way through and it rolls into a great next year also,” said co-CEO Reed Hastings.

Netflix also said it will begin using new metrics to report viewership, switching to hours viewed from the number of accounts that watched, which in part gives proper credit to re-watching content.

The company’s new hit show, “Squid Game,” has been its biggest ever, as 141-million-member households around the world watched the show in its first month after debuting.

Interestingly, Netflix said its viewership ballooned 14% earlier in the month when Facebook had a global outage.

Shares have increased over 6% since the company reported strong earnings and are up over 25%, year to date.

How to Play Like a Mastermind

The past week has been good to shares of the FAANGS overall, except Facebook. However, if you took the FAANGs as one portfolio right now, here’s how that would look in my Portfolio Grader.
As you can see, it’s a mixed bag.

The overall FAANG portfolio earns a Total Grade of “C,” with Google and Netflix earning a strong “B” for their Total Grade and a “B” for their Quantitative Grade, which represents institutional buy pressure under the stocks. Amazon and Facebook, on the other hand, earn a “D” for their Total Grade, meaning they’re an immediate sell, while Apple earns a “C” for its Total Grade, making it a solid Hold.

In fact, the stocks that earned poor grades in my Portfolio Grader sold off after reporting results.

So while a couple of the FAANGs are attractive buys right now, the remainder are not the fundamentally superior stocks my Project Mastermind system is tuned to find. Overall, I’d look for better opportunities in small-cap, high-growth stocks elsewhere.

In fact, my Project Mastermind system just spotted another fundamentally superior stock yesterday that’s been firing on all cylinders. In its latest earnings announcements was a stunner. The company reported triple-digit sales growth from the year prior and a triple-digit earnings surprise.

The company is slated to report its third-quarter announcements on Wednesday, and investors have been piling into the stock in anticipation.

Analysts are calling for triple-digit earnings growth from a year ago and double-digit sales growth. Over the past 90 days, analysts have revised their earnings estimates 82% higher. Positive analyst revisions typically precede future earnings surprises.

Sign up here to get all the details.

Sincerely,

Signed:
Louis Navellier

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Amazon.com Inc. (AMZN), Facebook Inc. (FB), Alphabet Inc. (GOOG)

The Next Evolution in Investing

I’ve always loved numbers, and I’ve always been fascinated with the stock market.

I’ve turned my love of those things into a successful career as an adviser and investor. Along the way, I’ve helped my readers claim double- and triple-digit gains in the market and create a more secure future for themselves.

But my career as an investor really started with a homework assignment.

As a grad student at Cal State Hayward some 30 years ago, a professor gave me an assignment that would change my life… and lead me down a path that would make me, and many of my subscribers, rich.

The assignment was to create a model that would mimic the S&P 500.

My professor wanted to prove that indexing was the best way to invest. Using Wells Fargo’s powerful mainframe computers, I completed the assignment – but there was one little problem.

My model didn’t just mirror the S&P’s performance, it actually beat it!

I was one of the first analysts to use advanced computer models to analyze the market – back when computers were cutting-edge technology.

Using those tools, and lots and lots of data, I was able to make calls like Nike at 39 cents per share and Intel at $3.57 per share.

Leveraging mathematical analysis and the latest technology, I’ve established an impressive track record of growth. In fact, over 15 years, my large-cap stock picks beat Warren Buffet!

The lessons I learned in grad school are still serving me well today. Advanced technology is the single greatest tool investors can use to make investment decisions.

The truth is that the technology is moving so fast that even the proprietary market terminals are relics!

And that’s why I’ve kept evolving my system and used technology to take investing to the next level.

And now I’m ready to present the next evolution to the world.

I call it: Project Mastermind.

Using the latest tech, I’ve discovered a way to do even better in the markets. The results are faster, and come without any additional risk – that’s what Project Mastermind is really about. Next Wednesday, October 20, at 4 p.m. ET, I will unveil the power of Project Mastermind and show what it can do for you. I will also reveal the stock I’ve rated number-one based on insights from Project Mastermind – absolutely free.

Simply click here now to reserve your spot. I don’t want you to miss out.

I’m going to reveal the stock I’ve rated number-one based on insights from Project Mastermind – ticker symbol and all…

I can’t wait to show you the power of Project Mastermind and what it can do for you, so stay tuned!

Sincerely,

Signed:
Louis Navellier

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Predictions Become Reality with Project Mastermind

Have you ever heard of Isaac Asimov? He was a famous science-fiction author and professor of biochemistry at Boston University in the mid-1900s. A good chunk of his science-fiction work was centered around robots, gadgets and the future.

One piece of writing Asimov is most famously known for is his “Three Laws of Robotics”:

  1. “A robot may not injure a human being or, through inaction, allow a human being to come to harm.”
  2. “A robot must obey orders given it by human beings except where such orders would conflict with the First Law.”
  3. “A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.”

Of course, these laws are fictional. But to this day, folks are still arguing about their validity and accuracy… especially as the fascination with robots and their future in our society continues to grow.

