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I do not publish frequently as I try to pick my spots and write compelling articles that have an impact and provide value to readers with stock ideas and analysis that are immediately actionable. I want to help investors FIND ALPHA. To be clear, I am advocating names that I own and have ultra-high conviction in my investment theses. This has been a challenging year for investors and I believe my “Top Six” ideas article is a great chance for readers to own six excellent companies with very asymmetric risk/reward characteristics.
We can debate whether this is a bear market rally or whether the bull market has resumed. Regardless of where your perspective lies, inflation continues to surge and is very clear in gas, groceries, and rents. There are clearly other measures, but those tend to hit the lower-end consumer hardest. We can also debate the impact of COVID, supply chains, etc. but interest rates are headed higher, and speculative no-earnings companies are likely to continue to see pressure, and value stocks are increasingly seeing the interest that they have not seen in over a decade. Valuation matters again and companies with strong free cash flow today are seeing a new level of interest from public and private investors. Regardless of whether one believes that the tech bellwethers that have led this market will continue higher or new leadership will emerge, the sectors I find most attractive have less government intervention at this time, excellent secular stories, and rock-bottom low valuations.
My top six stocks to buy now – Trinseo (TSE) and LANXESS (OTCPK:LNXSF) [LXS] in chemicals. Capri Holdings (CPRI) and PVH in retail. WestRock (WRK) in paper/packaging. And HeidelbergCement (OTCPK:HDELY) [HEI] for infrastructure and rebuilding Ukraine when the time comes – hopefully, sooner rather than later. I have written extensively on chemicals and my favorite names in the space. Chemicals – TSE and DOW. Chemicals – OLN. In paper/packaging – on WRK (Buy WRK). And, I have made many comments within my articles and on news releases highlighting my favorite names and the tweaks and changes over time. So while I will update my thoughts on TSE, LXS, and WRK, I will focus more on retail and why I like CPRI and PVH, and why HEI is likely to be a home run as well. I still like companies such as DOW and OLN and believe they will find their way to higher levels. However, as both DOW and OLN have recently hit 52-week highs, I prefer to focus on the six ideas in my portfolio with the most upside from current levels. And …….
Source: https://seekingalpha.com/article/4515662-six-ideas-that-may-make-money-next-12-months