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The Stock Market May Soar 22% Higher – The Daily Recap
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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.
Estimates Revisions
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.
Still Cheap
Because of the strong revision, stocks are cheaper today than at the start of the year with a 2019Â 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.
Economic Growth
For now at least the outlook for the economy remains strong. Third-quarter GDPNow estimates are forecasting growth of 4.6%.
3,500?
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!
-Mike
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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.
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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