Hey Trader, Today, we have another round of trading news and information from our top analysts here at Traders Agency. And, of course, our Trade of the Day. |
Stocks: Today’s Federal Reserve meeting minutes showed a continued commitment to additional 50 basis point (0.50%) rate hikes in coming months. With inflation potentially negatively impacting earnings, investors are cheering the Fed’s aggressive stance today. Bonds:The 10-year Treasury yield traded back down to the 2.71% level after failing to break back above the 3% level last week.Commodities: Crude oil was up 0.8% near the $111 level, while gold was down 0.8% and silver was off 0.5%. Digital Currencies:With stocks up, digital currencies are trading along. But be careful… There are great trading ideas, but only at the right levels that you won’t want to miss. This is where Josh Martinez is doing well in his War Room service showing how trading BTC and ETH could make for a great side job. Click here to learn more. Data Check: According to the Congressional Budget Office, real GDP should exceed 3% in 2022 and inflation should ease back to 2% some time in 2024. However, demand remains high, as evidenced by today’s report on durable goods orders, which rose again last month. To keep me up on what you’re thinking or what you want to see us cover, you can always email me directly at neilgeorge@tradersagency.com. Now, on to our Trade of the Day. |
Leonardo S.p.a. ADR Recently, I’ve been writing about US defense contractor Raytheon Technologies Corporation (RTX), and today I’m bringing back the European contractor that we’ve talked about before, Leonardo S.p.a. ADR (FINMY). The Ukraine-Russia conflict is reigniting the discussions by legislators and leaders in the nations that make up the European Union (EU) over defense spending. The EU does not have its own army, navy, air force or other dedicated military. Instead, it relies on the US under both individual treaties and agreements as well as the North Atlantic Treaty Organization (NATO) for defense. And yes, each nation has its own forces, but they are arguably imbalanced on a nation by nation basis. Even before the current conflict, there have been discussions about forming an EU joint military effort. And this is now getting a lot more attention. In addition, individual nations are now discussing the need to perhaps beef up their own military forces just to be on the safe side of things. European defense contractors plug into plenty of US technologies and defense products and have access to US government security clearances for the manufacture of plenty of products and services. And recently, with the conflict, a host of the stocks in European defense companies have gotten attention and buying on the expectations that the EU members will now step up their own defense spending. Leonardo S.p.a. ADRis an Italian-based company, formerly known as Finmeccanica, that is a leading engineering technology company. Its products make planes, helicopters, satellites, drones and pretty much everything on the ground, in the air and space, on the water and under the water work to attack or defend stuff. It utilizes plenty of US-licensed technologies and sells the vast majority of its products outside of Italy with the US military as its largest geographically-located customer base. The stock has been gaining recently, but it is still very much a bargain stock. It currently is valued at a discount to its trailing sales on a price-to-sales basis. And it is also valued at a discount to its intrinsic (book) value. This means that while the stock is moving up, it is still super cheap compared to its better known US peers that rely on Leonardo for many of its own products. With the EU expected to spend more money either on an individual national basis, or on a collective one, Leonardo is set to be a prime beneficiary. And on top of that, the US, Asia and beyond are all expected to spend more and more on their own military operations. And add in satellite and space products, and Leonardo makes for a great Trade of the Day at a still discounted stock value right now.
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Leonardo S.p.a. ADR Price -- Source: Dow Jones |
With the current price at $5.28, FINMY is a buy under $5.50 with a near-term target of $6.15 and even more beyond that. And for safety, consider a stop at $3.90. Now, on to the best of Traders Agency… |
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Do You Know Where You Should Be Buying the Dip? Too many traders think that it's nothing but a straight line to the next high price once a rally starts. Unfortunately, that's not how it works. Along the way, we'll get retracements (temporary price dips). And you've probably heard so many pundits and experts telling you to "buy the dip."
By that, they mean buying into a market when the price dips during a positive price trend. But it's a bit more nuanced than that.
For me, there's a crucial piece of the puzzle that many gurus leave out. Instead of focusing on the dips, we need to look at the U-turns that come after those dips.
Without a U-turn, we have no way of knowing if a price drop will actually turn positive or keep dropping. So, if you're tired of buying dips only to see the market continue to tumble…
Check out what I have to say about accurately predicting future price movement. It will save you a lot of heartache and money in this market!
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Thank you for reading Beyond The Trade! Look for much, much more every day the markets are open. You’ll get further updates on all that is going on to make your job as a trader all the more profitable and better informed. I’ll also continue to provide updates on the stock ideas I bring to you in Beyond The Trade. To provide feedback, suggestions and questions, feel free to email me directly at neilgeorge@tradersagency.com. Your friends, Beyond The Trade |
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