To be clear, while there are engineers and scientists building robots all over the world, there are none that are even remotely close to “human-like.” So, there’s no need to worry about a robot breaking one of Asimov’s laws!

However, there’s something else Asimov is famous for that is applicable to today….

After going to the 1964 World Fair, Asimov wrote this in a New York Times article:

“Much effort will be put into the designing of vehicles with ‘Robot-brains’ — vehicles that can be set for particular destinations and that will then proceed there without interference by the slow reflexes of a human driver. I suspect one of the major attractions of the 2014 Fair will be rides on small roboticized cars which will maneuver in crowds at the two-foot level, neatly and automatically avoiding each other.”

Sound familiar? He’s talking about self-driving cars. And those “robot-brains” he mentions? Well, that’s an exciting technology that can be used for far more than self-driving cars. I’d say Asimov’s prediction was pretty spot on!

Today we have Google parent, Alphabet Inc. (GOOG), Tesla (TSLA) and Apple (AAPL) – just to name a few – racing to release the first fully autonomous vehicle (AV). We’re not quite there yet, but that goalpost sure is moving closer with each new generation of AV technology. And thanks to the technology, or the “robot-brain,” we’re not going to need to wait another 50 years.

While experts expect it will be at least 12 years before fully autonomous vehicles hit the market and become available to consumers, robotaxis might be ready as early as 2025.

Now, as I mentioned, this technology is being used for far more than just cars. As we’ll talk about later in the week, it’s set to revolutionize just about every major industry in the world.

Finding the Next Big Winners with Project Mastermind

Now I’d like to let you in on a little secret… I use this technology, too, for all my stock recommendations.

I call it Project Mastermind. It uses special technology to find stocks with the potential for big profits. It does this by analyzing trillions of data points in real time to make stunningly accurate predictions about the likelihood of big stock moves.

NVIDIA Corporation (NVDA) is a great example…

NVIDIA is a leading computer graphics company, making graphic processing units (GPUs) for consumers and businesses.

And thanks to Project Mastermind, I recommended this stock to my subscribers back in 2016. In 2019, we sold it for a whopping 166% gain!

The reality is that with Project Mastermind I can find the next big winners in the stock market without the risk.

Over the next several days, you’re going to receive several messages from me where we’re going to talk a lot about Project Mastermind and how this system can work for you.

And then next Wednesday, October 20, at 4 p.m. ET, I will unveil Project Mastermind and reveal the stock I’ve rated number-one based on insights from Project Mastermind – ticker symbol and all…

I can already tell you with confidence – this recommendation has the potential to double your money or more in the coming months.

If you’re interested, sign up now to reserve your spot. I look forward to seeing you there!

Sincerely,

Signed:
Louis Navellier

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Alphabet, Inc. (GOOG), NVIDIA Corporation (NVDA)

Should You Buy the Big Banks Ahead of Earnings?

We’re fast approaching one of my favorite times of the year — the third-quarter earnings announcement season.

The reason why I get so excited during earnings season is because this is when the crème de la crème of stocks get their chance to rise to the top. Every company must open its books and show Wall Street how they performed in the quarter and share their longer-term outlook. Companies that reveal strong results and positive earnings and guidance are typically rewarded by investors, while those that post weak results and guidance are punished. In my forty-plus years of investing, I have found earnings have worked 70% of the time.

Now, for the third quarter, FactSet expects the S&P 500 to average 27.6% earnings growth and 14.9% revenue growth.

Yes, that is down from the 91% average earnings growth achieved in the second quarter, but the reality is economic growth is slowing, and year-over-year comparisons are now less favorable.

I should add that fourth-quarter estimates remain solid, with FactSet anticipating 21.5% average earnings growth and 11.4% average revenue growth.

Personally, I anticipate my fundamentally superior Growth Investor stocks will post strong sales and earnings results. My Growth Investor stocks are characterized by 46.9% average annual sales growth and 57.2% average annual earnings growth. The analyst community has also revised their consensus earnings estimates 14.9% higher in the past three months. So, I’m looking forward to wave-after-wave of positive earnings surprises in the coming weeks to dropkick and drive my Growth Investor stocks higher.

In fact, we got a taste of what strong earnings can do with Fastenal Company (FAST), one of my Growth Investor Elite Dividend Payers, this morning. The company achieved earnings of $243.5 million, or $0.42 per share, on $1.55 billion in sales, which compares to earnings of $221.5 million, or $0.38 per share, and sales of $1.41 billion in the third quarter of 2020. The consensus estimate called for earnings of $0.42 per share on $1.54 billion in sales.

Thanks to continuing demand for manufacturing and construction equipment, Fastenal Company achieved sales of $4.45 billion and earnings of $693.8 million, or $1.20 per share in the first nine months of the year. In comparison, the company reported sales of $4.29 billion and earnings of $663 million, or $1.15 per share, in the first nine months of 2020.

The stock rallied more than 2% in early trading on the heels of its strong results.

