What is a Descending Channel
A descending channel consists of two parallel lines that are equal distance apart and surround price action.
Are you confused yet? Well, a picture is worth a thousand words.
What are some of the things you notice right away when reviewing the chart?
A couple of items that jump out to me are that you need at least two points that you connect the line to start the channel. In this case, it’s the lines at the top of the channel, which have the red arrows pointing to them in the image.
Next, you will notice that the bottom of the channel runs from the low point of the gap up candle (large green candle in the chart). Notice how price stays within this channel as the stock EA marches lower.
How to Trade Descending Channels
There are multiple ways you can trade descending triangles. Now, each method will require a different trading style and preference, so you will need to see if one or any of these approaches work for your trading style.
#1 – Trade the Breakout
One method is to trade the breakout of the channel. This breakout can be to the upside, but also to the downside. This setup is going to be the toughest of the three to trade, due to the false breakouts which occur in the market at a high frequency.
Breakout to the Upside
A breakout to the upside means there is a possible shift from a bearish sentiment to bullish. This strategy will have you buying the break above the channel. It’s recommended that buying into this break should occur after multiple tests of the upper channel line. Reason being breakouts early on in the channel often lead to traps as shorts push the price of the stock back down to the lower end of the channel.
Breakout to the Downside
The breakout to the downside is again often overlooked as a method for trading this setup. A break below the lower trend channel line is a signal that the stock is experiencing significant weakness. This likely means the channel is now expanding and there will be a new lower channel line.
I know this sounds a bit ambiguous, but this is trading. The market is going to do whatever it wants and you need to be prepared to handle the action.
As you can see in the above chart of ARLO, after trading in a down channel for a few hours, the stock broke to the downside shortly after 10.
Stocks that breakout in the early morning session have a greater likelihood of following thru on the breakout. In this example, after hugging the oversold line for a few candles, ARLO broke thru with a vengeance.
#2- Short the Test of the Top of the Channel
Channels are better suited for traders that place trades within the range. The top of the channel is also known as the overbought territory for all of you Wyckoff traders out there.
This means that as a stock approaches the upper channel, there is a high probability of price returning inside of the channel.
For this strategy, you will place your sell order at the top of the channel and then cover your position as the stock moves in your favor. There is no guarantee the stock will make it all the way back to the support channel, so you need to be prepared for anything.
Also, the price action for stocks trading in channels is often slow and boring. Therefore the trading action will appear erratic at times as price marches to its own beat. This will give you a number of false signals, and head fakes as the action plays out within the channel.
This is why again it’s better to cover as things go in your favor and remember to exercise patience.
In the above example, notice how CLDX tests the top channel and rolls both times. The more touches you have in the channel, the greater the risk of the stock breaking out.
It’s like anything in life, the more tests of something, at some point it’s going to break.
#3 – Buy the Test of the Bottom of the Channel
Buying the test of the lower portion of the channel can get tricky. This is because you are knowingly buying a stock that is in a weak position. Therefore, you need to tread the waters with caution. Doesn’t mean you can’t take action but you have to be prepared that the stock may not bounce and could just ride the lower portion of the channel lower with no reaction back to the top line.
As you can see in the above example of EGHT, there were a number of buy opportunities, but there was only one that had a nice run up to the top of the channel. As you can see, there are setups, but you have to size them up appropriately.
Placing Stops with a Descending Channel Setup
Like any other trading setup or strategy, you need to enter stops. This will protect you from the unthinkable.
In a channel trade, your stop is determined by the strategy.
For breakout trades, you want to keep your stops beneath the top of the channel.
Channels Can Bore You to Death
We do have to talk about the fact that trading channels can bore you to death. What I mean by this is that the action in a down channel can be slow.
This means as you are observing the action, you should not overreact to one red or green candle. The stocks will generally hit one of the lines, but the move to the line is not linear.
Multiple Channels on One Chart – Which One Takes Priority?
As you are trading a channel let’s say on a 5-minute chart, there could be another channel that you run up against on a larger time frame.
So, what do you do?
For me, I am aware of the overhead resistance, but as a day trader, I do not react before observing the price action. If it begins to stall, I know the traders monitoring this channel are in control.
If the stock slices through this channel with ease, I know that the channel I am observing on the shorter time frame is in control.
False Breakouts in Descending Channels
If you are day trading, descending channels will materialize in the middle of the day. This is because the pattern takes time to develop.
Remember, the pattern needs the back and forth which is the makeup of the middle of the day trading.
The challenge with this pattern is midday trading is notoriously difficult and boring. With the lack of activity comes the risk of making a bone head move.
So, as a day trader, you need to decide if this is something you want to do with your day. Remember, it’s okay to just say no.
See How Tradingsim Can Help
Descending channels are a common trading pattern in the markets. If you are looking to make some trades on both the long and short side you have that option.
Remember, in descending channels the bears are in control, so if you go long, tread lightly.
You can always take a spin of the Tradingsim Platform to see if descending channels are a good fit for you.
The post Descending Channel – Learn How to Trade This Common Pattern appeared first on – Tradingsim.
