My “Buy List” is as Long as a CVS Receipt, But…

Keith Fitz-Gerald Feb 28, 2020
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Millions of investors are beginning to panic.

The Dow dropped a gut-wrenching 1,031 points Monday from Friday’s close and another points Monday and another 956.29 points Tuesday, following comments from the CDC that the spread of the coronavirus in this country is “inevitable.”

Even CNBC’s Jim Cramer threw in the towel, warning Monday that some stocks are “too toxic to touch.”

I agree.

But you know what?

There IS a list of stocks worth buying.

What’s more, it’s growing by the minute.

Here’s how to find great buys NOW.

What you do right now could set the pace for big profits for years to come.

That’s right, years to come.

Having the right perspective counts for a lot, especially when the you-know-what hits the fan like it is now.

The best part?

Most investors will not see what we’re going to talk about today because they’re frozen like deer in the proverbial headlights.

Admittedly, it’s hard not to be, frozen that is.

There will be more bad news about the coronavirus ahead. The Presidential elections are going to make a disorderly kindergarten class look tame compared to headlines that even Hollywood couldn’t come up with. The IMF, WHO, and CDC along with every other alphabet-soup agency out there will warn about global growth.

All of those things are true – but so freakin’ what?

Repeat after me… global growth may slow, but it will not stop.

Say it twice if you have to, or tape the following chart to your mirror if you must.

[CRITICAL] Investing in This Could Have Landed You A Spot on Forbes’s List of 100 Richest Americans

Capital is a constantly expanding resource and you can see that in this chart highlighting the last 2,000 years of economic history.

Then, ask yourself this: do you really think that everything is going to grind to a halt…? That there aren’t companies out there with plenty of profit potential??!!

To be clear, I’m not suggesting you throw caution to the wind and pile in. That’s a sucker’s game, given the headlines; “buying the dip” is exactly what Wall Street wants you to do because it helps them separate you from your money.

What I am urging is a measured, risk-based approach that’s proven to line up gobs of profit potential using a small fraction of your portfolio to nibble in. Even a few hundred bucks or just 1% of your cash on hand could mean the difference between getting taken to the cleaners and fighting back profitably.

Here’s a screen you can use to get started:

  • Market capitalization greater than $1 billion
  • Altman Z-Score greater than 2
  • Yield above average S&P 500 stock
  • Payout Ratio less than 60%
  • Dividend Growth greater than 5% over the past 5 years
  • At least two consecutive years of dividend increases

The goal is to identify a list of quality companies with enough liquidity, quality, and growth needed to be worth the risk of ownership when the SHTF – an acronym meaning something I cannot print here.

Feel free to tweak the criteria to match your personal objectives and risk tolerance; this is merely a starting point intended to help you identify great companies that have been put on sale.

That’s something a lot of investors are missing right now.

The temptation is to think the sky is falling but that’s not really the situation as long as the business case for owning companies like the ones that will come up in this screen remains intact.

[LAST CHANCE] S.C.A.N Technology is the Simplest Way You Can Make Big Windfalls in Weeks

Take Lockheed Martin Corp. (NYSE:LMT), for example.

The stock has been beaten down mercilessly from a high of $442.53 on February 11th to $405.28, where it’s trading as I type. On the surface that looks terrible, but the business case – to my point – remains rock solid:

  • Fundamentally strong defense contractor with a $115 billion market cap
  • Yield 2.2%
  • Payout ratio is a low 41%, meaning there’s plenty of extra capacity
  • 5-year dividend growth rate is 10.3%
  • 18 years of dividend increase

The company has top line growth from $47.25 billion in 2016 to $59.8 billion in 2019, and that’s not something that will simply vanish… virus or no virus, no matter who’s in the White House, no matter what the Fed does next.

Drug companies… similar story.

Big tech… same thing with the added twist that many will substantially increase profits if people are homebound.

In closing, I know it’s tempting to run for the hills. I get that.

My wife and I are right there with you. You are not alone by any stretch of the imagination.

I’ve been actively involved in the financial markets for 37 years and a keen student of history for even longer. And, if there’s one thing that I have learned in all that time it is that it always pays to play offense.

Always!

Adjust your tactics if you have to, refine your purchases, or simply be more choosy.

Be “in to win” or you won’t… win.

We have more computing power than any other time in history working on the coronavirus situation and anybody who doubts that we will fix this is sadly mistaken.

Don’t be “that” person standing there hands out wondering if you shoulda’ bought when you had the chance afterwards!

I will be with you every step of the way.

Until next time,


Keith

8 Responses to My “Buy List” is as Long as a CVS Receipt, But…

  1. Charles DiDonato says:

    Keith, I agree that this will eventually turn, and possibly as early as next week. I have a long list of companies I want to reestablish or start new positions in. Unfortunately, every day the market continues to drop and I wait until the next day to once again look for a better entry point. While waiting, I have been buying PUT options on the SPY and QQQ to protect my portfolio. I am in about 50% cash right now and want to start investing that cash, but not sure when to start. I too have been investing for quite some time, but have never encountered a market like we experienced over the past few weeks. Thanks as always for your updates and advice!

    • Keith says:

      Hello Charles and way to go!

      Having a plan and executing on that is HUGE advantage and it sounds like you’re very savvy in how you’re approaching things. Don’t worry about not having “seen” this before … nobody has. The key is anticipating actions for a variety of scenarios. Speaking of which, that actually gives me a great idea for a column in the weeks ahead.

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

  2. Edward McDonald says:

    Your so right. No one is going to go belly up. And they will find a vaccine for the corona virus .thank you.

    • Keith says:

      Thank you for the kind words, Edward.

      Like many people, I hope it’s sooner rather than later especially since my wife and I are isolating ourselves now that she’s returned from Japan!

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

  3. robert wolcott says:

    tx keith, I love your positive thinking here. are you still thinking about doing credit spreads?

    • Keith says:

      Thank you, Robert!

      I’ll be the first to admit this is testing every positive reflex I have but that doesn’t change my attitude. Besides, being negative must be a terrible way to go through life!

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

  4. Isaac Matta says:

    Hi keith:
    I do follow and trust your advice
    but where is the long list you promised at the begining ?
    come on man , this is the time your followers need good advice
    will wait ! Ike Matta, MD,

    • Keith says:

      Hi Doc!

      Thanks for the trust you place in me; I will do my very best to ensure that it is well placed and deserved.

      Speaking of which, I’ve mentioned several companies in recent media appearances and have a slew of new companies coming in upcoming paid sister publications – I hate holding those back but I have to be fair to the folks who buy my research to deliver it to them first!

      I’ll have more companies right here in Total Wealth, too in the weeks ahead.

      Best regards and thanks for being part of the Total Wealth Family, Keith 🙂

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