Now, the big banks, including JPMorgan Chase & Co. (JPM), Citigroup (C), Bank of America (BAC) and Wells Fargo & Co. (WFC), will release their earnings results this week, “officially” kicking off the earnings season.

FactSet expects the banks in the S&P 500 to tally about $31 billion in aggregate profits, up roughly 20% from a year ago but down 20% from the second quarter. Analysts also expect profits to stay flat in the fourth quarter.

Earnings estimates for the financials have risen because of more favorable economic conditions and higher Treasury yields, which benefit banks’ bottom lines related to their core lending businesses.

Also helping boost analysts’ predictions is the expectation that the big banks will release more in loan loss provisions they’d set aside to prepare for loan losses in the aftermath of the pandemic, though at a lower rate than during the first quarter of the year. That, in turn, will help boost the banks’ bottom lines.

On the other hand, loan growth for the big banks has been slow, climbing just 1% since the end of June.

JPMorgan Chase & Co.

  • First to report will be JPMorgan Chase & Co. on Wednesday morning. Analysts anticipate earnings of $3.00 per share on sales of $29.7 billion. Over the past 90 days, eight analysts revised their estimates upward, while two revised lower. The stock is up over 31% year-to-date, and is up nearly 6% the past month.

Wells Fargo & Co.

  • Analysts expect Wells Fargo & Co. on Thursday morning to announce earnings of $0.94 per share on revenue of $18.3 billion. Over the past 90 days, eight analysts have revised their forecasts for the bank upward, while six have revised downward. The company’s stock has gained over 56% so far this year and is up over 6% in the past month.

Bank of America

  • Analysts expect Bank of America, which reports on Thursday morning, to announce earnings of $0.70 per share on $21.6 billion in revenue. Over the last 90 days, three analysts have revised their earnings estimates for the company upward, while nine have revised downward. Bank of America shares have soared over 44% year-to-date, and are up nearly 9% in the past month.

Citigroup

  • Also reporting on Thursday, Citigroup is expected to see earnings of $1.79 per share on sales of $17 billion. Six Wall Street analysts have upped the estimates over the past 90 days, while six have downgraded the company. Citigroup shares are 16% higher year-to-date and have risen 3% in the past month.

Currently, these banks earn a B-rating in Portfolio Grader, making them “Buys” ahead of their earnings results. However, I don’t think they represent good high-growth buys and wouldn’t recommend them right now.

This is for two reasons…

First, I’m an ex-banking analyst who worked for a division of the government that is now part of the Federal Reserve. During my time there, I saw how they essentially “cook their books” and that scarred me for life.

Second, rising Treasury yields can eventually derail interest rate sensitive value stocks. Instead, I like to focus on high-growth, high-quality stocks that have historically prospered in a rising interest rate environment, and financials simply don’t fit that bill.

So, while the steepening yield curve and strong housing markets bode well for bank profitability in the near term, they may get into trouble if inflation runs too hot.

The bottom line: If you want to have a successful high-growth portfolio, these bank stocks should not be on your buy list.

Sincerely,

Signed:
Louis Navellier

P.S. Right now, successful Americans like us have a bullseye on our back.

We’re facing a direct threat to our safety and prosperity.

The values we hold dear, like individual freedom, hard work and fiscal responsibility have been tossed aside.

The U.S. national debt is growing at an unprecedented rate. And more spending is coming.

The cost of essential goods and services seems to get more expensive by the day. Critical materials are on backorder for months. Grocery store shelves are half-empty.

If you have any money in savings, in the stock market, in a 401k or even cash stuffed under the mattress, this should make the hair on your neck stand up.

To help understand the monumental problem we’re facing and why both our way of life and financial security are under attack, I put together a special presentation.

So, if you want to protect yourself and grow your wealth, I encourage you to watch this briefing now.

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

JPMorgan Chase & Co. (JPM), Bank of America (BAC), Fastenal Company (FAST)

The Key to a Successful Options Trade

First, I’d like to thank once again everyone who joined my InvestorPlace colleague Eric Fry and I for Tuesday’s Escape Velocity Event. Thousands tuned in to find out about our groundbreaking new strategy that could hand investors big gains without taking big risks in options trading. (If you missed the event, or would like to watch a replay, click here.)

Throughout the years, my subscribers have asked me to use my proprietary, market-beating system, which has enabled me to beat the market by 3-to-1, to trade options. They thought it would be the perfect tool to help implement even greater gains that I’d been known for.

And achieve them without taking on excessive risk.

I took this as a challenge and crunched trillions of data points and explored the financial markets at a depth I’ve rarely explored before. As it turned out, my subscribers were right.

I also realized that the key to a successful options trade hinges on picking the right stock, based on superior fundamentals. Most investors get caught up in “hunting” for the perfect option at the perfect price. But they fail to consider the most important element to the entire equation: the underlying stock.

The reality is when options are used improperly, that trade is nothing short of gambling. It’s why it’s critical that before we pick the option, we pick the right company that we know has the potential to climb higher because of its strong fundamentals.

