Adnan Rafique M.D.
It has been a tough few weeks for people invested in the stock market, especially those with NASDAQ heavy portfolios. I always urge people to diversify and rebalance their portfolio to minimize volatility due to sector rotation or market correction. High quality names fluctuate less and give you peace of mind with decent consistent returns.
Small technology companies and speculative stocks with no cash flow (memes stocks) have dropped significantly but stocks like Microsoft, Google, AAPL, FB, CRM and The Trade Desk (TTD) are doing pretty well.
Sector rotation is also a factor in this volatility with looming infrastructure bill and push for renewable energy by the Biden Administration, certain stocks in materials like iron, steel (US Steel), aluminum, and copper (FCX) have moved higher in those sectors. Also, shortage in chip and lumbar materials have helped big semiconductor companies, construction, and lumber companies gain some momentum recently.
Keeping these new trends in mind, I have come up with some names which are set for more gains in coming weeks and months. These are the stocks which may look boring but can add significant value in your portfolio. Remember, I recommend holding the stocks for at least 2-3 years. This time investors are also looking for income (dividend) stocks which traditionally do well when the interest rates are low and the market is trending down.
Masco Corp (MAS): Masco Corp engages in the design, manufacture, marketing and distribution of branded home improvement and building products. It operates through the following business segments: Plumbing Products and Decorative Architectural Products.
Louisiana Pacific Corp (LPX): With rising home demand and lumbar prices, LPX has come out as a very consistent winner. Louisiana-Pacific Corp. engages in designing, manufacturing and marketing of products for the new home construction, repair and remodeling and outdoor structures markets. It operates through the following four segments: Siding, Oriented Strand Board (OSB), Engineered Wood Products, and South America.
Mohawk industries ( MHK): Mohawk Industries, Inc. engages in the manufacture, design, and distribution of residential and commercial flooring products. It operates through the following segments: Global Ceramic, Flooring North America (NA), and Flooring Rest of the World (ROW).
O’Reilly automotive (ORLY): With worldwide semiconductor shortage, new car manufacturers are struggling to meet the demand, Used car prices have gone up and expected to stay high until chip shortage is dealt with, which may take another 2 years according to some analysts. O'Reilly Automotive, Inc. owns and operates retail outlets in the United States. It engages in the distribution and retailing of automotive aftermarket parts, tools, supplies, equipment, and accessories in the U.S., serving both professional installers and do-it-yourself customers. AZn and ORLY are the two biggest giants in the auto parts world.
Life Storage Inc (LSI): Life Storage, Inc. is a self-administered and self-managed equity REIT that is in the business of acquiring and managing self-storage facilities. Located in Buffalo, New York, the company operates more than 900 storage facilities in 30 states and in the province of Ontario, Canada. The company serves both residential and commercial storage customers with storage units rented by month. Life Storage consistently provides responsive service to approximately 500,000 customers, making it a leader in the industry.
Crown Castle International Corp Reit (CCI): Crown Castle International Corp. is a real estate investment trust company, which engages in the provision of access to wireless infrastructure via long-term contacts. I see significant opportunity for tower stocks as the rollout of 5G requires companies like Verizon, AT&T (T), T-Mobile (TMUS), and other carriers to establish lucrative contracts with companies like CCI and AMT in order to bring their services to the consumer. It's a fairly decent growth and income stock due to its modest dividend.
Rio Tinto Group (RIO): Rio Tinto Plc engages in the exploration, mining, and processing of mineral resources. It operates through the following business segments: Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals, and other operations. With high cash flow and rapidly paying debt, RIO is projected to become net cash positive in 2021 which is rare in this sector. This sector is highly cyclical but with rising china manufacturing and US infrastructure plans, material stocks have some room to grow. It also pays 4% dividend.
Medical Properties Trust (MPW): Medical Properties Trust (MPW) is a REIT formed in 2003 to acquire and develop net-leased hospital facilities. "From its inception in Birmingham, Alabama, the company has grown to become one of the world's largest owners of hospitals with 431 facilities and roughly 43,000 licensed beds in nine countries and across four continents on a pro forma basis." MPW yields 5.26%, one of the very few hospital stocks with an attractive yield.
KLA Corporations (KLAC) :There is a worldwide shortage of semiconductors, chip stocks have been the biggest beneficiaries and quality names like LAM, KLAC, NVDA, ASML, TSM and ON are taking advantage of rising demands in this sector. KLA is a company with strong fundamentals. There's growth in both the top and bottom lines, and it evolves into dividend growth and buybacks. This package comes with what I believe to be a reasonable valuation.
Digital Turbine, Inc.(APPS): Rapidly growing tech stock Digital Turbine, Inc., through its subsidiaries, provides media and mobile communication products and solutions for mobile operators, application advertisers, device original equipment manufacturers, and other third-parties worldwide.
High Risk/High Reward: I don’t invest more than 10% of my portfolio in high risk high reward stocks. Invest what you are willing to lose completely.
Etherium
GBTC
MNMD
DM
PACB
Clov
References: Special Thanks to Investopedia search, Seeking Alpha, Yahoo Finance for providing research content.
Disclaimer:
DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS WEBSITE.
I’m not a professional security or investment advisor, please do your own research before investing in any equity and be fully aware of the risk of losing all your money in stock market and/OR in any other investment mentioned on this website.
My website has been prepared for informational and motivational purposes only and is not intended to be used as a complete source of information on any particular company. To the fullest extent of the law, I will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided on this website.
IF YOU DO NOT AGREE WITH THE TERMS OF THIS DISCLAIMER, PLEASE EXIT THIS SITE IMMEDIATELY. PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
Comments