Dear Reader,
This morning, markets took a bit of a hit after Federal Reserve Chairman Jerome Powell appeared before the Senate to discuss interest rates and the state of the economy.
In prepared testimony, Powell told Congress that interest rates are likely higher.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
The odds of interest rates jumping by 50 basis points increased to more than 50% today…
The markets are not enjoying this testimony… and investors are starting to freak out…
What Can We Trade
Let me lay out stuff that you can own and trade right now with confidence.
Today, we’ll be talking about companies that have strong F&Z Scores and why they are critical to investors. I use three different metrics to help build a list of low-risk, high-upside stocks. I want great balance sheets, little debt, and really cheap valuations. We use:
- The Piotroski F-score
- The Altman Z-score
- A valuation rank
That’s where the Piotroski F-Score succeeds. The F-score is a NINE-POINT system that rewards each company for meeting a certain criterion on its balance sheet. Let’s look at Chevron, which has a perfect F score.
Improve your return on assets? You get a point.
Reduce outstanding shares? You get a point.
There are nine metrics here, and each is as important as the next.
A 9 is Perfect. A 1… that’s terrible.
Then we have the Altman Z-score.
This creates a weighted average of five metrics that tells us if the company might face a credit problem. If a company falls below 2.6, it has a risky balance sheet.
I play it safe. I want something that is above a 2.99, as it tells me that the company doesn’t have a lot of debt or leverage. The higher, the better.
Then, we look at valuation. We don’t want expensive stocks like NVIDIA (NVDA) with a PE multiple north of 133 or a PS of 22x.
We want stocks that are attractive from a buyout perspective. So, we look for positive book values and positive EBIT. And that gives us a cheap metric around EV/EBIT.
Today, I’ll unveil a list and show you how to approach these names.
You can get access to this list every month for free, at Midday Momentum.
Today’s Momentum Reading
Broad Market: Green
S&P 500: Green
Recap: The World’s Biggest Indicator (Momentum) is Green…
Momentum is weakening as the markets continue to sell off from Powell’s statements before Congress today. There’s a pretty steep move that this market can make as a result of any negative momentum move. Over at Flashpoint Trader, we’re shorting Gold and Ark Innovation Fund. And over at HyperMomentum, we’ve started to leg into inverse ETFs.
What You Missed
If you think the world couldn’t get any crazier, think again.
The war in Ukraine is escalating rapidly, inflation is out of control, and the United States has an election coming up soon.
The next two years are going to be a wild ride…
So let’s ride it out together.
If you missed my livestream last Monday, I gave out some critical information that could prove invaluable to you over the next 24 months.
I also gave away 14 stocks that could benefit from Russian sanctions and the massive shifts in global trade. I’ll likely be trading these companies over the next two years. And to maximize my gains with minimal risk, I’ll be utilizing options trading.
And if you want to join my next live trading session, you still have time.
Sign Up before Midnight
Get 12 Months FREE!
Yes, you read that correctly.
But you must act fast – because this offer expires tonight at midnight (ET).
You’ll get access to my daily live trading sessions, my premarket reports, and much more.
Simply call this number (855-509-6600) to secure your spot on my Flashpoint Trader team. You’ll get to trade along with me every day and join our extraordinary community of traders and investors.
The next two years are going to be a wild ride. But big changes in the markets create big opportunities. We could see trillions of dollars come home to American energy and manufacturing. I’ve got a long list of stocks I’m looking to trade over the next two years.
Don’t hesitate and miss out.
Call right now and get 12 months free of Flashpoint Trader – 855-509-6600.
Stay Liquid,
Garrett