When you choose randomly, odds are high that you’ll be left holding the bag after the smart money flees the stock.

To find the right company, I use my proprietary system to scan 5,000 stocks per week and pinpoint those with growing sales and earnings that are sure to move higher over the next year or two. Once I’ve found the right stock, I do a second deep dive to find the safest, most lucrative LEAPS (Long-Term Equity Anticipation Securities) options for maximum gains.

This allows me to leverage the gains from fundamentally superior stocks with explosive potential. Unlike short-term trades, we have at least a year to benefit from the underlying stock’s movement, which also helps limit our risk.

With this approach, folks can reach financial escape velocity.

Now, I know now might seem like a tricky time to achieve financial escape velocity, but the reality is we’ve finally reached October, which is a seasonally strong month for the stock market. So, there couldn’t be a better time to start trading LEAPS on fundamentally superior stocks. I look for high-quality stocks to strengthen in October as we approach the seasonally strong time of year when family and friends gather and celebrate the holidays.

In addition, these stocks should benefit from positive analyst revisions in late September and early October ahead of the third-quarter earnings announcement season. And after that, the fourth-quarter earnings season itself should be stunning, as the seasonally strong time of year in the market ramps up.

These are the kinds of stocks I look for as I build my Power Options LEAPS Portfolio. In fact, the six escape velocity trades in my Power Options Portfolio are all plays on companies that posted strong earnings results in their most-recent quarters.

Every one of these stocks has posted at least double-digit earnings and sales growth. And they all beat Wall Street’s earnings estimates, too.

So, in an environment where the companies that post strong earnings are rewarded, these stocks are well-positioned to meander higher over the longer term. So, it would be foolish not to trade options on stocks with major potential upside ahead. These first six escape velocity plays are just a taste of what’s to come.

If you’re interested, click here to learn more.

Sincerely,

Signed:
Louis Navellier

P.S. Once you sign up, in addition to receiving my six escape velocity trades, you’ll also have full access to Eric’s three LEAPS trade recommendations in his new report called The Spectacular LEAPS Portfolio: Three New “Escape Velocity” Trades. Get the full details, here.

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

How Eric Fry Made a Quadruple-Digit Return on a Copper Miner

In yesterday’s Market360, I introduced you to Eric Fry, the master of “global macro” investing. Today, I’m going to hand the mic over to Eric so he can show you how he was able to make a stunning 1,018% return on Freeport-McMoRan Inc. (FCX).

Eric, take it away!

Back in late 2019, I chose Freeport-McMoRan Inc. (FCX) as my pick in the InvestorPlace.com Best Stocks for 2020 contest.

And with 99% returns in 2020, the global copper giant came in No. 1 among the picks from InvestorPlace’s top analysts… giving me bragging rights at company cocktail parties for at least the next few years. I’ll admit, Louis was a close second. His pick, PennyMac Financial Services Inc. (PFSI), earned a 94% return in 2020.

So, why did I pick Freeport-McMoRan?

I’ll start by saying that Freeport-McMoRan is a unique company. The terms “artificial intelligence” and “copper miner” do not obviously relate to one another, but with Freeport-McMoRan, they absolutely do.

One of the world’s largest copper producers, this company has been testing an artificial intelligence, or “machine learning,” model, at its Bagdad copper mine in Arizona.

This machine learning model uses data from sensors around the mine to “tailor” the ore processing method to each of the seven distinct types of ore that come from it.

This test has been a remarkable success, so the company is now rolling out its new technology across all of its operations in the Americas.

By doing so, this company expects to increase its annual copper production by a hefty 5%.

Boosting Production

The machine learning program is just one of three major initiatives Freeport-McMoRan said would boost its copper production by 30% in 2020.

The other two production drivers were:

  • A ramp up in Freeport’s new underground mining operations at its massive Grasberg mine in Indonesia.
  • The company’s new Lone Star copper development in Arizona is going into production.

Combined, I predicted that these three initiatives would produce a significant jump in earnings, even with no change in current copper or gold prices. At a minimum, I said at the time, the company should have earned about $0.55 a share in 2020 and $1.40 in 2021. (We now know that the company is on track to more than double my initial earnings estimate for 2021.)

I predicted those results would give Freeport’s stock a price-to-earnings ratio of 24 in 2020, which would then fall to just nine times earnings in 2021. Remember, though, these earnings estimates assumed no change in copper prices during the next 12 months.

But that’s not what I assumed.

I believed then that the price of copper was on the verge of a major upside move that would carry it above the five-year high of the $3.32 a pound mark it hit in late 2017.

Copper’s price did just that in late 2020. And it now stands at around $4.19 per pound.

Not surprisingly, Freeport’s share price has also made a big move along with the price of copper. It’s up more than 150% since I made it my pick in the InvestorPlace.com Best Stocks for 2020 contest.

And I don’t think copper – or FCX’s – big move up is done yet.

Five main factors will power this big move. Three of them are the “usual suspects,” while two are unusual ones.

