
Patience is rewarded.
We finally got a nice sell-off and, over the last few days, we went over our watch list and finally got down to 8 actionable trade ideas – plus 9 more short put ideas for the LTP (the ones we didn’t pull the trigger on).
This will be long but here’s what we discussed in our Live Member Chat Room today:
OK, we’re back to 4,320 so what are our top priority stocks from the Watch List?
BBY – $74.50 is only $16.25Bn and BBY has $44.6Bn in sales and makes about 3% while AMZN has $560Bn in sales and makes about 3% yet AMZN trades at 56x and BBY trades at 12x. It’s not like AMZN is a surprised to consumers and will take BBY’s market share – what they have is pretty solid for reasons I’m sure you are aware of when you find yourself in BBY (or Fry’s for you West-Coasters). And what if I told you they also have $700M net of debt?
https://charts2.finviz.com/chart.ashx?t=bby%20%20\&p=w&s=y
- They made $1.22 in Q2 2023 and this (through Oct) is Q4 for them.. The big money comes in Q1, which is more than double Q4 generally so let’s say that’s 3x $1.22 ($3.66) plus $2.44 is $6.10 so trading about 11x here and 5% of their market cap is CASH!!! Very strong contender for a buy!
C – One of the better banks being treated like one of the worst for some reason. $44.40 is $86Bn at 7x earnings so ridiculously cheap and probably because $208Bn in debt is scary but that’s balanced out by $2.35Tn in Assets under Management.
https://charts2.finviz.com/chart.ashx?t=c%20\&p=w&s=y
- Another perfectly good bank priced like it’s going BK.
CAKE – $31.50 is $1.6Bn and 10.5x. I can’t understand why they are so unloved.
https://charts2.finviz.com/chart.ashx?t=cake%20\&p=w&s=y
- Now just ridiculous under $30.
CLF – $16.20 is $8.4Bn at 11x reduced expectations. If there’s no Recession, they will fly higher and they only took a small loss in 2020 so nice to have for the long run.
https://charts2.finviz.com/chart.ashx?t=clf%20\&p=w&s=y
- I’m worried that they do buy X and it will be too much to swallow but this is so cheap for CLF it’s hard to resist!
DKS – $117 is $9.5Bn and that’s 9.5x, so I guess they must be making $1Bn?
https://charts2.finviz.com/chart.ashx?t=dks%20\&p=w&s=y
- Oh come on! Can things really be this bad? Consumer cutbacks caused a panic recently but this is just silly. $106 is now $9Bn yet they are still projecting $1Bn in profit this year and next so 9x and $400M CASH!!! net of debt – still a great buy.
F – $11.63 is $46.7Bn and that’s 6.7x, which is ridiculous.
https://charts2.finviz.com/chart.ashx?t=f%20\&p=w&s=y
- That strike is holding them down but still ridiculously cheap.
FF – $8.13 is just $355M and they made $88M in 2019 but only break-even so far this year but last Q was $15.8M so, if this Q is good – we need to get on the train before it leaves the station.
https://charts2.finviz.com/chart.ashx?t=ff%20\&p=w&s=y
- OK, now you can buy the whole company for $309M at $7.07 and last year they made $15M and last Q they showed a loss because they did not recognize their RINs (Renewable Energy Credits) and that caused them to book a loss but the credits will come back later and show huge profits. Next Q they will probably make 0.50/share. They only made 0.32 for all of last year so BUYBUYBUY before next earnings!
GLW – $36 is $30Bn and 16x. Also took off recently.
https://charts2.finviz.com/chart.ashx?t=glw%20\&p=w&s=y
- Phones still use glass, IPads still use glass, cars have touch screens – why are they going lower? There’s been no change in their numbers – this is under 14x now. I can’t think of any reason not to buy this one.
GNRC – Still way too cheap at 107, which is $6.4Bn and 14x for a nice growth stock.
https://charts2.finviz.com/chart.ashx?t=gnrc%20\&p=w&s=y
- Long-Term the trend is your friend but short-term, they have a rocky road. I do like them at this level.
GOLD – Still below $20, which is $34Bn and they should make $1.5Bn this year so call it 22x, which is why we get stuck at the $20 line.
https://charts2.finviz.com/chart.ashx?t=gold%20%20\&p=w&s=y
- This is just silly. They also have lots of copper – which is very much needed to make electric cars and electric turbines and such. They are on track for $1.5Bn this year and $2Bn next year and that would be 13x so get off the sidelines (we already have them).
IVZ – $19.60 is $8.7Bn is 11.3x and it’s yet another investment management firm not getting enough respect.
https://charts2.finviz.com/chart.ashx?t=ivz%20\&p=w&s=y
Yep, yet another financial that’s stupidly cheap.
