Eq: Large Cap
(New York)
If you are an investor looking for safe yields, look no further than this handful of high-yielding stocks. All three stocks presented here have yields over 5%. That level may prove a key defensive barrier, as shares with yields that lofty are less likely to be affected by rate rises. The three stocks are REIT EPR Properties (6.2% yield), healthcare company Welltower (5.2%), and property giant Brookfield Property Partners (6%+ yield).
FINSUM: Brookfield, in particular, seems like a good buy, as its business looks very strong and it is trading at a big discount versus the value of its real estate holdings.
(New York)
We are in an era of rising rates. That means that income-based stocks generally suffer as their yields look less and less and attractive. So how does one maintain an allocation to high-yielding stocks while preserving capital—buy stocks with good dividend growth. With that in mind, here is a list of seven good dividend growers. The list favors “established dividend paying stocks with strong fundamentals and stocks potentially trading at or below fair value. Dividend safety is another important factor”. The stocks are Home Depot, Boeing, Union Pacific, Amgen, J.M. Smucker, Honeywell International, and Pepsico.
FINSUM: This is a nice mix of sectors and well-known names that seem to have some real value in them. Definitely worth a deeper dive.
(New York)
The long-awaited (long-feared?) shake up of the S&P 500’s sectors will occur soon, and there is a lot of focus on how the tech sector, as traditionally defined, will change. Google and Facebook will be making the switch out of tech and into the new communications services sector. Netflix, as well as Walt Disney, Ford, and Nike will be joining them. There is some fear about the volatility that will be caused as big index trackers have to change their holdings on September 21st. Overall though, it seems like tech stocks (as traditionally thought of) will be winners, as having them distributed across multiple sectors will avoid the sector-weight limits many asset managers face.
FINSUM: Tech stocks will likely do well, but so will the companies getting grouped with them. As one analyst pointed out, AT&T and Verizon joining Google and Facebook is kind of liking outsiders getting invited to the cool kids’ party, which may help their share prices.
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(San Francisco)
Faangs and the tech sector more generally have had a tumultuous year. There have been a lot of fears over regulation, valuation, and data breaches. Yet, on the whole, the performance has been strong. However, many investors are now turning against the faangs in a big way, as short bets against it have soared recently. There is now a $37 bn short position against the group of companies, up 40% in the past year. Amazon is the most shorted single stock, with around $10 bn of short interest against it. Faangs have accounted for almost half of the Nasdaq’s rally above 8,000.
FINSUM: The short interest is understandable given the lofty valuations, but the issue is that the underlying businesses look quite strong, which makes us doubtful there is going to be a coordinated faang crash of any grave magnitude.
(New York)
Stocks have been doing great—almost too great. After a rough patch from February to July, the S&P 500 is up 3% in the last two weeks alone. Stocks have been so strong over the last several weeks that it has taken shares back to nearly overbought territory—right where they were in January before February’s violent correction. However, that seems less likely this time around for a couple of reasons. Firstly, the economy and earnings have been humming; and secondly, because many fund managers might ditch their short bets and go long before they fall even further behind.
FINSUM: There are several factors coming together which make it look like this could be a very good autumn for stocks.
(New York)
For a long time, Walmart was one of the greatest growth stocks in history, growing from a small regional company to the largest retail chain in the nation. However, growth has evaded it for some time, and its quick expansion ended about 20 years ago. That may all be about to change, however. Walmart’s ecommerce operation is really taking off, growing at a 40% clip, at the same time as its in-store sales are rising at their fastest pace in a decade. Walmart is already the fourth largest online retailer in the US, but the stock has not given full credit to how well the company is doing, creating an opportunity for investors.
FINSUM: Walmart’s acquisition of Jet in 2016 was a smart one, and it has shown good leadership in ecommerce. We suspect the stock has a few years of good growth coming.