|Written by Rob Goldman|
Our recent gold and mining performance prediction was on the money as these groups excelled last week. Still, since this is the last week for a number of key market events, we profile 3 stocks that we want to own for the short and intermediate term.
THIS IS THE LAST WEEK
This week is shaping up the last week on a number of levels. This is basically the last week for second quarter financials. That likely means that there won’t be a whole lot of news after August 15th to drive stocks higher. We could see a “dead time” until right after Labor Day.
This is also the last week for many European investors who tend to go on holiday for the last two weeks of the month, along with many of their American counterparts. While there will be additional results next week, for the most part, this is likely the last week that back to school retailers will see big gains.
According to the Stock Trader’s Almanac, stocks peak mid-month in August prior to big declines at the end. Therefore, while this week could see more gains, you better enjoy it while it lasts, if it occurs at all.
The same stories, as in inflation, valuation, and a tired market do not bode well for extending last week’s gains which occurred mostly on Friday’s low volume rise. President Obama seems to have checked out early and his laissez faire attitude toward foreign policy has placed the U.S. and stocks in a precarious state. With no real leadership and direction, stocks are vulnerable to the conflict-laden regions of Russia/Ukraine and the untenable Iraq/Syria situation which could quickly spiral out of control. Sprinkle in the divisive immigration policy fiasco along with this week’s economic figures, and the market appears confused at best.
Stocks I Want to Own
In last week’s edition of The Goldman Guide we noted that gold and mining stocks would have a good week and they certainly did as more market players hopped on board our thesis. While the S&P 500 Index somehow managed to eke out a 0.36% gain, our targeted industries enjoyed some of the market’s best returns.
If I were establishing new stock positions this week, I know exactly what I would want to own both for the short and intermediate term. First, I would want exposure to the one area that seems totally illogical, even though it did well last week: coal. We profiled Peabody Energy Corporation (NYSE – BTU - $15.83) again recently and the stock appears primed to rise with the aid of increased guidance. Check out our recent Market Monitor blog here: http://www.goldmanresearch.com/20140724817/Daily-Blogs/the-ultimate-contrarian-small-cap-stock.html.
A stock I owned as a money manager was also profiled last week. In my view, Cherokee Cor. (NASDAQ—CHKE—$18.43), which hit a new 52-week last week, is the best back-to-school stock play. Here is why: http://www.goldmanresearch.com/20140805823/Daily-Blogs/back-to-school-special-to-counter-beat-down.html.
With the expectation that it could be airstrikes galore in Iraq going forward, a defense stock is probably a good component these days. Again we are not trying to reinvent the wheel. Innovative Solutions & Support (NASDAQ—ISSC—$5.96) is a favorite written up by us before and the stock is trading around its newly achieved year low. This has occurred despite a strong quarter great guidance, high profit margins and no debt. I see a bounce very soon. Read more here: http://www.goldmanresearch.com/20140709806/Daily-Blogs/playing-the-political-pandemonium.html.
Have a good week!
This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
The Firm’s non-sponsored research publications category, Select Research, reflects the Firm’s internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, daily Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report.
Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored micro cap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles.
All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data is derived from Yahoo! Finance. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com.