NVDA, AMD, PLTR: Buy, Sell or Hold? + Louie's 4 BONUS Picks!

Louie is grading your stocks you asked about most and we're ending with three refiners he's buying right now. Buy, sell or hold. Welcome back to Naval Market. So before we get started with your stocks, we use stock grader pretty heavily as you know in these videos and we've been getting a few comments exactly how you grade your stocks. Especially with everything that's going on in the market, people have seen their grades change quite dramatically. Okay. So, Don, let's just go over how the grades work from A down to F. >> All right. Well, there's two components. One is called the quantitative grade and the other is the fundamental grade based on those eight fundamental factors. The quantitative grade is mathematically alpha divided by a stock standard deviation. Alpha is the return that's uncorrelated to the stock market. What we do each weekend is we regress over 6,000 stocks against several different benchmarks. The benchmark with the highest R square correlation is the one we use. So we might use the S&P 500, the Russell 1000, the NASDAQ composite, the Russell 2. The benchmarks change um because the higher the correlation, the better the data. So what we miss are stocks that are what we call high beta, low alpha, or negative alpha, things like meta, hyperorrelated the market. We're always looking for something that kind of zigs when the market zags. That's how we end up in these eclectic stocks like oil tanker companies or sometimes other very unique stocks that just move in their own little world. And alpha divided by standard deviation essentially identifies buying pressure especially on the down days. That's 70% of the grade. 30% of the grade is that eight factor fundamental model. Now, I'm obsessed with fundamentals because our our testing shows that the fundamental model is a lot broader than the than the pure quantitative model. I'm known to hold, you know, BNC rated stocks, a great fundamental grades. Our viewers are very smart. What happens is during earnings season, the fundamental grades are changing a lot. Okay? And um and and that makes the overall grade change. And of course, we have been in in a correction and the quantitative grade is is changing as well. And what grade does a stock need to be before you would buy it? >> I'm normally buying A-rated stocks. You know, we write up stocks that are on the cusp being added and I just noticed that a couple we recently wrote up. That's from Market 360, the free letter that Investor Place offers. A couple of stocks we wrote up, we just added. So, you know, we have our current list. We have a prospective list. So, if you subscribe to Market 360, you might get some early clues to what we're going to be adding soon. And that link is always in the description below. Also, all the links for Stock Grader, including Stockgrader AI, is in the description. So, if you want to grade your own stocks, that's the best platform to use. It's free. And if you want a paid service on top of it, which is the AI service, that link is in the description. So, now everyone knows what they're looking for. Let's get into these stock picks. As always, all of the stocks will be in the description below, so feel free to skip around. But let's start out with the most popular group, AI chips. Dad, we have to talk about Nvidia again. Nvidia makes the chips that power most of the world's AI data centers. I hope that everyone owns it by now, but dad, is it still a buy? >> Screaming by. You know, it got hit with a sell-off. In my opinion, the sell-off was unwarranted. Wall Street's been spreading a false narrative that they're going to run out of money uh for the AI chips and that there's going to be order cancellations. Even though you saw the cash flow at Meta, Google, and Amazon all drop, they all can go out and raise money. Meta's having a $95 billion secondary stock offer. And then Google and Amazon tend to borrow in the bond market when they need capital. So I thought all that that news that cash flow was falling because of AI spending was good news for us and it should be showing up in the earnings. Now interesting Apple just announced and their cash flow grew 136 billion in this last fiscal year. So that's incredible. The order backlogs are now 2032. So almost all these AI related stocks and data center related stocks we recommend are going to have spectacular earnings for the next four years. And so hang on, enjoy the ride. All right, next up is AMD, which makes the processors and its own AI chips to compete with Nvidia. What would you say for this one? Buy, sell, or hold? >> That's a buy and that's announcing here shortly. By the time this video goes out, it I think it will have announced. The main thing that you should be aware of AMD is the analysts are forecasting 41.6% revenue growth. They're forecasting 61.7% earnings growth. The analysts have revised their estimates higher and it it does have a good surprise history. So AMD chips are not as sophisticated as Nvidia's but you know we have this thing called dumb AI that doesn't have to look at everything doesn't have to do full machine learning it just looks at correlated things. So AMD has a big role to play and is definitely involved in AI. >> Next up is Broadcom which is one of the most asked about stocks. Yeah, I sold that in growth investor and you know we made a lot of money in it. We had it for years and uh I get a little grief on this but here's what it's supposed to do. The earnings supposed to be up 93.8 so that's obviously excellent. The earnings supposed to be up 96.8 but the reason I sold it the analyst stop revising estimates higher the minor trim is not significant. Also Broadcom has very tiny earnings surprises. So Broadcom is a very solid stock. I literally sold it just because of the anu analyst earnings estimates and the smaller surprises, but it's still a very good stock and everything I sell usually goes higher. I'm just trying to replace it with something go higher with less volatility. >> Let's