This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
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The Stock Market May Soar 22% Higher – The Daily Recap
Beating By A Wide Margin
Strong Sales Growth
The better than expected earnings growth is coming on the strength of strong revenue. Sales growth has increased by more than 11 percent over the same time last year to $334.60 per share.
But better still, earnings estimates continue to increase, with operating earnings climbing to $177 per share as of August 23 for the year 2019. That is up 11 percent since the start of the year when estimates were for only $160.
Because of the strong revision, stocks are cheaper today than at the start of the year with a 2019 operating PE ratio of 16.1. That is down from 16.7 on December 29. That is because earnings growth expectations have outpaced the S&P 500’s rise of 7.5 percent.
For now at least the outlook for the economy remains strong. Third-quarter GDPNow estimates are forecasting growth of 4.6%.
So it possible for S&P 500 to climb to 3,500 within the next year? Consider if estimates remain consistent the operating PE would be less than 20 at 19.8. Seems plausible to me, that a 22 percent rise in the S&P 500 looks possible.
Have a great week!
Michael Kramer is the Founder of Mott Capital and the creator of Reading the Markets.
I started learning to invest when I was 16 years old. At 40, I have pieced together a long career on Wall Street, working as an analyst, and a domestic and international equity trader at two multi-billion dollar equity firms.
I started Mott Capital in 2014 to follow a passion and dream of being in control of my career path.
The idea behind Reading the Markets was to help both individual and institutional investors benefit from my experience in the business and my unique approach to dissecting stocks and the markets, which helped me become a great trader.
Reading the Markets is a combination of technical, fundamental, a macro market analysis, trying to piece together the clues the market is sending in its future direction.
Reading the Markets is unique, in that the video does not only serve as a means to deliver the content but to interact, making it a personal learning experience, while also showing the user how I go about finding my research and how you can use the process to do your work.
I want this product not only to be profitable and enjoyable but also affordable.
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Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
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