Is Apple a Buy After Its Annual Event?

The holidays may be a few months away, but one glance at the headlines shows that Christmas has come early for gadget lovers. Amid much fanfare, Apple Inc. (AAPL) unveiled a number of new products that will hit shelves over the next few months. Let’s take a look at the highlights and determine whether or not AAPL stock is a buy right now.

As usual, the biggest announcement involved the new iPhone 13. The tech giant announced the new iPhone 13 and iPhone 13 Pro will have low light capabilities, for capturing better photos in dark settings, as well as astrophotography capabilities.

The new iPhones will feature Apple’s ProMotion technology, which aids in refresh rates. This technology makes gameplay and scrolling quick while the refresh rate slows down when not needed, improving battery life.

In terms of design, there isn’t much news. Apple did shrink the size of the notch at the top of the phone’s display for more screen space as well as rearrange the orientation of the rear cameras.

The company also unveiled its new Apple Watch Series 7 with a 20% larger display. However, folks have to wait until later this fall for the new iWatch, but can put in reservations. Apple also announced new and improved iPads and iPad minis. The tablets will have similar upgrades as the iPhone, with better screens, processing chips and rear and front cameras.

These new phones with better cameras, bigger batteries and new OLED screens will be snapped up, but the change is not enough too many investors excited. The stock has been sleepy all year and its price-to-earnings ratio is very low compared to the rest of the FAANG – Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOGL) – stocks.

Apparently, Apple briefly mentioned “the car,” so that will be a big deal when it is announced. Beginning as early as 2017, the Apple autonomous electric car project has been nicknamed “Project Titan.” The project is rumored to have as many as 1,000 car experts rumored to be actively working on developing the vehicle for Apple.

The bottom line is that Apple is just resting and boosting its service revenue until it can make the next exciting thing, which will be “the car” and/or the “folding 5G phones.”

So, Is AAPL a Buy?

You may know that last Friday was a rough day for Apple because it had a bad court decision on its app software. Even though the judge did not find Apple had a monopoly on the software, the stock declined 3% on the news. While many see the tech giant as a sort of bellwether, the reality is Apple is just a weak performer right now.

According to my Portfolio Grader, while it earns a B-rating for its Fundamental Grade, earnings momentum has a D-rating and cash flow has a C-rating. Its Quantitative Grade, which measures institutional buying pressure, holds a C-rating. AAPL’s Total Grade is a C-rating, making it a “Hold” right now.

I do not view the stock as a good buy right now, as there are plenty of more fundamentally superior stocks that will remain an oasis for investors.

Take one of my Growth Investor stocks, for example. EPAM Systems, Inc. (EPAM) is a software engineering services company introduced in 1993. Today, EPAM Systems operates in more than 35 countries, with more than 43,450 EPAMers and more than 275 Forbes Global 2000 customers. The company also has strategic partnerships with big-name corporations like Adobe, AWS, Google, Microsoft, Salesforce and SAP.

So, what services does EPAM Systems offer to attract such noteworthy partners? Simply put, EPAM Systems helps businesses adapt, grow more agile and faster, and stay competitive amidst a constantly evolving digital world. The company offers consultants and data expertise, designers to customize and develop digital experiences, engineers to construct software platforms, next-generation software solutions and process optimization solutions.

EPAM Systems collaborates with clients in a variety of industries, including automotive, retail, business information services, financial services, life sciences, travel and hospitality, software and insurance. The company has also partnered with healthcare clients, which includes Curogram. EPAM Systems is working with Curogram to help healthcare systems implement a simplified COVID-19 crisis response solution.

EPAM also shows strong earnings growth. During the second quarter, reported on August 5, revenue increased 39.4% year-over-year to $881.4 million, while earnings rose 43.5% year-over-year to $155.2 million, or $2.05 per share. The consensus estimate called for earnings of $1.93 per share on $860.36 million in revenue, so EPAM topped earnings estimates by 6.2% and revenue forecasts by 2.4%.

For fiscal year 2021, EPAM now expects revenue to grow about 37%, while earnings per share are forecast to be between $8.25 and $8.44. That compares to earnings of $6.34 per share in fiscal year 2020, and this forecast is also nicely higher than current estimates for $7.74 per share.

Investors cheered the news, boosting the stock up 4% in the wake of its strong earnings results.

Now as you can see in the chart below, EPAM has significantly outperformed AAPL this year.

While EPAM isn’t as well-known or as “exciting” as AAPL, it offers a great deal more growth potential right now.

Of course, EPAM isn’t the only high-quality growth stock I recommend right now. My Growth Investor Buy List is chock-full of fundamentally superior stocks that are poised to do well in the coming weeks and months. This includes two stocks that have the potential to be some of the biggest winners of the shift to electric vehicles (EVs).

If you’d like to learn more, click here now.

P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch, and by doing so, I know you’ll be ahead of everyone else struggling to understand what is really going on.

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:

EPAM Systems, Inc. (EPAM)

The Best Way to Play the 5G Rollout

As the world hunkered down for the pandemic, individuals and companies around the globe turned to the internet to stay connected and keep business up and running.

And thanks in part to the fifth generation of wireless technology known as 5G, internet speeds have not only kept pace with the surge in demand but have accelerated.

Mobile download speeds rose 59.5% this July from a year prior and are up 194.0% from June 2017, according to the Speedtest Global Index. Speeds only stalled for two months —February 2020 and March 2020 — as initial lockdowns triggered across the globe.

And it’s hardly a surprise that nations with the fastest mobile download speeds, like the United Arab Emirates, South Korea and China, are investing more and more in the 5G rollout.

Apple Inc.’s (AAPL) first 5G-enabled smartphone, the iPhone 12 released last year, was wildly popular. The company sold 100 million units in seven months — two months quicker than the iPhone 11 and about the same pace the iPhone 6 reached during the peak of the 4G transition.

And as Apple just released its new iPhone 13 (I’ll talk more in-depth about Apple’s latest event tomorrow), the company could sell as many as 200 million devices this year, adding to the expected sale of 605 million 5G-enabled smartphones worldwide in 2021, according to Counterpoint Research.

The iPhone 13 has an updated modem — QUALCOMM Inc.’s (QCOM) x60 — that will allow U.S. carriers to offer improved, lower-latency 5G coverage on the new phone over last year’s model.

In fact, the iPhone 13 could roughly double the 15% of iPhones around the world currently with 5G. That in turn could ramp up pressure on carriers to upgrade their networks to handle the increased demand.

A bumpy rollout of 5G across carriers in the U.S. has been frustrating for consumers, but about $80 billion worth of new C-band spectrum licenses purchased by AT&T Inc. (T) and Verizon Communications Inc. (VZ) in February will boost 5G infrastructure when it starts to come online in December. Meanwhile, PCMag recently found that T-Mobile US, Inc. (TMUS) provides the country’s fastest and most robust 5G mobile network by using mid-band airwaves purchased during its acquisition of Sprint in 2020.