10 of the Best Value Stocks to Invest in Now
Value stocks can seem like a bargain to investors, but can become a valuable part of an investor’s portfolio. This article will explain what value stocks are, how they differ from growth stocks, and how TradingSim can help investors find the 10 best value stocks.
What is a value stock?
A value stock is a bit like a stock on sale. Value stocks tend to trade at lower prices than other stocks. In addition to being cheap, value stocks tend to have less-than-average growth than other stocks. They also tend to have low valuations in relation to earnings and cash flow.
Value investing can be a great choice for risk-averse investors who want to slowly wade into the investing waters. Value stocks also tend to have dividend payments to investors every quarter. Also, with the Dow Jones in such volatility, these value stocks could be a safer alternative to faster-paced growth stocks.
How is a value stock different from a growth stock?
Here are some differences between growth stocks and value stocks. The comparison of value stocks versus growth stocks shows vast differences.
Growth stocks usually
- have high valuations. Tech stocks, like Amazon (NASDAQ:AMZN), often have a sky-high valuation in the billions. Amazon has a record-shattering $1 trillion valuation.
- have high P/E ratios. Growth stocks usually have a P/E ratio of 16 and higher. Netflix’s ( NASDAQ:NFLX) P/E ratio has skyrocketed to trading for 86 times its earnings.
- steadily rising stock prices. Growth stocks like Zoom ( NASDAQ:ZM) have stock prices that surged 200% above its listed IPO price of $ 36 per share.
- strong growth rate. Many growth stocks have better-than-average projected future earnings. Growth stocks also tend to outperform the overall S&P 500.
- more available cash flow. Easily available cash flow is usually a sign that a company has a growth stock.
- don’t pay dividends to investors. Growth stocks from corporations tend to reinvest money back into corporations. They don’t usually offere quarterly dividends to investors.
- many growth stocks are in tech or other growing industries. Teledoc (NYSE: TDOC) is a growth stock that rose 18% just over the past month. The telehealth company is successful because of its innovation in medicine. Teledoc’s stock is also performing well because of its timely use by patients during the coronavirus crisis.
- riskier for investors. Growth stocks can rise higher than the overall market, but can fall faster into a bull trap when the market declines into a bull market as well.
Value stocks are less volatile than growth stocks
In contrast to growth stocks, value stocks usually
- have low price-to-earnings ratios (P/E). Value stocks, like MetLife(NYSE:MET) have a rock-bottom P/E ratio of 5.10. Life insurance stocks often have a low P/E ratio below 16.
- have a slower growth rate in more established industries. Growth stocks tend to increase quickly in innovative new fields. Tech stocks, like Tesla (NYSE: TSLA) especially, may have wild swings on the stock market because of production issues ( or Elon Musk’s comments). However, value stocks usually grow at a slower pace and are in industries that have been around for decades. BP(NYSE:BP) is a giant in the oil industry and is a value stock with less drastic change in its stock price.
- pays dividends to investors. In addition to BP, another oil stock, Chevron (NYSE: CVX) is a high-paying dividend stock. Chevron pays investors a 7.5% dividend to investors.
- are undervalued. Semiconductor maker Qualcomm(NYSE: QCOM) has undervalued stock because it’s overlooked, but will be vital to the future. Even though Qualcomm stock is in the $66 range, the stock should rise soon. Since Qualcomm is making chips that will be used in 5G technology, the corporation’s stock will likely benefit from this in the future.
- are less risky than growth stocks. Value stocks are usually less volatile and have steady returns for investors. Even though IBM (NYSE:IBM) stock has dropped, the stock is still a solid value stock. IBM is moving into cloud computing with its acquisition of software company Red Hat. The stock will likely remain a safe bet for investors who are looking for value stocks.
Top 10 Value Stocks for Investors
For investors that want low-risk investing , this value stock list has venerable stocks that have high-yield dividends. Here are 10 stocks that are some of the top value stocks to add to a portfolio.
1. Berkshire Hathaway
Warren Buffett is the OG investor and his Berkshire Hathaway (NYSE:BRK-A) and (NYSE:BRK-B) is the top value stock on Wall Street. The Oracle of Omaha has been choosing stocks since the Beatles were a new group. His conglomerate has chosen some of the best stocks to invest in, and Buffett’s corporation itself is a must-pick stock.
Berkshire Hathaway started in 1929, but didn’t become a viable company until Buffett took over the corporation in 1965. His investment strategy was to buy undervalued companies, then let them grow. As a result of value investing, Buffett’s fortune has grown to almost $70 billion.
Former hedge fund manager Whitney Tilson says Berkshire Hathaway is a top value stock because of Buffett’s wise choices.
“I’m being even more conservative because I’m not factoring in the value Warren Buffett will likely create as he puts his $128 billion cash hoard to work amidst this chaos: buying back his own stock in size, buying other stocks, and negotiating deals with desperate companies,” said Tilson.
