Connect with us

Stock Picks

Stock Picks: General Motors and Everest RE Group

Published

on

The S&P 500 (SPX) appears to have filled the gap between 2,695.68 and 2,709.79 on the daily chart as the index went as high as 2,717.49 on April 18. However, it seems that SPX has generated another lower high. Unless the index can move above 2,720 soon, it is in danger of creating a bearish descending triangle pattern.

With the SPX showing signs of weakness, let’s look at stocks that are near firm support levels.

GM – General Motors Company

General Motors Company (GM) is an American multinational corporation that designs, builds, and sells cars, trucks, crossovers, and automobile parts. Founded in 1908, it now has 180,000 employees across 35 countries worldwide. The company’s operational segments include GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO), GM South America (GMSA) and General Motors Financial Company, Inc. (GM Financial). In General Motors’ portfolio are the brands Buick, Cadillac, Chevrolet, GMC, Holden, and Wuling.

Technical analysis show that GM has taken out resistance of 37 on September 8, 2017 and triggered the inverse head and shoulders reversal pattern on the weekly chart. The stock went as high as 46.76 on October 24, 2017 and hit the target of the pattern before it retreated and dipped to 34.50 on March 27, 2018.

The stock, however, has recently reclaimed 37. As long as that level holds, the large cup and handle pattern on the weekly chart is still in play.

In addition, fundamental analysis show that the trailing twelve months (TTM) price to earnings ratio (PE ratio) of GM is 21.35. While the PE ratio looks as if the stock is already fairly valued, its five-year maximum shows that it has still room to grow. GM’s maximum TTM PE ratio in the last five years was 32.18. Based on this number, we can say that GM has some more upside potential.

The strategy is to buy as close to 37 as possible. If bulls continue to hold this level, they may create a base and crawl to our target of 54. The process may take more than a year.

Weekly GM Chart

Monthly GM Chart

As of this writing, the General Motors Company stock is trading at 37.61.

Summary of Strategy

Buy: As close to 37 as possible.

Target: 54

Stop: 34.50

RE – Everest RE Group Limited

Everest Re Group (RE) is a company engaged in insurance and reinsurance underwriting. Founded in 1973, its products now range from property and casualty reinsurance to marine, aviation, surety, errors and omissions liability (E&O), directors’ and officers’ liability (D&O), medical malpractice, accident and health (A&H), and workers’ compensation insurance.

Technical analysis show that RE bottomed out in December 2017 when it dropped to 208.81. The stock has been rallying since and has even managed to go as high as 264.88 on March 21, 2018. Bears repelled the advance, but the stock appears to be carving a bullish higher low setup above 240. If this level holds, RE may use it to take out 265 resistance.

Moreover, fundamental analysis show that RE’s trailing twelve months (TTM) PE ratio stands at 22.13. This looks like a reasonable PE ratio but it’s five-year maximum of 38.36 indicates that investors are willing to pay a premium. In other words, RE has some more potential for growth.

The strategy is to buy at current market level. If the stock holds the higher low of 241.80, bulls will likely use it to create a base and breach 265 resistance. Once breakout is complete, the stock may march to our target of 320.

The process may take more than a year.

Daily RE Chart

Weekly RE Chart

As of this writing, the Everest RE Group Limited stock is trading 246.99.

Summary of Strategy

Buy: At current market price of 246.99.

Target: 320

Stop: 241.80

 

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




Feedback or Requests?

Stock Picks

Stock Pick: Walt Disney

Published

on

Walt Disney Company (DIS) is one of the most popular mass media and entertainment companies in the world. The conglomerate stands as an entertainment empire that operates in three business segments: feature film, TV, and theme park. Currently, Walt Disney has a labor force of 195,000 across 45 countries. In 2017, the company generated revenues of $55.1 billion.

Technical Analysis of Walt Disney (DIS)

Walt Disney posted its all-time high of $122.08 in August 2015. From that point, the stock entered a multi-year consolidation period. It pulled back to as low as $86.25 in February 2016 before generating a bullish pin bar on the monthly chart, suggesting that a short-term bottom was in place. This attracted bottom fishers and bargain hunters who helped push the stock to $116.10 in April 2017.

Unfortunately for buyers at this level, $116.10 was a lower high. This was a clue that DIS was still consolidating. It could also have been a sign that bulls have lost their momentum. Before panic ensued, however, DIS generated a higher low of $96.20. This dispelled the notion that DIS was ready to end its uptrend. More importantly, it emboldened more investors to place buy orders.

