Are you looking to make smart investment decisions in the ever-changing market? At Extreme Investor Network, we understand the importance of finding companies with solid fundamentals that can withstand economic uncertainty. In a recent note to clients, Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, emphasized the need to focus on quality fundamentals at a reasonable price in the third quarter.
So, what should investors be looking for in potential investments? According to Piper Sandler, companies with strong free cash flow yield and positive earnings revisions are good indicators of quality fundamentals. This includes big tech companies like Alphabet, which has a combination of solid balance sheets and strong growth potential. While Alphabet may not be the biggest stock in the world, it’s steady performance and market cap above $2 trillion make it a promising investment option.
In addition to tech companies, consumer-focused businesses like Chipotle Mexican Grill and Wingstop are also showing momentum this year. Despite challenges in consumer spending, both restaurant chains have reported positive earnings and growth in traffic. On the entertainment front, Netflix is standing out with its advertising tier reaching 40 million monthly users in May, driving its stock up by more than 40% in 2024. This strategic move by Netflix is seen as a way to attract more users and potentially increase revenue per user.
However, not all stocks are performing as well. AMC Networks, a company reliant on the cable bundle, has seen a 51% decline in its shares this year. Despite this, positive free cash flow in the first quarter and a recent deal to raise $125 million show potential for a turnaround. Another stock to watch is Academy Sports and Outdoors, with shares down 19% year to date but showing improvements in cash flow and debt management compared to last year.
At Extreme Investor Network, we provide valuable insights and analysis to help you navigate the complex world of investing. Stay tuned for more expert advice and recommendations on where to put your money for optimal returns.