“It’s an incredible collection of high-quality businesses… it’s run by the greatest investor of all time… and it has the ultimate, Fort Knox-like balance sheet: $128 billion in cash and short-term investments, $19 billion in bonds, and roughly $200 billion in liquid, blue-chip stocks,” added Tilson.
This TradingSim chart shows Berkshire Hathaway’s trajectory the week of March 19, 2020.
Berkshire Hathaway has a low P/E ratio of 5.46, which makes the company’s undervalued shares a value stock for investors. While most value stocks offer dividends, Berkshire doesn’t. Buffett noted that he’d rather reinvest in his companies to improve the efficiency of his investments. For investors interested in value investing, Berkshire Hathaway is a must.
Buffett only buys stocks he likes for the long haul
Berkshire Hathaway is a value stock because of its investment in other blue-chip stocks. Buffett is known for his quotes about cautious, long-term investing. One quote about long-term investing is especially timely with the stock market slowing down now:“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Buffett also loves to quote Benjamin Graham, the father of value investing. “Long ago, Ben Graham taught me that price is what you pay; value is what you get. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down,” said Buffett.
Buffett doesn’t just chase trading trends. He only invests in companies he believes in for a long time. Even though his stock picks may seem too safe, they pay off in the long run. His recent $549 million investment in Kroger grocery stores in February has been very savvy. The recent run on grocery stores like Kroger during the COVID-19 pandemic has made Berkshire Hathaway’s investment a good buy. Buffett has the Midas touch when it comes to picking stocks. His time-tested value investing in top corporations make Buffett’s Berkshire Hathaway a top value stock.
One of the value stocks that Berkshire Hathaway invests in is Apple (NASDAQ:AAPL). The tech giant is a value stock because of its lower-than average P/E of 20. For the largest tech company in the world, Apple is ironically undervalued compared to other tech stocks like (NASDAQ:FB). Even though Apple is a tech company, it’s also seen as a hardware company since it produces iPhones and Apple Watches.
The company has a hallmark of a value stock, strong earnings reports. Apple’s last earnings report saw the company earn a record- shattering $91.8 billion. Apple’s ample cash glow gives the stock a characteristic of a growth stock. However, the company’s $58.9 billion in cash flow in fiscal year 2019 helped pay its $14.1 billion dividend payout to investors. That’s an impressive 6.5% yield. Apple is a reliable value stock that investors should add to their portfolio.
Coronavirus will impact Apple, but stock will bounce back
The COVID-19 crisis has hit every corporation, especially Apple. Many Chinese factories that make Apple devices have been shut down in February. However, the pandemic is slowing in China and factories are starting to reopen. Apple is also set to launch its 5G iPhone in the fall, which should help Apple stock recover from its current losses. Apple recently noted that even though iPhone sales are down in China, there is still growth in sales in other countries. This TradingSim chart shows the volatility in Apple’s stock.
“Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations, ” said Apple.
Wearables make Apple a value stock
Even though Apple stock is currently down, Apple devices are still going strong. Many homebound people are Facetime on their iPhones and iPads to stay connected to each other (and to the games they’re addicted to playing). Apple Watches and other wearable device sales rose 17% in 2019. The ability of Apple to innovate in technology gives value investing in Apple a benefit to investors.
Craig Johnson, chief marketing technician at Piper Sandler, said Apple is still a value stock because of customer loyalty. He noted that even through the last economic downturn 10 years ago, customers still bought iPhones.
“People are still going to step up and they’re going to buy the iPhone. You know, when this gets relaunched and gets released for the 5G iPhone, they’re going step up and buy it. We saw the iPhone get released in 2007 and 2008 in the middle of the crisis there. Consumers still were able to open their wallet and buy these things,” said Johnson.
Apple can withstand the current market volatility and COVID-19 crisis because of its ample cash flow, innovative new products, and a devoted customer base.
Another value stock Buffett believes in is Coca-Cola( NYSE:KO). Buffett owned the stock since hip-hop was a new category of music. The soft drink company is a value stock because of its high dividend and its steady cash flow. Coca-Cola made billions by selling its soda. Then the corporation pivoted to sales from water and low-calorie drinks and increased sales. The beverage company’s earnings for Q4 2019 were $9.07 billion and the stock rose 22% over the past year. However, CEO James Quincey noted that Coca-Cola has been negatively impacted by the coronavirus pandemic.
“The supply chain is creaking around the world. There are flash points when it’s getting a little harder to get ingredients through, whether it’s delays at the borders, the big changes in channel mix,” said Quincey.
The corporation also noted that the 2020 guidance would be impacted by restaurant closures and sport events cancellations. Coca-Cola sells many of its beverages in dining establishments and during games.
“[S]ince our last guidance update, local market policies and initiatives to reduce the transmission of COVID-19 have significantly increased. These initiatives include the direction to refrain from dining at restaurants,” said Coca-Cola.
However, Quincey noted that Coke’s workers are “doing a great job at adapting” to the changes brought on by COVID-19.
Coca-Cola dividend consistent for investors
The company’s dividend may be small at 3.5%, but it’s very consistent. The dividend has risen for an astonishing 57 straight years. For a value stock that proves that slow and steady investment pays off, investors should choose Coca-Cola.
