Category Penny Stocks

Why Jeff Clark says it’s time to buy on weakness … the sector Eric Fry is recommending today … Trump fuels a bitcoin rally … Bitcoin’s incentive structure

Despite the market’s pullback that’s continuing as I write Monday, let’s get bullish.

On Saturday, fellow Digest-writer and InvestorPlace’s Editor-in-Chief Luis Hernandez highlighted the latest AAII Sentiment Survey showed only 19.4% of respondents are bullish.

This is the most lopsided report we’ve seen in several years…which makes it a contrarian’s dream.

Let’s jump to master trader (and frequent contrarian) Jeff Clark, editor of Jeff Clark Trader:

Back on November 13, 2024 – following the large, post-election rally that pushed the S&P 500 above 6000 for the first time ever – bulls outnumbered bears 50% to 28%.

From a contrarian perspective, that was bearish. And stocks have struggled to make any headway since then.

Now, with the S&P 500 still stuck near 6000 and trading down just 2% from its all-time high, the vast majority of investors have turned bearish.

It’s remarkable that two months of choppy, back-and-forth action can create that drastic a shift in sentiment. This is the sort of bearish reading we’d typically get following a 10% to 15% decline in the market.

So, there’s plenty of fuel to power the stock market higher from here.

Jeff highlights three indicators: Moving Average Convergence/Divergence, the Relative Strength Index, and the Commodity Channel Index, all of which have been trading recently in neutral territory.

While such readings mean the S&P could break lower, Jeff believes it’s more likely that bulls will reassert their dominance:

We are entering the seasonally bullish month of March. And the Volatility Index just generated its first buy signal of 2025. So, the bulls have a slight edge here…

Returning to the AAII Sentiment Survey, remember, the emotional pendulum swings both ways.

Excessive fear always gives way to new bullishness…eventually. And recent, heightened levels of fear suggest that a bullish reversal could be fast approaching.

Back to Jeff for what he’s doing about that:

If stocks start to move higher, then we could see a dramatic rally over the next few weeks as bearish investors flip to bullish and chase stock prices higher.

Traders should use any weakness over the next few days as a chance to add long exposure to the stock market.

One sector to be bullish on today

Solar.

Before we dive into those details, for newer Digest readers, Eric is our global macro expert and the analyst behind Investment Report.

He’s also one of the most successful analysts in the newsletter industry, having identified 42 different 1,000%+ returning investments over his multi-decade career. That’s more than anyone we know of in our business.

In Eric’s latest issue of Investment Report, he made the case for why it’s time to add solar stocks to your portfolio.

From Eric:

No other domestic energy source is growing faster.

Last year, solar installations accounted for a record-high 64% of all new U.S. electricity-generating capacity – up from 36% three years ago and 23% six years ago. This renewable energy source now produces enough electricity annually to power one quarter of all U.S. homes.

Meanwhile, domestic solar-module manufacturing capacity is also ramping higher.

During the last two years, manufacturing capacity has quadrupled, from less than 10 GW to nearly 40 GW. This year, capacity is on track to surge again to 66 GW.

But what about President Trump’s disdain for what he’s called the “Green New Scam” and his plans to “Drill, baby, drill” for fossil fuel energy? Is that not a headwind to solar?

Back to Eric:

Most of this new [solar] manufacturing capacity is popping up in “red states,” which is one of many reasons why the Trump administration might treat the industry kindly…

[Plus, Trump] has stated several times that he “hates wind.” By contrast, he famously stated last year that he’s “a big fan of solar.”

Eric goes on to highlight a second reason why solar power will continue to thrive during the current Trump administration…

Growth is the path of least resistance.

The U.S. desperately needs more power. The nation’s soaring demand for energy – led by the data center construction boom – will require an all-hands-on-deck solution.

Remember, last week, Nvidia CEO Jensen Huang said that next-generation AI will need 100 times more computing than older models due to new reasoning approaches.

From Huang:

The amount of computation necessary to do that reasoning process is 100 times more than what we used to do.

Solar is one of the cheapest ways to power such computing needs. So, even if Trump favors policies that encourage oil and gas development, he’s unlikely to enact policies that actively discourage solar.

As usual, Eric includes far more details that make the case for why he’s bullish on solar today. If you’re an Investment Report subscriber, click here to log in to read your Monthly Issue.

For an easy way to play the solar opportunity, check out the Global X Solar ETF, RAYS. It holds leading solar stocks including Enphase Energy, First Solar, and Sunrun. Just be aware that of your top 10 holdings, six are Chinese companies. So, watch out for trade wars.

As to how Eric is playing it, his preferred investment is trading near a four-year low, and Eric believes “a double is well within reach.”

You can learn more about it as an Investment Report subscriber by clicking here.

Finally, has Bitcoin bottomed?

Bitcoin rallied over the weekend after President Trump announced the creation of a “strategic crypto reserve” that will include bitcoin, ether, XRP, Solana’s SOL token and Cardano’s ADA.

From Trump on Truth Social:

A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World.

In a follow-up post, Trump added:

And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve. Bitcoin popped over $93,000 in the wake of the news though it has pulled back to about $90,000 as I write Monday morning.

Stepping back, Bitcoin has fallen sharply in recent weeks

After notching an all-time high in December near $108,000, the grandaddy crypto fell below $85,000 last week. Meanwhile, many leading altcoins have full-on crashed 50% or worse.

Despite the sector gains over the weekend, many bears continue to predict Bitcoin’s demise. Perhaps they’ll be right (though they’ve all been wrong so far).

