The S&P rose 1%, a modest gain in what was a quiet week in terms of economic news. The market indexes continue to trade at or near 52 week highs. The market is showing strength at current levels, however trading volumes were relatively light, so conviction is difficult to assess. It is also interesting that volatility rose slightly, not overly significant in itself, but perhaps indicative of a growing nervousness amongst investors at these levels. We still consider the market reasonably valued. There is still a great deal of money on the sidelines in safe investments. We expect that money to enter the stock market over time as the investor's appetite for risk increases. The hunt for higher yielding investments will eventually bring investors back to equities. We remain optimistic for the remainder of the year, but also expect to have a few bumps along the way. Next week will represent a better barometer for market strength as more economic news will be in play.
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What Stock Tips do we have? Delta Apparel (DLA, Apparel), Universal American (UAM, Insurance), and City Telecom Hong Kong (CTEL, Communication Services) remain buys from our Breakout list from last week. We have written before that China based stocks have taken a beating and CTEL in kind lost more ground last week. We still think the stock represents a very good buying opportunity, but investors should be cautious given the current weakness in these stocks. CTEL should do well long term despite the short term malaise. We also added three new stocks to our buy list this week to include PHH Corp (PHH, Consumer Finance), Maidenform Brands (MFB, Apparel/Accessories), and Aeropostale (ARO, Apparel). PHH provides mortgage and fleet management services and the company is showing strong growth in sales and earnings despite the difficult lending environment. As credit markets begin to thaw, we expect this company and the stock price to really take off. Maidenform Brands and Aeropostale are both in the apparel business. Maidenform Brands designs and markets intimate apparel products including bras, panties, and shapewear. Aeropostale is a popular mall-based specialty retailer of casual apparel and accessories. Both stocks have spiked sharply over the past month as reports show that the retail industry is doing much better than expected. We expect that trend to continue as consumers are becoming more confident, willing, and able to spend. Frankly, buying these stocks on their recent spike makes us a little nervous as we usually like to buy during consolidation periods. However, these two stocks look very strong and waiting for consolidation could mean paying 10 to 15% more for the stock. The fundamentals look good for Maidenform and Aeropostale, with Aeropostale having a slightly lower PE ratio, but higher short interest. Options trade on both stocks so we may choose to buy stock on one and an option on the other depending on pricing next week. We do not plan to chase these stocks, but would be willing to buy at current levels rather than wait for a longer consolidation period. Overall, we remain optimistic that the market will trend upward through the remainder of the year. There will surely be some bumps along the way, but we plan to remain aggressive and fully invested in stocks.
Remember, you can access daily updates on Hot Stocks to Buy directly from our web site At: http://www.marketbeatingstocks.com
Market Beating Stocks: Joes Jeans Skyrockets 26% For Week!
Our two stock portfolios, Growth and Retirement both gained ground last week. The big winner was Growth which rose 3% to bring its YTD return to 6.2%. That is quite a turnaround from the challenges experienced earlier in the year. Spurts like these are not unusual and that is why we try to stay fully invested most of the time to ensure we take advantage. Our retirement portfolio has had phenomenal performance since inception, 133% return versus an -8% loss on the S&P over the same time period. We trail the market slightly YTD, but know that this portfolio will have its spurts and in the end produce market beating returns. Our Retirement portfolio has beaten the market return every year and we do not expect this year to be any different.
Portfolio Details and Stock Positions Available Online At: http://www.marketbeatingstocks.com
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