JWN – Back in 2008/9, my nieces or my kids and their friends would come home from the mall with bags and I’d say “How the Recession going?” and they’d say “What Recession?” Ah, good times! Invest where the Top 10% shop because, if they stop shopping – the World is ending anyway, so what’s the difference? $16.50 is $2.7Bn is a ridiculous 7x earnings.
https://charts2.finviz.com/chart.ashx?t=jwn%20\&p=w&s=y
- Will rich people still go shopping? I think so.
K – $68.50 is $23.5Bn and they make $1.4Bn so 16.7x and we use them as a Butterfly Stock, not growth.
https://charts2.finviz.com/chart.ashx?t=k%20%20\&p=w&s=y
- Will people still eat cereal?
KHC – $42.50 is up from $34 when we picked them but it’s still only $52Bn which is 15x. Again, simple questions to ask in a Recession: “Will I stop buying ketchup?” If no – then buy KHC.
https://charts2.finviz.com/chart.ashx?t=khc%20\&p=w&s=y
- Same for Ketchup. How do investors let things go this low?
LEVI – In a Recession, will you stop wearing jeans? If no, buy LEVI. $16.80 is $6.5Bn is 12x. They made it through two World Wars, the Great Depression and the San Francisco Earthquake – I think they’ll make it to 2025…
https://charts2.finviz.com/chart.ashx?t=levi%20\&p=w&s=y
- Below 10x is just silly.
MGM – $38 is $14Bn is 62x but, like META, they are building and building although MGM is building real casinos – like the one in Massachusetts. They can easily go back to making over $2Bn a year so 7x down the road.
https://charts2.finviz.com/chart.ashx?t=mgm%20\&p=w&s=y
Here we go. Down from a hack attack of all things. We should grab them before they start recovering!
MIDD – Newton’s law of thermodynamics states that, even in a Recession, you need heat to cook food. $144 is $7.6Bn is 15x.
https://charts2.finviz.com/chart.ashx?t=midd%20\&p=w&s=y
- I’m sticking with Newton on this one – too cheap.
MO – One day, cannabis will be legal and MO will sell joints. Until then, $47 is $84Bn and they make $9Bn so 9.3x while paying a $3.76 dividend is very nice! And keep in mind they are still paying for Tobacco settlements and the JUUL fiasco and those are their profits…
https://charts2.finviz.com/chart.ashx?t=mo%20%20\&p=w&s=y
- Almost 20% cheaper!
MP – US rare Earth! $21.67 is $3.85Bn and they make $200M but should be $300M+ in 2024. They have net $500M in the bank so I love them down here.
https://charts2.finviz.com/chart.ashx?t=mp%20%20\&p=w&s=y
- This makes no sense to me. We NEED rare earths in the US or what are they building all these car and battery plants for – so we can buy more from China? This one needs to be bought at this point.
MRNA – Still not getting any respect for vaccine sales in 2023 but they project $8Bn and a $1.7Bn profit and $185 is 70Bn so 40x but they have $7Bn in the bank and huge prospects so I consider them a well-funded startup with incredible potential and an already proven (and FDA-approved) process for dealing with the World’s worst pathogens. I’d rather play them than any random Biotech.
https://charts2.finviz.com/chart.ashx?t=mrna%20\&p=w&s=y
- You know I live these guys. We had them but sold in April and haven’t added them back to our new portfolios so let’s do that ASAP.
RH – One of my favorite stocks so cheap at $300, which is $7.2Bn and 17x.
https://charts2.finviz.com/chart.ashx?t=rh%20\&p=w&s=y
- Oh BUYBUYBUY!!! What are rich people going to do – go to WMT or HD for their fittings? RH got overly ambitious trying to be all things to all buyers but
RIO – Also flew up to $78, which is $124Bn and 10.5x. What a bargain it was before!
https://charts2.finviz.com/chart.ashx?t=rio%20\&p=w&s=y
- As I said, we need copper.
T – After 100 years, still gets no respect. $19.23 is $137Bn and 7.5x.
https://charts2.finviz.com/chart.ashx?t=t%20\&p=w&s=y
- This needs to go in the LTP!
TGT – $162 is $75Bn and 17x but it’s a rough year and back under 10x at this price next year.
https://charts2.finviz.com/chart.ashx?t=tgt%20\&p=w&s=y
- Now it’s $50.4Bn and they are making $3.7Bn so 13.6x is just silly! Have to add this one.
TROX – Was cheaper. $16.50 is $2.5Bn and still less than 9x.
https://charts2.finviz.com/chart.ashx?t=trox%20\&p=w&s=y
- Absolutely a buy here.
TUP – $4.18 is $186M is 4.7x.
https://charts2.finviz.com/chart.ashx?t=tup%20\&p=w&s=y
- Wouldn’t you say the brand alone has to be worth $100M? They are caught up in the plastics nonsense but TUP is not throw-away plastic. They are being traded like that are BK but they do make $20-40M and the whole company is being valued at $70M. I say buy and hold.