But if they’re going to be right, they’re fighting an uphill battle against today’s incentive structure.

Consider this…

Who is incentivized for Bitcoin’s price to rise? Simultaneously, who is in a position to help create the conditions for that rise to happen?

We got a clue over the weekend.

Trump.

But he’s not the only one. Here are a few other such individuals…

• Vice President JD Vance: He’s recognized as the first Bitcoin owner to hold the vice presidency
• Secretary of the Treasury Scott Bessent: This former hedge fund manager and multi-millionaire is known for his pro-crypto stance
• Secretary of Commerce Howard Lutnick: He’s the former CEO of Cantor Fitzgerald, where he invested significantly in crypto. He is quoted as saying, “Do I own Bitcoin? Of course, I do. Does Cantor Fitzgerald own Bitcoin? A shitload of Bitcoin.”

Bottom line: Whether you love or hate Bitcoin… whether you love or hate the current administration… when you follow the incentive structure… you’ll see a reason to remain bullish on Bitcoin.

And it’s not just Bitcoin. We expect select altcoins to reward investors handsomely here in 2025. Trump mentioned a few in his post, but there will be others.

In fact, our crypto expert Luke Lango believes this could be the year of huge altcoin gains, similar to 2021 when dozens of altcoins rallied more than 5,000% in a single year.

To help him identify the most lucrative opportunities, Luke is using a quant-based trading algorithm he and his team recently created. It puts the focus squarely on the one thing that matters when you’re trading altcoins – price.

Specifically, the tool is engineered to identify price breakouts that suggest a continuation of gains based on momentum. To learn more, click here.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Well, folks, with NVIDIA Corporation’s (NVDA) earnings report now in the rearview mirror, earnings season is winding down. So, it begs the question: Is it time to buy or sell? That’s the question my friend Jason Bodner and I answer in this week’s Navellier Market Buzz.

We preview earnings estimates of a few companies that are set to report over the next few days and review the results of some companies that announced last week. I also explain why certain stocks go down despite beating expectations and give my thoughts on Warren Buffett’s stockpiling of cash.

This week, a number of key economic reports are scheduled to be released. They include the Institute of Supply Management (ISM) manufacturing and services reports, the ADP and February payroll reports and the U.S. trade deficit. I explain what I expect from these critical reports in this week’s Market Buzz.

Click the play button below to check it out now!

Hello, Reader.

Geopolitical uncertainty abounds… tariffs are on the menu… earnings results are mixed… price action has stalled out… and so much more is throwing a wrench into the works.

But our partners at TradeSmith couldn’t be more certain about what’s coming.

And what’s coming is not a crash or a bear market.

What’s coming is the continuation of an epic melt-up that officially began in April of last year… and will likely only accelerate over the next 12 months.

Today, I’d like to share a special conversation between TradeSmith CEO Keith Kaplan and Michael Salvatore, the editor of TradeSmith Daily. In the video, Keith and Michael share exactly how the research team at TradeSmith reached that conclusion. (Hint: They did so by looking at the data – not the headlines.)

The conditions we’re seeing today, they say, mirror the biggest melt-ups in history… the kind that come around once or twice every 100 years. So, when they occur during your lifetime – you might not see another one again.

And when the TradeSmith team realized the gravity of this opportunity, they knew they had to develop something you could use to profit on the way up… and avoid the inevitable meltdown.

What they created is a strategy with an 80% win rate and 16% average returns over a 21-day hold time on hundreds of backtested trades.

Click here or on the video below to watch the conversation between Keith and Michael to see how they built it – and take a look at a fresh signal that flashed just seven trading days ago, on a stock you might not hear about anywhere else.

Plus, last Thursday, Keith hosted a research presentation that covers all this in much greater detail. You can watch a replay of the event here.

As part of his demonstration, he shared 10 stocks he thinks will dominate through the melt-up… and 10 more that are destined for the bargain bin.

By the end, he shared everything you need to understand just how bullish the next year will be.

Once again, you can watch a replay of the Keith’s special broadcast here.

Now, let’s take a look back at what we covered here at Smart Money last week…

Smart Money Roundup

It’s the Perfect Time for This Low-Risk, High-Reward Strategy

By targeting quality stocks in sudden, steep downtrends, the folks at TradeSmith have learned you can bank on a quick reversion to the mean that sends shares much higher from your entry. But why talk about it now? Read on as Keith Kaplan discusses the ultra-rare bullish signal his team is picking up… and the strategy perfectly suited to give you monumental gains.

Your Soaring Electric Bill Signals the Next Big Market Opportunity

A sky-high utility bill may have more to do with your portfolio’s potential profits than you think. And it has all to do with the solar industry. In last Thursday’s issue, Tom Yeung dives deeper into solar’s coming revolution, why we could see an uptick in solar spending, and how you can profit from it.

3 AI Stocks to Buy Before They Steal Nvidia’s Crown

Nvidia’srocky start to the year reminds us that investors should start considering companies that will eventually inherit the chip king’s momentum – the AI Appliers. Some of these companies use AI to enhance businesses, while others provide the energy AI needs to run. Continue reading to learn about under-the-radar AI plays set to produce strong investment gains in the coming years.

A Low Price to Pay for a Mega Melt-Up

Between Chinese AI breakthroughs, radical shifts in trade policy, the Federal Reserve’s rate-cutting cycle, and now a surge in inflation expectations, the headlines have been all over the place. All this chaos can’t help but make you wonder if we’re heading for a crash. Keith Kaplan is here to tell you how this isn’t the beginning of a bear market, but the setup for one of the biggest opportunities of your lifetime.

