Three top stocks from Louis Navellier… the common feature they share… a free tool to help your portfolio returns
In today’s Digest, let’s put you in position to make some money.
We’ll do this with the help of legendary growth investor, Louis Navellier. Specifically, we’re going to profile three stocks Louis recently highlighted to subscribers that he’s highly-bullish on today.
They range from small-cap to large-cap, while providing exposure to three different sectors: artificial intelligence, cybersecurity, and Chinese FinTech.
Best of all, each one passes the grade when it comes to Louis’ strict, quant-based market approach. That puts these companies in rare territory. So, if you have a few dollars and you’re looking for the best place to put it to work, today’s Digest is for you.
Lots to cover, so let’s jump in.
***A no-brainer artificial intelligence stock to anchor your portfolio this decade
For newer Digest, readers, Louis is one of the early pioneers of using predictive algorithms to scour the markets for quantitatively-strong stocks. Forbes even named him the “King of Quants.”
As a quantitative investor, he has strict investment rules that are rooted in cold, impartial numbers. This approach removes a great deal of emotion from investing, and has produced one of the most envied, multi-decade track records in the investment industry.
Louis’ algorithms have spotlighted three stocks that we’re featuring today. Let’s begin with one that falls into one of the most exciting sectors in the market…
Artificial intelligence (AI).
While AI spans a huge range of applications today, Louis’ first pick finds itself a key player in an often-overlooked corner of the sector – gaming.
AI not only improves gaming, but gaming is also a great way for AI to be improved by humans through a similar collective experience.
Things like virtual reality (VR) and online games are constantly being adjusted by feedback from users, which, in turn, upgrades the AI algorithms that can not only improve gaming platforms – but can be more widely used across many platforms!
So, which AI gaming company finds itself in Louis’ crosshairs today?
NVIDIA Corporation (NVDA).
Back to Louis:
This fundamentally superior company got its start in the computer graphics business and has been leading the industry for more than two decades.
It invented the GPU in 1999 – so it is a well-established player. Since 2014, the company has shifted its focus to five major markets – gaming, professional visualization, data centers, auto and AI.
Last week, NVDA made headlines when it announced a new, flagship gaming processor, or GPU (Graphics Processing Units).
Here’s Louis on why this new GPU could goose earnings:
Its last GPU launch for the 3000 series debuted toward the end of last year and gamers seemed to love them. The launch sold out quickly and the models are being sold for three times the sales price, if they are being re-sold at all.
This tells me that NVIDIA could stand to charge significantly more for the next line of units to earn higher margins.
Louis explains that NVDA uses a proprietary deep learning model for its GPUs called DLSS which is best-in-class, and “puts the company lightyears ahead of any competition.”
NVDA’s stock is roaring, basically doubling in the last 12 months compared to the S&P’s 31% gains, as you can see below.
Here’s Louis’ bottom-line:
The reality is AI is expected to be bigger than the tech boom in the 1990s and the smartphone revolution of 2007. It will allow us to build a whole new generation of incredible innovations…
And NVIDIA is perfectly positioned to benefit. It’s one of the reasons why I recommended the stock in Growth Investor back in May 2019.
Growth Investor subscribers who followed Louis’ official NVDA recommendation are up 309% as I write, but it looks like even more gains are on the way.
***A top-tier to play in the global fight against cyberattacks
As we’ve detailed here in the Digest, the last several weeks have seen a wave of ransomware attacks on key U.S. infrastructure targets.
First, there was the attack on Colonial Pipeline, which led to gasoline shortages on the east coast before Colonial paid-off the attackers. On a side note, news this morning is that federal officials have recovered around $2.3 million of the bitcoin that Colonial paid.
Then there was the hit on the world’s largest meat processor, JBS SA (JBSAY). It shut down all nine JBS beef plants in the U.S. last Tuesday, which paralyzed about 25% of the beef and 20% of the pork processed in the U.S. Lesser known was the hit on JBS’ subsidiary, Pilgrim’s Pride Corporation (PPC), which led to additional plant closures.
Then, last Thursday brought reports that at least three TV news stations had been kicked offline in a ransomware attack on their parent company, Cox Media Group.