5G-enable phones using T-Mobile’s services had 5G capabilities in cities like Chicago, Las Vegas and New York about 90% of the time.

Of course, the lightning-fast connectivity of 5G is set to impact more than just smart phones.

5G will fuel the growth of smart cities, connecting everything from lighting, parking, traffic and waste management to safety and security. 5G will also help revolutionize manufacturing, energy, artificial intelligence (AI), virtual reality, gaming and healthcare — basically any sector that can benefit from near real-time connectivity.

The market for what’s known as the Internet of Things (IoT) — essentially all of these billions of devices connected to the internet — is expected to reach $1.6 trillion by 2025, up from an estimated $418 billion this year, according to Statista.

And the process is already underway.

QUALCOMM and Ericsson just successfully tested new radio access technology being built for 5G — basically a new communications standard designed for 5G’s massive data loads in Texas.

The idea of this new technology is to allow for private cellular networks with advanced response times and more reliable connections that can be used on the factory floor.

Simply put, the transition from 4G to 5G could be one of the biggest trends of this year and next. And the companies building the machine learning programs, data analytics and sensors needed for the rollout of the IoT are booming.

The Crème de la Crème of 5G Stocks

Case in point: KLA Corporation (KLAC).

KLAC is one of the biggest semiconductor equipment manufacturers in the world. And it’s helping create, and profiting from, almost every aspect of 5G, with a focus on machine learning, electron and photon optics, data analytics and sensors. The company is doing so by developing solutions that enable the next-generation technologies enhanced by 5G, including the cloud, robotics, IoT and autonomous vehicles.

And it’s clear that this fundamentally superior company’s focus in this space is helping boost its top and bottom lines…

After topping analysts’ earnings and revenue forecasts in late July for its fourth quarter in fiscal year 2021, KLAC increased its quarterly dividend by 17%. It was the 12th-straight dividend increase, and the company will now pay a dividend of $1.05 per share

For its fourth quarter, KLAC achieved earnings of $684 million, or $4.43 per share, and total revenue of $1.93 billion. That was up from earnings of $2.73 per share and revenue of $1.46 billion in the fourth quarter of 2020. The consensus estimate called for earnings of $3.99 per share on $1.87 billion in revenue, so KLAC posted an 11% earnings surprise and a slight revenue surprise.

Looking ahead to its first quarter in fiscal year 2022, KLAC expects revenue between $1.92 billion and $2.12 billion and earnings per share between $4.01 and $4.89. In comparison, KLAC reported earnings of $3.03 and revenue of $1.49 billion in the first quarter of fiscal year 2021.

Seventeen analysts on Wall Street have revised their earnings estimates higher for KLAC over the past three months, and now expect earnings of $4.50 per share, or 34% higher than a year prior, when the company is slated to announce its first-quarter results on October 29.

I recommended the stock to my Growth Investor subscribers back in November 2019. Year-to-date, the stock is up over 42%, more than double the NASDAQ’s 17% gain and the S&P 500’s 18% rise.

The company is a “Buy” and currently earns a Total Grade of “B” in my Portfolio Grader, as well as a “B” for its Quantitative Grade, which represents strong institutional buying pressure under the stock.

Of course, that’s not the only fundamentally superior stock that’s helping usher in the 5G revolution on my Growth Investor Buy List.

In fact, this company is currently sitting among my Top 5 on the Growth Investor Buy List.

The company operates in dozens of countries around the world and has strategic partnerships with big-name corporations like Microsoft Corporation (MSFT), Adobe Inc. (ADBE) and Salesforce.com, Inc. (CRM).

During the second quarter, the company topped Wall Street’s earnings and sales estimates. Looking forward, it also expects fiscal 2021 earnings to rise over analysts’ estimates.

The stock earns a Total Grade of “A” in my Portfolio Grader, with an “A” for its Quantitative Grade that shows strong institutional support under the stock.

So, my Growth Investor subscribers have multiple opportunities to benefit from the 5G trend.

If you sign up, you can read my exclusive report — The #1 Investment for the Coming 5G Revolution — that explains what 5G is about and why it’s so important for our technological future.

You can get the full details by clicking here.

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.

Time is ticking, 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:

T-Mobile US, Inc. (TMUS), KLA Corporation (KLAC), Microsoft Corporation (MSFT), Adobe Inc. (ADBE)

The Cybersecurity Sector is Booming – Here’s How to Play It

Imagine you receive a text message that looks off.

You’ve had cybersecurity training at work and know not to click on or download links in texts coming from random numbers or email addresses.

But herein lies the rub: now you don’t have to do anything except receive a text and you could still get infected by some of the latest, ultra-sophisticated spyware known as “zero-click exploits.” They can leave your phone, computer or smartwatch completely compromised by unscrupulous hackers, without you ever knowing.

Such a flaw was recently found on Apple Inc. (AAPL) devices’ iMessage application by investigators at The Citizen Lab, a cybersecurity research center at the University of Toronto, which published a report about the exploit Monday.

The Citizen Lab flagged that the malicious software called Pegasus had been created by the Israeli spyware company, NSO Group. The cybersecurity researchers discovered examples of Pegasus being used to track journalists in Mexico reporting on drug cartels, as well as dissidents from Saudi Arabia. In fact, The Citizen Lab said it uncovered the exploit while it was researching the phone of a Saudi Arabian dissident.

“Ubiquitous chat apps have become a major target for the most sophisticated threat actors, including nation state espionage operations and the mercenary spyware companies that service them,” The Citizen Lab said. “As presently engineered, many chat apps have become an irresistible soft target.”

Apple responded by releasing a security patch for the exploit and advised users to update immediately. But that’s not the only security issue they’ve had to fix.

Apple has patched 15 so-called zero-day vulnerabilities so far this year.

In late August, the company joined other tech giants, including Google parent Alphabet Inc. (GOOGL), Microsoft Corporation (MSFT), and Amazon.com, Inc. (AMZN), at the White House to help President Biden figure out a way to shore up the nation’s cyber defenses.

Massive cyberattacks against the government cybersecurity contractor SolarWinds Corp. (SWI) and the Colonial Pipeline underscored the difficult task ahead.

Apple said it would work with its supply chain partners to beef up cybersecurity. Google announced it would shell out over $10 billion over the next five years to strengthen cybersecurity and train 100,000 Americans in IT and other tech fields under its Career Certificate program. Microsoft promised to put in $20 billion over the next five years to create better cybersecurity tools, and another $150 million to help government agencies improve their cybersecurity training programs.

Interestingly, as the world has undergone a huge shift to taking care of business online amid the pandemic and social distancing, emerging threats to cybersecurity pose greater risks than ever.

A recent study by Opswat found that only 8% of the 302 IT security professionals at global organizations it surveyed with web applications used to upload or transfer files are taking sufficient measures to guard against malicious attacks.

Some 32% of these organizations revealed that they don’t scan all file uploads to detect potential threats. Also, a majority said they don’t use a file sanitizing protocol to help prevent unknown malware and zero-day attacks.

