Today I posted Step #8 in my Special Report: 8 Steps to Protect Your Portfolio from the Global Debt Bomb. I recommended selling Deere (DE), Caterpillar (CAT), and BHP Group (BHP) out of portfolios ahead of rising yields i the bond market. (In the case of Deere, I said I would keep my position in my long-term portfolio but sell the position in my 12-18 month portfolio.) Here’s what I posted in my Special Report
I added Step #7 to my Special report: 8 Steps to Protect Your Portfolio from the Global Debt Bomb today. And my advice is to sell Ford and General Motors sometime between now and before the December 13 meeting of the Federal Reserve. Here’s what I wrote in that Special Report.
I’ve hi-lighted the key characteristics of the coming global debt bomb explosion that investors MUST include in any plan to protect a portfolio from the explosion of this bomb.
Clearly, inflation isn’t bad for everyone. Not if you have pricing power, anyway. Today, PepsiCo (PEP) reported earnings and sales that a beat Wall Street estimates, and raised its guidance for the next quarter.
The Wall Street Journal has reported that Exxon Mobil (XOM) is in advanced talks to buy Pioneer Natural Resources (PXD) in a deal valued at $60 billion. Pioneer currently has a market cap of $55 billion. Through in th debt that Exxon would be buying and there’s not a lot of extra upside here, in my opinion. Today’s 10.45% jump in pioneer shares to care of a lot of any potential deal premium. (I’m assuming that the report is accurate. Today’s news story follows on earlier speculation that the two companies were talking.) Unless you think another bidder will emerge–difficult but not impossible at this deal size, I’d sell my shares here. I like Pioneer as an independent big dividend paye
Shares of Moderna (MRNA) closed up 3.18% yesterday, September 13, on news that
1. The Food & Drug Administration has approved updated Covid-19 vaccine boosters (including one from Moderna) and that the Centers for Disease Control was recommending the boosters for adults and children older than 6 months. 2. The company announced that the newest results from Phase 3 clinical trials for an updated version of its flu vaccine, mRNA-1010, had met all primary endpoints in a Phase 3 trial, Compared to Glaxo’s Fluarix, Moderna’s vaccine showed higher antibody levels for all four influenza strains (two each for influenza A and B) recommended by the World Health Organization (WHO) as well as higher seroconversion rates. This comes after an earlier version of the vaccine failed to demonstrate superiority for the B strains. The company expects to meet with regulators very soon and, depending on guidance received, the flu shot could launch as soon as next year, CEO Stephane Bancel told Fierce Biotech. “We’ll know more in a few months when we speak to regulators, but [we’re] trying to go as fast as we can,” he said. Of these two pieces of news I’d say No 2 is way, way more important
I’m looking for another wild ride for Apple (AAPL) and consequently for the entire tech sector. Apple shares dropped another 3% on Thursday taking the two-day losses in the shares to almost $200 billion, (Yep, with a “B.” That brought Apple’s market cap to $2.9 trillion. Yep, with “T.”) A massive (Internet irony alert) rally on Friday took the shares up 0.35%. And I think that this coming week could be just as volatile.
Tomorrow September 8, I’m selling shares of U.S Oil Fund (USO) out of my Jubak Picks ad Volatility Portfolios to take profits on the 25% really in oil since June and to raise some cash in case September volatility delivers a bargain or two.
Today’s Quick Pick is Cheniere Energy (LNG). There are a number of positive trends for Cheniere right now. The company is adding to its liquid national gas production capacity and has signed long-term contracts with Equinor, Korea Southern Power, China ENN National Gas, and BASF. This is on top of a big increase in sales and margins in its most recent report. (Year to date the stock is up about 10%.) Another factor that makes this a “buy now” stock is that Australia will likely see a liquid natural gas strike. Workers at Woodside Energy have already voted to strike if there’s no contract and Chevron workers look like they may follow suit. These strikes could happen as soon as September, so now is the time to add shares in LNG, as Australia accounts for about 10% of global LNG supply. Morningstar calculates that the shares are at a 2% premium. I think we can expect more upward bumps for LNG and as much as it pains me to accept, I think liquid natural gas will be a necessary global energy transition fuel. I own this stock in my online portfolios.
Today’s Quick Pick is: Alphabet Inc (NASDAQ: GOOGL) or as most people know it, Google. Google is an extraordinarily good stock with pricing power. At 85% of the search market, Google is pretty close to having a monopoly. The good time to buy a stock like this is when there have been doubts about it. The recent worries were Microsoft’s addition of AI to their search engine, possibly having a huge impact on Google and a decrease in Google’s advertising market. These factors caused the stock to plateau for a time, but we’re now seeing the stock shoot upward. This has been solidified by second quarter earnings. Revenue growth returned to YouTube, searches increased, and second quarter revenue was up 7% year to year, cloud revenue grew 28% and operating margins grew to 29% from 28%. Morningstar says Google is about 17% undervalued. Google is a part of my long term 50 stocks portfolio, but I’ll be adding it to my 12-18 month JubakPicks portfolio as well.
Today’s Quick Pick is Visa (NYSE: V). Shares of Visa are showing a good trend reversal. From June through July, Visa’s stock began to pick up after sitting flat for some time. The reason for this jump? The company’s second-quarter report included a 13% increase in net revenue, a 9% increase in payment volume, and an increase in margins to 67.5% from 66.9% in the previous quarter. Visa is so embedded in the economy that it can actually outperform the economy. For example, Visa recently went to war with small merchants by lowering the permissible surcharge on credit card payments from 4% to 3% and the company has deployed inspectors to ensure merchants are abiding by that rule. That’s even though back in 2017, the Supreme Court decided that laws that regulate surcharge amounts were unconstitutional. Visa isn’t making a law, but they clearly have the market clout to put this kind of pressure on small businesses. The 20% of merchants that have imposed a surcharge on credit card use don’t seem to be affecting profit margins or growth for Visa. Morningstar calculates that Visa is trading at a 17% discount to fair value, although the trailing twelve-month PE is 30.2. Visa always trades at higher than a market multiple. The 5-year average PE is 35.6, so 30.2 actually looks like a discount. I own it in my 12-18 month Jubak Picks portfolio and will continue to hold it there. I am also adding it to my long-term 50 Stocks Portfolio.
This isn’t the quarter I expect from a stock trading at a record, all-time high. Today, after the close, Microsoft (MSFT) reported fiscal fourth-quarter adjusted earnings of $2.69 a share. That exceeded Wall Street estimates of $2.55 a share.Revenue rose on 8% to $56.2 billion Wall Street analysts had expected $55.5 billion. For the fiscal 2023 year revenue grew by just 7%. That was the lowest annual growth since 2017.