Regards,

Eric Fry

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Stock Grader recommendations for 164 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

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Article printed from InvestorPlace Media, https://investorplace.com/market360/2025/03/20250303-blue-chip-upgrades-downgrades/.

©2025 InvestorPlace Media, LLC

Editor’s note: “Stock Picking Mastery: Identifying Tomorrow’s Champions Today” was previously published in January 2025 with the title, “Stock Picking Mastery: An Exciting New Tool for Smarter Investing.” It has since been updated to include the most relevant information available.

I don’t know about you, but as someone heavily involved in stock analysis on a regular basis, I often feel like there must be a better way to approach the markets. Just imagine how much time you could save if, instead of poring over the details of each individual stock out there, you had a tool that could do so for you. Well, that’s exactly what we’ve aimed to create with Auspex, our latest stock picking system.

You may already be familiar. Indeed, in recent issues, we’ve offered glimpses into this tool’s inner workings. 

In short, Auspex leverages fundamental, technical, and sentimental data to help us find the stocks with the strongest possible setup. That way, we have the opportunity to get into the most promising stocks at the best time – before they go on to rise. 

We’ve spent several months developing, testing, even using Auspex to help us home in on such up-and-coming market winners. And today, we’re releasing the model’s top picks to buy for March. 

But… before you check out those latest trades… I would like to finish explaining just how this innovative model helps uncover the market’s future top performers.

That is, previously, we’ve discussed how Auspex uses a series of fundamental factors to narrow down a universe of ~14,000 potential picks to uncover just those that meet our very strict criteria.

And today, I want to explain how Auspex takes those fundamentally strong stocks and whittles the list down even further, ultimately landing on the best picks the market has to offer. 

Using Fundamentals, Technicals and Sentiment to Reveal Top Stocks

As we’ve mentioned previously, when we have Auspex scan the markets, it analyzes a universe of roughly 14,000 stocks. In our scan from early December, for example, only about 300 of those 14,000 stocks were deemed fundamentally strong, with accelerating sales and earnings growth and swelling profit margins.

But we don’t stop there. After receiving those results, we incorporate additional technical and sentimental parameters to continue paring down that list. And ultimately, only a few stocks make the final cut. For instance, out of 14,000 possible stocks, Auspex identified just 10 picks for the month of December.

OK… so, how does this system deem which stocks are worthy investments?

Well, when it comes to technicals, we’re essentially looking for stocks with strong upward price momentum.

We want to see the 200-day moving average (MA) sloping higher, indicating that the stock’s primary long-term price trend is positive. We also want to see the 50-day MA trading above the 100-day, as well as the 100-day trading above the 200-day MA. That indicates that short- and medium-term price momentum are both growing stronger. 

Additionally, positive action on the moving average convergence/divergence (MACD) line – with the MACD above the signal line – is also ideal. It’s another indication of strengthening price momentum. And, lastly, we want to make sure the stock isn’t “too hot” or overbought. That’s why we look for stocks where the relative strength index (RSI) measures less than 70. 

Now, on the sentimental side of things, we hope to find stocks that analysts are getting more bullish on and that have investors flocking to get positioned in. Specifically, we want to see earnings estimates moving higher and trading volume on the rise. 

Then we layer these technical and sentimental filters on top of the fundamental filters we’ve discussed to find the stocks that are strong in every way.

Hello, Reader.

Much of the United States is still zipping up coats and fitting on gloves. And as it were, Punxsutawney Phil saw his groundhog-shaped shadow in Pennsylvania earlier this month, predicting six more weeks of winter.

We’re now about halfway through the superstitious forecast, which means that nature will soon be gearing up for its rendition of The Beatles’ classic, “Here Comes the Sun.”

The song’s famous lyrics may resonate with you folks in frostier regions, where “it’s been a long, cold, lonely winter.” But the sun will soon come again, and “I say, ‘It’s alright!’”

This sentiment also applies to solar stocks.

It’s true… a dark cloud has been hanging over the solar industry.

After President Trump won reelection in November, solar stocks experienced a selloff over worries that he would repeal the Inflation Reduction Act. This would halt the flow of loans to the solar industry from the Department of Energy and grants from the Environmental Protection Agency’s “Solar for All” program. Indeed, since assuming office, Trump has paused distributions from the act.

And yet… solar stocks performed far better during the first Trump administration than they did during the Biden administration.

A repeat performance may be imminent. Solar stocks may soon catch fire once again.

So in today’s Smart Money, let’s take a brief tour of the recent past and explain why President Trump’s return to office might signal bright prospects for the solar industry.

Then, I’ll share how you can capitalize on this solar resurgence…

The Trump Solar Paradox

During the first Trump administration, U.S. solar power capacity doubled. Then it doubled again during the Biden administration.

And now, based on the latest forecasts from the U.S. Solar Energy Industries Association, solar capacity will come close to doubling again during the second Trump administration.

In other words, the solar power industry does not seem to care which party occupies the White House or Congress.

It simply continues to grow… and do so at an exponential rate. Last year, the solar industry installed about 40 gigawatts of new capacity, which is more than the total capacity that existed 10 years ago.

No other domestic energy source is growing faster. Last year, solar installations accounted for a record-high 64% of all new U.S. electricity-generating capacity – up from 36% three years ago and 23% six years ago. This renewable energy source now produces enough electricity annually to power one-quarter of all U.S. homes.