A survey of chief financial officers by Gartner noted that about 82% plan on ramping up their investment in digital capabilities in fiscal 2021 over the prior year, while just under 70% said they planned on growing their IT investments over the same period.

Cybercrime is anticipated to cost $6 trillion in damages this year around the world, and rise to $10.5 trillion by 2025, according to Cybersecurity Ventures.

So it’s little surprise that Statista expects the global cybersecurity market to reach $345.4 billion by 2026, up 58% from the $217.9 billion cybersecurity market this year.

My Top Cybersecurity Play

Now, when it comes to recommending fundamentally superior cybersecurity plays right now, I personally like CrowdStrike Holdings, Inc. (CRWD).

The company is in the lucrative cloud security business—and its business has been booming since the global COVID-19 pandemic. Specifically, CrowdStrike offers real-time endpoint security, threat intelligence and cloud workload protection, helping prevent cyberattacks on and off an enterprise’s network.

The company’s platform, The CrowdStrike Falcon, utilizes its proprietary CrowdStrike Threat Graph to identify security threats and prevent data breaches. CrowdStrike boasts that its platform combines artificial intelligence (AI) and machine learning with behavioral analytics and 24/7 threat hunting all in one solution to protect all workloads on the network—cloud-based, on-premises and virtual environments.

Currently, CrowdStrike offers 16 modules on its Falcon platform, which includes next-generation antivirus protection, firewall management, malware search engine and analysis, threat intelligence and threat hunting. The company also acquired Preempt Security in September to expand its offerings to include identity protection.

Thanks to the addition of a record 1,660 new subscription customers, CrowdStrike achieved “outstanding” second-quarter results, which it released back on August 31. Second-quarter revenue soared 70% year-over-year to $337.7 million, up from $199 million in the same quarter a year ago. Subscription revenue accounted for $315.8 million, or a 71% year-over-year increase. Analysts were expecting total second-quarter revenue of $323.16 million.

Second-quarter earnings surged 227.8% year-over-year to $25.9 million, or $0.11 per share, compared to $7.9 million, or $0.03 per share, in the second quarter of 2020. Analysts were looking for earnings of $0.09 per share, so CrowdStrike posted a 22.2% earnings surprise.

Looking forward to the third quarter in fiscal year 2022, CrowdStrike expects total revenue between $358 million and $365.3 million and earnings per share between $0.08 and $0.10. That’s in line with analysts’ current expectations for earnings of $0.09 per share on $350.92 million in revenue.

For fiscal year 2022, CrowdStrike anticipates revenue between $1.39 billion and $1.41 billion and earnings per share between $0.43 and $0.49. That compares to earnings of $0.27 per share and revenue of $1.36 billion in fiscal year 2021.

So, it should be no surprise that CRWD is highly rated in my Portfolio Grader.

While it struggles slightly in the cash flow and return on equity categories, CrowdStrike’s Quantitative Grade remains B-rated, which means institutional buying pressure under the stock is strong right now. Its Total Grade of a “B” makes it a Buy.

Given these factors, I expect CRWD to continue to outperform its competitors. This is why it remains a strong player on my Growth Investor Buy List.

I should note that it’s not the only cyber play on my Growth Investor Buy List that enjoys a high rating in my Portfolio Grader, so there really isn’t a better time to join Growth Investor.

In fact, this company, which operates one of the largest online networks in the world and offers advanced security solutions to protect against cyberattacks, earns an “A” for its Quantitative Grade and a Total Grade of “A.”

Last month, the company recorded its strongest quarter ever as a public enterprise and beat analysts’ earnings and revenue estimates for its second quarter. Looking ahead to the third quarter, the company is already expecting to top earnings and sales forecasts.

Click here to learn more.

P.S. You probably have a similar story to me.

You saved your money and invested wisely. You paid your taxes, even as they went up every year. And you raised your children on the promise of American democracy and capitalism.

Unfortunately, right now, successful Americans like us have a bullseye on our back.

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.

The disturbing truth is we’re at a major inflection point in American history. A radical shift is taking place.

There’s something serious taken root in America, and it’s not going away.

So 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. Time is ticking, 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:

CrowdStrike Holdings, Inc. (CRWD), Microsoft Corporation (MSFT), Amazon.com, Inc. (AMZN)

How the Global Chip Shortage is Affecting the EV Industry

Many folks know that I’m a car guy. I even have a collection of sports cars at my Florida home. So, you can imagine how excited I was for the IAA Mobility 2021 event in Munich last week. Every year (with the exception of 2020), well-known auto companies like Volkswagen AG (VWAGY), Ford Motors (F), Toyota (TM), BMW and Audi unveil their latest automobile innovations. This ranges from fancy sports cars to hybrids to electric vehicles (EVs).

This year, the auto giants did not disappoint. For example, Volkswagen’s fully electric car, ID. LIFE.

Source: Bloomberg

But cool cars aside, there was another running theme during the IAA Mobility event: concerns over the growing chip shortage.

The reason why the chip shortage is such a problem for the auto makers is because new cars need more chips. For some perspective, a Ford Focus uses roughly 300 semiconductor chips, but a Mach-e utilizes almost 3,000 semiconductor chips. In other words, the EV boom is exasperating the global semiconductor chips shortage.

The global chip shortage has forced auto manufacturers to either reduce production or shut down plants completely in North America and Europe. In fact, 17 plants in Michigan, Kentucky, Kansas, Mexico, Canada and Germany have been impacted significantly by the shortage. Ford Motors and General Motors (GM) have both temporarily shuttered plants this year. Analysts anticipate that about four million vehicles will not be produced this year, which totals approximately $110 billion in sales.

Given this, I was very interested to hear what some of the big auto executives had to say at an auto show in Munich last week about the chip shortage. And boy, they did not hold back.

For example, Daimler CEO Ola Lallenius said, “Several chip suppliers have been referring to structural problems with demand. He also noted that “This could influence 2022 and [the situation] may be more relaxed in 2023.”

BMW CEO Oliver Zipse commented that “the general tightness of the supply chains will continue in the next six to 12 months.” Volkswagen CEO Herbert Diess said, “The Internet of Things is growing and the capacity ramp-up will take time. It will probably be a bottleneck for the next months and years to come.”

Tesla (TSLA) is supposedly trying to work around the shortage by reprogramming its EVs to utilize less semiconductor chips, but, unfortunately, its Shanghai plant still had to curtail production due to a lack of semiconductor chips. Ford Europe Chairman Gunnar Hermann estimated that the chip shortage could continue into 2024, adding that it’s difficult to pinpoint exactly when it will end. Regarding shortages, he said, “It’s not only semiconductors,” and added that lithium, plastics and steel are all in relatively short supply.

As a result, Diess believes that it was “impossible” for the company’s electric transformation to happen any faster. He stated, “Electrification is the way forward. There’s no other alternative. No competitor is serious about any alternatives anymore.” However, Diess seemed clearly frustrated with the lack of lithium-ion batteries now available, which is slowing its ability to launch new EV models.