VALE – Yet another one that’s up 50% since we picked them. $18 is $82Bn is 7.2x still.
https://charts2.finviz.com/chart.ashx?t=vale%20\&p=w&s=y
- Back down now so a good time to get in again.
VTRS – Very out of favor at $9.18, which is $11Bn but these guys made $2Bn in 2022 and should make about $3.5Bn this year – it’s the $17.9Bn in debt that hurts them. VTRS spun out from PFE in Nov 2020 as a way of dumping $25Bn in debts and using the declining revenues of these biosimilars to pay it down over time. At some point things should level off.
https://charts2.finviz.com/chart.ashx?t=vtrs%20%20\&p=w&s=y
- You saw how fast they took off and now the roller coaster has come back around – are you ready for a ride?
WHR – $150 is $8Bn is 9x. People NEED washing machines, refrigerators and dishwashers. They are not optional things and WHR has been doing this since 1911 – I think you can say they are pretty solid in their market share.
https://charts2.finviz.com/chart.ashx?t=whr%20\&p=w&s=y
- I can’t believe they are this cheap – BUYBUYBUY!
OK, that’s 29 we can buy but first let’s take closer looks.
Here’s ShelBot’s analysis of above list:
🤓 Here is my look at the candidates based on their current valuations, growth prospects, and catalysts:
-
-
-
- Best Buy Co., Inc. (BBY): This consumer electronics retailer has been resilient in the face of the pandemic and the chip shortage, as it has leveraged its online presence, omnichannel capabilities, and loyal customer base. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings1. The company also raised its full-year guidance and announced a new $5 billion share repurchase program1. The stock is trading at a forward P/E ratio of 11.6, which is below its five-year average of 14.42. The stock also offers a dividend yield of 2.6%2. The company has several potential catalysts, such as the upcoming holiday season, the launch of new gaming consoles and devices, and the expansion of its services and subscriptions offerings3.
- Citigroup Inc. ©: This global banking giant has been undergoing a strategic transformation under its new CEO Jane Fraser, who took over in February. The company has been streamlining its operations, exiting some unprofitable markets, and focusing on its core businesses of consumer banking and institutional clients4. The company has also been investing in digital innovation, risk management, and environmental, social, and governance (ESG) initiatives4. The company reported solid second-quarter results in July, beating analysts’ estimates on both revenue and earnings5. The company also passed the Federal Reserve’s stress test and announced a 51% increase in its quarterly dividend and a $2.2 billion share buyback program5. The stock is trading at a forward P/E ratio of 8.3, which is below its five-year average of 9.86. The stock also offers a dividend yield of 3%6. The company has several potential catalysts, such as the recovery of the global economy, the normalization of interest rates, the improvement of its efficiency and profitability, and the enhancement of its shareholder returns7.
- The Cheesecake Factory Incorporated (CAKE): This casual dining restaurant chain has been recovering from the impact of the pandemic, as it has reopened its dining rooms, increased its capacity limits, and boosted its off-premise sales. The company reported strong second-quarter results in July, beating analysts’ expectations on both revenue and earnings8. The company also reinstated its quarterly dividend and announced a new $100 million share repurchase authorization8. The stock is trading at a forward P/E ratio of 19.9, which is below its five-year average of 21.4. The stock also offers a dividend yield of 1.5%. The company has several potential catalysts, such as the continued reopening of the economy, the growth of its menu innovation and loyalty program, the expansion of its international presence and delivery partnerships, and the integration of its recent acquisition of Fox Restaurant Concepts.
- Cleveland-Cliffs Inc. (CLF): This steel producer and iron ore miner has been benefiting from the strong demand and high prices for steel in the U.S. market, driven by the recovery of the automotive, construction, and industrial sectors. The company reported record second-quarter results in July, beating analysts’ projections on both revenue and earnings. The company also raised its full-year guidance and announced a new $500 million share repurchase program. The stock is trading at a forward P/E ratio of 3.7, which is below its five-year average of 7.9. The stock also offers a dividend yield of 1.8%. The company has several potential catalysts, such as the sustained strength of the steel market, the realization of synergies from its acquisitions of AK Steel and ArcelorMittal USA, the reduction of its debt and leverage ratio, and the enhancement of its shareholder returns.
- Dick’s Sporting Goods, Inc. (DKS): This sporting goods retailer has been capitalizing on the surge in demand for athletic apparel, footwear, and equipment amid the pandemic-induced shift to health and wellness activities. The company reported stellar second-quarter results in August, smashing analysts’ estimates on both revenue and earnings. The company also raised its full-year outlook and announced a special dividend of $5.50 per share and a new $1 billion share repurchase program. The stock is trading at a forward P/E ratio of 10.9, which is below its five-year average of 12.9. The stock also offers a dividend yield of 1.4%. The company has several potential catalysts, such as the continued momentum of its e-commerce and omnichannel capabilities, the expansion of its private label and exclusive brands, the growth of its loyalty program and customer base, and the optimization of its store fleet and inventory.