In addition to Coca-Cola and Apple, ExxonMobil ( NYSE:XOM) is an established value stock for investors for many reasons. One reason investors can pick ExxonMobil to implement their value investing is its well-paying dividend. ExxonMobil had $6.6 billion in free cash flow last year. The oil corporation paid $14.6 billion in dividends to investors in 2019. Like many value stocks, ExxonMobil is an undervalued stock that has a high-yield dividend of $3.48 per share. That’s an impressive 9% dividend for investors.
ExxonMobil will survive oil crisis
ExxonMobil has been hit by two crises. The ups and downs of the stock market has affected the Dow Jones overall. However, oil companies have been rocked by the decline in oil prices. Saudi Arabia is overproducing oil to drive down prices and spite rival producer Russia.
As a result, the volatility of the stock market and oil prices have dropped to about $30 a barrel. ExxonMobil CEO Darren Woods announced that ExxonMobil will reduce capital expenditures to reserve its cash flow.
“Based on this unprecedented environment, we are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term. We will outline plans when they are finalized,” said Woods. This TradingSim chart shows ExxonMobil’s stock trajectory over the past few weeks.
Despite the reduction in spending, Woods said ExxonMobil will survive the current uncertainty in the oil industry. With refinery expansion around the world, ExxonMobil is poised to recover from this current setback.
“We are confident that we will manage through these challenging times by taking deliberate action to keep our people safe, our environment protected and our company strong,” said Woods.
ExxonMobil is a value stock before oil companies recover
ExxonMobil is a bargain value stock for investment. Investors could buy the stock while the oil industry is in turmoil. Then they could reap the benefits when the economy and oil industry recovers. Oil will likely bounce back above $30 a barrel if Saudi Arabia compromises with Russia and other oil-producing countries in OPEC ( Organization for Petroleum Exporting Countries) to reduce its oil output. If the economy recovers, the oil company will rebound and ExxonMobil will remain a value stock.
5. Johnson & Johnson
Just as ExxonMobil has been an established stock for almost a century, Johnson & Johnson (NYSE:JNJ) is another value stock with longevity. The multinational corporation has been around for a century and has been a reliable stock for value investors. The company’s stock pays a healthy 2.6% dividend and increases every year. The corporation has survived a scandal about asbestos in their talcum powder to remain a value stock. For investors that want a safe value stock, Johnson & Johnson is a safe pick-especially in the wake of the coronavirus outbreak.
Johnson & Johnson stock rises on coronavirus vaccine hopes
The world’s biggest healthcare product producer is racing to create a vaccine for COVID-19. The company has signed a $1 billion deal with the U.S. government to create 1 billion doses of a possible vaccine for the respiratory disease. Johnson & Johnson CEO Alex Gorsky expressed optimism that the company can create an effective vaccine to slow the disease.
“We have very good early indicators that not only can we depend on this to be a safe vaccine base but also one that will ultimately be effective based on all the early testing and modeling we’ve been doing. This is a bit of a moonshot for J&J going forward, but it’s one we feel is very, very important for use to be doing at this period in time,” said Gorsky.
Johnson & Johnson said in a statement that it “is committed to bringing an affordable vaccine to the public on a not-for-profit basis for emergency pandemic use.”
The hope of a vaccine has raised investors’ confidence in the stock. Johnson & Johnson stock has jumped 8% as a result of the news. Johnson & Johnson’s stock shows that an established company can weather any storm and persevere. By providing medical devices and other badly needed products during this health crisis, Johnson & Johnson has proven to be a value stock that will withstand Wall Street volatility.
6. JP Morgan Chase
Just as Johnson & Johnson is a health product institution, JP Morgan Chase (NYSE:JPM) is a banking institution that has a value stock. Chase’s P/E ratio is 8.68, making it an undervalued stock that’s perfect for value investing. Chase had a positive earnings report in Q4 2019 with profits of $8.52 billion. CEO Jamie Dimon said in a statement that the company can withstand Wall Street’s ups and downs.
“While we face a continued high level of complex geopolitical issues, global growth stabilized, albeit at a lower level, and resolution of some trade issues helped support client and market activity towards the end of the year,” said Dimon. This TradingSim chart shows the volatility of Chase stock during the week of March 19.
Chase stock has also been helped by the Federal Reserve injecting $1 billion into banks as part of the Fed trying to revive the economy. With that security, Chase can loan more to customers. Customers themselves will need to take out loans more than ever with the struggling economy. Before the coronavirus crisis, Chase was opening more branches and investing more in banking apps. Now the bank can be an option for consumers during this time of economic uncertainty. Chase is a top value stock for investors looking for a solid bank stock to add to their portfolios.
While many banks have value stocks, the nation’s biggest retailer also has a reliable value stock. Walmart(NYSE:WMT) has succeeded by selling many essential products and become a value stock because of its strength during the COVID-19 crisis. The nation’s largest big-box store was a top stock to financial experts like Jefferies analyst Christopher Mandeville. Even before the coronavirus pandemic, Mandeville praised Walmart for its financial strength.