With more EV models now available via VW Group’s Audi, Porsche, Seat and VW brands, its Bentley and Lamborghini brands may have to slow their upcoming EV models due to a lack of lithium-ion batteries. In 2021, VW Group has sold more EVs in Europe than Tesla, but it has lost market share in China, largely due to the semiconductor chip shortage. Overall, the electrification of vehicles may be characterized by perpetual shortages for several years, due to the lack of semiconductor chips as well as lithium, nickel and cobalt.

Even with the semiconductor shortage, the big auto companies do not seem to be backing away from building the batteries that will go with the electric vehicles. Case in point: Toyota is planning on spending $9 billion over the next decade to build factories for electric car batteries as it ramps up to sell two million EVs by 2030. Although Toyota has not specified how many battery plants it would build, it did say it planned 10 EV production lines by 2025 and would eventually have 70 EV production lines. Naturally, one factory can have multiple production lines.

Now, building an electric vehicle battery is no easy feat, which Masahiko Maedo, Toyota’s CTO, is finding out firsthand. The company is dealing with development challenges, in particular, the solid-state battery’s lifespan. Maeda added that Toyota was seeking to sell an EV with a solid-state battery this decade. He commented, “We cannot be optimistic yet. There are a lot of difficulties we are facing,” and concluded by saying, “We are looking for the best material for solid-state batteries.”

Interestingly, Ford, GM and Volkswagen have also said that they plan to build their own battery factories. These future battery plants will most likely be built in conjunction with their battery suppliers.

So, while automakers try to work through the chip shortage, it looks like there’s a battery battle brewing. As an investor, if you bet on the right battery maker, you could make a lot of money down the road. I believe I have found that winner, and it’s likely one you wouldn’t expect. I recommended this stock in Growth Investor just last month, and with the stock still trading below my current buy limit, now is an excellent time to jump in.

I should add that I also have several semiconductor chip companies that are well-positioned to benefit from the current chip shortage. So, my Growth Investor subscribers have a unique opportunity to benefit from the EV trend and the chip shortage.

You can get the full details by clicking here.

P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch, and by doing so, I know you’ll be ahead of everyone else struggling to understand what is really going on.

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:

General Motors (GM), Volkswagen AG (VWAGY)

Weekly Upgrades and Downgrades

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 129 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
AON Aon Plc Class A B C B
ARE Alexandria Real Estate Equities, Inc. B C B
BILI Bilibili, Inc. Sponsored ADR Class Z B C B
BKR Baker Hughes Company Class A B C B
CNQ Canadian Natural Resources Limited B B B
DIS Walt Disney Company B B B
EOG EOG Resources, Inc. B B B
EQR Equity Residential B C B
HLT Hilton Worldwide Holdings Inc C B B
KLAC KLA Corporation B C B
KMI Kinder Morgan Inc Class P B C B
L Loews Corporation B C B
LI Li Auto, Inc. Sponsored ADR Class A B C B
LRCX Lam Research Corporation B C B
MSFT Microsoft Corporation B C B
MTN Vail Resorts, Inc. B C B
NLOK NortonLifeLock Inc. B C B
NLY Annaly Capital Management, Inc. B C C
NXPI NXP Semiconductors NV B C B
RDS.A Royal Dutch Shell Plc Sponsored ADR B B B
SAN Banco Santander S.A. Sponsored ADR B B B
SBUX Starbucks Corporation B B B
SHG Shinhan Financial Group Co., Ltd. B C B
SHOP Shopify, Inc. Class A C B B
SMFG Sumitomo Mitsui Financial Group, Inc. B B B
TECH Bio-Techne Corporation B C B
TS Tenaris S.A. Sponsored ADR B B B
TSLA Tesla Inc C B B
WELL Welltower, Inc. B D B
XOM Exxon Mobil Corporation B B B
Upgraded: From Sell to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ADBE Adobe Inc. C C C
CCL.U Carnival Corporation C D C
CHWY Chewy, Inc. Class A C C C
CPB Campbell Soup Company D C C
CTAS Cintas Corporation D C C
EXPE Expedia Group, Inc. C C C
FAST Fastenal Company C C C
FISV Fiserv, Inc. D B C
GIS General Mills, Inc. C D C
HMC Honda Motor Co., Ltd. Sponsored ADR D B C
HTHT Huazhu Group Ltd Sponsored ADR D C C
KDP Keurig Dr Pepper Inc. C C C
KHC Kraft Heinz Company C C C
LULU Lululemon Athletica Inc C B C
MCHP Microchip Technology Incorporated D B C
NFLX Netflix, Inc. C C C
PYPL PayPal Holdings Inc C D C
RE Everest Re Group, Ltd. D B C
SJM J.M. Smucker Company C D C
SU Suncor Energy Inc. C C C
WTRG Essential Utilities, Inc. C C C
WYNN Wynn Resorts, Limited D C C
YNDX Yandex NV Class A C C C
Downgraded: From Buy to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ABB ABB Ltd. Sponsored ADR C C C
ALC Alcon AG C C C
ALLE Allegion PLC C C C
BLDR Builders FirstSource, Inc. C B C
CAT Caterpillar Inc. C B C
CCEP Coca-Cola Europacific Partners plc C C C
CE Celanese Corporation C B C
CHT Chunghwa Telecom Co., Ltd B C C
CNA CNA Financial Corporation C C C
COO Cooper Companies, Inc. C B C
CTVA Corteva Inc C C C
DISCA Discovery, Inc. Class A C B C
DLR Digital Realty Trust, Inc. C C C
DPZ Domino’s Pizza, Inc. B D C
DVA DaVita Inc. C C C
EL Estee Lauder Companies Inc. Class A C B C
EPD Enterprise Products Partners L.P. B C C
FCX Freeport-McMoRan, Inc. C B C
FE FirstEnergy Corp. B D C
FIVE Five Below, Inc. C C C
GLPI Gaming and Leisure Properties, Inc. C C C
HOLX Hologic, Inc. C B C
HPE Hewlett Packard Enterprise Co. C B C
IX ORIX Corporation Sponsored ADR B C C
LBRDA Liberty Broadband Corp. Class A B D C
MCO Moody’s Corporation C C C
NWL Newell Brands Inc C B C
ODFL Old Dominion Freight Line, Inc. C C C
RSG Republic Services, Inc. C C C
SBAC SBA Communications Corp. Class A C B C
SE Sea Ltd. (Singapore) Sponsored B C C
SHW Sherwin-Williams Company B C C
TMO Thermo Fisher Scientific Inc. C C C
TSN Tyson Foods, Inc. Class A C B C
TXG 10x Genomics Inc Class A C B C
TYL Tyler Technologies, Inc. B C C
VALE Vale S.A. Sponsored ADR C B C
VER VEREIT, Inc. B D C
VICI VICI Properties Inc C C C
WM Waste Management, Inc. B C C
Downgraded: From Hold to Sell
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
AES AES Corporation D C D
AGR Avangrid, Inc. D D D
AMCR Amcor PLC D B D
BHP BHP Group Limited Sponsored ADR D C D
BMY Bristol-Myers Squibb Company D C D
CHGG Chegg, Inc. D B D
CP Canadian Pacific Railway Limited D C D
DELL Dell Technologies Inc Class C D C D
DOW Dow, Inc. D B D
EBAY eBay Inc. D C D
EMN Eastman Chemical Company D D D
GMAB Genmab A/S Sponsored ADR D D D
GPC Genuine Parts Company D C D
IEP Icahn Enterprises L.P. D D D
ITW Illinois Tool Works Inc. D B D
JBHT J.B. Hunt Transport Services, Inc. D C D
LOW Lowe’s Companies, Inc. D D D
MASI Masimo Corporation D C D
MCD McDonald’s Corporation D C D
MDT Medtronic Plc D C D
MMM 3M Company D C D
MPW Medical Properties Trust, Inc. D D D
NSC Norfolk Southern Corporation D C D
O Realty Income Corporation D C D
OPEN Opendoor Technologies Inc D C D
ORAN Orange SA Sponsored ADR D C D
PH Parker-Hannifin Corporation D C D
PHM PulteGroup, Inc. F C D
RCI Rogers Communications Inc. Class B D C D
SKM SK Telecom Co., Ltd. Sponsored ADR D C D
SWK Stanley Black & Decker, Inc. D C D
TJX TJX Companies Inc D B D
WRB W. R. Berkley Corporation D B D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,
Louis Navellier