Another reason to believe solar power will continue to thrive during the current Trump administration is that growth is the path of least resistance. The U.S. needs more power, and solar is one of the cheapest ways to get it.

Therefore, even if Trump enacts policies that encourage oil and gas development, he will not likely enact policies that actively discourage solar development.

And the nation’s soaring demand for energy – led by the data center construction boom we need for AI – will require an all-hands-on-deck solution. It will need contributions from every major energy-generation source, from nuclear to oil and gas to – you guessed it – solar.

A New Solar Landscape

Moving from political rhetoric to boots-on-the-ground policies, the Trump administration’s initial actions provide more “pros” than “cons” for the solar industry.

As I mentioned above, Trump has paused distributions from the Inflation Reduction Act.

However, Trump is also eager to fast-track energy projects of all types – both by removing regulatory obstacles and by providing direct government support.

These efforts are great news for the U.S. solar industry, because the main growth constraints it faces are physical, not political. Like most of the power sources in the United States, solar installations often struggle to overcome lengthy permitting processes and grid bottlenecks that can delay projects for years.

The National Energy Emergency Act that Trump signed into law last month seeks to eliminate all obstacles to what it calls “energy security.” In the words of the act…

The integrity and expansion of our Nation’s energy infrastructure — from coast to coast — is an immediate and pressing priority for the protection of the United States’ national and economic security…

This would create jobs and economic prosperity for Americans forgotten in the present economy…

Without immediate remedy, this situation will dramatically deteriorate in the near future due to a high demand for energy and natural resources to power the next generation of technology. The United States’ ability to remain at the forefront of technological innovation depends on a reliable supply of energy and the integrity of our Nation’s electrical grid…

In light of these findings, I hereby declare a national emergency.

Although Trump clearly intends for fossil fuels to take the lead in delivering energy security, solar will also play an essential role, even if government subsidies disappear forever.

According to recent data from Ernst & Young, solar power has become the cheapest source of energy in most locations. For example, the levelized cost of solar energy is at least 29% lower than the cheapest fossil fuel option, including natural gas combined cycle plants. 

In other words, solar power is no longer a quirky, fringy obsession of “tree-huggers.” It has joined the club of legitimate, economically viable energy sources.

In 2019, I recommended Daqo New Energy Corp. (DQ), a company that makes and sells polysilicon for solar panels. And a little more than a year after that recommendation, Daqo delivered a 148% gain.

I believe that solar stocks are presenting another compelling opportunity, just like they did during the first Trump administration. And at Fry’s Investment Report, we’re positioned to capitalize on the solar sector’s sunny transformation.

In fact, I’ve recently added a promising solar investment to our portfolio that’s primed for significant growth. To learn more about this opportunity, click here to learn how to join me at Fry’s Investment Report.

Regards,

Eric Fry

Frequently Asked Questions (FAQs)

Last month, I (Tom Yeung) introduced eight cyclical stocks to buy immediately. These high-quality companies had winds in their sails, and all have since performed splendidly. As of writing, these companies have returned:

• CME Group Inc. (CME): 6.4%
• Cboe Global Markets Inc. (CBOE): 6.2%
• DTE Energy Co. (DTE): 7.0%
• Duke Energy Corp. (DUK): 4.9%
• Dominion Energy Inc. (D): 3.1%
• Eversource Energy (ES): 12.7%
• AbbVie Inc. (ABBV): 19.0%
• Kimberly-Clark Corp. (KMB): 9.1%

On average, these eight stocks have surged 8.6% in less than a month.

That’s more than ten times better than the S&P 500’s return, and stands in total contrast with the negative returns of the Dow Jones Industrial Average (-0.3%) and Nasdaq Composite (-0.1%).

We didn’t even have to take much “risk” to achieve these results. CME Group and CBOE have virtual monopolies in options and futures markets… Eversource is a New England power utility… and it’s hard to think of a more stereotypically dull firm than Kleenex maker Kimberly-Clark.

That’s because conservative stocks can provide magnificent returns when they have cyclical tailwinds on their side. Short-term seasonal effects are powering the four energy companies higher because natural gas prices typically rise during the cold winter months. Medium-term optimism is driving KMB’s gains. And longer-term business cycles are helping CME, CBOE, and ABBV do well.

Still, these cycles are a blink of an eye when viewed through the lens of Keith Kaplan, CEO of TradeSmith. To him, he’s looking for cycles across decades… if not longer.

These generational shifts can power stocks like Apple Inc. (AAPL) for a quarter-century, turning every $10,000 invested in 1997 into $16 million today.

That’s why I encourage you to reserve your spot for Keith’s latest presentation. During that free broadcast, next Thursday, February 27, he’ll be revealingwhat he’s calling “the pattern,” a cyclical effect that’s only happened every 49.5 years on average.

When this patten appears, Keith says, it can send a specific class of stocks soaring. In fact, back-tests show the last time this pattern appeared under these conditions, it led to historic gains over the long haul, such as 9,731% from a leading software company… and 28,894% from a computer-driven hardware firm.

For long-term investors, it’s an event you don’t want to miss.

To save a seat for that event, click here.

Meanwhile, I’d like to introduce two more cyclical stocks for shorter-term investors seeking to ride cyclical waves higher.