“WMT[Walmart] exhibited just how well the company is leveraging its physical scale/digital presence and financial stamina to push the boundaries of retail, using innovative tech and learnings from abroad. With clear momentum in grocery and a sustainable productivity loop in place, WMT[Walmart] now pivots to better general merchandise, one item alongside enhanced fulfillment practices that is critical to long-term e-com success,” said Mandeville.
Walmart thrives during COVID-19 outbreak
After the COVID-19 outbreak,Walmart has become an essential resource by staying open during the pandemic.
Walmart CEO Doug McMillon noted that the corporation has seen e-commerce sales grow by 35% over the last few months.
“We continue to see good traffic in our stores. We’re growing market share in key food and consumables categories, especially with its online grocery delivery service. including fresh,” said McMillon.
Goldman Sachs analyst Kate McShane noted that Walmart will help customers by keeping stores open and by delivering groceries as well.
“In the short term, we expect demand to remain robust, even if panicked buying subsides, given the companies’ mix of essential/grocery. Further, these stores will likely remain open (versus over half of retail in the U.S. that is currently closed), even in states that have “shelter in place” rules,” said McShane.
Walmart dividend makes stock attractive to investors
Like many value stocks, Walmart has a well-paying dividend for investors. Walmart’s payout to investors tops 2% and has steadily increased for an impressive 47 years. Walmart’s consistent dividend payouts make the retailer’s stock a stable value stock for investors.
AT&T(NYSE:T) is another top pick for value investors. The telecommunications company has been a great value stock. The corporation is a “dividend aristocrat” that consistently raises dividend for investors every year. The current yearly payout to investors is a hefty 6.5%.
AT&T also will keep many of its stores open during the coronavirus pandemic. The corporation said that it’s critical for customers to stay connected during the quarantine orders nationwide.
“Connectivity is always essential to our customers — doctors and nurses, first responders, governments, banks, grocery stores, pharmacies, and others delivering vital services.”It’s even more critical during a public health crisis that’s challenging everyone. In fact, as a critical infrastructure provider, AT&T views it as our civic duty to step up and keep our customers and communities connected,” said AT&T.
5G technology and streaming could help AT&T stock
The lastest Wi-fi technology could also help boost AT&T stock. 5G technology will soon come to many phone customers that subscribe to T-Mobile ( which is owned by AT&T) could benefit from having 5G devices. With faster streaming on devices, AT&T could have a lock on the 5G market once the technology takes off.
In addition to 5G technology, AT&T stock could rise once it enters the streaming wars. The corporation plans to launch HBO Max, which will fan favorites like Friends and The Boondocks. When the service debuts in May, HBO Max could help AT&T stock grow if gains a lot of viewers. AT&T stock could rise after launching the streaming service. AT&T stock could be ideal for value investors looking for a long-established stock pick.
Just at AT&T is evolving to meet new communications needs, Disney is adapting to new forms of entertainment. The entertainment conglomerate has been struggling during the COVID-19 crisis because of the closure of its theme parks. However, Disney+has been a bright spot for the corporation. The streaming service has attracted 28.6 million subscribers since its launch in November. The international expansion of Disney+ in Europe should help the corporation’s earnings in the long run. Minal Modha, consumer research lead at Ampere Analysis, noted that Disney has to appeal to kids that love Frozen 2 and adults who want to binge watch Star Wars: The Mandalorian.
“It will now be key for Disney to ensure it retains these customers with a mix of new Disney Plus originals and new release movie titles,” Modha said in a statement. “Furthermore, while there is still room for growth among both the two core demographic groups, it will be imperative for Disney Plus in the longer term to broaden out its content offering to appeal to a wider audience.”
Hulu, another Disney-owned streaming service, is also an area of growth for the company with 30 million subscribers. Even though many sports events are canceled, ESPN+ still has 6 million subscribers. With many people being quarantined, Disney’s popular movies can enjoy a greater audience and possibly increase its stock price.
Disney dividend is no Mickey Mouse amount
Disney can be a daily stock pick for investors because of its ability to withstand the current Wall Street volatility. The corporation’s dividend payout is consistent for investors. Because Disney’s net income grew to $10 billion in 2019, its dividend payout to investors is 1.8%. While that figure is smaller than other companies’ yields, it’s still a steady increase year after year. Disney stock is a top stock pick for value investing.
10. Weight Watchers
Another value stock may be the least likely. Weight Watchers(NYSE:WW) isn’t just for your fluffy Aunt Margaret anymore. The company has grown from a weight-loss company predominately for women to a wellness company for all genders. Since Oprah purchased 5 million shares of Weight Watchers, the company has added 6 million more subscribers. “The Oprah effect” of her magic touch helping businesses has helped Weight Watchers.
