Weekly Stock Round-up

The major indexes ended the week mixed, as good news on the coronavirus vaccine front continued to be offset by worries about the worsening of the pandemic in most parts of the country.  The Dow Jones Industrial Average, the S&P MidCap 400 Index, and the small-cap Russell 2000 Index all reached new intraday highs in the first part of the week before surrendering some of their gains.  

The Dow closed the week down 216 points, the S&P 500 finished down 27 points, while the Nasdaq rose 26 points for the week.  As for the tickers we highlighted, read on to find out why we like them and how they performed since we issued the trade alert for each one.  

11-16-2020–SPEM ETF up 0.62%

One of our favorite ways to invest in EMs is through SPDR Portfolio Emerging Markets ETF (SPEM)SPEM tracks the performance of the S&P Emerging BMI (Broad Market Index), which is a subset of the S&P Global BMI.  The index is market-cap weighted and float adjusted.

SPEM’s weighted average market cap is $66.4 billion with the largest checking in at $425 billion.  This isn’t a place for small fries.  But SPEM is pretty spry with a 12.5% estimate for average annual EPS growth for the next three to five years.  And a fee of just 0.11% to gain exposure to nearly 2,300 stocks in 30 different EMs is a bargain.

11-17-2020–MRK down 0.75%

Analysts forecast Merck to generate average annual earnings growth of almost 8% over the next three to five years.  The company sports a solid balance sheet and cash flow situation.  Plus a healthy 3% dividend yield that seems to be just heating up.  MRK upgraded its dividend payouts by 14.6% in 2019 then followed that up with a nearly 11% improvement for 2020.  Merck is solidly established among the best value stocks to buy if you’re looking for large-cap stability and rising payouts.  

MRK has a $204.83 billion market cap and currently trades with a 17.89 profit to earnings ratio.

11-18-2020–NEE down 2.29%

Investors have endorsed NextEra’s clean-energy strategy, with renewable energy becoming both mainstream and desirable.  At least a dozen U.S. states have policies that will eventually mandate completely clean power grids.  Plus, president elect Joe Biden has proposed a green electrical system in the U.S. within 15 years.  

“Renewable Energy is not a niche investment anymore,” said Kit Konolige, a utilities analyst with Bloomberg Intelligence.  “It’s a big industry.”  And NextEra Energy seems to be poised for a lion’s share in the future.  

NextEra has a very strong track record of success.  Between 2004 and 2019, their adjusted earnings per share grew at a compound annual growth rate of 8.4%, while dividends grew at a compound annual growth rate of 9.4%, that’s incredible growth over a 15-year period.  Over the past five years, the stock is up 231% on a total return basis.  That type of performance is not typical for a utility company which indicates that NextEra truly is an outlier in the industry. 

11-19-2020–GLDM up 0.86%

Under that scenario, gold would make sense as a possible inflation and dollar devaluation hedge, and one of the cheapest and most cost-effective ways to buy it is via SPDR Gold MiniShares (GLDM)GLDM sports a low expense ratio of just 0.18%, making it one of the cheapest gold ETFs on the market.  

Gold will likely continue to rise no matter who wins the senate.  Investors are genuinely worried about the health of the dollar these days, and with legitimate reason.  But under an unrestrained blue Senate, you might see gold’s ascent speed up. 

11-20-2020–CMCSA down 0.14%

Comcast’s diversification has come in handy this year as the pandemic halted movies, theme parks and spending on advertising.  Deutsche Bank’s Bryan Kraft, who has CMCSA at Buy, highlights strong broadband subscriber growth, cable margins and cable capital intensity as a reason to invest in the company. 

A supermajority of analysts lump Comcast in with other value stocks they’re bullish on.  Of the 31 analysts tracked by S&P Global Market Intelligence covering CMCSA, 17 rate it at Strong Buy, seven say Buy and seven call it a Hold.

That’s at least in part because Comcast stock looks like such a bargain.  Analysts expect the company to deliver average annual earnings growth of 12.9% over the next three to five years, and yet shares trade at around 20 times expected earnings.  CMCSA also sports a 1.9% yield.