Technical analysis shows that DIS has taken out resistance of $110 in July 2018. This triggered the break out from the symmetrical triangle pattern. The price action marks the end of the three-year consolidation and the resumption of the uptrend.

On top of that, DIS has only one more resistance left to face: its all-time high of $122. Take that out and its all blue skies for the stock.

Fundamental Analysis of Walt Disney (DIS)

In addition, we have fundamental analysis to back our bullish view. The trailing twelve-month price to earnings ratio of DIS is 14.68. The stock is significantly undervalued considering that it has a five-year maximum of 25.30. This tells us that the stock is currently trading at a discount and it is likely a good buy at this level.

In addition, Walt Disney is set to acquire 21st Century Fox for $71.3 billion dollars after it received shareholder approval in July. While the merger was scheduled to go through early next year, recent reports suggest that the deal could be completed within the year. If the merger pushes through, DIS can become a strong long-term play. The purchase of Fox’s assets enables the media giant to grow its content vault and launch its own streaming service by next year.

The strategy is to buy on dips as close to $114 as possible. There’s a lot of excitement surrounding the stock even in the midst of general market volatility. As long as DIS stays above this level, it is set to take out its all-time high of $122 and rally to our target of $140.

The timeline for the target is more than six months.

Weekly DIS Chart

Monthly DIS Chart

As of this writing, the Walt Disney stock (DIS) is trading at $118.27.

Summary of Strategy

Buy: On dips as close to $114 support as possible.

Target: $140

Stop: Close below $110.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




Feedback or Requests?

Continue Reading

Analysis

FedEx Goes Looking for New Lows

Published

on

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

At a recent Federal Reserve meeting, the market was made clear that interest rates were going to rise, which means that the burden on business in the form of interest on borrowed funds will increase. The ‘cheap’ money has run out, and now overvalued companies will be heading to their real quotes. If you look at the market, the corrections are already beginning, and there is a decline in each sector. Under these conditions, stocks will be forming ranges, although in most cases they are already here. If the price is at the lower boundary, then we should expect an even greater decline, as new support levels will be formed lower.

The ‘weak link’ under these conditions will be the companies that have shown a significant decrease in profits in the current quarter relative to the previous quarter and to similar periods of the previous year.

Tips for trading here should be sought in technical analysis, since the fundamental one will not show negative trends in Q3, as reports will be provided for the previous period, and they will be compared with similar periods of last year, which in most cases will show a positive trend.

In this situation, it is possible to consider trading for lowering overpriced companies, but the trader needs to be aware of the risk they will be taken taking, as due to the gaps at the opening, losses can be fatal.

FedEx, a leading mailing operator, is among such companies that are set to decline in the near future. Quarterly reports show an increase in profits compared to the same period last year. With this in mind, it would seem, there is no reason for concern, as the fall in profits in Q3 this year was also observed last year.

FedEx

Meanwhile, the short float is as low as 2.01%. The debt to capital ratio is less than 1, which also indicates the company is good to invest into.

On Oct 18, FedEx announced the acquisition of Manton Air-Sea Pty Ltd, a leading logistics service provider based in Australia. This will allow FedEx to increase its presence in the Australian market. The transaction is scheduled to be completed by the end of this year.

Analyzing other financial indicators, the negative details can only be found in the discrepancy between the Q3 earnings per share predicted values, since the EPS expectations were at $3.80, and in fact it turned out to be just $3.46, which resulted in the company ending its trading session with a 1.7% decline.

Without going into details, the company’s profit is growing, dividends are paid, and there is no reason to worry, especially when the index is being bought heavily during such falls. Let’s get back to the reports however, and we’ll see the profit in Q3 decreased by 42% compared to the previous quarter, although last year it was only by 16%.

In July, Amazon announced its new project, Delivery Service Partners (DSP), as mentioned earlier in one of our analytic reports. This led to the largest international postal operator’s decline. The project by Amazon enables starting your own shipping business under Amazon brand. This project is already working and the goods, despite the problems that arise, are being shipped. This means that FedEx and UPS are guaranteed to lose some of their income. In the long term, the development of DSP will create an even more serious competition against postal operators.

Amazon’s policy led to FedEx shares losing around 16%, after which the price tried to recover, but nothing came out of it, and now it’s trading around the year’s lows. Another negative fact is that the price went below the 200-day SMA, which last occurred in 2015. Last time, after the SMA breakout, the price fell by 36% from its highs. The last fall was accompanied with the largest trading volume over the last 2 years, which increases the likelihood of further price fall.