Weight Watchers has also evolved because of its new marketing campaigns to reach more male customers. DJ Khaled has become a spokesperson and another one- big male superstar, that is- is aligning with the brand. The Rock joined Oprah on her Weight Watchers tour to promote the rebranding of the corporation. The revamp to focus more on holistic health instead of weight loss appears to have worked. Chief Financial Officer Nick Hotchkin, said that tour helped drive Weight Watchers awareness up with potential customers. The success also drove the corporation’s earnings up to $29 million in its last earnings report.
“We believe this high visibility has had a halo effect well beyond those who are in the audience.In addition, the tour helped reinforce our brand transformation, showing how WW is your partner in both weight loss and wellness. Member recruitment so far in 2020 has been well above the prior year, as expected, and is reflected in revenue and earnings growth guidance for full year 2020,” said Hotchkin.
Weight Watchers may benefit after quarantine
With many people cooped up inside and stress eating during the quarantine, Weight Watchers could benefit after the nationwide quarantine ends. When the COVID-19 crisis passes, people will be eager to be more active and become healthier. Morgan Stanley analyst Lauren Cassel says that Weight Watchers could add more subscribers after the end of the nationwide quarantine.
“Once the ‘cocoon’ phase ends and shelter in place measures are raised, we[Morgan Stanley] see WW as a potential beneficiary of changes in consumer behavior. We anticipate a heightened focus on health, wellness, and weight loss after weeks of gym closures, stress eating, and limited physical activity.”
In addition, Cassel said that “the extent to which existing subscribers are currently showing greater interest and spending more time engaging with the app during the cocoon phase could lead to better retention curves for these subscribers over the medium term, which we incorporate into our $47 Bull case valuation. Bottom line, we think WW’s value proposition is actually stronger post-COVID-19 than it was before,” Cassel said.
“WW’s value proposition is actually stronger post virus than it was before”, said Cassel.
The wellness company has had its stock rise 17% last week while the S&P only gained 11%. Weight Watchers can be an affordable option for investors who want to cash in on wellness.
Weight Watchers stock is a bargain for investors
The wellness company is undervalued and is selling for only 8 times its earnings. The stock will likely continue to rebound and be a great pick for value investing. Unlike other value stocks, Weight Watchers stock doesn’t pay a dividend. However, Weight Watchers stock is a value stock that investors can choose if they want a stock that is capitalizing on the wellness trend.
Value stocks are safe stocks in volatile stock market
Value investing may seem boring, but can pay off in the long run. In this time of economic instability, value investing can be a great way for investors to build a slow and steady growth in their portfolios. Growth stocks may get more attention, but value stocks can stand the test of time. For investors taking a long-term view and that can exercise patience, value stocks are a safer option.
Diversification is key in value investing
Even though many value stocks are in similar established fields, there is still room for diversification. Value investing can consist of investing in life insurance stocks, bank stocks, and even tobacco stocks. Altria (NYSE:MO) is a long-established stock that offers a strong dividend. By diversifying a value stock portfolio, investors can get bigger returns in their investments. If the bank industry is struggling, diversification in another field can help create a healthier portfolio.
Conduct research before investing in value stocks
Research is important to find the best stock for investors. By using TradingSim’s analysis and trading simulations, investors can find the best value stocks for them. Investors can take advice from Warren Buffett, but ultimately have to decide for themselves what value stocks are best for them. With TradingSim’s charts and guidance, value investing can be rewarding- and maybe even profitable.
I Put Together A New Swing Set
After peak news flow over the weekend, along with the state of Louisiana shutting down, I decided to take the day off and build a swing set for my two little girls. This was my first build of any sort of playground set and I was a little terrified going into the project. I heard horror stories of grown men putting together these contraptions, and promised myself I would always pay labor for that task.
Being that we are in unprecedented times, with the state shutting down and the government mandate to shut down my small businesses, I said, “What the hell, I’m going to build a swing set as if was a giant outdoor puzzle and take my precious time with it.”
And, that’s exactly what I did. I took my 4×4 Ford to Academy, put the swing-set box in my truck like superman, and drove back to my residence before the whole state shut down.
Upon arriving, my girls were excited. I one-armed the swing set box (I’m 6’4 225lbs) out of my truck and threw it in the garage. Then, I opened the box and realized what a grave mistake I just made. This was worse than a 10,000 piece puzzle. I remained calm.
This was the box the swingset came in. Imagine opening a box to find this shit. pic.twitter.com/YQM5ruXlk3
— Cajun ✪ (@RaginCajun) March 24, 2020
Long story short, this was just the therapy I needed to get away from the news flow. I sashayed in and out my backyard to office, taking my time with each wood board while buying every dip in $AAPL.
The news flow was too negative. I was damn near attacked on Twitter for even the thought of buying shares in $AAPL. This gave me big confidence in the trade, so much confidence that I went back outside and built my girl’s playground like I was Bob fucking Vila.
Here are some pictures from the project. Don’t believe the hype, with time and a clear head, these things can be a lot of fun to put together with your family. Just as investing can be.
— Cajun ✪ (@RaginCajun) March 23, 2020
— Cajun ✪ (@RaginCajun) March 23, 2020
The swingset is complete and so is my new swing long in $AAPL.
