Trade of the Year Tuesday – The Top 20 (Members Only)

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This is a lot of pressure. 

We've been doing Trade of the Year picks since 2010 (BAC!) and we haven't missed one yet so I'm always worried about breaking the streak. Our Trade of the Year is the Stock that we can design an options spread around that is most likely to make 300% over the next 14 months and our criteria this year is the same as it was last year - we're looking for stocks that are undervalued, have little debt and have a high income/employee ratio - which we think is important as it means rising wages will have less impact on those companies.

Last year, our Trade of the Year was YETI and our runners up were AAPL, CMCSA, GOOG, JXN and SPG - all very good trades, as it turned out:

We were (and once again are) concerned about a slowdown impacting Q1 and that's why our logic picking YETI last year was as follows:

And that means our Trade of the Year for 2023 is – TaDa! – YETI!  YETI beat out the competition BECAUSE it’s not very indexed and because they are growing so fast and selling to such a high-end crowd that the recession should not bother them too much. 

Currently valued at $3.6Bn at $42, YETI expects $200M in sales for an 18x valuation but growth is a solid 20% and there’s no debt impacting it at the moment.  YETI manufactures in the US, China and Philippines but it’s not like they are competing with dozens of others for thermos parts or raw materials so supply chain shortages are having little effect on them.  

For the third quarter, the cooler manufacturer notched a beat on top and bottom lines, driven by a 19.6% increase in revenue from the prior year.

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