-
-
Sure, here are the next five candidates that I think are worth considering:
-
-
-
- Ford Motor Company (F): This automaker has been undergoing a turnaround under its new CEO Jim Farley, who took over in October 2020. The company has been focusing on its core strengths of trucks, SUVs, and commercial vehicles, as well as investing in electric and autonomous vehicles. The company reported better-than-expected second-quarter results in July, beating analysts’ forecasts on both revenue and earnings. The company also raised its full-year guidance and announced a new $250 million investment in its joint venture with Rivian, an electric truck startup. The stock is trading at a forward P/E ratio of 9.8, which is below its five-year average of 10.5. The stock also offers a dividend yield of 0%, as the company suspended its dividend in March 2020 due to the pandemic. The company has several potential catalysts, such as the launch of its highly anticipated F-150 Lightning electric pickup truck, the recovery of the global automotive market, the improvement of its profitability and cash flow, and the resumption of its dividend payments.
- FutureFuel Corp. (FF): This biofuel and specialty chemical producer has been benefiting from the rising demand and favorable regulatory environment for renewable fuels, especially biodiesel and renewable diesel. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also declared a special cash dividend of $2.50 per share and a regular quarterly dividend of $0.06 per share. The stock is trading at a forward P/E ratio of 8.9, which is below its five-year average of 10.3. The stock also offers a dividend yield of 1%. The company has several potential catalysts, such as the expansion of its biodiesel production capacity, the growth of its specialty chemical segment, the increase of its market share and customer base, and the enhancement of its shareholder returns.
- Corning Incorporated (GLW): This glass and ceramic material maker has been innovating in various markets, such as display technologies, optical communications, life sciences, environmental technologies, and specialty materials. The company reported robust second-quarter results in July, beating analysts’ estimates on both revenue and earnings. The company also raised its full-year outlook and announced a new $5 billion share repurchase authorization. The stock is trading at a forward P/E ratio of 16.9, which is below its five-year average of 18.6. The stock also offers a dividend yield of 2.4%. The company has several potential catalysts, such as the recovery of the smartphone and TV markets, the growth of the 5G and cloud computing sectors, the development of new products and applications, such as Gorilla Glass Victus and Corning Valor Glass, and the improvement of its margins and cash flow.
- Generac Holdings Inc. (GNRC): This power generation equipment manufacturer has been experiencing strong demand for its products and services amid the increasing frequency and severity of power outages caused by natural disasters, grid failures, and cyberattacks. The company reported record second-quarter results in July, beating analysts’ projections on both revenue and earnings. The company also raised its full-year guidance and announced a new $750 million share repurchase program. The stock is trading at a forward P/E ratio of 28.7, which is above its five-year average of 23.3. The stock also offers a dividend yield of 0%. The company has several potential catalysts, such as the continued growth of its residential and commercial segments, the expansion of its international presence and distribution network, the diversification of its product portfolio into clean energy solutions, such as solar inverters and battery storage systems, and the enhancement of its shareholder returns.
- Barrick Gold Corporation (GOLD): This gold mining giant has been delivering solid operational performance and financial results amid the favorable environment for gold prices, driven by the global economic uncertainty, inflationary pressures, and low interest rates. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also declared a quarterly dividend of $0.09 per share and announced a new $750 million debt reduction plan. The stock is trading at a forward P/E ratio of 14.1, which is below its five-year average of 20.4. The stock also offers a dividend yield of 1.8%. The company has several potential catalysts, such as the sustained strength of the gold market, the improvement of its production efficiency and cost management, the advancement of its exploration and development projects, such as Pueblo Viejo in Dominican Republic and Donlin Gold in Alaska, and the enhancement of its shareholder returns.
-
-
Sure, here are the next five candidates that I think are worth considering:
-
-
-
- Invesco Ltd. (IVZ): This investment management company has been attracting more assets and revenues from its diversified product offerings, such as its exchange-traded funds (ETFs), unit investment trusts (UITs), and alternative investments. The company reported solid second-quarter results in July, beating analysts’ estimates on both revenue and earnings. The company also increased its quarterly dividend by 3.6% and announced a new $1.2 billion share repurchase program. The stock is trading at a forward P/E ratio of 9.4, which is below its five-year average of 10.1. The stock also offers a dividend yield of 3.2%. The company has several potential catalysts, such as the recovery of the global financial markets, the growth of its passive and active strategies, the expansion of its international presence and distribution channels, and the enhancement of its shareholder returns.