go on to another AI stock. Marll is another one you guys asked a lot about. >> Well, yeah, Marll is buying LIT. And of course, what they're doing is they're making the chips more optical so they can transfer data faster. So Marll, their sales are supposed to be up 52.1. Their earnings are supposed to be up 44.9. Some upward analysis earnings estimate changes, but very small surprises on this stock. So that's why it's mostly missed my radar. Uh obviously it bought LIT and you usually have to pay a little bit of a premium for that. But yeah, Marll's a a very serious company. But again, I'm running the portfolio like it's a sports team. And if you look at a football team, they usually have two or three good tight ends, but somehow one tight end's getting the ball most of the time. Marvel would qualify for a pro team, but uh it may not qualify for my portfolio, and we don't recommend it. >> All those AI chips create a mountain of data that has to be stored somewhere, and we got a lot of questions about those. So, let's start out with Western Digital. You called the dip after earnings a buying opportunity. Do you still feel that way? >> Yeah. Yeah. because Western Digital is a leader and it's the all these companies have fat operating margins while the shortage persists. So for the next quarter, Western Digital sales are supposed to be up by 69.9%. Their earnings supposed to be up 175.7. Uh the analysts have revised their estimates dramatically higher just in the last 7 days. They've gone from $4.76 to $587. That's a huge upward revision in the past week. And of course, they have a great surprise history. Last quarter, they beat by 13.2%. So, yeah, lock and load on Western Digital. >> Well, speaking of earnings, we did get a lot of questions about Seagate that reported last week. >> Seagate's pretty similar to Western Digital. Their sales are forecast to go up 70.7 next quarter. Their earnings are supposed to be up 198.1%. So, slightly stronger than Western Digital. The analysts have revised their estimates. Here's interesting. last seven days of revisor estimates from $857 to $927. That's a pretty big revision. Now, it only had a 3.4% surprise last quarter. Okay, that's the slowest surprise in four quarters. But I love that big upward analyst revision. >> Well, while we're still talking about the data center, we have one more company that people asked about, which is Celestea. >> Yeah, CLS did slip to a D rating, and I'm holding it. Okay, and here's why I'm holding it. First, it might go up here soon. Well, it is going up as I talk to you. Sales are supposed to be up 77%. These are forecasted sales. Earnings supposed to up 85.5%. They just posted a 11 12% range surprise. So, yeah, I think it's unfortunate the stock got excessively volatile, but I don't want to be shook out of a stock with fundamentals this strong. You know, when I test that eight factor fundamental model, as long as they score high, it's it's going to be fine. But this company's a huge in the cloud computing space. They're specializ in all the connections to speed up data centers and all. So yeah, I mean I'm going to hang on to this one. >> So we've got the chips, the storage, and the servers. Now let's talk about the companies actually putting it all together and renting it out. Nebas is in the same business as Corey. How does it compare? >> Okay, so here's the dirt on Nebus. Okay, first of all, their sales are supposed to be at 5 and 19.9%. So, obviously that's spectacular, right? Their earnings are supposed to be down 51.7%. Those are operating earnings. If you want some good news on Nebius, in the last 7 days, the analysts were estimating a $140 per share. Now, they're estimating $124 a share loss, excuse me. So, they went from losing $140 to $1.24. So, it has missed my radar because it loses money. It did have a 21.2% surprise last quarter, but yeah, until it makes money, I'm not going to buy it. So, this is in a similar business to Cororeweave, and um until it earns money, I'm not going to be interested in it. >> Another one you all asked about a lot was Applied Digital. >> Sales is supposed to be up 25.1. Earnings supposed to be flat as a pancake and operating earnings is supposed to be minus 21 cents a share. and they have missed for the past 3 quarters. So that's why applied digital is not recommended by me. >> And I en started as a Bitcoin miner and now was using data centers for AI. >> Okay. So that means IN is like a core weave. It's like a Nebus and unfortunately their sales are forecast to fall 9.1%. Earnings are forecasted to collapse over 8,350%. The analysts have still have negative estimates of minus 76 cents a a quarter. Seven days ago is - 72 cents and huge earnings misses for the past three quarters. So yeah, I that's why I have that eight factor fundamental mod. See these stocks that we just rattled off. We let me rename them. Coreweave, Nebius, IN. They have negative estimates. So they're not surprising. That's not good. Okay. And the analysts are cutting the estimates. So yeah, they're not going to hit my radar. So, I demand incredible sales and earnings, and these stocks are on the fringe. I wish them well, but they're not I'm not going to recommend them till I know they can uh sustain good earnings growth. >> Well, every one of those data centers need an enormous amount of power, cooling, and construction to get built. So, let's talk about some of those. Let's start out with Verte BRT. >> Yeah, VRT already had spectacular earnings, and uh they are involved in the the water cooled rack systems. Their sales are forecast to be up 55.8%. Their earnings was to be up 67.7%. The analysts have revised estimates from 2011 to 210 a share in the last 7 days and last quarter had a 19.8% surprise. Its guidance was very impressive and its backlog was even more impressive. So that's why Verive is looking so good here. So yeah, we this is um a stock we've recommended for a long long time and it's held in manage accounts our family owns this stock. >> Next up we have Env, which makes