The nearest support is around $200. Further decline may be news-driven and come later, as it often happens. A short-term price increase to the resistance at $240 USD is possible, but after that, a rebound and a more serious price fall to $200 may follow. With larger volumes or a consolidation range, a reversal may occur.

To sum up

According to the Federal Reserve’s latest meeting minutes, rate hikes are going to happen both this year and next. This will increase the cost of borrowed funds, which will lead to consolidation of the stock market and a possible sharp decline when approaching the highs. Some investors will close their positions on highs, trying to lock in as much profit as possible, after which they can move to less risky instruments such as bonds, whose yields will only increase with rate hikes.

Yet another crisis coming is often a surprise for investors, because usually everything starts with a small correction, which then rapidly develops into a market collapse and leads to a massive fall in stock prices. For this reason, investing in companies at current prices is not a good idea.

In this situation, it is best to look for small and unknown companies to buy, or to focus on those that are just starting their IPO’s.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




Feedback or Requests?

Continue Reading

Analysis

Boeing Still a Good Investment, but Not Now

Published

on

By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

In one of our previous articles, we spoke about the rising demand of pilots and air transportation, which made us focus on relevant companies. Another important aspect here is aircraft, without which no air transportation is possible. So today, we’ll analyze one of the largest aircraft manufacturers out there, Boeing.

Boeing Company (NYSE: BA) is a leading aircraft, military and space equipment manufacturer. Headquartered in Chicago, IL, the company mostly operates in Seattle, WA. Boeing is among the top three military equipment companies in the US by the yearly order volume. Around 50% of the company’s budget accounts for military orders.

Over the last four years, Boeing’s yearly revenue is always somewhere near $90B, while the net profit is steadily growing.

Since 2014, the company’s equity was going down, with the debt growing at the same time, and thus the debt-equity ratio is currently not the best one.

Despite the debt, however, the investors get the dividends regularly, and those have been growing speedily since 2014: from $1.94 per share that year to $6.50 in 2018. Meanwhile, the growing demand led to Boeing supplying 763 aircraft in 2017. This was a record high, and the earnings went up from $4.985B to $8.197. The price per share also rose by over 100%, breaking out $300. In 2018, the company is going to supply 912 aircraft, or 20% more.

Boeing Contracts

Recently, Boeing got a contract for $62.7M which included maintenance and modification of F/A-18 и EA-18G. The contract is expected to be fulfilled by Sep 2019.

Another contract won by Boeing is worth $805M and includes developing, manufacturing, testing, and supplying for pilotless aircraft to the US Air Force by 2024.

The US Air Force also has yet another contract with Boeing, which is worth $9.20B and includes both aircraft and flight simulators. At the first stage, the company will get $813M to supply 351 Advanced Pilot Training aircraft and 46 simulators. The overall deadline is 2034.

This is just to name a few, and still one could clearly understand Boeing has orders for at least the next 10 years.

Boeing is also a significant player in the international military business; with the emerging countries increasing their budgets in the light of global geopolitical uncertainty, the company is sure to get more orders.

Apart from military aircraft, Boeing is planning to launch an air taxi prototype next year, which would carry passengers for short distances, while the company is also determined to create an air transport management system within 5 years.

All this makes the outlook perfect, with both dividends and share prices growing steadily. Technically, however, there is some extreme volatility, which shows investors are uncertain; some are closing their positions to lock in over 100% profit, others are, conversely, buying. This led to the price forming a wide range between $315 and $370. At this rate, it may well reach $400 and then bounce back to $300.

Technical Analysis

In 2016, Boeing shares started rising from $100, with the volumes growing, and reached the high at $350, i.e. those who bought at $100, started selling at $350. This means one should better wait for higher volumes and lower prices, as well as some good news, before buying, rather than going long straight away.

Alphabet Inc (NASDAQ: GOOG) experienced a similar situation, when the price was between $1,000 and $1,200, and then, when good earning reports came out, it reached $1,270. Then, Google shares went down again, and are now trading at $1,150, while being fundamentally very strong. So, it may start rising again soon, but at lower levels.

You remember an old saying ‘Buy rumors, sell facts’, of course. This is true with Boeing as well. The news on the company plans must be already priced into the shares, so before adding Boeing to your portfolio, you’d better wait for some lower prices.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




Feedback or Requests?

Continue Reading

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending