When you stop to think about the overall environment we've all been working in these past few months, it's amazing to think there are some stocks that are at their all-time highs. Of course, whenever there is a crisis, there are stocks that benefit. This is especially true for those stocks that investors see as "safe haven" trades, i.e. ones that might thrive under certain circumstances. A few stocks that come to mind include Peloton (PTON), as people look for alternative/safe ways to exercise, and Zoom (ZM), as more people look for safe ways to communicate. But one company that sticks out among the crowd is Chipotle Mexican Grill (CMG) as it hit its all-time high on Friday.
What makes the story even more amazing is the turmoil the company went through a few years back, as the equivalent of food poisoning caused many analysts to declare the stock D.O.A.. Instead, as you can see from the chart below, the stock has managed to power through all of the issues it has faced, including a world that has mostly been shut down over the past 60 days.
I'm bringing up CMG for another reason. This stock has been in the EarningsBeats.com Model Portfolio - created back in November, 2018, by our Chief Market Strategist Tom Bowley - on a number of occasions, and it serves as a perfect example of what can happen over the course of 90 days, which is the period stocks in the portfolio are meant to be held. For example, CMG was included in the Model Portfolio when Tom released his Top 10 Stock Picks on February 19 of this year, with the stock closing at $933.84 on that same day. It also happened to be 2 days before the stock started to crater as it got sawed in half, losing 50% of its value in the course of 30 days as news of the coronavirus started to break. What happened over the next 60 days? It gained back all of its losses and more. Wow!
In addition to the Model portfolio Tom has created, there are three others: the Aggressive, Income and Character Change portfolios. For example, in the Aggressive portfolio, DexCom (DXCM) stands out with a chart very similar to CMG's, with the stock plunging right after it was revealed to our members, but also recently hitting its all-time high.
Of course, not every stock in the 4 portfolios Tom has created fared as well as CMG or DXCM. BUT... the two primary portfolios - the Model and Aggressive - have clobbered the S&P since their respective inceptions, with the Model portfolio up almost 67% compared to the S&P of 6.4% during the same timespan and the Aggressive portfolio up more than 22%, with the S&P flat during the same time span. And it goes to show you that when you have even a few superstars, it can go a long way to help offset the losers. Now, Tom is getting ready to release his "Top Ten Stock Picks" for all 4 portfolios - 40 stocks in all - this upcoming Tuesday, May 19. Those stocks will be revealed exclusively to EarningsBeats.com members, but prior to the unveiling, we will be having a "Sneak Preview" webinar the day before on Monday, May 18 at 4:30pm Eastern Time. And this FREE event will be open to all members of the EarningsBeats.com and StockCharts.com communities. During the event, Tom will go over some past results and discuss his methodology for picking the stocks that end up in each portfolio, so we hope you can join us. It's our most popular event, so just click on this link to register for our FREE EarningsBeats Digest newsletter and we'll make sure you receive room instructions prior to the event. You DON't want to miss this one!
Committing to a stock for 90 days - no matter the market conditions - can be a scary proposition. But, as you can see from the two examples above, if you focus on the "best of the best," you just might be able to ride out any storm.
At your service,
John Hopkins EarningsBeats.com