electrical and cooling products for data centers. >> This is a British company. Okay, they also make big transformers and things. So their sales is supposed to be up 48.3 earnings supposed to be up 49. We actually have minor analyst trims on this in the last month from A12 to$18. But in the last 90 days, we've got 96 to$18. So upward in the last 90 days, downward in the last month, but they missed by a penny. So they earned$123 a share in analyst dollar24. So they had a 1.1% earnings miss. So So I wouldn't say this stocks in my doghouse, but I I think it's important. But yeah, this company is going to prosper because of the data center buildout. We recommend it. We own it. >> And Sterling Infrastructure, it does the site work and construction for new data centers. This one was also one of the most asked. >> Yeah, the shorts uh were pretty nasty to Sterling, just so everybody knows, saying they're over they're over their skis, you know, they can't fulfill all their orders. And none of that's true. So, first of all, Sterling sales are supposed to be at 50.3%. Their earnings is supposed to be at 58.1. Now, this is a contractor. Last seven days, earnings got revised from $3.98 to $4.31. That's a nice upward revision for a contractor. And last quarter, it just it posted a 22.9% surprise. So, yeah, Sterling's checking all the boxes, lock and load on this one. >> Okay, we've covered the hardware side. Let's switch to software and big tech. Let's start out with Palunteer. This one always gets a lot of questions. Yeah. Well, they just announced, of course, and their sales were up 96% and their earnings were up 95%. Their commercial sales were up dramatically, 148%. So, the commercial business is now outgrowing the the government business, but yeah, this company's fine. Now, its surprise wasn't as big as it normally is. It was, I believe, se a little over 7%. Yeah, it was an 8.1% surprise. and the analysts are going to continue to revise its estimates higher. So, Palanteer does trade at a higher multiple. Okay, that's the only thing that might hold it back. The business is phenomenal. This was the 10th quarter row. Spectacular results. So, yeah, back up the truck on Palunteer. They're the best AI applier out there. >> Next up, we have Microsoft. It just reported earnings. So, how did it do? >> I don't own it. Looks fine. Sales are up 19 sales are forecast to be up 19% next quarter. Earnings supposed to be forecast to be up 16. We got a minor analyst trim last 7 days from 482 to 480. That's nothing to worry about. It It's beat by 3.6. My only comment is boring. That's all. It's fine. Pays a nice dividend. So, it's missing my radar. But if you want dividend income, you want own a monopoly, this is great. You know, Microsoft's pretty simple. If you don't renew to them every year, your software stops working. So, as long as you're use computers, we got to pay Microsoft. >> Okay. So, we've made it through your most asked stocks. Now, let's get to the ones that you are buying right now. You've been talking about the refiners for a while, and we actually got a comment asking if it's time to downsize oil and tanker investments. >> No, cuz that's where the best earnings are. So, no, oil normally goes down in the fall. It's starting to go down, but the main catalyst for it dropping was that the Iran supreme leader authorized some representatives to negotiate with the US and there's supposed to be negotiations in I think Abu Dhabi or Qatar I'm not sure where but uh there's supposed to be negotiations with you know and Jared Kushner etc. And so we'll see if they get anywhere. Right now there's more oil getting out there than before when the Iran war started. The problem is inventory has been depleted. So everybody has to refill those inventories. And then what you're going to see is worldwide demand will pick up come February. So there is going to be a lull in crude oil prices. You already see it. But all the companies we recommend are going to continue to have incredible sales and earnings growth and then we're going to get more appreciation oil or firmer pricing come the spring. >> Well, I'm glad to hear that you're profiting from these higher oil prices. But you were sharing that you have three refiners that you are buying right now. Can we start with that first pick? >> Yeah, the main refiners are PBF which has the lowest P ratio. It trades under four times forecast earnings. DO that's HF Sinclair they've already announced. Spicer results, PSX, Philip 66, they had spectacular results. And then Marathon Petroleum MPC just announced. So I gave you four. Now we have big integrated energy companies like British Petroleum and Shell. Clearly they have refinery operations. We have Suncor in Canada has refinary operations. We have CVE in Canada and CNQ in Canada. So the money is in refining right now. Okay. >> Wonderful. Well, there you have it. Louis top four refiners that he is buying right now. Thank you all so much for all your amazing questions. And if your stock wasn't picked in this one, we'll keep an eye out and leave it below for a future episode. As always, if you want to check how your stocks grade, the link to Stock Rider will be in the description below. Let's remind everyone how can they be tracking their stocks. >> Sure. So, when you click on the stock grader link, the free link, you have to sign up, give your email and address, everything to our publisher, but then you have full access to Stock Grader. This is the the nonAI version. And you can save your portfolio. So once you key in your stocks, you just check them and I would check them at least every week and we rank ABCDF and you will start running your portfolio like a sports team. You will start selling good stocks by better stocks. >> Wonderful. Well, thank you all so much for watching. Make sure to give this video a like and subscribe to our channel for more content from us and for more buy, sell, or hold videos. Thank you all so much for watching. We'll see you this Sunday for our next video. Heat. Heat. Hey hey hey.