First, the usual ones:

  • Copper supply is falling short of copper demand, which is creating a deficit in the market.
  • The copper deficit is likely to grow much larger over the coming decade.
  • The Federal Reserve has recently stated its intention to hold interest rates low throughout 2020, which should ignite commodity prices.

In addition to these bullish forces, copper prices could gain a tailwind from two nontraditional factors:

  • Improving international trade relations, especially between the United States and China.
  • The global boom in electric vehicles and energy storage.

Let’s take a closer look at each of these five factors…

Fueling Up for the Copper Rally

First, Federal Reserve Chairman Jerome Powell is pursuing an “easier” monetary policy than most investors had been expecting during the last couple of years. Generally speaking, “easy money” monetary policies tend to produce periods of rising commodity prices.

Supply deficits are a second factor that could push copper prices higher. For most of the last few years, the global supply of refined copper has been falling slightly short of demand. But according to most forecasts for the copper industry, the current supply deficit will not merely persist during the next few years; it will grow much larger.

Source: InvestorPlace

Thanks to this supply deficit, coupled with the Fed’s low interest rates, Freeport’s earnings and cash-flow results are likely to keep surprising on the upside.

Electric Vehicles

But remember, Freeport also produces nearly 1 million ounces of gold per year and 92 million pounds of molybdenum (a metal that’s highly resistant to corrosion). So if either of those metals took a major swing to the upside, Freeport would benefit as well.

That said, copper is the major driver of the company’s profitability. So let’s take a closer look at the two unusual “one-off” factors that could spur strong copper demand… and a rising copper price.

First, the Trump-era trade war between the United States and China is in the past. As normalized trade continues between the U.S. and China, economic growth could gain a tailwind that boosts demand for essential commodities like copper.

Importantly, China is the world’s largest importer of refined copper. So if the Chinese economy gains renewed vitality, the copper market will notice. And let’s not forget that China is also the world’s largest producer of electric vehicles, which are “copper hogs.”


Source: InvestorPlace

Electric vehicles require about four times as much copper as internal combustion vehicles. Therefore, as EVs continue to gain market share, they will absorb a growing slice of the global copper supply.

The Bottom Line

When I first wrote about FCX in late 2019, I expected the stock to produce triple-digit gains in 2020. And I was pretty darn close. That final gain was 99%.

In 2021, the stock rose nearly 108%. And it’s tacked on another 26% gains so far this year.

Like I said before, add it all up and it’s soared more than 150% since I made it my pick in the InvestorPlace.com Best Stocks for 2020 contest

That’s a great return.

However, I’m pleased to say that over the time period, members of my elite trading service have done even better – and it’s all thanks to my escape velocity strategy. Freeport has been the gift that keeps on giving for members of my Speculator service. They’ve taken triple-digit and even quadruple-digit profits several times over the past couple of years on various FCX positions.

Since I recommended an escape velocity-charged position on Freeport to members of The Speculator in March 2020, we’ve closed out portions of it for 407.9%… 775.6%… 1,378.7%… and 1,506.7% gains.

Add it all up – and their total gains are 1,017%!

And it’s all thanks to the escape velocity strategy that Louis and I share.

Next Tuesday, Oct. 5, at 7 p.m. Eastern, during a special Escape Velocity Event Louis and I are holding, we’ll explain how escape velocity works and how you can make big returns using this strategy, too. If you haven’t reserved your spot yet, I encourage you to do so now.

Simply click this link and we’ll save a seat for you. Louis and I hope to see you there!

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Meet the Master of “Global Macro” Investing

Longtime readers know that I am a numbers guy. I have loved math my entire life, so it should come as no surprise that math is at the heart of my investment thesis. I’m only interested in a company that has growing sales and earnings and can prove that it will continue to grow over the long term.

In my 40-plus years of experience, when a company can consistently grow its sales and earnings, its stock price will climb higher, too.

The bottom line: I’m a “quant” guy.

But the reality is that there are many different types of investment strategies. One such strategy is the “global macro” approach. This is when you analyze the macroeconomic trends throughout the world and try to uncover major investment trends. Then you dig deeper to find the most innovative, fastest growing companies operating within those trends.

This is the strategy my InvestorPlace colleague Eric Fry uses, and it’s one that’s led to a very successful career.

While Eric and I have different investment philosophies, we use a similar tactic to help our members earn their biggest gains. We’ll talk about this tactic in our upcoming Escape Velocity Event next Tuesday, Oct. 5, at 7 p.m. Eastern – and how you can use it, too.

Before Eric and I sit down for the Escape Velocity Event, you probably want to know a little more about him… and his global macro strategy.

More importantly, you want to know how he uses it to dig up some of the most amazing trades I’ve ever seen.

Let’s take a look…

A Few Interesting Turns to Success

Eric has spent just about all of his more than 30-year career in investing.

But it took a few turns to get there.

He didn’t come out of Harvard Business School.

And he didn’t start his career at Goldman Sachs or one of the other big firms.

Instead, he graduated with a comparative literature degree from UCLA.