Louis Navellier

Is GameStop Out of Lives After Earnings?

GameStop Corp. (GME) has had quite an interesting year so far, rising to fame (and new highs) after a group of Redditors decided to “stick it to the man” and bid up GME.

GameStop’s surge was a fascinating example of a “short squeeze.” Simply put, when traders “short” a stock, they borrow shares of the stock they think will fall over a given timeframe. If the stock drops, they give back the shares and collect the difference between the initial borrowed price and the actual sale price.

In a January Market360 article, I explained why I would not recommend GME to my subscribers. The reality was the fundamentals were weak, and the stock was simply too volatile to pass my fundamental screenings.

I also talked about the stock’s underwhelming fourth-quarter earnings back in March. Well, the company has just released second-quarter earnings, and I am once again not impressed.

After the market closed on Wednesday, GameStop, Inc. unveiled second-quarter results that fell short of analysts’ expectations. During the second quarter, revenue rose 26% year-over-year to $1.18 billion, 5.4% above consensus estimates for $1.12 billion. The company also reported an earnings loss of $0.76 per share, up 54% year-over-year, but still wider than analysts’ call for an earnings loss of $0.66. So, GME posted an 14.3% earnings miss.

Interestingly, the company is under new leadership and no longer sees itself as a retailer but rather a tech company. The new leadership claimed in the earnings meeting, “We are evolving from a video game retailer to a technology company that connects customers with games, entertainment and a wide assortment of products.”

However, company management did not expand any further on its new business model. Perhaps the only things GME has in common with start-up tech companies is that it has lost a significant amount of money this year and lacks strong fundamentals.

GME dropped 9% in early trading after its weak fundamentals were put on center stage. Interestingly, the stock did rebound slightly on Thursday, but it ultimately ended the week lower.

Now, no one can argue that GameStop is in a better position than a year ago, but the reality is the stock is too volatile, and it doesn’t pass my fundamental screens.

Yes, my Portfolio Grader does give the stock an A-rating for its Quantitative Grade, which represents the strong buying pressure the stock has been under. However, its fundamentals are quite poor. It holds an F-rating for Earnings Momentum and Analyst Earnings Revisions, a D-rating for Cash Flow and Return on Equity and a C-rating for Fundamentals and Sales Growth. Overall, its Fundamental Grade is a “C.”

In other words, the stock is a mixed bag and likely a bubble waiting to be pricked. Short covering should never be confused with real strength, which is why I also recommend that GameStop and other short squeezes be avoided.

Instead, I encourage investors to focus on fundamentally superior stocks. In order words, stocks with strong earnings and sales growth, which also describes my Growth Investor Buy Lists stocks to a “T.”

Take my Growth Investor stock, Restoration Hardware (RH) for example. While certainly not as flashy as GameStop is right now, the company offers luxury home furnishings, including furniture, rugs, lighting and textiles. RH is also in the process of expanding its brand to include RH Guesthouses and RH Residences, which enable folks to stay in private, luxury accommodations.

RH also unveiled record quarterly results on Wednesday afternoon. Second-quarter revenue jumped 39% year-over-year to $989 million, up from $709 million in the same quarter a year ago. Adjusted earnings surged 105% year-over-year to $252 million, or $8.48 per share, compared to $123 million, or $4.90 per share, in the second quarter of 2020. The analyst community was expecting adjusted earnings of $6.48 per share on $975.45 million in revenue, so RH crushed earnings estimates by 30.9% and posted a 1.4% revenue surprise.

Thanks to the strength of its business and continuing demand for its home furnishings, RH increased its outlook for fiscal year 2021. Full-year revenue is now forecast to grow between 31% and 33%, up from previous estimates for 25% to 30% annual revenue growth.

Company management also noted that it anticipates a “more long-term and sustainable step change in consumer spending on the home.” In other words, RH expects folks to continue to spend money on nesting at home and/or updating their homes. As a result, RH stated that “2022 is shaping up to be the most exciting year on record for the RH brand.”

While the stock holds a B-rating for its Total Grade, its overall fundamentals are clearly much stronger. The fantastic second-quarter earnings report sent the stock soaring over 8% on Thursday.

My Growth Investor Buy List is chock-full of stocks at the top of their respective sectors, like RH. This includes two stocks that have the potential to be some of the biggest winners of the shift to electric vehicles (EVs).

If you’d like to learn more, click here now.

P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch, and by doing so, I know you’ll be ahead of everyone else struggling to understand what is really going on.

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:

RH (RH)

How Central Bank Tapering Could Impact the Stock Market

The big economic news this week was that the European Central Bank (ECB) decided yesterday to reduce its $2.2 trillion bond-buying program at a “moderately lower pace” as the economy bounces back to life and inflation takes hold in the eurozone.

However, ECB President Christine Lagarde was careful about the phrasing when she spoke to reporters after the meeting. “The lady isn’t tapering,” she said. Instead, the decision is a “… recalibration of the pandemic emergency purchase program for the next three months.”

ECB officials also said they’d keep the bond-buying program, which began in March 2020, going until March 2022 or later. The bank will keep interest rates at 0%, while the deposit rate will stay at negative 0.5%.

While details are still emerging, The Wall Street Journal said the ECB could scale back its purchases of eurozone debt to €60 billion to €70 billion per month, compared to the current rate of about €80 billion a month.

The bank also revised its eurozone 2021 GDP forecast upward in September to 5.0% from 4.6% in June.