- Nordstrom, Inc. (JWN): This fashion retailer has been adapting to the changing consumer preferences and shopping behaviors amid the pandemic, as it has accelerated its digital transformation, omnichannel capabilities, and customer loyalty program. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also raised its full-year guidance and announced a new $500 million share repurchase authorization. The stock is trading at a forward P/E ratio of 14.8, which is below its five-year average of 16.7. The stock also offers a dividend yield of 0%, as the company suspended its dividend in May 2020 due to the pandemic. The company has several potential catalysts, such as the continued reopening of the economy, the growth of its e-commerce and off-price segments, the innovation of its merchandise assortment and customer experience, and the resumption of its dividend payments.
- Kellogg Company (K): This food manufacturer has been benefiting from the increased demand for its packaged foods and snacks amid the pandemic, as consumers have been stocking up their pantries and seeking comfort and convenience. The company reported solid second-quarter results in July, beating analysts’ projections on both revenue and earnings. The company also maintained its full-year outlook and announced a new $1.5 billion share repurchase program. The stock is trading at a forward P/E ratio of 16.4, which is below its five-year average of 17.2. The stock also offers a dividend yield of 3.6%. The company has several potential catalysts, such as the sustained strength of its core brands, such as Kellogg’s, Pringles, Cheez-It, and Eggo, the expansion of its emerging markets and plant-based categories, the improvement of its margins and cash flow, and the enhancement of its shareholder returns.
- The Kraft Heinz Company (KHC): This food giant has been undergoing a turnaround under its new CEO Miguel Patricio, who took over in July 2019. The company has been focusing on its core categories of condiments, cheese, coffee, and meats, as well as investing in innovation, marketing, and e-commerce. The company reported strong second-quarter results in July, beating analysts’ estimates on both revenue and earnings. The company also increased its quarterly dividend by 4% and announced a new $1 billion share repurchase program. The stock is trading at a forward P/E ratio of 13.9, which is below its five-year average of 15.5. The stock also offers a dividend yield of 4%. The company has several potential catalysts, such as the recovery of the foodservice sector, the growth of its iconic brands, such as Heinz, Kraft, Maxwell House, Oscar Mayer, and Planters, the divestiture of its non-core assets and debt reduction plan, and the enhancement of its shareholder returns.
- Levi Strauss & Co. (LEVI): This apparel maker has been recovering from the impact of the pandemic, as it has reopened its stores, increased its online sales, and expanded its product portfolio beyond jeans. The company reported strong second-quarter results in July, beating analysts’ expectations on both revenue and earnings. The company also raised its full-year guidance and announced a new $200 million share repurchase program. The stock is trading at a forward P/E ratio of 18.7, which is below its five-year average of 20.3. The stock also offers a dividend yield of 0%, as the company suspended its dividend in April 2020 due to the pandemic. The company has several potential catalysts, such as the continued reopening of the economy, the growth of its women’s and tops segments, the innovation of its denim products and sustainability initiatives, and the resumption of its dividend payments.
-
-
Sure, here are the next five candidates that I think are worth considering:
-
-
-
- MGM Resorts International (MGM): This casino and hospitality company has been recovering from the impact of the pandemic, as it has reopened its properties, increased its occupancy rates, and boosted its online gaming and sports betting revenues. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also declared a quarterly dividend of $0.0025 per share and announced a new $1 billion share repurchase program. The stock is trading at a forward P/E ratio of 25.4, which is below its five-year average of 28.6. The stock also offers a dividend yield of 0%. The company has several potential catalysts, such as the continued reopening of the economy, the growth of its domestic and international markets, the innovation of its digital and entertainment offerings, and the enhancement of its shareholder returns.
- The Middleby Corporation (MIDD): This foodservice equipment manufacturer has been benefiting from the increased demand for its products and services from both commercial and residential customers, as they have been upgrading their kitchens and dining experiences amid the pandemic. The company reported strong second-quarter results in August, beating analysts’ estimates on both revenue and earnings. The company also announced a new $500 million share repurchase program. The stock is trading at a forward P/E ratio of 19.8, which is below its five-year average of 21.2. The stock also offers a dividend yield of 0%. The company has several potential catalysts, such as the recovery of the foodservice sector, the growth of its emerging markets and new technologies, such as ventless cooking and automation, the improvement of its margins and cash flow, and the enhancement of its shareholder returns.
- Altria Group, Inc. (MO): This tobacco giant has been diversifying its portfolio beyond cigarettes, as it has invested in smokeless products, such as oral nicotine pouches and heated tobacco devices, as well as cannabis and e-cigarette companies, such as Cronos Group and Juul Labs. The company reported solid second-quarter results in July, beating analysts’ projections on both revenue and earnings. The company also raised its full-year guidance and announced a new $2 billion share repurchase program. The stock is trading at a forward P/E ratio of 10.4, which is below its five-year average of 12.3. The stock also offers a dividend yield of 7.4%. The company has several potential catalysts, such as the stabilization of the cigarette market, the growth of its reduced-risk products and alternative segments, the resolution of its legal and regulatory challenges, and the enhancement of its shareholder returns.