2 Roaring Cyclical Stocks to Buy

Like before, I apply four key criteria to find cyclical firms to buy:

• Upside. These firms must score an “A” or “B” in Louis Navellier’s Stock Grader (subscription to any Navellier service required). This proven quantitative system has long been a solid predictor of future gains, thanks to its focus on institutional fund flows, fundamental quality, and other critical factors.
• Quality. Companies must have “moats” around their businesses that protect them during low-cycle moments. Buying cyclical companies is pointless if the firms can’t survive the next inevitable downturn.
• Cyclicality. The firm’s industry must demonstrate an ability to bounce back. So, I exclude any “sunset” industries that are trending downward into oblivion.
• Timing. The company must trade within 30% of its 52-week low. This prevents us from buying shares of cyclical companies at the top of the market.

The Data Center Giant Hiding in Plain Sight

Anyone who has visited Northern Virginia will have seen its picturesque rolling hills, scenic trails, and budding winery industry.

In addition to the occasional hidden government base, this natural beauty hides another secret:

America’s largest data center network.

The region hosts more than 500 of these facilities – drawn in by Virginia’s world-class fiber optic network, affordable electricity, and proximity to other data centers. When you’re running a massive computer network, it’s best to locate your servers near others.

That’s where Digital Realty Trust Inc. (DLR) comes in. The San Francisco-based firm is the world’s largest data center and co-location provider – the service that rents data center facilities to other companies. Digital Realty’s 300 data centers span 50 cities, and it has strategically located centers in almost every major computing cluster.

That’s made Digital Realty an incredible winner in the race for AI computing power. On February 13, the company announced revenues of $1.4 billion (a solid 5% rise from the prior year) and earnings per share of $0.51, a fivefold jump.

The cycle will likely continue through 2025 as cloud computing companies struggle to construct data centers fast enough. In January, companies from Alphabet Inc. (GOOGL) to Microsoft Corp. (MSFT) reported they were turning business away from a lack of capacity.

This has triggered a surge in new leasing activity for Digital Realty, which should bring in record profits in 2025. Analysts expect adjusted EBITDA growth to accelerate to 8% this year and 11% in 2026.

Please note that the party will eventually end for Digital Realty. Many tech firms are building their own hyperscale data centers, and these facilities will compete against Digital Realty’s vast network. DLR is also not immune from the “bust” part of the boom-bust cycles of data centers, given its relatively commoditized business.

Nevertheless, Digital Realty’s double-digit selloff since November provides an opening for investors to buy into the AI Revolution for a discount. Shares likely have a 30% short-term upside from here.

Getting Back on the Menu

In 1992, the National Livestock and Meat Board launched an advertising campaign aimed at promoting beef consumption.

“Beef. It’s What’s for Dinner” was a surprising success. Over 88% of Americans now recognize the slogan, and it may have contributed to the recovery of beef consumption in the late 1990s.

Nevertheless, no advertising campaign has ever solved the cyclicality of the meat production industry. Cattle producers typically adjust their herds collectively, and the U.S. Department of Agriculture notes this creates a “cattle cycle” that lasts 8to 12 years. The graph below illustrates how regular these peaks and troughs can be.

The latest trough is now in sight. Cattle herds are expected to bottom out this year and potentially rise again in 2026. The trade publication Drovers Magazine notes that Oklahoma calf prices are up 61% since 2022, which is creating “increasingly strong market signals for cow-calf producers to expand the beef cow herd.”

That’s excellent news for Tyson Foods Inc. (TSN), North America’s largest cattle processor. The firm handles almost a quarter of beef packed in the U.S., and has divisions across Asia and Europe that do the same. A turnaround in U.S. cattle production will strongly impact the company’s bottom line since that segment is loss-making at current production volumes.

In addition, Tyson is benefiting from consistent poultry demand, because it also controls 25% of that market. That segment generated 9.1% adjusted operating margins in its most recent quarter – the highest level since 2017. Chicken feed costs have eased, and Tyson has managed the recent bird flu epidemic relatively well.

Together, analysts expect Tyson’s net income to rise at a 19% annualized rate through 2027, a bullish sign for the stock. Shares of the meat processor have typically surged during cattle upcycles (60% during 2004-’07 and 120% in 2015-’22), and this new cattle cycle promises more of the same.

The Even Greater Cycle

The downside to cyclical companies like Digital Realty and Tyson is that “what goes up must come down.” Good times eventually end, and investors have a habit of acting as if peak cycles will never return. Shares of both firms fell as much as 50% in the last market downturn and will likely do so again.

That’s why I urge you to sign up now for Keith’s special briefing on Thursday, February 27th.

During that event, he’ll demo his company’s new tech breakthrough that revealed “the pattern.”

He’ll show you the pattern in full.

Keith will even reveal the names and tickers for 10 tech stocks poised to soar as the pattern begins to play out in 2025.

Based on what happened last time, the long-term gains could get legendary.

Just go here to get your name on the list for Keith’s February 27 briefing.  

I’ll see you here next week,

Regards,

Thomas Yeung

Markets Analyst, InvestorPlace

Editor’s note: “This Advanced Stock Picking Tool Uncovers Tomorrow’s Profits” was previously published in December 2024. It has since been updated to include the most relevant information available.

“Americans Cut Spending at Most Drastic Level in Four Years”…

“Stocks Bounce Back, But Head for Down Week, Month”…

“Homebuyers in U.S. Canceled Contracts at Record Rate for January”…

“Bitcoin Down 25% From All-Time High as Crypto Rout Worsens”…

No matter where you look, it’s clear that Americans are feeling the pain. We’re living through turbulent times. And for investors, that volatility is on full display in the stock market.

But what if I told you there was a better way to invest, avoiding the rollercoaster while still achieving enormous returns? 