Interestingly, inflation in the eurozone ticked up to 3% in August, well over the ECB’s goal of 2% and the highest level the 19-country block has seen in nearly a decade. Household spending is behind most of the eurozone’s recent economic growth, though the overall economy is roughly 3% smaller than it was before the pandemic.

The problem is that the ECB recently increased its quantitative easing policies. Bank officials in July said they could look past short-term rises in inflation and would raise interest rates only when it was clear the annual inflation rate would hit 2% or higher and stay that way for the medium term.

And that’s just what it did.

In July and August, the ECB ramped up its bond purchases to $160 billion worth of government bonds, well over the net supply of the $105 billion worth of government bonds issued by Italy, Germany, France and Spain meant to stimulate the economy impacted by the pandemic.

So, in my opinion, the ECB is not being very transparent. The ECB President, Christine Lagarde, is the former head of the International Monetary Fund and is an expert in “kicking the can down the road.”  A day of reckoning may be forthcoming for the ECB and its endless money printing via Modern Monetary Theory (MMT).

Essentially, because the ECB will begin “tapering,” I now expect that the Federal Reserve will announce the same thing in its September 22nd Federal Open Market Committee (FOMC) statement. This will effectively put the ECB and Fed in “synch.”

Speaking of which, the Fed on Wednesday released its Beige Book survey in preparation for its upcoming FOMC meeting and stated that economic growth “downshifted” in August as Covid-19 cases resurged due to the Delta variant and led to a pullback in dining out, travel and tourism.

The Beige Book survey also noted that labor markets are tight and that “Inflation was reported to be steady at an elevated pace.” Indeed, the Producer Price Index (PPI) from the Labor Department rose 0.7% in August, increasing 8.3%, year-over-year, and notching the biggest annual increase since November 2010.

The Fed cited supply chain bottlenecks for continued inflation pressure. Overall, the Beige Book survey was dovish, so it will be interesting if the Fed will kick its tapering decision down the road due to slowing economic growth.

The truth of the matter is, due to massive budget deficits for many eurozone countries, raising interest rates may no longer be an option for the ECB. The same could be said for the Fed here in the U.S.

As a result, the “Goldilocks” environment of ultralow interest rates, an accommodative central bank and robust economic growth is likely to persist and should continue to support higher stock prices.

Will September Finish Strong?

I’ve warned regular readers that September is historically the weakest month of the year for the stock market, and we’ve seen some of that weakness manifest this week, as the Dow and S&P 500 tallied drops Tuesday through Thursday.

But the momentum began shifting today and the good news is that liquidity tends to improve around mid-month when folks in Europe and on Wall Street return from their extended summer vacations. My fundamentally superior stocks also tend to firm up just in time for the fourth quarter.

See, my Platinum Growth Club Model Portfolio stocks represent the crème de la crème and often benefit from the “forced” institutional buying pressure at the end of the quarter. That’s when quarter-end window dressing and the 90-day ETF rebalancing take place and tend to send my fundamentally superior stocks higher.

The reality is that my Platinum Growth Club Model Portfolio stocks remain characterized by superior fundamentals at a time when earnings momentum is slowing down for a lot of S&P 500 companies.

This includes the five new stocks with accelerating earnings momentum and robust buying pressure I added in my Platinum Growth Club September Monthly Issue, published last Wednesday. (Click here now for my full recommendations.)

I’ve also recommended a host of new stocks (and LEAPS call options, or Long-Term Equity Anticipation Securities) in the past few days. I recently added two new high-quality stocks in Accelerated Profits, four stocks in my Breakthrough Stocks Monthly Issue and two new LEAPS call options trade in my Power Options service Thursday, as well as four stocks in my Growth Investor Monthly Issue for September in late August – all of which my Platinum Growth Club subscribers have full access to.

All told, I have more than 100 stocks across all of my services across all of my services and nearly 50 LEAPS call options, and each and every one boasts strong sales and earnings growth. Of course, you don’t have to invest in all 100-plus stocks. If you’d rather start small, I’ve got you covered there, too. My Platinum Growth Club service comes with my exclusive Model Portfolio.

As I discussed, these stocks represent the crème de la crème. I handpick all of my Model Portfolio recommendations from my different stock services – Growth InvestorBreakthrough Stocks and Accelerated Profits – so you can rest assured that you’re investing in the best of the best.

And if you do decide to sign up, you couldn’t have picked a better time. In addition to having instant access to every recommendation, Weekly Update, Monthly Issue, Trade Alert and Market Alert I’ve issued, you’ll also be signing up just in time for my Platinum Growth Club Live Chat event for September, which I will be holding Monday, September 13, at 12 p.m.

I will be covering a wide range of topics, including my latest thoughts on the market, updates on several Platinum Growth Club Model Portfolio stocks and much, much more. Plus, I will take Platinum Growth Club subscriber questions live at the end of the event, and those who send me questions early will get to jump ahead of the line. So, if you have any questions, sign up now and send them over!

Simply click here and sign up 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:

 

The Best Biotech as COVID-19 Boosters Arrive

There’s a growing consensus around the globe that COVID-19 may become a permanent fixture among diseases we have to combat on a continual basis, like the flu.

Part of the problem is that the virus continues to mutate into troublesome variants — including the Delta variant that’s grabbed headlines for weeks — particularly in countries or areas with low vaccination rates, according to Dr. Mike Ryan, executive director of the World Health Organization’s Health Emergencies Program.

“I think this virus is here to stay with us and it will evolve like influenza pandemic viruses, it will evolve to become one of the other viruses that affects us,” Dr. Ryan said at a recent press conference.

In Malaysia, a crucial global producer of automotive semiconductors that are in short supply at the moment, has seen resurging COVID-19 cases take a bite out the country’s economic growth. Last month, Malaysia’s central bank cut its 2021 GDP growth forecast nearly in half, to 3% to 4% from 6% to 7.5%.

The country’s International Trade and Industry Minister Azmin Ali recently told CNBC that, starting in October, Malaysia will consider COVID-19 an endemic disease with an expected permanent presence like dengue or malaria.

Having access to an affordable vaccine is key to Malaysia’s economic recovery and manufacturing expansion, Ali said.

The same could be said for other Southeast Asian nations that are important links in the global supply chain, including Vietnam and the Philippines, which have also seen a rise in COVID-19 cases.

Currently, the Centers for Disease Control and Prevention says about 63% of the adult U.S. population is fully vaccinated, while the country is seeing over 161,000 new infections per day, with over 103,000 hospitalizations per day and up to 1,385 deaths per day. Health officials have said that most of the people who end up hospitalized or dying from the disease are unvaccinated.

The U.S. has topped 40 million COVID-19 cases so far, or about one-fifth of the world’s 221.2 million confirmed cases, according to Johns Hopkins University. The U.S. also has recorded about 14% of the world’s deaths from the disease, or 649,168.

The White House announced its own plan to roll out booster shots to combat COVID-19 in mid-August. Interestingly, the U.S. could soon begin booster shots starting the week of September 20, and they could be popular.

