Total Wealth Weekly. August 6, Earnings Season Moves Our Portfolio

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Total Wealth Weekly August 6, 2017 Earnings Season Moves Our Portfolio Hi everyone. Welcome to Total Wealth Weekly for Sunday, August 6. First, thanks to all of you who wrote in.

1 Total Wealth Weekly August 6, 2017 Earnings Season Moves Our Portfolio Hi everyone. Welcome to Total Wealth Weekly for Sunday, August 6. First, thanks to all of you who wrote in. If you have comments and questions, as always, send them to I promised a few pictures from my family s cruise vacation last week so here s me in Alaska s Glacier Bay. The glacier behind me is one of those classic tidewater glaciers that comes right down to the edge of the fjord, with chunks periodically breaking off. My favorite part of the trip? Riding the famous White Pass & Yukon Route Railroad out of Skagway, Alaska. Not only is the scenery spectacular, but it gave me some perspective on a couple of our investment themes: gold and infrastructure. The gold rush didn t last long, a reminder about the boom and bust of many commodity businesses. The railroad though, stayed flexible and continues to make money even now. We Sold Goldcorp A shot of me at Alaska s Glacier Bay National Park and Preserve while on vacation last week. Speaking of gold, on Friday I recommended selling Goldcorp (NYSE: GG) at the market. The miner reported better-than-expected results while I was on vacation, including lower all-in costs. Investors though, seemed preoccupied with negative cash flow and some problems with the development of its newer mining properties. It was close to our trailing stop of $ My concern is the stock could move much lower, hence my recommendation to sell that stock sooner, rather than later. BANYANHILL.COM 1

And this is precisely why we have these trailing stops in mind for ourselves they protect our capital, provide a guide on how to exit and let us rest easy knowing that if

Our other gold mining stock, Wheaton Precious Metals (NYSE: WPM), reports earnings this Thursday. Analysts expect profits of $0.15 a share.

2 And this is precisely why we have these trailing stops in mind for ourselves they protect our capital, provide a guide on how to exit and let us rest easy knowing that if a position ever turns, we re safeguarded. I never like the idea of losing sleep over positions, so this is an essential part of our trading strategy. Our other gold mining stock, Wheaton Precious Metals (NYSE: WPM), reports earnings this Thursday. Analysts expect profits of $0.15 a share. I m moving its trailing stop up to $18.50, from $16.50 out of an abundance of caution. Here s my concern. If gold prices weaken further, it doesn t really matter what kinds of profits these companies produce. BANYANHILL.COM 2

But the price of gold took a tumble on Friday, and if you look at an index of gold mining stocks, like the Vaneck

3 For a larger perspective, two weeks ago, you ll recall that I said: Maybe, just maybe, we re at that point where gold-mining stocks are about to take off again. But the price of gold took a tumble on Friday, and if you look at an index of gold mining stocks, like the Vaneck Vectors Gold Mining ETF (NYSE: GDX), they appear unable to hold above the 200-day moving average that I mention from time to time. So it s prudent to be cautious. BANYANHILL.COM 3

This week the stock notched its highest price since 2008. Under Armour (NYSE: UAA), on the other hand, lost more than 5% for the week.

4 What Earnings Season Means for Us Shares of ING (NYSE: ING) picked up a little ground over the past week. It reported better than expected profits. The shares are up 25% since going into the portfolio in March. This week the stock notched its highest price since Under Armour (NYSE: UAA), on the other hand, lost more than 5% for the week. The athletic apparel maker reported a smaller-than-expected loss for the quarter. But it sees lower revenue for the year, and it said it would restructure some of its operations and layoff a couple hundred staff. BANYANHILL.COM 4

The story we need to stay focused on is the changes put in place over the last six months. The company is doing all the right things to turn around its operations.

5 The story we need to stay focused on is the changes put in place over the last six months. The company is doing all the right things to turn around its operations. And with this week s news, I believe Under Armour is clearing the decks for some great quarters to come. What s interesting is that some previously bearish analysts are now coming around to the same viewpoint. An analyst at Keybank said: For the first time in over five years, our view is turning more constructive on UAA. Another, at the Jefferies brokerage, noted: Too much fear/hate has created a dislocation in UAA shares in our view. If you don t own Under Armour shares this is THE time to buy them. The risk is that I m wrong, and the stock drops down to $15.36 and hits our trailing stop for about a 16% loss. The reward will be much, much bigger as the company s efforts gain traction in the second half of the year. You can read the original recommendation here. Now on to Stericycle (Nasdaq: SRCL). It gained more than 7% on Thursday, and gave a chunk of it back on Friday. Two big things happened. Stericycle reported adjusted quarterly profits of $1.15 per share 2 cents better than estimates. The company is also moving to settle a long-standing class-action lawsuit over its billing practices, which has been hanging like a dark cloud over the stock. BANYANHILL.COM 5

This is a good spot to buy shares of Stericycle; I see 50% or more upside to this stock in the next two years, as I mentioned in the original recommendation, especially after this improved earnings

6 This is a good spot to buy shares of Stericycle; I see 50% or more upside to this stock in the next two years, as I mentioned in the original recommendation, especially after this improved earnings report from the company. However, it always strengthens our positions to be cautious, so I m moving the trailing stop higher to $74. Archer Daniels Midland (NYSE: ADM) reported earnings on August 1 and beat estimates with adjusted earnings of $0.57 a share, a nickel above estimates. Revenues came in less than expected, but investors focused on the CEO s comments: We are aggressively managing costs and capital. So this position is performing in line with expectations, up about 60%, and remains a hold. BANYANHILL.COM 6

Nidec Corp (OTC: NJDCY) soared to new all-time highs and is now also up about 60% for us. Net sales and operating profits also rose to record highs as well.

So let s go ahead and raise that to a buy today. Rio Tinto (NYSE: RIO) also had a good week.

7 Nidec Corp (OTC: NJDCY) soared to new all-time highs and is now also up about 60% for us. Net sales and operating profits also rose to record highs as well. The brushless motor company raised its sales and profit forecasts for the next six months. Frankly, I m overdue raising this stock to a buy from hold. So let s go ahead and raise that to a buy today. Rio Tinto (NYSE: RIO) also had a good week. The iron and copper miner said its first-half profits more than doubled from year-ago levels, thanks to a jump in iron-ore prices. The company also turned in a huge half-year dividend of $1.10. Look for another $1 billion in share buybacks as well in the second half of the year. We re up about 10%, but there s much more upside ahead of us. BANYANHILL.COM 7

Looking to the coming week Another of the recent picks, AES (NYSE: AES) reports quarterly profits this coming Tuesday.

8 South Jersey Industries (NYSE: SJI) reported adjusted earnings of 6 cents a share on Friday, that was 2 cents better than analysts expected. The shares are holding their own. The stock is up 42% in the portfolio. Looking to the coming week Another of the recent picks, AES (NYSE: AES) reports quarterly profits this coming Tuesday. Analysts expect earnings of $0.21 a share. I think it could do 1 or 2 cents better than that, pushing our position up. I ll follow up on the results next Sunday. I ll wrap it up for now. I m Jeff Yastine for Total Wealth Insider. BANYANHILL.COM 8

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