As you might expect from someone with a comparative literature degree, instead of heading to Wall Street, Eric got started at a beachfront restaurant in Malibu, and then at the Hard Rock Cafe in Beverly Hills.

But during his restaurant days, he started studying the markets – and developed the global macro strategy that helped him launch a 30-year investment career.

Soon, Eric was professionally analyzing investments in Monte Carlo. He then spent seven years as a hedge fund analyst/manager in San Francisco and New York.

Along the way, in order to pursue his global macro style, Eric produced his first book. International Investing With ADRs: Your Passport to Profits Worldwide, published in 1994, was the first comprehensive guide to investing in foreign companies using American depository receipts.

About 10 years into his career, while still in New York, Eric joined the Wall Street-based publishing operations of James Grant, editor of the prestigious Grant’s Interest Rate Observer. Working alongside Grant, Eric produced Grant’s International, before starting his own boutique firm, Apogee Research, where he produced research products geared toward professional money managers.

Eventually, Eric moved on and started working with Bill Bonner, another legend in the financial research business. Bonner is the majority owner of Agora, one of the largest independent research outfits in the world. Together, they wrote some of the most widely read (and profitable) financial analysis in the world.

Along the way, Eric’s views and investment insights have appeared in numerous publications including TimeBarron’sThe Wall Street JournalInternational Herald TribuneBloomberg BusinessweekUSA TodayLos Angeles Times, and Money.

Eric is known for his extraordinary long-term track record, which includes numerous “10-bagger” calls, like buying Asian stocks during the depths of the late-’90s currency crisis… buying Russian stocks during its debt-currency crisis… buying commodities in the early 2000s, right before their historic rally into 2007… and buying stocks in 2015 that would benefit from the electric vehicle boom, just as they were gaining big momentum.

Eric’s record on the short side of the market is just as remarkable. He’s known for successfully shorting numerous technology names in 2000 and 2001, as those stocks sputtered toward bankruptcy… and for his predictions in 2005 and 2006 that the housing boom would go bust and drive government mortgage firms Fannie Mae and Freddie Mac into bankruptcy.

In 2016, he won the Portfolios With Purpose stock-picking contest – Wall Street’s most prestigious investment competition – beating 650 of the biggest names in finance with a 12-month return of 153%.

So, when the opportunity came to put our heads together and combine my quant approach with his global macro approach for a very special project, I jumped at the chance.

Eric and I will tell you all about this special project next Tuesday, Oct. 5, at 7 p.m. Eastern, during our Escape Velocity Event. We’ll share how our strategies, when combined, can create powerful gains. If you’re interested, click here now to reserve your spot. You don’t want to miss out!

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Why Automakers Are Looking Into Designing Their Own Chips

The global semiconductor chip shortage appears to be getting worse for automakers in the short term, with some experts now saying it could last into 2023 without a major change.

It’s already having a significant impact on the auto industry, as companies have had to shutter plants due to a lack of chips to build their cars, which require more chips than ever as they become more technologically advanced.

This year, car makers could lose $210 billion in sales because of the chip shortage, according to the latest from AlixPartners, or nearly double the losses it estimated in May.

Last Thursday, President Biden met for the second time at the White House with several large automakers, including Ford Motor Company (F) and General Motors Company (GM), as well as some of the tech giants like Apple Inc. (AAPL) and Microsoft Corporation (MSFT), to discuss how to handle the shortages.

Interestingly, the government has been asking automakers to report their chip supply and how much they would like or need to purchase, but hasn’t heard much in response. The information could help them better identify the actual extent of the shortages. The president could even force the companies to divulge this information through the Defense Production Act.

The Semiconductor Industry Association said chip factories have ramped up production by 8% since the beginning of 2020 and are on track to produce 16% more chips by the end of 2022.

Federal legislation that’s passed in the Senate but has yet to pass in the House of Representatives could grant $52 billion in subsidies for domestic semiconductor manufacturing.

Automakers like Tesla, Inc. (TSLA) are taking matters into their own hands and starting to build their own advanced chips or partner with others who can help them.

Tesla moved away from sourcing its most sophisticated chips from NVIDIA Corporation (NVDA) in 2016 and began creating and designing its own while partnering with Samsung to manufacture the chips. The company has developed a new microchip to train artificial intelligence (AI) networks in its pursuit of attaining fully autonomous driving capabilities and demonstrated it at the company’s “AI Day” last month.

Last Friday, Tesla released updated software that gives select customers access to its Full Self-Driving Beta (FSD Beta) software. The company says the software can automatically change lanes, navigate on the highway, park the car and more without a driver at the wheel.

Volkswagen AG (VWAGY) CEO Herber Diess has said the company will design and develop — but not build — its own specialized chips for autonomous vehicles, following Tesla’s lead.

Mercedes-Benz began last year to form a partnership with NVIDIA to develop new chips and software.

Intel Corporation (INTC) CEO said at the Munich mobility show earlier in the month the company is looking to build new chips and high-tech manufacturing plants that can build designs from other partners. He cited a study that predicts semiconductors will amount to 20% of the cost of materials for cars by 2030, up from 4% in 2019.