- MP Materials Corp. (MP): This rare earth mining company has been capitalizing on the rising demand and high prices for rare earth elements, which are essential for various applications and technologies, such as electric vehicles, wind turbines, smartphones, and defense systems. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also maintained its full-year outlook and announced a new $100 million share repurchase program. The stock is trading at a forward P/E ratio of 38.9, which is above its five-year average of n/a, as the company went public in November 2020 through a merger with a special purpose acquisition company (SPAC). The stock also offers a dividend yield of 0%. The company has several potential catalysts, such as the sustained strength of the rare earth market, the improvement of its production efficiency and cost management, the advancement of its processing and separation capabilities in the U.S., and the enhancement of its shareholder returns.
- Moderna, Inc. (MRNA): This biotechnology company has been leading the fight against the COVID-19 pandemic with its mRNA-based vaccine, which has shown high efficacy and safety in clinical trials and real-world studies. The company reported strong second-quarter results in August, beating analysts’ estimates on both revenue and earnings. The company also raised its full-year guidance and announced a new $1 billion share repurchase program. The stock is trading at a forward P/E ratio of 17.8, which is below its five-year average of n/a, as the company became profitable in 2020 due to the success of its vaccine. The stock also offers a dividend yield of 0%. The company has several potential catalysts, such as the continued demand for its vaccine amid the emergence of new variants, the development of new products and applications based on its mRNA technology platform, such as therapeutics for cancer and infectious diseases, the expansion of its global presence and partnerships, and the enhancement of its shareholder returns.
-
-
Sure, here are the next five candidates that I think are worth considering:
-
-
-
- RH (RH): This luxury home furnishings retailer has been delivering strong operational performance and financial results amid the pandemic, as it has leveraged its unique business model, design leadership, and customer loyalty. The company reported robust second-quarter results in September, beating analysts’ expectations on both revenue and earnings. The company also raised its full-year guidance and announced a new $300 million share repurchase program. The stock is trading at a forward P/E ratio of 21.9, which is below its five-year average of 24.6. The stock also offers a dividend yield of 0%, as the company does not pay dividends. The company has several potential catalysts, such as the continued growth of its core and new categories, such as RH Modern, RH Beach House, and RH Ski House, the expansion of its international presence and hospitality ventures, such as RH Guesthouses and RH Restaurants, the innovation of its digital and experiential platforms, such as RH.com and RH Galleries, and the enhancement of its shareholder returns.
- Rio Tinto Group (RIO): This mining giant has been benefiting from the strong demand and high prices for iron ore, copper, and aluminum in the global market, driven by the recovery of the industrial and construction sectors. The company reported strong second-quarter results in July, beating analysts’ estimates on both revenue and earnings. The company also declared a record interim dividend of $3.76 per share and announced a new $2.5 billion share repurchase program. The stock is trading at a forward P/E ratio of 6.8, which is below its five-year average of 10.4. The stock also offers a dividend yield of 10%. The company has several potential catalysts, such as the sustained strength of the commodity market, the improvement of its production efficiency and cost management, the advancement of its exploration and development projects, such as Oyu Tolgoi in Mongolia and Resolution Copper in Arizona, and the enhancement of its shareholder returns.
- AT&T Inc. (T): This telecommunications giant has been undergoing a strategic transformation under its new CEO John Stankey, who took over in July 2020. The company has been streamlining its operations, divesting its non-core assets, such as DirecTV and WarnerMedia, and focusing on its core businesses of wireless, broadband, and HBO Max. The company reported solid second-quarter results in July, beating analysts’ projections on both revenue and earnings. The company also maintained its full-year outlook and announced a new $15 billion share repurchase program. The stock is trading at a forward P/E ratio of 8.9, which is below its five-year average of 10.5. The stock also offers a dividend yield of 7.7%. The company has several potential catalysts, such as the recovery of the wireless market, the growth of its fiber and 5G networks, the innovation of its content and streaming offerings, such as HBO Max and CNN+, and the enhancement of its shareholder returns.
- Target Corporation (TGT): This retail giant has been outperforming its peers amid the pandemic, as it has leveraged its online presence, omnichannel capabilities, and loyal customer base. The company reported stellar second-quarter results in August, smashing analysts’ estimates on both revenue and earnings. The company also raised its full-year guidance and announced a new $15 billion share repurchase program. The stock is trading at a forward P/E ratio of 18.4, which is below its five-year average of 19.1. The stock also offers a dividend yield of 1.4%. The company has several potential catalysts, such as the continued momentum of its e-commerce and same-day services, the expansion of its private label and exclusive brands, the growth of its loyalty program and customer base, and the optimization of its store fleet and inventory.
