AI Models Suggests These Stocks Amid Rising Uncertainty

What does the rising 10 year yield mean for the stock market? Markets rallied for the majority of the week but cooled down going into Friday after treasury yields increased. There’s a mixed outlook from investors regarding the economy – some are banking on the vaccine distribution and the newly signed rescue package to jumpstart the economic recovery while others remain concerned about inflation rates.

Before we dive into this week's trades, we want to share a very exciting update on the AI Investor platform. We created the platform to be an easy to use tool that speeds up the research process and helps you discover actionable and valuable investment ideas. So how are we doing so far? Here are the results of the feedback from some early users (As of March 5, 2021). Over 70% of the users agree that the platform is easy to use. Over 57% of the users agreed that the platform has accelerated their investment research process. Most importantly, over 85% of the people traded on the ideas shared on the platform and nearly all of them find the recommendations useful.

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For next week, our AI models have selected several stocks with Top Short ratings. The first is Las Vegas Sands Corp (LVS), a company that has recently announced that it would be selling its casinos in Las Vegas. LVS received the following Q-Factor Scores: B in Technicals, D in Growth, D in Low Volatility Momentum and F in Quality Value. This also includes Western Digital Corp (WDC), which has been a Top Short for the last several weeks and has received scores of C in Technicals, F in Growth, F in Low Volatility Momentum and D in Quality Value.

Alternative investment management firm Hamilton Lane Inc (HLNE) is rated Top Buy for next week. The company has stayed in the green all year and recently announced a public offering of 1,453,110 shares of Class A Common Stock. Our AI assigned scores of C in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value. Toro Co (TTC), a company that manufactures turf, is the other Top Buy for next week and has been assigned scores of A in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value.

For the next 30 days, Pinterest Inc (PINS) and Hess Corp (HES) are the two stocks rated Top Short by our AI. Hess Corp has been rated C in Technicals, D in Growth, F in Low Volatility Momentum and F in Quality Value while Pinterest scored C in Technicals, F in Growth, F in Low Volatility Momentum and D in Quality Value.

Stocks rated Top Buy for the next 30 days include semiconductor company Formfactor Inc (FORM), a stock that had an outstanding Wednesday. Shares jumped 7.2%, bringing its marketing cap to $3.4 billion. Our AI has given the stock Q-Factor Scores of C in Technicals, C in Growth, A in Low Volatility Momentum and B in Quality Value. 

Hain Celestial Group Inc (HAIN), an organic and natural foods company, is also a Top Buy for the next 30 days and currently holds scores of C in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value. Amn Healthcare Services Inc (AMN) is the final Top Buy for that same period and received the following scores: C in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value.

We’re seeing a wild mix of ETFs for the next week and 30 days – most of which weren’t on our AI’s picklist for the last 2 weeks. The only repeat pick is SPDR S&P Kensho Smart Mobility (XKST), a Top Buy-rated ETF that offers exposure to companies behind innovation in smart transportation. A notable, albeit small, consistency is the focus on momentum funds. Specifically, Invesco S&P 500 Momentum (SPMO) is a Top Buy for the next week while Alpha Architect U.S Quantitative Momentum (QMOM) is a Top Buy for the next 30 days. As for bonds, our AI’s current attitude has remained unchanged as it has rated iShares TIPS Bond (TIP) a Top Short for the next 30 days.

While tech stocks have been hot and cold in recent weeks, our AI suggests that may only be temporary. Invesco China Technology (CQQQ), an ETF that focuses specifically on Chinese tech firms, and SPDR S&P 500 ETF Trust (SPY), an ETF in which technology makes up a quarter of all holdings, are both rated Top Buy for the next 30 days.

Some of our favorite options trades this week: 

Long Call Spread in Hershey (HSY) – Ref Price- 152.69. Top Buy in weekly Q.ai model. Potential breakout from a wedge.

Short Call Spread in Western Digital (WDC) – Ref Price- 69.16. Top short in Q.ai model. Yield enhancement opportunity.

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Performance Update

Our monthly top buys for stocks have outperformed the SPDR S&P 500 ETF by over 23% since December 2013, generating a total return of 159%. After beating the market in January, our top buys were up 0.81% in February vs 2.78% for the SPY ETF.† You can find this full list of monthly top buys for stocks and ETFs in a simple and easy to understand table on the AI Investor Investment Discovery platform. Sign up here to try it for free for one month.

The Latest

Home Depot has fast become a stock market favorite throughout the pandemic and has consistently produced strong earnings. At this time, the stock is currently down and our AI suggests that now is the time to buy.

Looking for additional stock trading ideas? We publish articles daily and have highlighted the following stocks with Top Buy and Top Short ratings.

†As of 2/28/2021. The calculated returns above are based on paper trades and back tests during the relevant measuring period and therefore represent hypothetical performance. The average holding period for each security is 1 month with the return calculation assuming an equally-weighted theoretical portfolio. Returns reflect full reinvestment of dividends. The hypothetical returns do not include advisory fees or transaction costs as Qai does not maintain an investment advisory business and has no assets under management. However, an investor paying a professional advisor would have its return affected by any fees or commissions paid. Past performance is not an indication of future returns. Changes in economic conditions and market factors will affect the returns of investments in different ways. Any investment involves a risk of a loss. All information herein is from sources believed to be reliable but have not been independently verified. No representation or warranty can be given with respect to the accuracy or completeness of the information, and is subject to updating, revision, and amendment. Hypothetical returns are shown against the actual returns for the SPRD S&P 500 ETF Trust (SPY) during comparable periods. The strategy is based on buying an equal amount of all stocks ranked as Top Buys by the Q.ai Factor Models for US Large-Cap Stocks (and an identical back tested strategy employed in the earlier stages of the measuring period January 1, 2017 through February 28, 2021). The Q.ai Factor Models are calibrated to focus on capital appreciation. Q.ai is the trade name of both Quantalytics Research, LLC and Quantalytics Holdings, LLC.