Interestingly, the situation bodes well for fundamentally superior semiconductor stocks, one of the hottest new sectors right now.

Unfortunately, Intel simply doesn’t have superior earnings and sales momentum. It also lacks the buying pressure from institutional investors I like to see before I could recommend it. As you can see below, INTC earns a “Sell” rating and Total Grade of D and a Quantitative Grade of D in my Portfolio Grader.

Then there’s United Microelectronics Corporation (UMC). I recommended the second largest contract semiconductor manufacturer in Taiwan to Growth Investor subscribers back in October 2020.

The company has beaten Wall Street’s earnings expectations for the past five quarters in a row.

In July, UMC copresident Chien Shan-Chieh predicted the global semiconductor shortage would last through 2023 as COVID-19 boosted demand for the company’s chips for automobiles and smart home devices.

A couple of weeks later, UMC reported second-quarter earnings of $0.17 per ADS on $1.83 billion in revenue, which represented 89% year-over-year earnings growth and 8% year-over-year revenue growth. The consensus estimate called for earnings of $0.13 per share on $1.78 billion in revenue, so UMC posted a 30.8% earnings surprise and a slight revenue surprise.

Company management commented, “Strong demand fueled by 5G adoption and digital transformation underpinned our strong performance in the second quarter … Looking ahead, we anticipate demand to stay robust in the third quarter driven by megatrends such as 5G and EV.”

UMC shipped 2,440 wafers during the second quarter, which was up from 2,218 wafers in the same quarter last year. For the third quarter, UMC expects wafer shipments to rise between 1% and 2% quarter-over-quarter.

And the company recently took steps to further broaden its reach in the Taiwanese semiconductor industry by forming a strategic partnership with integrated circuit packaging and testing services provider Chipbond Technology Corp. After a share swap with Chipbond, UMC will become the company’s largest shareholder, with a 9.09% stake.

So far this year, UMC’s stock has climbed over 41%. That handily beats the performance of the industry bellwether, iShares Semiconductor ETF (SOXX), which has risen over 24% year to date, or the S&P 500’s 18% increase.

UMC remains a “Strong Buy” in my Portfolio Grader, with a Total Grade of A and a Quantitative Grade of A.

But UMC is far from the only fundamentally superior stock taking advantage of growth industries in technology I’ve lined up for my Growth Investor subscribers.

In fact, my Growth Investor Portfolio is chocked-full of fundamentally superior stocks that are also highly rated in my Portfolio Grader. This includes stocks in several of the most explosive sectors of the economy, like semiconductors, artificial intelligence, and healthcare. So, my Growth Investor Portfolio represents the crème de la crème of growth stocks with strong sales and earnings.

And if you’re interested in my Growth Investor service, now is the perfect time to join. I recently released my Growth Investor October Monthly Issue with three new buys, my latest Top 5 Stocks list, and my outlook for the market going into the seasonally strong time of the year.

There’s a lot to talk about, so click here now to get started!

P.S. Right now, successful Americans like us have a bullseye on our back.

We’re facing a direct threat to our safety and prosperity.

The values we hold dear, like individual freedom, hard work and fiscal responsibility have been tossed aside.

The US national debt is growing at an unprecedented rate. And more spending is coming.

The cost of essential goods and services seems to get more expensive by the day. Critical materials are on backorder for months. Grocery store shelves are half-empty.

If you have any money in savings, in the stock market, in a 401k or even cash stuffed under the mattress, this should make the hair on your neck stand up.

To help understand the monumental problem we’re facing and why both our way of life and financial security are under attack, I put together a special presentation.

So, if you want to protect yourself and grow your wealth, I encourage you to watch this briefing now.

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA), Volkswagen AG (VWAGY), United Microelectronics Corporation (UMC)

The Global Supply Chain Is Clogged — Here’s How to Play It

Temperatures are cooling, fall is in the air and the big box stores and shopping malls are busy preparing for the upcoming holiday season.

But those well-laid holiday plans may have to get reshuffled because of a buildup in supply shortages hitting around the world.

The entire supply chain that ferries commodities and other goods into the hands of businesses has been upended by revolving COVID-19 shutdowns and enhanced safety protocols, as well as erratic peaks and troughs in consumer demand and labor force participation.

The result is that everything from wiring harnesses and hydraulic components to semiconductors, plastic polymers, bicycles, masks and vaccine vials have been in short supply.

And as demand picks up the closer we get to the holidays, it’s going to create even more shortages and headaches for an already overstressed shipping industry.

The world’s roughly 25 million shipping containers are in short supply, forcing many shippers into more expensive spot markets for container space, where prices have been soaring.

On Monday, the Baltic Dry Index that tracks bulk sea shipping rates for vessels hit a 12-year high at the start of a seasonally strong time of the year for the sector.

The container carrier industry is set to bring in $100 billion in net profit this year, compared to roughly $15 billion last year, a Bloomberg report found.