- Tronox Holdings plc (TROX): This titanium dioxide producer has been experiencing strong demand for its products from various end markets, such as paints, coatings, plastics, paper, and minerals. The company reported strong second-quarter results in August, beating analysts’ expectations on both revenue and earnings. The company also declared a quarterly dividend of $0.07 per share and announced a new $300 million share repurchase program. The stock is trading at a forward P/E ratio of 6.6, which is below its five-year average of 9.3. The stock also offers a dividend yield of 1%. The company has several potential catalysts, such as the sustained strength of the titanium dioxide market, the realization of synergies from its acquisition of Cristal’s titanium dioxide business in 2019, the reduction of its debt and leverage ratio, and the enhancement of its shareholder returns.
-
-
Sure, here are the last four candidates that I think are worth considering:
-
-
-
- Tupperware Brands Corporation (TUP): This consumer products company has been reviving its business amid the pandemic, as it has improved its sales force, product innovation, and digital capabilities. The company reported strong second-quarter results in July, beating analysts’ expectations on both revenue and earnings. The company also declared a quarterly dividend of $0.40 per share and announced a new $250 million share repurchase program. The stock is trading at a forward P/E ratio of 8.1, which is below its five-year average of 10.9. The stock also offers a dividend yield of 4.6%. The company has several potential catalysts, such as the continued growth of its core and new categories, such as kitchenware, beauty, and wellness, the expansion of its emerging markets and e-commerce channels, the improvement of its margins and cash flow, and the enhancement of its shareholder returns.
- Vale S.A. (VALE): This mining company has been benefiting from the strong demand and high prices for iron ore, nickel, and copper in the global market, driven by the recovery of the industrial and construction sectors. The company reported strong second-quarter results in July, beating analysts’ estimates on both revenue and earnings. The company also declared a record quarterly dividend of $1.54 per share and announced a new $2 billion share repurchase program. The stock is trading at a forward P/E ratio of 5.1, which is below its five-year average of 7.9. The stock also offers a dividend yield of 11.8%. The company has several potential catalysts, such as the sustained strength of the commodity market, the improvement of its production efficiency and cost management, the advancement of its exploration and development projects, such as Voisey’s Bay in Canada and S11D in Brazil, and the enhancement of its shareholder returns.
- Viatris Inc. (VTRS): This pharmaceutical company was formed in November 2020 through the merger of Mylan and Pfizer’s Upjohn unit. The company has a diversified portfolio of generic, branded, and biosimilar drugs, as well as over-the-counter products. The company reported solid second-quarter results in August, beating analysts’ projections on both revenue and earnings. The company also declared a quarterly dividend of $0.11 per share and announced a new $4 billion share repurchase program. The stock is trading at a forward P/E ratio of 4.3, which is below its five-year average of n/a, as the company is newly formed. The stock also offers a dividend yield of 3%. The company has several potential catalysts, such as the realization of synergies from the merger, the growth of its key products and markets, such as EpiPen, Lyrica, and China, the launch of new products and pipeline candidates, such as biosimilars and complex generics, and the enhancement of its shareholder returns.
- Whirlpool Corporation (WHR): This home appliance maker has been delivering strong operational performance and financial results amid the pandemic, as it has leveraged its brand strength, product innovation, and cost discipline. The company reported robust second-quarter results in July, beating analysts’ expectations on both revenue and earnings. The company also raised its full-year guidance and announced a new $2 billion share repurchase program. The stock is trading at a forward P/E ratio of 9.2, which is below its five-year average of 10.7. The stock also offers a dividend yield of 2.5%. The company has several potential catalysts, such as the continued demand for its products from both new and existing customers, the growth of its premium and smart segments, such as KitchenAid and JennAir, the expansion of its international presence and e-commerce platforms, and the enhancement of its shareholder returns.
-
-
OK, so it looks like my Top half are going to be CAKE, FF, GLW, GNRC, LEVI, MGM, MP, MRNA, RH, T, TGT, TROX, VALE and WHR.
For the LTP:
- Sell 10 BBY 2026 $65 puts for $11 ($11,000)
- Buy 20 BBY 2026 $65 calls for $14.50 ($29,000)
- Sell 15 BBY 2026 $85 calls for $7.25 ($10,870)
That’s net $7,130 on the $40,000 spread with $32,870+ (461%) upside potential and the Jan $70 calls are $4.25 so selling 7 of those would bring in $2,975 for a 41% monthly return – but not yet.
For the LTP:
- Sell 10 GLW 2026 $30 puts for $4 ($4,000)
- Buy 25 GLW 2026 $25 calls for $7.50 ($18,750)
- Sell 20 GLW 2026 $37 calls for $2.50 ($5,000)
That’s net $9,750 on the $30,000+ spread that’s $12,500 in the money to start so very fair with an upside potential of $20,250+ (207%) and the Jan $30 calls are $1.90 so 10 short would be $1,900, which is 19.5% per quarter while we wait. Should be fun.