A September Investor’s Business Daily poll found 86% of respondents who’d been fully vaccinated would take a booster.

And so far, the vaccine from Pfizer (PFE) and BioNTech SE (BNTX) is likely to be first to get early approval from the Food and Drug Administration (FDA) and the CDC for their initial booster shots. The FDA’s outside advisory committee will meet September 17 to publicly review the Pfizer booster shot data.

Pfizer and BioNTech have been at the forefront of obtaining crucial regulatory approval for the COVID-19 vaccine ahead of their competitors. (I recently wrote about them receiving full FDA approval for the vaccine, and some of the potential implications here.)

Their vaccine has also been the most administered in the U.S., with over 212 doses given as of September 4, compared to 146.7 million for Moderna, Inc. (MRNA) and about 14.5 million for Johnson & Johnson (JNJ).

Both Pfizer and Moderna said last week they have submitted data for a booster shot to the FDA. The New York Times is reporting regulators are still trying to figure out the proper dosage of a third Moderna shot, while JNJ has not delivered needed data yet to the FDA.

Meanwhile, Moderna announced today its plans for a single booster shot for both COVID-19 and the season flu called mRNA-1073, while it continues its mid-stage trial testing the COVID-19 vaccine in children aged six months to less than 12 years.

And Novavax, Inc. (NVAX) said it’s begun an early-stage study to test its own, two-in-one flu and COVID-19 vaccine shot, and expects results in the first half of next year.

There’s clearly significant profit potential for several biotech companies working on COVID-19 vaccines. But as I have said before, I believe BioNTech stands to be one of the biggest winners in the months ahead when you consider its fundamentals.

Choosing the Crème de la Crème

Case in Point: For the company’s second quarter, reported on August 9, it achieved total revenue of 5.31 billion euros, or $6.23 billion, up an eye-popping 12,634% from 41.7 million euros in the same quarter a year ago.

Second-quarter earnings came in at 2.78 billion euros ($3.37 billion), compared to an earnings loss of 88.3 million euros in the second quarter of 2020. Earnings per share came in at 10.77 euros, or $12.64 per share, topping estimates for 8.91 euros by 20.9%.

Company management also noted that it reached a major milestone, as it has now supplied more than 1 billion doses of its COVID-19 vaccine to countries around the world. Through its partnership with Pfizer, BioNTech has agreements for another 2.2 billion doses of the vaccine.

Looking ahead, this fundamentally superior company is expecting to bring in 15.9 billion euros ($18.63 billion) in revenue from the COVID-19 vaccine this year, up from a prior estimate of 12.4 billion euros.

In fact, the German startup’s revenue gains are projected to be so high this year they could amount to an eighth of the overall GDP growth of the entire nation of Germany — Europe’s largest economy by up to 0.5 percentage points this year.

Of course, the company isn’t a one-trick pony, which is another reason why I like the stock. BioNTech is working on more than just a COVID-19 vaccine. It’s currently advanced 15 oncology product candidates in 18 ongoing clinical trials.

BioNTech is also working on a malaria vaccine for the African continent and anticipates starting a clinical trial by the end of 2022.

As you can see below, BNTX is a “Strong Buy” in my Portfolio Grader, with a Total Grade of “A,” and a Quantitative Grade of “A,” signaling institutional buying pressure under the stock.

The stock has consolidated gains after reaching a52-week high of $464 on August 10 but has risen over 4% over the past week as investors weigh the potential for COVID-19 boosters. So far this year, the stock has climbed an incredible 324%.

And I’m pleased to say that my Growth Investor subscribers have been along for the ride, as I recommended BNTX to my Growth Investor Buy List back in April 2021. The stock is currently at the top pick of my Top 5 Stocks, and I look for this stock to continue climbing higher over the longer term.

The bottom line is that BNTX has the regulatory chops and the superior fundamentals to keep trekking higher while the world combats COVID-19.

P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch, and by doing so, I know you’ll be ahead of everyone else struggling to understand what is really going on.

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:

BioNTech SE (BNTX)

 

Will September Be Another Bumpy Month for the Stock Market?

I hope that you enjoyed the long Labor Day weekend!

Despite the three-day break, it appears that Wall Street is still digesting the disappointing jobs report from Friday. The S&P 500 and Dow both opened lower this morning, while the NASDAQ and Russell 2000 were relatively flat.

Specifically, the Labor Department revealed that only 235,000 payroll jobs were created in August. In comparison, economists were expecting 720,000 new payroll jobs, so that was a massive miss. The unemployment rate still declined to 5.2% in August, down from 5.4% in July. The dip was largely due to the fact that the number of folks looking for jobs declined. The good news is that June’s and July’s payroll reports were revised higher, and I suspect that the August payroll report will also be revised higher in the upcoming months.

Interestingly, the Labor Department and ADP have been out of sync for the past few months, but they grew a bit closer in August. ADP reported last week that 374,000 private payroll jobs were created last month. That was also a big disappointment, since economists were looking for 600,000 private jobs. Now, despite the rising COVID-19 fears, 201,000 jobs were created in leisure and hospitality.

Unlike the ADP report, the Labor Department did not show any jobs created in leisure and hospitality in August. In fact, bars & restaurants lost 42,000 payroll jobs in August, while retailers lost 29,000 payroll jobs. I should also add education jobs creation was insignificant even though most kids are going back to in-person school. The truth of the matter is that the U.S. economy has lost 5.3 million jobs since the pandemic commenced, and there is now an acute labor shortage.

The labor shortage is weighing heavily on the Federal Reserve’s mind, and it is the main reason why the Fed hasn’t taken steps to curb rising inflation. In the wake of the August payroll report, the Fed’s Federal Open Market Committee (FOMC) statement on September 22 will be more important than ever. I suspect the FOMC will likely continue to use the COVID-19 Delta variant as an excuse to kick the can down the road and defer any tapering announcement.

The fact that the Fed is failing in its unemployment mandate and hasn’t been able to replace the 5.3 million jobs lost during the pandemic likely irritates the doves of the FOMC. The hawks, on the other hand, are alarmed over higher inflation and know that the Fed cannot fight market rates long term.

Overall, the September FOMC statement will be closely scrutinized. Personally, I still don’t look for the Fed to make any adjustments to its quantitative easing and key interest rate policy until 2022. As a result, the “Goldilocks” environment of ultralow interest rates, an accommodative central bank and robust economic growth will persist and should continue to support higher stock prices this month.

The Weakest Month of the Year for the Stock Market

With that said, I should add that September tends to be the weakest month of the year for the stock market, so it likely won’t be a straight ride up for stocks. According to Standard & Poor’s and Haver Analytics, the S&P 500 has declined an average 1.0% in September between 1928 and 2021. The analysts at Bespoke also recently reported that the Dow has posted negative gains on average in September over the past 100, 50 and 20 years. So, we might be on the verge of another bumpy month.

The good news is that much of the stock market’s weakness occurs at the beginning of September. The reality is that liquidity tends to improve around mid-month when folks in Europe and on Wall Street return from their extended summer vacations. Stocks tend to firm up just in time for the fourth quarter.

