Leading stocks in leading industry groups.
If you've struggled with your investments, read that line over and over again. Investing in leaders will change your returns and likely alter your opinion about your chances to outperform the overall market. Our Model Portfolio has now returned +148.21% in just over 22 months, while the S&P 500 has gained 23.96% over the same time frame. We post updated results on our website every day:
The simplest way that I can describe our philosophy is this: Buy leading companies in leading industry groups that are delivering better-than-expected revenues and EPS. That's it. It's not complicated.
Solar Edge (SEDG), a renewable energy stock that's in our current Model Portfolio, has broken out today, along with another renewable energy company that we considered for our portfolios - Enphase Energy (ENPH). Check out their charts and I think you'll see what I mean by leading stocks in leading industries:
SEDG:
ENPH:
Any stock that's breaking out when the overall market is consolidating is generally bullish, especially when it's been a leading stock up to the period of consolidation. Renewable energy stocks have been strong (leading industry) and SEDG and ENPH have shown considerable strength (leading stocks). In their most recent quarterly results, both reported revenues and EPS that beat Wall Street consensus estimates. SEDG posted EPS of .97, which crushed the estimate of .69. ENPH's beat wasn't as impressive, but they raised guidance.
In my opinion, sticking to leaders will improve your investing results over time. Not every individual stock will work, but having a balanced portfolio of leading stocks in leading industries is exactly what we teach and follow at EarningsBeats.com.
Today at 4:30pm ET, I'll be hosting our "Q4 Market Outlook" webinar. I'll be detailing everything I'm looking at as I approach the fourth quarter. A comprehensive review periodically is necessary to make sure that my strategy is aligned with what I'm seeing from a Big Picture perspective. If you'd like to be a part of this event, you can CLICK HERE to sign up for a fully-refundable $7 30-day trial. I'd love to see you there!
Happy trading!
Tom Bowley, Chief Market Strategist, EarningsBeats.com