$AAPL long with a 212 stop looks good.
— Cajun ✪ (@RaginCajun) March 23, 2020
No lie, I was attacked several times today for noting my buy in $AAPL
— Cajun ✪ (@RaginCajun) March 24, 2020
The end result to my day: PRICELESS. Go build something.
WARNING: Fake Sykes Scammers Want Your Money
I got so mad I wanted to SCREAM.
Recently, someone contacted my team asking for their money back. But here’s the thing…
They hadn’t purchased any of my DVDs. They weren’t part of the Trading Challenge. As a matter of fact, they hadn’t spent a single penny with me.
It gets worse. You might be thinking I was upset at this person and their claims. Nope. I felt sorry for them.
Because before the person in question got in touch with my team, they’d been conned out of several thousand dollars.
It all started when they were contacted on social media by someone claiming to be me. After the poser scammed the unwary victim, he disappeared. Never to be seen again…
Finagling Fraudsters Pose as Teachers
They come at you with a fake account in my name, say they’re me, and then do everything they can to take your hard-earned cash.
These immoral scam artists deserve nothing less than the full brunt of the law to come crashing down on them.
In the meantime, beware. If something sounds too good to be true, it probably is…
SO many scammers these days, 1.) don’t pay anyone via Western Union 2.) don’t use Walmart Moneycenter and 3.) I don’t refer ANYONE to ANYONE else other than my own teachings are there’s so much BS these days it’s disgusting
— Timothy Sykes (@timothysykes) January 15, 2018
Needless to say, the scam victim was distraught. One of my team members was nearly in tears because the victim was in tears. It was awful. For privacy reasons I won’t name the victim, but I want you to understand how serious this is.
It’s not the first time something like this has happened. But it seems to be happening more often. My team is already working hard to stop the scammers.
Click on the link below to watch a very important 7 minute video. (Video opens in a new tab.) Then continue reading this post so you know what a scam attempt looks like.
Bottom line: I’ve had enough. Scammers, pay close attention to these words … I’m on a mission to out you crooks once and for all. I’m gonna expose you and your methods so you can’t prey on innocent people anymore.
Now I want to give you some ideas … some red flags to tip you off to potential scams.
Scam Alert Red Flags: Conversation With a Con Artist
Below is an excerpt of a direct message (DM) exchange on Instagram. The victim was targeted because he follows me on social media. Luckily, this follower knew what to look for. Be aware of what cybersecurity specialists call spear-phishing and social engineering.
The conversation was taken from actual screenshots, some of which I’ve included. I’ll point out the red flags along the way so you know what to look for, as well.
If you ever get a private DM from someone saying they’re me it should instantly raise…
Scam Alert Red Flag #1: Private Chat Invitations
To be clear: I don’t have a private chat page. As a matter of fact, I will never DM you. I hardly have time to DM my family, friends, and members of my team … let alone students. Students get my attention on webinars and in my chat rooms. That’s about it.
Here’s how the conversation played out…
[scammer] Hello. Welcome to my private chat page. How are you doing today?
[victim] Cool. How are you?
[scammer] Am great. Where are you from?
[victim] From US. Live in UK.
[scammer] Okay. Have you ever traded and earn some profit before?
[victim] Only paper traded so far.
The victim, at this point, thought I’d contacted him. He thought it was pretty cool he’d been invited to my ‘private chat page.’
Scam Alert Red Flag #2: Forex, Bitcoin, Options, and Money Management
I don’t trade forex. Nor do I mine bitcoin for people. I’m neither an options trader or options trading teacher. If someone tries to tell you I do anything other than penny stock trading education, alarm bells should ring in your head. Don’t give them a penny.
In the next part of the exchange, the victim knew enough to question the forex trading claim.
[scammer] Oh. I see. Would you want to trade in forex and earn huge profit daily?
[victim] You trade forex? I thought you were penny stock trader.
[scammer] I trade forex and also I mine Bitcoin for people. I can help you earn real big in forex and crypto trade.
[victim] Oh. Your blog says you trade penny stocks. How can you help?
As the conversation continues, notice how the scammer works to keep the things moving along and overcome objections.
[scammer] Penny stocks and forex trade. I can help you if you are ready.
[victim] I see. Well, I’ve been saving to fund a trading account.
[scammer] Very well then I can help you kick off. How much have you saved so far?
[victim] A few thousand.
[scammer] How much exactly?
[victim] £2800 roughly. Been paper trading while I save.
Scam Alert Red Flag #3: The Platform Change or … “Hey, Step Into My Office”
Watch how the scammer tries to get the victim to move to a different platform to continue the conversation. In this case, it was WhatsApp. But it could be any platform where they can avoid getting caught.
The target in this chat knew by now he was dealing with a scammer. He went along with things for a while, just for fun. As soon as this exchange ended, he contacted my team…
[scammer] Okay […] that’s still okay…you can start up with something even lower than that.
[victim] Yeah, but I’m practicing the patterns you teach on your blog.
[scammer] Send me your WhatsApp number now so I can add you up and we chat better over there. So I can teach you all you need to know.
