To respond to the original post, AA Alcoa is one of the five most undervalued stocks in the Dow 30 and should outperform the averages during the next rally. The other 4 are CVX, CAT, BA, HD. XOM actually would be the fifth instead of HD except that takes two stocks (CVX being the other) in the same industry which is one of my filters. So that means number 6 goes into the 5 spot. Buying these five stocks should result in a superior performance to the Dow average itself over the next 6 months, based on the valuations. Of course beating the Dow does not seem like much now with the drop we have had, but over time had you done it, this method basically doubles it on average, it works out quite well.
Track em and see if buying them tomorrow on the open and selling them May 1st on the open beats what the Dow does over the same span. Don’t bother trying to figure out how I measure this, it is proprietary and the result of years of research. It does not involve opinions or emotions, it is strictly numbers. Buying these low values has outperformed the Dow every year that I have done it. Of course there are trend measures also that need to be used to enhance this, but the post was just based on valuation so I was commenting on that directly. I am not in any of these at the moment as I am in cash, but I am looking for a trend reversal then these are the ones I will look to play if and when that occurs.
It is harder to measure valuations on Tech stocks like AAPL due to all of their ratios being much higher than the more traditional blue chips. That may be a good play, I do not know, but based on valuation in my models, it is not. It depends on your style, this is a big swinger so for short term trading can be a good one.