So, it’s not surprising that shipping volume has exploded.

The number of containers arriving at the ports in Los Angeles and Long Beach in California each month this year has been about 860,000, or 24% more than the average monthly volume for the five years prior to the pandemic. The two ports handle roughly 40% of the nation’s imports.

This buildup of ships is clogging the ports.

On Tuesday, a new record of 73 cargo ships were waiting to enter the Los Angeles and Long Beach ports, up from 60 just last week and almost double the figure a month ago. A record number of these ships have had to settle for the “drift area” where they wait outside the port in waters too deep to anchor. Before the pandemic, it was rare to have more than a single ship wait to dock.

At the ports themselves, a shortage of trucks and drivers to transport the goods is adding to the delay.

The Los Angeles and Long Beach ports recently announced they’d add night and weekend operations to help alleviate the backlog.

The average wait time for ships entering LA is now about 8.7 days, roughly 2.5 days longer than a month ago.

Shippers are now trying to reach basically any port in the U.S. they can, including less utilized East Coast ports, though doing so is more expensive and can mean goods stay in transit from Asia for additional weeks.

The Wall Street Journal reported that even the port in Savannah, Georgia has had 20 or more ships waiting to enter the port in recent weeks.

Ocean freight now takes about 71.5 days to reach consumers’ doors, up 43% from a year ago.

Many ports and industry insiders are anticipating that the bottlenecks will continue well into 2022 — and possibly persist for all of 2022.

It’s easy to understand why businesses are concerned that supplies will be constricted as demand rises during the holiday shopping season. To me, that spells opportunity.

And it’s why shipping and logistics companies that are benefitting from the supply chain crunch have been hitting my screens lately.

The Crème de la Crème of Shippers

Case in point: Danaos Corporation (DAC).

Named after the Greek mythological figure who is said to have built the very first ship, Danaos, the company was founded in 1963 by Dimitris Coustas. Coustas entered the shipping world with one ship, Amalia, which was named after his wife. Since then, though, Danaos Corporation’s fleet has expanded exponentially.

Today, Danaos Corporation operates a fleet of 65 containerships that have a total capacity of 403,793 20-foot equivalent units. The company is now one of the largest containership companies in the world, and it boasts long-term charters with leading liner companies. So, it’s not surprising that Danaos Corporation has prospered amidst the container shortage and rising container rates.

Case in point: In early August, the company reported that it topped analysts’ earnings estimates for its second quarter in fiscal year 2021. The containership operator achieved second-quarter adjusted earnings of $68.9 million, or $3.34 per share, up from $42.5 million, or $1.71 per share, in the same quarter a year ago. The consensus estimate called for adjusted earnings of $3.25 per share, so DAC posted a 2.8% earnings surprise. Second-quarter operating revenue rose 25.3% year-over-year to $146.43 million, just shy of forecasts for $146.48 million.

Over the past six months, the stock has soared over 48%, compared to the 12% gain for the S&P 500 and the 4.8% gain for the Dow over the same timeframe.

I recommended the stock to my Accelerated Profits subscribers back on March 24. The stock earns a Total Grade of “A” in my Portfolio Grader, and an “A” for its Quantitative Grade, which represents institutional buying pressure behind the stock.

Of course, Danaos Corporation is not the only way to play the global shipping crisis right now.

In fact, my Accelerated Profits Portfolio is loaded with multiple shipping companies that are rated as “Strong Buys” in my Portfolio Grader, and thus represent the crème de la crème of shipping stocks.

All of these stocks have a Total Grade of “A” or “B,” and they all earn an “A” for their Quantitative Grade, one of the key factors I use to evaluate stocks in my Portfolio Grader.

So, my Accelerated Profits subscribers have multiple opportunities to benefit from the global shipping backlog.

Of course, my Accelerated Profits Portfolio is also locked and loaded with fundamentally superior companies in a variety of the market’s most important growth sectors, including 5G, artificial intelligence (AI) and biotech.

We’re also in the final trading days of the third quarter, and professional money managers still need to shore up their portfolios before October. Typically, money managers make their client’s portfolios “pretty” at the end of September by loading up on companies with strong third-quarter forecasted earnings and sales, i.e., my Accelerated Profits stocks.

My Accelerated Profits stocks are currently characterized by 34.2% forecasted sales growth and 298.4% forecasted earnings growth. So, these stocks represent the crème de la crème, and I fully anticipate that they will benefit from quarter-end window dressing over the next two weeks.

And you can get the full details on these stocks by clicking here.

Sincerely,

Signed:
Louis Navellier

P.S. The “predictive” power artificial intelligence has today is incredible.

Which is why I’ve incorporated it into my cutting-edge stock-research system called Project Mastermind.

Project Mastermind uses advanced AI to target the market’s most explosive stocks.

Stocks that can go on 300% or 400% runs in the near term.

And just recently I put together a full presentation about how Project Mastermind works – and how you can access all my research and recommendations based on its insights.

For a limited time, you can watch that presentation by going here.

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Danaos Corporation (DAC)

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