Scam Alert Red Flag #4: The Scarcity Principle
Look, scarcity is used in legitimate marketing. Heck, I use it. For example, I don’t let just anyone join the Trading Challenge. You have to go through an interview process. Not everyone makes the cut.
Here’s another example: we have a limited number of seats for my Trader & Investor Summit every year. Once the tickets are sold out … that’s it.
So you see, scarcity is nothing new. But scammers hit you with “be fast because I have so many people I chat with.” Sorry, that’s just BS.
[victim] I almost joined your trading challenge. Thinking of pennystocking silver subscription first. Is this for trading challenge?
[scammer] This is for a full package of all I do…. Send me your whatsapp number now so I can add you up now. You need to be fast because I have so many people I chat with.
[victim] I see. Which is forex/crypto/penny stocks?
Like I said, I don’t have time to chat with potential students. I wish I did. If you want to chat … join the Trading Challenge and hit me up in the chat room. Better yet, become one of my top students.
Only after you apply for the Trading Challenge will one of my team contact you. The conversation continued and raised…
Scam Alert Red Flag #5: You Should Be So Lucky
Notice how the scammer tries to make the victim feel both lucky to be in direct contact and … beneath him.
I don’t talk to my students like this. Yes, I’ve been known to be harsh on a webinar. It’s called a pattern interrupt and it helps students break dangerous thought patterns. Thought patterns that keep them in the wrong mindset to be a self-sufficient trader.
But this is different. This is an air of arrogance meant to lull the mark into feeling like he’d better act fast.
[scammer] Yes. All of it.
[victim] I was under the impression I had to apply to the challenge and someone from your team would call. Where are you now?
[scammer] You should be very happy that you are communicating privately with me now so you are lucky.
[victim] Most definitely. Exciting.
[scammer] You still haven’t sent me your WhatsApp number…I will go off soon now.
The exchange continues…
[victim] Don’t really use WhatsApp. What can we do?
[scammer] Quickly download WhatsApp on your phone now, register it and send me the number you used in registering it so I can add you up right now. Do that fast now.
[victim] Why WhatsApp? What do I need to do to study with you? Is this how all your top students started?
[scammer] Listen, you need to understand that I am a very busy business man and I am not always here…that’s why I’m asking you for your whatsapp number…so if you are not serious or ready it’s up to you.
[victim] What’s your best forex setup? Did you trade today? How many stock trades did you take today?
[scammer] I trade everyday and am too busy to be chatting with just only you…
[scammer] I have so many people I chat and trade with…and they are all waiting for me.
[victim] But I’m going to be your next millionaire student. Did you see Bohen today?
[scammer] You can only be my next millionaire student when you are serious. I don’t work with people who are really not serious.
[victim] Did you trade $TTCM today? I’m totally serious. 100% dedicated.
Ultimately this led to…
Scam Alert Red Flag #6: Gaslighting
Gaslighting is a form of psychological manipulation where the victimizer sows seeds of doubt in the victim. Check it out…
[scammer] You are asking me lots of private questions and I don’t take that from anyone.
[victim] But you are asking me to give you my number. Where are you?
[scammer] You have a nice privilege of chatting with me and you are blowing it up, if I leave here … I won’t be able to chat with you here again. I am asking you to send me your WhatsApp number because I chat all my clients on whatsapp … so it’s for your own good.
The exchange continued, but you get the idea.
How To Protect Yourself From False Stock Gurus and Con Artists
The above conversation is real. It went along for a while longer, and the ‘victim’ had a little fun with the scammer. Unfortunately, the scammers get away with this all too often. They ask for money and some unsuspecting person gives it to them thinking I’ll make them a millionaire.
- I will never ask you for money.
- I will never ask you for investment.
- And I won’t offer to manage your money.
I am an educator. That’s it. No forex, no options, and no crypto.
They Who Laugh Last Have the Last Laugh
Unfortunately, this is no laughing matter. I want you to be successful. My mission is to help people. These criminals are using my name to scam unsuspecting people out of their hard-earned money.
All you Internet scammers and impersonators out there should be ashamed of yourselves and know it’s not your fault for your unethical behavior, it’s your parents and teachers who failed you…but if you keep scamming you’re going straight to hell so don’t say I didn’t warn you
— Timothy Sykes (@timothysykes) January 15, 2018
Contact My Team
Please be safe. Please, please don’t fall prey to these crooks. If you’re ever contacted by someone claiming to be me, contact firstname.lastname@example.org. Together we can let these jerks know we won’t stand for any more of their BS.
Verify Social Media Accounts
I use verified accounts on social media. If you EVER receive something from an account that looks like it’s from me but isn’t verified … it’s NOT from me.
Here’s Twitter’s official Verified Accounts FAQ page. There you’ll find all sorts of information about verified accounts, what they look like, and how to report a fake.
And here’s Facebook’s Verified Profile information page.
Remember, I won’t contact you via direct messaging. Should anyone contact you claiming to be me, get in touch via the contact page and we’ll get the fake page or account taken down.
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