That is, in response to recent market volatility, my team and I have turned to data and analytics to create a smart stock-picking model that only invests in the best stocks at the best times, maximizing upside potential while mitigating downside risk.

This screener analyzes thousands of stocks each month to find those best positioned to rise over the next 30 days. I’m talking stocks with a strong fundamental, technical, and sentimental basis. 

We’ve dubbed this advanced tool Auspex – in recognition of the ancient Roman officials who interpreted omens to guide their decisions. 

As I mentioned, each month, Auspex runs a comprehensive scan of the market, examining many thousands of data points to find the few stocks that are strong across the board. 

But what exactly does that entail? 

Today, we’ll start by reviewing the fundamental aspect of Auspex’s stock picking.

There are a lot of fundamental factors to consider. And that means there are a lot of ways for a stock to be fundamentally strong. 

Trained to Seek Only the Best Fundamental Setups

In our experience, three things matter most when it comes to stock fundamentals: sales, earnings, and profit margins.

Are sales rising? What about earnings? Is the trend of that growth picking up or slowing down? And how about profits? Are margins compressing or expanding? 

When looking for the market’s top performers, we want to find stocks that are growing sales and earnings. Moreover, we want to see sales growth acceleration, meaning the business is seeing underlying sales momentum. The same goes for earnings growth. 

Additionally, we want to see profit margin expansion, too. That means we’re hoping to uncover businesses whose profit margins are higher today than where they were last year. 

When a stock meets all those criteria, Auspex deems it fundamentally strong. 

And not many meet such strict criteria. 

That is, very few stocks have rising and accelerating sales and earnings growth, as well as profit margin expansion, all at the same time.

When we have Auspex scan the markets, it analyzes a universe of roughly 14,000 stocks.

In a recent scan we conducted, only about 300 of those 14,000 stocks were deemed fundamentally strong, with accelerating sales and earnings growth and swelling profit margins. 

That is just about 2% of all possible picks. 

Yet, the complete list of the most promising stocks Auspex flags is even narrower.

Editor’s Note: Geopolitical uncertainty, tariffs, mixed earnings results, and stalled-out price action have been throwing a wrench into the works this year. But our partners at TradeSmith couldn’t be more certain about what’s coming. And what’s coming is the continuation of an epic melt-up that officially began in April of last year… and will likely only accelerate over the next 12 months.

Today, TradeSmith CEO Keith Kaplan is joining us today to brief you on exactly how this Mega Melt-Up can set you up for one of the biggest moneymaking opportunities of your lifetime, and why you shouldn’t fear this week’s down market.

Take it away, Keith…

The market has taken us on a wild ride in 2025.

Between Chinese AI breakthroughs, radical shifts in trade policy, the Federal Reserve’s rate-cutting cycle, and now a surge in inflation expectations, the headlines have been all over the place.

Stocks are acting as you’d expect — soaring one week, shaking out weak hands the next.

All this wild price action has ultimately not taken us far. As I write, the Nasdaq-100 is down 1.8% from the start of the year…

And that’s especially painful, considering the 5.7% year-to-date gain we were looking at just last week.

All this chaos can’t help but make you wonder, “Are we heading for a crash?”

If you google that question, you’ll probably find a bunch of mainstream media headlines urging you to stay scared.

But I’m here to tell you something quite different:

This isn’t the beginning of a bear market.

On the contrary, it’s the setup for one of the biggest opportunities of your lifetime.

We’re smack in the middle of what my team has taken to calling a Mega Melt-Up.

We’ve gone through history and quantified the price action of the past few years. And what we found, shocking as it was, tells us that there’s only been two previous market environments like this one: the 1990s and the 1920s. And both were periods where individual companies rose thousands of percent in very short order.

If our research is correct, and I’m confident it is, the volatility we’ve seen this year isn’t a warning sign.

Instead, it’s even more evidence that we’re in a Mega Melt-Up… the kind that only comes around once or twice in a lifetime.

Three Bear Markets to a 1,000% Gain

Yes, the volatility we’re seeing right now actually supports the case for a Mega Melt-Up.

Let’s take a quick trip back in time.

Like what we’ve seen so far in the 2020s, the 1990s were a boom decade.

From 1995 to 2000, the Nasdaq-100 went up 1,000%.

But it wasn’t a straight shot up. In fact, there were more than two dozen major pullbacks in those five years…

Several of which you could consider an “official” bear market…

And each of which would prove a buying opportunity.

Let’s look at 1995-1996.

Starting in 1995, the Nasdaq-100 started to become a lot more volatile. From July 1995 to August 1996, the Nasdaq-100 posted drawdowns of 9.1%… 10.5%… 14%… 8.2%… and 14.4%. All in the span of one year:

What else happened back then? Well, in 1995 the Nasdaq-100 rose almost 40%. And the next year, it rose 22.7%.

Let’s skip ahead a bit to 1997-1998. We see the exact same thing.

Not only did the Nasdaq-100 retreat 20% in late 1997, creating a short-lived bear market… it saw two separate drawdowns of -22.2% and -19.1% within six months in 1998:

Yet once again, the index went up 21.6% in 1997 and 39.6% in 1998.

Finally, let’s look at 1999. Four major pullbacks in the double-digit range, and one final flush of nearly 9% before stocks took off into the end of the year:

What was the Nasdaq-100’s return in 1999? 101.95%… the highest ever.

The big takeaway from this is simple. You can’t have a Mega Melt-Up without massive price swings along the way.

This is exactly what we found in our research. Both the ’90s Mega Melt-Up and the 1920s Mega Melt-Up were marked by a ton of volatility.

It’s the price you pay for the kind of extraordinary gains markets deliver in these times.

And, when you zoom out, it’s clear that it’s a small price to pay.

Now, by comparison, what we’re seeing in stocks right now isn’t anything like what I just showed you. The S&P 500 is 3% off its highs and the Nasdaq-100 is 5% off its highs.

They can absolutely go lower from here, and that would not change my thinking on this Mega Melt-Up one bit.

In fact, there’s an argument that the Melt-Up we’re about to see could be even bigger than the one in the ‘90s.

Why This Melt-Up Could Be Bigger Than the 1990s

The 1990s had three powerful forces fueling stocks:

1. The birth of the internet (what we’ve been calling a General Purpose Technology) and the associated new companies taking advantage of the trend.
2. The rise of online trading, making stocks more accessible than ever.
3. Easier monetary policy, where the Fed’s interest-rate cuts fueled a consumer credit boom.

These three forces are what we call Melt-Up Multipliers. For a Melt-Up to be truly powerful, it must have these specific three factors.

The 1920s saw the same thing, with electrification being the major technological breakthrough… margin lending making it possible for investors to own more stocks than they could buy… and a consumer credit boom powering the economy.

Today, we have these same three melt-up multipliers… and one more.

1. Artificial Intelligence: AI is today’s Internet moment — a technology that’s changing everything, from medicine to finance.
2. Zero-Commission Trading & Apps Like Robinhood: More retail money is flooding into the markets than ever before.
3. The Fed’s Rate Cuts: The Federal Reserve is slashing rates again, just like it did in the mid-90s.

Oh, and there’s a “wild card” fourth factor… President Donald Trump. Like him or not, his policies are market-friendly… And the last time he took office in 2017, the Nasdaq-100 surged 31.5%.

This is the perfect storm for a Mega Melt-Up.

But there’s a tricky thing to understand about melt-ups… and especially Mega Melt-Ups…

All melt-ups end the same way—in a meltdown.

Ride the Melt-Up and Avoid the Meltdown

The 1990s Melt-Up ended with the 2000 crash. The Roaring ’20s Melt-Up ended in the 1929 crash… and, even worse, the Great Depression.

And yes, this melt-up will end in a crash, too.

But that doesn’t mean you should sit on the sidelines. It means you need the right tools to capture the upside — and know exactly when to get out.

That’s why we built Trade360, our all-in-one software suite that’s designed to help you make the most out of every market environment.

And we recently made two big upgrades specifically to make it the perfect trading tool for a Mega Melt-Up period like we’re seeing now.

One is a tool that clearly identifies whether markets are in Melt-Up mode or not… and alerts you when that condition changes.

With this, you don’t have to second-guess whether or not we’ve seen a major top. You’ll get an alert that tells you when it’s time to get out before stocks crash.

The other is an advanced trading strategy that’s perfectly suited to melt-up environments.

Remember all those drawdowns in the Nasdaq-100 I showed you earlier?

If we’re seeing all that selling in the benchmark, you better believe we’re seeing it in individual stocks, too.

So, we designed a strategy that takes advantage of these short-term, extreme pullbacks in otherwise quality stocks.

When prices fall by a certain amount and at a certain pace, the strategy buys in… and sells the stock 21 trading days later.

This simple strategy has a near 80% win rate and average gains of around 16% — counting winners and losers.

And it works whether stocks are in a bull market, or a bear market… as it targets those rare occurrences where prices reach irrational extremes.

I discussed the full details on our Mega Melt-Up thesis and the full breakdown of this new strategy in a recent free research presentation.

Not only that, but I also let viewers in on 10 stocks to buy and 10 to avoid during the melt-up period… completely free. Click here to watch the replay.

All the best, 

Keith Kaplan

CEO, TradeSmith

Last week, I (Tom Yeung) introduced you to two cyclical stocks to buy immediately. 

These promising firms couldn’t have been more different, at least from a business perspective: 

1. Digital Realty Trust Inc. (DLR) is a $50 billion data center company leasing millions of square feet to AI cloud computing customers.  
2. Tyson Foods Inc. (TSN) packs chicken and beef into grocery store containers. 

Yet, these two companies are both riding cyclical waves. The AI Boom is driving Digital Realty’s business to new heights, while a turnaround in cattle production is powering Tyson to a strong recovery. 

That pair joins another eight recommendations from January that also focused on riding cyclical trends. These 10 high-quality firms have now risen 7% on average – outperforming the weighted S&P 500 return (-3%) and trouncing the -6% decline in the Nasdaq Composite over the same period. 

That’s because cyclical effects can often overwhelm broader market negativity. Commodity prices surged during the 2008 financial crisis while everything else was plummeting… airline stocks boomed in the mid-2010s as oil prices collapsed… and chipmaking stocks surged in 2020 on a global shortage despite the broader Covid-19 selloff. 

Today, the cycle is pointing upward for power-producing companies… financial exchanges… meatpackers… and more. That’s happening even as the rest of the market goes in reverse. 

Nevertheless, these wonderful up-cycles are incredibly short to Keith Kaplan, CEO of TradeSmith. He’s helping his software firm’s investor customers find cycles across decades… if not longer. 

That’s why I encourage you to watch Keith’s latest presentation while it’s still available. During this free broadcast, he reveals what he calls “the pattern,” a cyclical effect that’s only happened every 49.5 years on average. 

