Some Bargain Stocks Can Provide Reassurance in an Uncertain Climate
When there are global uncertainties stoking fears, some bargain stocks can give you the footing you need.
Stock trading always involves selecting stocks that are priced right. But price isn’t the only criterion as there are factors such as the current performance of the stock and its future prospects too. Sometimes you have stocks with a great deal of earning potential that are prized amazingly low due to various factors not directly related to their performance. Such bargain stocks are worth holding on to. A Mild Fear Scenario Calls Out for Bargain Stocks Strong gains are continuing to be posted by the S&P 500, but fears do surface about economic growth being hemmed in by trade tensions. In such situations, Investopedia analyst Mark Kolakowski believes that finding strong dividend payers that trade at valuations that are reasonable could be a good approach. Kolakowski points to portfolio manager Jenny Van Leeuwen Harrington who keeps looking outfor stocks with consistent cash flows supporting solid dividends. Harrington looks to Six Flags Entertainment ($SIX), Victoria’s Secret parent company L Brands ($LB), Qualcomm ($QCOM) and Target ($TGT).
www.tradezero.co
+1.954.944.3885
Theme Parks Are Reckoned to Be a Safe Option - Six Flags When it comes to Six Flags, it is the priciest of these stocks. Its forward P/E for the 2018 fiscal is in the region of 25 times projected earnings. Six Flags runs theme parks, so its entry barrier is quite high. But Harrington claims $SIX can withstand recession since times of economic gloom will cause people to hunt for cheaper vacations closer to home, and a local Six Flags park will always be around to give them fun. Six Flags has been reducing its operating costs while raising the cost of its season passes on a consistent basis. That helps streamline its functioning, and it has also significantly benefited from the tax reform. The company has been raising dividends andsince 2013, has managed to hike its dividends by 73%, says Harrington. Six Flags has growth plans abroad, as a result of which it is projecting an annualized growth rate of 10% through 2020 in adjusted EBITDA.
www.tradezero.co
+1.954.944.3885
Poor Treatment of Retail Sector Has Run Down L Brands Harrington reckons L Brands has a market leading brand, Victoria’s Secret, and says that this lingerie brand’s appeal can surpass “socioeconomic segments” and regions. Harrington was attracted by the stock’s resilient cash flow and great dividend coverage. She also feels that the company has a great management team running it, knowing how to help it withstand the various economic cycles. As a result, Harrington finds a contrast between the stock’s low price and its strong performance citing the poor treatment of the entire retail sector. Disruption Caused by Failed Takeovers Will Settle Soon for Qualcomm Qualcomm is a leading chip producer. Its chips are universally used in mobile phones, but the failed takeover by Broadcom ($AVGO)
and
Qualcomm’s
own
failed
takeover
of
Semiconductors NV ($NXPI) have weighed down the stock. Legal disputes with Apple ($AAPL) involving licensing agreements have also negatively affected the stock. Harrington believes the disruption caused by all these events would settle
www.tradezero.co
+1.954.944.3885
down soon. The company has announced a share repurchase plan worth $10 billion, which could really give the stock a big boost. Harrington believes that on the basis of the existing valuation multiple, $QCOM has a 50% upside if the management’s 2019 earnings projections are met. Target among Unique Bargain Stocks Hard to Come By The Target stock fits in the category of stocks trading at 12 or less forward P/E ratios but offering 4.5% dividend yields or more, and Harrington swooped on this stock and others like this in 2017. These stocks offered uniquely great bargains, something which Harrington feels happens rarely in stock trading. Other attractive stocks in this category were CenturyLink ($CTL), the telecom provider, data storage device company Seagate Technology ($STX), mall operating company Tanger Factory Outlet Centers ($SKT) and Navient ($NAVI), the loan servicer.
Owens & Minor ($OMI), the healthcare
distributing company, and Pitney Bowes ($PBI), the postage meter manufacturer were two other companies in this category.
www.tradezero.co
+1.954.944.3885
Studying the patterns of other investors who have a great deal of experience helps you make some great stock trading decisions. Bargain stocks are perhaps the way to go to as fears about the global trade climate still linger.
www.tradezero.co
+1.954.944.3885