So, why exactly does the stock market often rally at the end of September? Simply put, quarter-end window dressing and the 90-day ETF rebalancing.

Typically, in the final 10 days of the third quarter, institutional investors look to shore up their clients’ portfolios. They attempt to make the portfolios “prettier” by selling stocks with lackluster quarterly results and buying stocks with superior fundamentals. Smart Beta and equally weighted ETFs will also rebalance ahead of the quarter’s end. It’s a one-two punch of “forced” institutional buying pressure that tends to drive fundamentally superior stocks higher.

I fully expect my Platinum Growth Club Model Portfolio to experience this one-two punch, as they represent the crème de la crème—with at least double-digit forecasted earnings and sales growth—my stocks often benefit from the “forced” institutional buying pressure at the end of the quarter and trek higher. I suspect that will be the case this time around, too.

The reality is that my Platinum Growth Club Model Portfolio stocks remain characterized by superior fundamentals at a time when earnings momentum is slowing down for a lot of S&P 500 companies. This includes the five new stocks with accelerating earnings momentum and robust buying pressure I added in my Platinum Growth Club September Monthly Issue, published last Wednesday. (Click here now for my full recommendations.)

I’ve also recommended a host of new stocks (and LEAPS call options, or Long-Term Equity Anticipation Securities) in the past few days. Today, I added two new high-quality stocks in Accelerated Profits, four stocks in my Breakthrough Stocks Monthly Issue and one LEAPS call options trade in my Power Options service last Thursday, as well as four stocks in my Growth Investor Monthly Issue for September in late August – all of which my Platinum Growth Club subscribers have full access to.

All told, I have more than 100 stocks across all of my services across all of my services and more than 50 LEAPS call options, and each and every one boasts strong sales and earnings growth. Of course, you don’t have to invest in all 100-plus stocks. If you’d rather start small, I’ve got you covered there, too. My Platinum Growth Club service comes with my exclusive Model Portfolio.

As I discussed, these stocks represent the crème de la crème. I handpick all of my Model Portfolio recommendations from my different stock services – Growth Investor, Breakthrough Stocks and Accelerated Profits – so you can rest assured that you’re investing in the best of the best.

If you’d like access to my latest recommendations, simply click here and sign up now.

The truth of the matter is you couldn’t be joining at a better time. In addition to having instant access to every recommendation, Weekly Update, Monthly Issue, Trade Alert and Market Alert I’ve issued, you’ll also be signing up just in time for my Platinum Growth Club Live Chat event for September, which I will be holding next Monday, September 13, at 12 p.m.

I will be covering a wide range of topics, including my latest thoughts on the market, updates on several Platinum Growth Club Model Portfolio stocks and much, much more. Plus, I will take Platinum Growth Club subscriber questions live at the end of the event, and those who send me questions early will get to jump ahead of the line. So, if you have any questions, sign up now and send them over!

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:

 

 

The Generator Company to Watch

In the wake of Hurricane Ida, hundreds of thousands of people across the southern U.S. were left without power. However, some were able to stay on the grid thanks to the help of in-home generators.

Hurricane season is a great reminder of why generators are so important, especially as natural disasters are on the rise across the country. From wildfires out in California to hurricanes in Louisiana, generators are vital for homes as the nation’s power grid gets even more vulnerable and archaic.

One of my fundamentally superior stocks has been seeing the effects of this phenomena in the past week, as it hit a new all-time high of $458.10 after soaring over 12% on Monday. The company is Generac Holdings, Inc. (GNRC), and they not only makes high-quality generators, but also have tapped into the solar business as well.

Generac Holdings was the first company to develop generators for home use back in 1959 in Wales, Wisconsin. Founder Robert Kern started the company with only five employees and his own personal generator designs. Thanks to a strategic, decades-long partnership with Sears Holding Corporation (SHLDQ), the company’s generators were marketed under the Craftsman brand well into the 1990s.

Today, Generac is the number-one manufacturer of home backup generators, which are now marketed under the Guardian brand. The company also offers portable generators, pressure washers, water pumps, transfer switches and other parts and accessories.

Generac has also developed its own clean energy power storage system, PWRcell. The PWRcell stores energy from solar panels or the electric grid, ensuring that your home is never without power in rolling blackouts or other power outage situations. The system can provide up to 11 kilowatts of backup power.

More and more Californians are rushing to install either Generac’s or Tesla’s backup power systems. But, given Generac’s vast dealer network, I look for Generac to beat Tesla.

It’s second quarter earnings were quite impressive due to its strong underlying fundamentals. Thanks to strong demand for its back-up power generators, Generac Holdings, Inc. posted exceptional results for its second quarter and upped its 2021 guidance.

For the second quarter, Generac achieved total sales of $920 million, or 68% year-over-year growth — a new record for the company. The analyst community was expecting total sales of $863.41 million. Residential sales accounted for $600 million, while commercial and industrial sales accounted for $245 million.

Generac also reported adjusted second-quarter earnings of $153 million, or $2.39 per share, up from $88 million, or $1.40 per share in the second quarter of 2020. These results also represented a new record for Generac. Analysts were looking for adjusted earnings of $2.31 per share, so Generac posted a 3.5% earnings surprise.

Looking forward, Generac expects production of its residential standby generators to ramp up along with increased demand for its PWRcell energy storage systems. As a result, the company increased its outlook for fiscal year 2021. Full-year sales are now expected to grow between 47% and 50%, up from previous estimates for 40% to 45% annual sales growth.

The Bottom Line

 As more and more states move to adopt green energy, the switch from fossil fuels will result in a very unstable and inconsistent power grid. This equates to frequent brownouts and rolling blackouts.

This establishes a need for generators to protect against blackouts and a need for their PWRcell energy storage systems for brownouts. Generac Holdings has positioned itself perfectly to help the nation during the switch to green energy.

And the stock has exploded since I recommended it to my Growth Investor subscribers in August of 2020. SoI don’t expect its momentum to slow down anytime soon given the incredible growth expected in the sector.

I hand pick every stock on my Buy Lists, and it’s clear why I chose GNRC for its high growth potential. The bottom line is GNRC is the best play in the energy market.

In fact, I expect even more growth in the future as the company turns to solar. Generac currently has a B grade (Buy) on Portfolio Grader.

And if you’re looking for stocks in other exploding sectors of the economy to invest in, then look no further than my Growth Investor Buy List, which is chock full of high-quality stocks dominating their respective industries.

Click here to learn more.

P.S. There’s a great divide opening up in America, and investing in my Growth Investor stocks will help get you on the right side of it. You see, on one side is a new aristocracy that’s amassing more wealth, more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch and by doing so I know you’ll be ahead of everyone else struggling to understand what is really going on.

PPS: The InvestorPlace Media offices will be closed on Friday, September 3 and Monday, September 6 for the Labor Day holiday weekend.

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:

Generac Holdings, Inc. (GNRC)

 

 

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