When this patten appears, Keith says, it can send a specific class of stocks soaring. In fact, back-tests show the last time this pattern appeared under these conditions, it led to historic gains over the long haul, such as 9,731% from a leading software company… and 28,894% from a computer-driven hardware firm.  

For long-term investors, it’s an event you don’t want to miss.  

Click here to watch that presentation. 

And in the meantime, I’d like to introduce two final cyclical stocks to buy this year. 

Let’s Talk About the Weather 

In 2015, New England faced “Snowmageddon,” an epic winter season that dumped nearly 8 feet of snow in Boston alone. The city would spend over $40 million responding to the storms – more than twice its annual snow-removal budget. One massive snow pile in South Boston’s Seaport district took until mid-July to fully melt. 

Construction of Boston’s city monument to Winter ’15

The following period would prove a windfall for Douglas Dynamics Inc. (PLOW), America’s largest producer of snowplow attachments and ice management tools. Over the next three years, revenues would surge 56% as customers scrambled to replace their aging plows and salt-spreading equipment.  

PLOW’s stock more than doubled. 

A down-cycle then began in 2020 after a series of dry winters eviscerated demand. Northern regions from the Midwest to New England saw unusually low amounts of snow, and Douglas’s stock dropped to within striking distance of its pre-2015 levels. 

2025 could mark a turnaround year for the Wisconsin-based firm. 

In January, an unusual Gulf Coast snowstorm dumped as much as 10 inches of snow on parts of New Orleans. The city only had 14 rented plows to clear the streets. The same storm would also expose enormous snow-clearing equipment shortages from Texas to the Carolinas. 

Many parts of America are also seeing their first “average” winters in several years. That same month, Boston saw 4 inches or more of snow for the first time in 1,000 days. 

That should provide a new up-cycle for this high-quality firm. Douglas Dynamics owns some of the best-known brands in the business, including Fisher, Henderson, and SnowEx, and has a history of making solid bolt-on acquisitions. The company has generated positive cash flows every year since it began publishing records in 2006. 

In addition, shares trade at a significant discount. PLOW is currently valued at under 10 times earnings and eight times cash flow – less than half of historical levels. 

Please note that much of the Midwest is still seeing an unusually dry winter, so Douglas’s up-cycle could take until 2026 to fully play out. But given the Northeast’s sudden return to an “average” winter (and the South’s recent snowstorm), that should be enough to jumpstart a new upward cycle for PLOW’s beaten-down shares. 

The Tools of the Trade 

In January, I said CME Group Inc. (CME) and Cboe Global Markets Inc. (CBOE) were two wide-moat cyclical companies to buy. These firms have virtual monopolies in the options and futures markets, and profits tend to spike when volatility rises.  

Donald Trump’s second term in office is providing a compelling catalyst for gains. 

Shares of the two companies have since risen 7% each on a spike in the market’s VIX “fear” index (a ticker ironically owned by CBOE). Further gains are likely as the threat of tariffs materialize. 

This week, I’d like to add one more financial firm to our list of high-quality cyclical stocks: 

Charles Schwab Corp. (SCHW). The world’s largest brokerage firmscores a solid “B” based on InvestorPlace Senior Analyst Louis Navellier’s proprietary Stock Grader scores, and has generated positive net income every year since going public in 1987. 

Schwab’s management has also been relatively quick to recognize trends in both institutional and retail trading. In 2019, the firm shocked the industry by offering zero-commission online trades, reasoning it could earn enough interest income from cash deposits to make up the difference. The following year, Schwab acquired TD Ameritrade, giving it a strong presence in the online trading boom.  

Together, that’s turned Schwab into a money-printing machine. The firm now supports over $8 trillion of client assets and generates $9 billion of net interest revenue annually – almost half of total revenues. 

Still, the trading business is highly cyclical. Trump’s first year in office in2017 saw a flurry of stock trading, boosting Schwab’s revenues by 17% and its share price by 35%. Rising interest rates the following year then created a down-cycle by causing customers to reduce cash balances and cutting into Schwab’s interest revenues. 

A similar cycle played out in the years following the Covid-19 pandemic. Retail traders flush with pandemic stimulus money powered Schwab’s business to record heights. Then, rising rates from 2022 through 2023 created a down-cycle for the blue-chip firm. Wall Street’s rollercoaster rides are even wilder for trading firms. 

2025 marks the beginning of a new cycle. Donald Trump is back in office, and according to Nasdaq data, trading in equity volumes surged 14% in January. Interest rates are also on the decline, making cash more attractive. 

Both should benefit Schwab greatly. Analysts now expect earnings per share to surge 34% this year and 26% in 2026. For conservative investors seeking a safer way to play the market, Schwab offers an incredible deal. 

The 49.5-Year Cycle 

I must emphasize that the 12 cyclical stocks I’ve shown you so far this year all have relatively short time horizons. Douglas Dynamics could reach its peak within two years. Kimberly-Clark Corp. (KMB), a cyclical firm I recommended in January, took just a month to come within 5% of its target price. 

That’s why I urge you to check out Keith’s free special briefing while it’s still available.  

During that event, he’ll demo his company’s new tech breakthrough that revealed “the pattern.” 

He’ll show you the pattern in full.   

Keith will even reveal the names and tickers for 10 tech stocks poised to soar as the pattern begins to play out in 2025.   

Based on what happened last time, the long-term gains could get legendary. 

Just go here to watch Keith’s free broadcast.    

I’ll see you back here next week, 

Regards, 

Thomas Yeung 

Markets Analyst, InvestorPlace