Sometimes, it’s just a gross week.
The stock market is stuck in the mire, the U.S. government is in a bind (again) and I think half of our office is fighting the fall bug that’s going around.
Like I said, it’s “gross.” September was rough for stocks, and it hasn’t been a strong start to October either. Over the last month, the S&P 500 has lost more than 5%!
When stock markets ratchet the volatility up, finding stocks well-suited for the rocky environment is tricky.
Of course, Adam O’Dell’s Green Zone Power Ratings system makes it easier. This incredibly valuable tool gives us a snapshot of what to expect for a stock over the next 12 months.
Poorly rated stocks (anything from 0 to 40) are expected to underperform … stocks from 41 to 60 should follow the market’s broader moves … and anything 61 or above is on track to outperform from here!
It is that simple…
I thought I’d just run a couple of stocks on my own watchlist through Green Zone Power Ratings to show you how easy it really is.
Let’s get started!
My Current Obsession
One of my best friends recently pulled me back into the world of “Magic: The Gathering.”
To my wife’s chagrin (and my inner child’s delight), I get a huge kick out of opening packs of cards and seeing how they could fit into the decks I’m building. It also is a great way to hang out with my out-of-state friends more regularly.
And after seeing how popular this 30-year-old game has now become — there are now sets featuring popular intellectual properties like Lord of the Rings and Doctor Who — it got me thinking about investment potential.
Hasbro Inc. (Nasdaq: HAS), one of the largest toy brands out there, owns Magic’s subsidiary, Wizards of the Coast. With such a well-known brand at the helm, I thought for sure this was a stock worth buying.
Green Zone Power Ratings says otherwise…
Hasbro stock rates a “High-Risk” 12 out of 100 in Adam’s system. Stocks in this category are set to severely underperform over the next year.
HAS’s Green Zone Power Ratings in October 2023.
HAS stock rates an 82 on Momentum after a nice start to the year, but the bottom has since fallen out. Over the last month, its share price has declined 14%.
The real red flags for Hasbro stock are on the three fundamental factors, where it doesn’t score higher than a 25 on Value, Quality or Growth.
Zooming in on Growth, where HAS stock sports a 14, its latest quarterly report tells all you need to know. In July, it reported $1.2 billion in revenue, which was almost 10% lower year over year. Net income also declined more than 265% compared to the same quarter a year ago.
While I am currently obsessed with one of Hasbro’s core product lines, I’ll steer clear of the stock for now.
Follow the Internet Overlords
Another stock that’s always been on my watchlist, but I’ve never pulled the trigger on, is Comcast Corp. (Nasdaq: CMCSA).
I may just be a tired millennial, but it’s hard to back a company that has such a stranglehold on internet and media access. But it’s an effective business model that’s reflected in its solid Green Zone Power Ratings.
CMCSA rates a “Bullish” 69 out of 100 in Adam’s system. Bullish stocks are set to outperform the broader market by 2X over the next 12 months.
CMCSA’s Green Zone Power Ratings in October 2023.
A Momentum score of 93 is nothing to scoff at. That means CMCSA is in the top 7% of more than 6,000 stocks we rate on that factor. Year to date, the stock has doubled the gains of the broader S&P 500. Zoom out to one year, and Comcast stock has gained 41% while the broader market is up 12%. That’s more than 3X!
It’s also solid on Value and Quality — in the mid-60s — which avoids a potential “value trap.”
I hate paying a premium for Comcast’s spotty internet service, but maybe I’ll start offsetting that cost a bit by investing in its stock.
If you can’t beat ‘em, profit off ‘em (that’s the saying, right?)…
As you can see, it’s pretty easy to run with an idea in Green Zone Power Ratings. Within moments, you can get a better picture of how investable a company is.
If you want to try it for yourself, just look for the search function on this page. Click it, type in a ticker or company and see what Green Zone Power Ratings says!
Until next time,
Chad Stone
Managing Editor, Money & Markets