We’ve profiled this cyberattack problem here in the Digest on many occasions, pointing out how cybersecurity falls into the “inevitables” category of investing, meaning that it’s “inevitable” that there will be more attacks in the future, leading to – unfortunately – a thriving cybersecurity industry.
So, which cybersecurity stock does Louis like?
Cybersecurity leader CrowdStrike Holdings, Inc. (CRWD) tracked 1,400 ransomware and data extortion schemes in 2020 alone, with the majority impacting manufacturers, industrial companies, and engineering and technology businesses…
Personally, I see a lot of potential with CrowdStrike Holdings. So, if it’s not on your radar, it should be. This fundamentally superior company offers real-time endpoint security, threat intelligence and cloud workload protection, helping prevent cyberattacks on and off an enterprise’s network.
The company’s platform, The CrowdStrike Falcon, utilizes its proprietary CrowdStrike Threat Graph to identify security threats and prevent data breaches. CrowdStrike boasts that its platform combines artificial intelligence (AI) and machine learning with behavioral analytics and 24/7 threat hunting all in one solution to protect all workloads on the network—cloud-based, on-premise and virtual environments.
In his update to subscribers, Louis dives into CrowdStrike’s strong numbers and earnings projections, noting that the company is enjoying strong institutional buying pressure. Regular Digest readers recognize that this signal carries a lot of weight in Louis’ stock grading system.
***Finally, look beyond the U.S. borders to this small, Chinese FinTech play
Louis’ final recommendation is benefiting from an investing phenomenon known as index realignment. This is basically when a major stock index, such as the Dow or Nasdaq, adds or drops specific companies from its holdings.
Here’s Louis with more:
The MSCI index, which tracks emerging markets, had its annual realignment last week. This boosted major Israeli, Taiwanese and Chinese stocks higher, including Futu Holdings Limited (FUTU), which I recommended to my Breakthrough Stocks subscribers in August 2020.
Based in Hong Kong, Futu Holdings Limited is a Chinese financial services company. Through its brokerage and wealth management platform, Futu Holdings provides stock trading, wealth management services, market data and information, margin financing and other interactive services. The company’s services are available in Hong Kong, China and the U.S.
Per usual, Louis dives straight into the numbers for his subscribers, pointing out stunning revenue and earnings growth.
From his update:
Given the strong results, it was no surprise when company management announced on May 12 that this fundamentally superior stock would be added to the MSCI Hong Kong index on May 27. Last week, FUTU rallied nearly 14% ahead of the realignment…
Overall, FUTU is up more than 200% year-to-date, but I fully anticipate the stock to continue to climb higher as it benefits from the Russell realignment later this month. The same should be true for my other Breakthrough Stocks, considering that the average Breakthrough Stock is forecasted to post 83.7% annual sales growth and 497.5% annual earnings growth. So, I am very excited for what’s to come!
***I’ll point out one commonality to all three of Louis’ recommendations today…
Careful readers might have noticed the same phrase repeated from Louis as we quoted him above.
From his NVDA commentary: “This fundamentally superior company got its start in the computer graphics business…”
From CrowdStrike: “This fundamentally superior company offers real-time endpoint security…”
And from Futu: “…it was no surprise when company management announced on May 12 that this fundamentally superior stock would be added to the MSCI Hong Kong index…”
This repetition doesn’t surprise Louis’ subscribers, as superior fundamentals are at the heart of Louis’ market approach.
As we’ve highlighted many times here in the Digest, Louis offers a free tool to help investors find their own fundamentally-strong stocks – the Portfolio Grader. It analyzes a stock according to the same metrics that drive Louis’ high-powered quantitative algorithms.
But if you’re interested in getting the details on the specific fundamentally-strong stocks in Louis’ official Breakthrough Stocks portfolio, click here. I’ll add that, last week, Louis made a whopping nine new recommendations to subscriber. They span a variety of sectors, from industrials, to healthcare, to retail, to name just a few.
Wrapping up, if you’re looking to put money to work today, these three stocks are a great starting point as Louis expects big things for them in the future. And a reminder to use Louis’ free Portfolio Grader when you’re evaluating your next potential investment.
Have a good evening,