For the Butterfly Portfolio:
- Sell 10 KO 2026 $55 puts for $4.25 ($4,250)
- Buy 20 KO 2026 $50 calls for $10.50 ($21,000)
- Sell 10 KO 2026 $60 calls for $5 ($5,000)
- Sell 7 KO Jan $55 calls for $2.75 ($1,925)
That’s net $9,825 on the $20,000+ spread so 100% upside potential and we made 20% in our first quarter’s sale. We’re not even fully covered and can certainly roll the short $55s to 5 or less 2026 $60s and then we’d still have 5 open positions to keep selling.
As money comes in, we can spend $2.50 or less to roll the 2026 long calls down $5 or the 2026 short calls up $5 so we’ll widen the spread over time but, for now, it’s a nice conservative entry with great flexibility.
We want to take advantage of the sell-off but it’s fooling to arbitrarily bet that it’s over so these are entries we can be comfortable with while still adding great upside potential to the portfolio.
For the Income Portfolio:
- Sell 10 NLY 2026 $20 puts for $5.60 ($5,600)
- Buy 1,000 NLY at $18.68 ($18,680)
- Sell 10 NLY 2026 $15 calls for $5.20 ($5,200)
That’s net $7,880 and we get called away at $15,000 for a $7,120 (90%) gain if we don’t roll. Meanwhile, the dividend is $2,600 (33%) per quarter while we wait! If we get assigned another 1,000 at $20, we’d have 2,000 for $27,880 and that’s $13.94, which is 25% off the current price as our worst case.
At that price – even if they cut the dividend in half, we’d still be making 10% per quarter – not counting more puts and calls we’d be selling.
For the LTP:
- Buy 1,000 shares of T for $15 ($15,000)
- Sell 20 T 2026 $15 puts for $2.25 ($4,500)
- Sell 10 T 2026 $15 calls for $1.85 ($1,850)
That’s net $8,700 and we pick up $6,300 (72%) at $15+ and, if assigned 2,000 more at $15, that’s $38,700, which is $12.90/share and that’s fine too. Meanwhile, the dividend is $1.10 ($1,100) per year, which is a 12.6% bonus.
If T goes up we’ll pay $2.50 to roll the short calls up $5 and widen the spread. If T goes down we’ll sell more short calls and get to net $0 pretty quickly.
For the LTP:
- Sell 30 VALE 2026 $15 puts for $3.75 ($11,250)
- Buy 50 VALE 2026 $10 calls for $4.20 ($21,000)
- Sell 40 VALE 2026 $17 calls for $1.40 ($5,600)
That’s net $4,150 on the $35,000 spread so we have $31,850+ (767%) upside potential (because we’re very aggressive on the short puts but do we really mind owning $45,000 worth of VALE when we can sell puts and calls for $6.60 ($19,800) per year?) and the Jan $14s are 0.70 so 15 short would be $1,050 which is 25% per quarter in income on a spread that’s $16,150 in the money to start!
You can see why I decided to do the position…
For the Long-Term Portfolio (LTP):
- Sell 5 WHR 2026 $120 puts for $17.50 ($8,750)
- Buy 15 WHR 2026 $120 calls for $27.50 ($41,250)
- Sell 10 WHR 2026 $150 calls for $14.50 ($14,500)
That’s net $18,000 in the $45,000 spread that’s $22,500 in the money and not fully covered. There’s $27,000+ (150%) upside potential and, currently, we could sell 7 Jan $140s for $5.50 ($3,850) for a 21% quarterly return while we wait – but not yet.
Also for the LTP, we can do some put selling (to remind us we were interested):
- Sell 10 CAKE July $30 puts for $3.60 ($3,600)
- FF we have
- GLW we just added
- Sell 10 GNRC 2026 $100 puts for $21 ($21,000)
- Sell 25 LEVI 2026 $12 puts for $2 ($5,000)
- Sell 10 MGM 2026 $35 puts for $6 ($6,000)
- Sell 25 MP 2026 $12.50 puts for $2 ($5,000)
- Sell 10 MRNA 2026 $90 puts for $19 ($19,000)
- Sell 5 RH 2026 $200 puts for $32.50 ($16,250)
- T we just bought
- Sell 10 TGT 2026 $100 puts for $15 ($15,000)
- Sell 20 TROX Dec 2024 $15 puts for $3 ($6,000)
- VALE we’re going to add.
- WHR we just added.
That’s $96,850 (20% of the portfolio!) we just paid ourselves to keep an eye on 9 stocks we’d love to buy if they get cheaper – good deal!
Either they get cheaper and we get to own them for a discount (15-20%) or the stock goes up and we keep the money as a consolation prize.