46 Actions To Take Now That The Dollar Has Cracked

The U.S. dollar has cracked. Last week, the currency fell to a seven-month low relative to the euro and the Japanese Yen. In the past three months it has fallen nearly 4% against the British pound and 3% against the Swiss Franc.

This news is music to my ears. Now, I’m not saying that you should rush out and buy gold or silver like so many investors have this week—prices for these precious metals surged last week but have settled down since. No, my eye is on a different kind of gold rush—one that should kick off in about two weeks.

That’s because October 8 marks the official start to third-quarter earnings season, when aluminum giant Alcoa Inc. (AA) reports its quarterly operating results. To be clear, AA is an F-rated sell in my Portfolio Grader screening tool, so I don’t want you to load up on this metal play either. However, I expect plenty of profit opportunities to open up the first few weeks of earnings season.

That’s because the weakening dollar is a boon to corporate profits, particularly for multi-national companies. Companies like Caterpillar Inc. (CAT) and Johnson & Johnson (JNJ) are typically paid in international currencies and pay their expenses in U.S. dollars. So this is a big deal. In fact, approximately 40% of the S&P 500’s earnings come from outside the U.S.!

During the first- and second-quarter, the relatively strong dollar weighed on bottom lines, but it looks like that’s about to change. So as we approach the kickoff to third-quarter earnings, let’s revisit some of the biggest multinationals on the market right now. I’ve seen a flurry of upgrades and downgrades in my stock screening tool—46 to be exact—so now is the time to get caught up on these changes.

Upgrades

Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
FDX FedEx Corporation B C
LVS Las Vegas Sands Corp. B B
MFC Manulife Financial Corporation B D
PCAR PACCAR Inc B C
PUK Prudential plc Sponsored ADR B C
UNP Union Pacific Corporation B C
UPS United Parcel Service, Inc. B C
VFC V.F. Corporation B C
WIT Wipro Limited Sponsored ADR B C

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
AMT American Tower Corporation D C
BBBY Bed Bath & Beyond Inc. C B
BEN Franklin Resources, Inc. D B
CNI Canadian National Railway Company C C
CSX CSX Corporation D C
DTV DIRECTV C C
HCN Health Care REIT, Inc. C C
KLAC KLA-Tencor Corporation C C
KSS Kohl’s Corporation D C
SNY Sanofi Sponsored ADR C D
TS Tenaris S.A. Sponsored ADR C C
USB U.S. Bancorp D C
VLO Valero Energy Corporation C C

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
CAG ConAgra Foods, Inc. C B
DEO Diageo plc Sponsored ADR C C
GM General Motors Company C C
HPQ Hewlett-Packard Company C C
KMB Kimberly-Clark Corporation C C
LLY Eli Lilly and Company C B
MDLZ Mondelez International, Inc. Class A C C
NLSN Nielsen Holdings N.V. C C
STJ St. Jude Medical, Inc. C C
TWC Time Warner Cable Inc. C B
VOD Vodafone Group Plc Sponsored ADR C C
XRX Xerox Corporation C B

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
ALXN Alexion Pharmaceuticals, Inc. F B
BNS The Bank of Nova Scotia D C
DE Deere & Company D B
GLW Corning Incorporated D C
GPS The Gap, Inc. D B
INFY Infosys Limited Sponsored ADR D C
MCD McDonald’s Corporation D C
MJN Mead Johnson Nutrition Company D C
PRGO Perrigo Company D C
PSO Pearson PLC Sponsored ADR D C
SWK Stanley Black & Decker, Inc. D C
YUM YUM! Brands, Inc. D C

Sincerely,

Louis Navellier

Louis Navellier

 

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