While October was a rocky month for the S&P 500, the market has rebounded considerably since the capitulation day on October 15. As I write this, the benchmark index is up over 8% since mid-October.
And I expect the market to move higher from here. Looking further ahead, November kicks off the holiday season, and we all know how much investors cheer the holidays and drive stocks higher. We saw stocks rally into each of the big holiday weekends this year—Memorial Day, Fourth of July and Labor Day. And I’m looking for this trend to continue with Thanksgiving and then Christmas.
Now that the stock market has regained its stride and is poised to move higher, now is an excellent time to make sure you’re invested in the stocks with the strongest earnings potential. But first, you may need to trim your portfolio of all dead weight. I’m talking about all of the companies that have announced mixed earnings results or have sloppy guidance looking forward. Of course, it can be tedious reviewing the latest earnings results for each of your companies, so I’ve broken down the top 15 big blue chips that you should take profits on immediately.
Consider Taking Profits on These 15 Stocks:
|Symbol||Company Name||Market Cap ($B)||Quantitative Grade||Fundamental Grade||Total Grade|
|AUY||Yamana Gold Inc.||$3.5||F||D||F|
|CS||Credit Suisse Group AG Sponsored ADR||$42.6||F||D||F|
|DB||Deutsche Bank AG||$43.2||F||D||F|
|DDD||3D Systems Corporation||$4.2||F||D||D|
|ERIC||LM Ericsson Telefon AB Sponsored ADR||$38.3||D||D||D|
|FLO||Flowers Foods, Inc.||$4.0||F||D||F|
|PXD||Pioneer Natural Resources Company||$27.0||D||D||D|
|SHLD||Sears Holdings Corporation||$3.7||D||D||D|
|TLM||Talisman Energy Inc.||$6.6||F||D||F|
|VALE||Vale S.A. Sponsored ADR||$52.0||F||D||F|
If you still own at least one of these stocks, now would be the time to reconsider whether you want to continue holding it, or lock in profits and use that money towards better opportunities.
In my professional opinion, the best thing you can do to prepare for the year-end rally is invest solely in companies with the best earnings prospects. While I expect the general holiday optimism to boost many stocks, the smart money will flow into those companies that are growing sales, growing earnings and beating analysts’ expectations. To ensure that you’re investing with the cream of the crop, I recommend that you run your portfolio through my Portfolio Grader screening tool. It doesn’t take much to see that sticking to A- and B-rated stocks pays off big in the long run.