AI Models Suggest Markets Are Moving in the Green

Bank shares are leading the market today on tamer-than-expected inflation fears. The Fed announced that banks will be able to buy back shares and raise dividends by the end of June. This signals an end to the restrictions that took a toll on financial stocks throughout the pandemic. But June is still some ways away, so let’s focus on the next week and the month ahead for now.

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 the next week, our AI models have selected stocks with Top Buy ratings. The first is insurance company Aflac Inc (AFL), which received the following Q-Factor Scores: a C in Technicals, B in Growth, B in Low Volatility Momentum and A in Quality Value. Next up is turf and landscape maintenance company Toro Co (TTC), which earned an A in Technicals, B in Growth, A in Low Volatility Momentum and B in Quality Value.

As for Top Shorts, our AI models have selected Bluegreen Vacations Hldg Crp (BVH) for another week in a row, as fewer people are vacationing these days. The stock was assigned a D in Technicals, D in Growth, D in Low Volatility Momentum and F in Quality Value. Meanwhile, Par Technology Corp (PAR) was given an F in Technicals, D in Growth, D in Low Volatility Momentum and F in Quality Value. And user-generated travel review platform Tripadvisor Inc (TRIP) was assigned an F in Technicals, F in Growth, D in Low Volatility Momentum and F in Quality Value.

Looking ahead to the month, Altria Group Inc (MO) and Beazer Homes Usa Inc (BZH) are rated top buys, both with Cs in Technicals, As in Growth, Bs in Low Volatility Momentum and As in Quality Value. As is Philip Morris International (PM) with an A in Technicals, C in Growth, A in Low Volatility Momentum and B in Quality Value. Top shorts for the next month include Bluegreen Vacations Hldg Crp (BVH) yet again, and Par Technology Corp (PAR), which was given an F in Technicals, D in Growth, D in Low Volatility Momentum and F in Quality Value.

As for ETFs next week, our AI models have rated four Top Buys. Invesco DB Oil Fund (DBO) is among them, following oil’s comeback from a recent sell-off. iShares Core S&P Small-Cap (IJR), Principal U.S. Small-Cap Multi-Factor ETF (PSC), and SPDR S&P 600 Small Cap (SLY) are also among the mix. Our AI has picked just one Top Short ETF for the next week, which is  Invesco S&P 500 Low Volatility (SPLV), which recently hit a 52-week high.

For the next 30 days, our AI has selected three Top Buy ETFs and two Top Short ETFs. Top Buys include iShares Latin America 40 (ILF), SPDR Kensho Smart Mobility (XKST), and United States Natural Gas Fund (UNG). This makes sense, as the energy sector has been performing well lately. And Top Shorts include iShares U.S. Healthcare (IYH) and SPDR Russell 1000 Low Volatility Focus (ONEV).

Some of our favorite options trades this week: 

Short Put Spread in International Business Machines Corp (IBM) — Ref Price- 129.31. Top Buy in Q.ai weekly model, potential breakout.

Short Call Spread in SPDR S&P 500 ETF Trust (SPY) — Ref Price- 391.62. Top Short in Q.ai ETF Model. Yield Enhancement opportunity. Macro play on yield curve steepening.

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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.

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In stock news, Freeport-McMorRan Inc appears to be undergoing a necessary correction on its overvalued stock prices. That’s why our AI has rated it an unattractive investment at this time.

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

We have some very exciting news to share. Q.ai Invest, has been named the best investment platform by Fintech breakthrough awards. In addition, the Q.ai Invest launched on product hunt yesterday, and was the #1 product of the day. We would highly encourage you to take a moment to visit and upvote. Thank you!

†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.