Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.
We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
Something we’ve been working on internally is using various 'bottoms-up' tools and scans to complement our top-down approach.
One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small, to mid, to large - and ultimately mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.
Welcome to our latest RPP Report, where we publish return tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.
Back then, we were already leaning toward "NO." Fast forward to today, and it's more like a "NO WAY."
The reason for this is simple. In that post, we explained the line in the sand for our USD/BRICS Index was ~19.
In the few weeks since, this critical level has been violated. The market has spoken, and it's saying we're in for a lower US Dollar relative to BRIC-country currencies.
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge@granthawkridge
Check out our latest Mystery Chart!
What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.
This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.
It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!
The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.
While you can try to guess the chart, the point is to make a decision…
So, let us know what it is… Buy, Sell, or Do Nothing?
This is one of our favorite bottoms-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity -- either bullish or bearish... but NOT both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind... and they're doing so for one reason only: Because they think the stock is about to move in their direction and make them a pretty penny.
We've already had some great trades come out of this Smallcap-focused column since we launched it late last year and began rotating it with our flagship bottoms-up scan, "Under The Hood."
To make the cut for our Minor Leagues list, a company must have a market cap between $1 and $2B. After applying price and liquidity filters, we simply sort by proximity to new highs in order to focus on the best players.
In last week's Mystery Post, we discussed this chartand posed the question as to whether or not it was about to finally break out above those prior highs.
With price coiling in a bullish flag-like continuation pattern, yet showing waning momentum - responses we're mixed with many wanting to wait for more information.
The chart was a long-term look at the Global Auto ETF $CARZ. And as far as the impending breakout is concerned, it looks like we got our answer this week...
Here's the same weekly bar chart. Looks a bit different now, doesn't it?
Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Momentum Rebalance Heavy On Financials
One of the big lessons investors have been taught this year is that Growth is not Momentum. For many years, Growth-oriented sectors held the reigns of Momentum strategies. But that's not because the two are synonymous in any fundamental way. It's simply because growth stocks have been where the momentum is. In other words, they've been going up!
Well, that's changing and this is yet another data point that supports this view. After MSCI’s semi-annual rebalance of the Momentum Factor ETF $MTUM, Technology has shrunk from a 41% to 18% weighting, while Financials’ weighting has shot up from a measly 2% to 32%. Moreover, both Consumer Discretionary and Communications have shrunk in their weighting, while the other Value sectors - Industrials, Materials, and Energy - now represent a far more significant portion of the ETF.
Check out this week’s Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.
By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.
Let’s jump right into it with some of the major takeaways from this week’s report:
* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.
We held our June Monthly Strategy Session this past Thursday night. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a "big-picture" point of view.
With that as our backdrop, let's dive right in and discuss three of the most important charts and/or themes from this month's call.
As JC mentioned this morning, we've found quite the winning formula in selfishly pursuing projects and creating content that WElike. Fortunately, it usually turns out that our readers and clients think what we do is cool and valuable too.
Just like our new Saturday Morning Chartoons, everything we're doing with crypto lately is another great example of this self-serving strategy of ours.
Along those lines, we just created a custom index for cryptocurrency that we think is pretty damn neat. It also got us thinking about something...
