Last week’s picks*:
FX: GBPUSD -50 pips
VA: PKG +4.84%
SC: INTT +12.15%
SH: CHH +1.34%
TF: CYY -0.14%
My stock picks performed better than my forex picks last week as I vastly underestimated the significance of the Scottish Independence vote in the UK. A Scottish breakaway would impact UK GDP and that is bearish for the pound, which gapped lower again this morning.
Looking to this week, there is not an awful lot on the calendar but traders will be watching the unveiling of the new iPhone 6 on Tuesday. As I said on Friday, I like Apple shares but I wouldn’t want to be a buyer this week as I don’t know what to expect from the event.
This week’s trading picks:
Copa Holdings $CPA
Copa Holdings is an airline based out of Panama that schedules flights across a number of countries in South America. I’ve tipped Copa Holdings before but I’m still bullish based on the company’s financials. The stock has a PE of 10.89, PEG of 0.41 and has been able to grow EPS at a rate of 28.90% over the past five years. Shares rebounded off a support line on Friday, climbing 1.40% even as Morgan Stanley analysts downgraded the company. I see this as a bullish sign and agree with The Street that CPA is a buy.
I failed to do my homework last week and paid the price as GBPUSD fell heavily and hit my stop of 50 pips.
This week, I”m looking at AUDUSD which rose on Friday but is currently off it’s highs. The currency climbed after US non-farm payrolls came in lower than expected, prompting speculation that the Fed will delay raising rates. Right now I can’t see anything on the horizon that could change that view.
Taking an economic standpoint, Australian growth has been healthy but inflation is tight at 3.0% so I feel the Australian dollar is mildly undervalued here. 60 pip stop on this one.
G Willi-food International Ltd $WILC
G Willi-food International specialize in the development, manufacture and marketing of kosher foods and with over 600 food products is one of the world’s leading suppliers of kosher food products.
The company is small, with a market cap of just $94.48 million, but the stock might be worth a punt this week. Volume has tailed off and the quiet period could give way to a break to the upside if enough buyers come in. The stock’s financials look solid with very little debt and a current ratio of 11.60. Furthermore, PE is 11.05 and PEG 0.74.
Vector Group Ltd. $VGR
Short sellers who sold $CHH last week may want to hold onto their shorts for a few more days. Those who didn’t may want to take a look at Vector Group Ltd. which manufactures and markets cigarettes in the US and has a proud history going back to 1873.
Vector Group shares are not cheap right now and have a PE ratio of 62.87 and a PEG ratio of 5.72. AS well, the daily RSI reading is overbought at 79.56 and we have seen a decent amount of insider selling in recent weeks. SEC filings reveal that at least one company director has sold 150,000 shares over the last few weeks.
Freeport-McMoRan Inc $FCX
Another value pick this week, Freeport-McMoRan Inc has been on my watch-list for a while as a result of the company’s solid financial position. The stock has had a poor couple of months and now trades with a PEG ratio of just 0.38. I can see the shares rebounding this week.
*Hypothetical results. Commissions and slippage not applied.
Disclosure: I am long CPA.
Additional disclaimer: Please be aware of the usual risks to trading in financial instruments. Please remember the importance of doing your own research and understand the cost to trade including trading commissions and the bid:ask spread.