Dear Savio, Our Model Portfolio exhibited tremendous relative strength in the past week, rising about 5%. In comparison, the S&P 500 and Dow only tacked on gains of 1.2% and 0.9%, respectively. As I’ve stated before, good stocks bounce like fresh tennis balls—and that’s exactly what we saw happen recently. After the washing machine market sloshed us around for the better part of the month of May, I was certainly pleased to see our fundamentally superior stocks come roaring back this week. Our small-cap stocks performance was particularly impressive, as the Breakthrough Stocks section of the Model Portfolio soared 6% in the past week. What’s interesting is that there wasn’t any news to support the higher stock market. Now, if you’ve been a Platinum Growth Club member for a while now, then you probably know that Main Street tends to be in a more positive mood heading into holiday weekends, and that positivity rubs off on Wall Street. So, the stock market often rallies into holiday weekends like Memorial Day and the Fourth of July. I should also add that economic growth is continuing to accelerate as more and more parts of the U.S. reopen and life resumes at some level of normalcy. In fact, the Commerce Department revealed on Thursday that the U.S. economy grew at a 6.4% annualized pace in the first quarter, which was unrevised from last month’s estimate. Consumer spending was revised up to show an 11% jump for the first quarter, compared to the previous estimate of a 10.7% rise. While the first-quarter GDP growth estimate fell shy of economists’ projections for a 6.6% annualized rate, it’s the second-fastest economic growth rate since the third quarter of 2003. And looking forward, economists are still expecting the U.S. economy to gather more steam. The Atlanta Fed currently estimates that the U.S. economy will grow at a 9.1% annualized pace in the second quarter. Overall, I still feel that we’re in the midst of an ideal environment for stock market appreciation. We’re benefiting from accelerating economic growth, ultralow interest rates and stunning forecasted earnings growth. So, I fully expect that our Platinum Growth Club Model Portfolio stocks will continue to climb and lead the overall market higher in the upcoming weeks. I’ll have more details on why we can expect our Model Portfolio stocks to outperform in June in your Platinum Growth Club Monthly Update for June on Tuesday, June 1. In the meantime, I hope that you have a wonderful Memorial Day weekend, and I’ll be back in touch on Tuesday morning with your Accelerated Profits Weekly Profit Guide. Growth Investor June Issue I’m pleased to bring you your June 2021 Issue of Growth Investor! Over the past few weeks, we’ve made several changes to the Growth Investor Buy Lists. Specifically, we have sold a few Buy List positions, including three doubles, in spite of their strong forecasted earnings and sales growth. It’s disappointing that we’ve sold good stocks, but all of these positions had deteriorating Quantitative Grades and we simply could not ignore that fact. So, this month, we’re going to take a closer look at how our Quantitative Grades are calculated and the role that institutional buying pressure plays in our Growth Investor strategy. The reality is that strong fundamentals coupled with persistent institutional buying pressure will support higher stock prices and ensure that our stocks are less volatile during the bumpy summer months. In your Growth Investor Monthly Issue for June, we’ll review the recent changes that we made to the Buy Lists. In total, we’re selling seven stocks with dwindling buying pressure this month, which will make room for four exciting new buys. All four are characterized by relentless buying pressure and accelerating earnings momentum. I’ll also provide my outlook for the bumpy summer months. Personally, I look for June to be a good month for our stocks, as analysts revise their second-quarter earnings estimates higher and quarter-end window dressing kicks off in the latter half of the month. I’ll have all the details on why these two phenomena should create forced buying pressure under our Growth Investor stocks. And after that, we have another stunning earnings announcement season to look forward to. Read all about it here. Breakthrough Stocks Weekly Update If you’ve been a Breakthrough Stocks member for a while now, then you’ve probably heard me say on several occasions that Wall Street likes to “react first” and “think later.” And boy, the month of May was the epitome of that statement. There were plenty of distractions for the stock market in May, including military events, cryptocurrency gyrations, surging inflation and taxation disagreements. Each headline had the potential to ignite massive swings in the market, leaving many investors reaching for the antacids. In today’s Weekly Update, we’ll review how the stock market reacted to the latest headlines in May and why I’m not concerned as we head into the bumpy summer months. The reality is that we remain in a “Goldilocks” environment of low interest rates, positive economic growth and accelerating earnings—all of which bode well for higher stock prices. I’m particularly excited to see how our Breakthrough Stocks perform in the upcoming weeks, as they remain characterized by triple-digit forecasted earnings growth and double-digit forecasted sales growth. I even added a new stock to the Buy List this week to ensure that we remain well-positioned to profit in the current environment. We’ll review this buy advice today. In addition, we had a few Buy List companies making their own headlines over the past week, and I received a question about Digital Turbine, Inc. (APPS) ahead of its earnings release on Tuesday. I’ll provide updates on each of our companies in the news and discuss why Digital Turbine still remains a good buy right now in your Weekly Update. Let’s look at the details. Sincerely, Louis Navellier |
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