Louie's Top Stocks to Buy Right Now (Energy & AI Winners

SpaceX just joined the Nasdaq 100, but there's one big catch. We also have Robert Shiller saying that investors should be cautious. Oil prices still don't make any sense. So, with all these mixed signals, where does Louis still see the opportunity? That's what we're breaking down today. Welcome back to Navellier Market Buzz. Let's start out with SpaceX. It's worth more than 2 trillion. So, why has its weight been cut in the Nasdaq 100? >> Yeah, the main reason is they only floated 5% of their stock in the IPO. And folks at Nasdaq, they gave it the normal weight for $2 trillion company, there wouldn't be enough float. So, they restricted it. Now, obviously there's going to be more float because there's going to be shares that are locked up right now that become unlocked and then insiders will start selling. So, I expect that Nasdaq will gradually increase its weight. Also, SpaceX has not been added to the S&P 500 yet. It's been added to the Russell 1000, now the Nasdaq 100, and then eventually S&P 500. So, as it gets added to more of these indices, it will really help curtail the stock's volatility. And it seems to be pretty smart on SpaceX as far as I'm concerned because at least when the insiders sell, there'll be a buyer out there, namely the indices. >> So, that's a great reminder that sometimes the headlines don't tell the whole story. Well, we do have a lot of investors hearing Robert Shiller and immediately thinking, uh-oh, is there a market crash coming? I know that that's not your opinion, but what are you looking at in terms of today's market? >> You know, Robert Shiller is a Yale professor. I mean, he's on CNBC. He invented this Shiller index that shows whether the markets are overvalued or not. And he has his own special take on how to do a P/E ratio. And he's a value guy and value hasn't worked for 12 years. So, the Telegraph in the UK basically said that according to Shiller we're overvalued, but to be candidly, according to Shiller we're almost always overvalued. So, the media continues to roll out these perma-bears, Robert Shiller, you know, we talked about Jeremy Grantham the other day. All I can tell folks is the market is not going up as much as earnings and P/E ratio is under compression. So, I think we should all just take a chill pill. >> So, this kind of brings us to energy because that's one area where the headlines rarely tell the whole story. This is something that I think is confusing everyone. America produces more oil than any country in the world, yet we still import millions of barrels every day. Why is that? >> It's just how the energy markets work. 95% of our light sweet crude is exported. Europe burns predominantly light sweet crude and they get a lot more from Africa and that's a crude oil that's a very viscous, doesn't have much sulfur in it. And we are engineered for more intermediate grades of crude. That's what WTI, West Texas Intermediate is, as well as the the heavy oils, the high sulfur oils that you can get from Venezuela and some other places. Alaska oil is heavy as well. So, we're just geared up to refine the heavy oils while Europe isn't. We export all all but 5% of our light sweet crude and we import all kinds of heavy grades. Now, after we import that that oil, we can then turn around and sell it as a refined product. There's a lot of refineries in America, especially if you you go to from Houston Louisiana, there's a lot of refineries in that area. So, we're kind of the refinery capital of the world right now. >> But then why are gas prices still tied to global markets if we're producing so much oil ourselves? >> Because everybody's replenishing their inventories. Inventories did get depleted even in America. Our strategic petroleum reserve was drawn down dramatically. So, what they're doing is they're trying to replenish the inventories they they drew down on. Oil is seasonal. It goes up in in the spring and goes down in the fall. So, we're at peak demand right now and plus they're replenishing inventories. So, I don't expect any price relief until the fall comes, so after Labor Day when the summer driving season officially ends, then we should get some significant price relief. The other reason we have this seasonality is there's just more people in the northern hemisphere than southern hemisphere. So, if we could take a billion people in the northern hemisphere and put them in Brazil or India or Africa, then the seasonality might stop. But right now we have this seasonality. >> And understanding that helps to explain why you like energy transportation. I'd love for you to share with our viewers where you're seeing opportunity right now. >> Well, my stalwarts are ECO, INSW, that's International Seaways, and TEN. These are all petroleum tankers. I'm adding two more to Breakthrough Stocks. The announcement will come out at the end of the week, so I don't really don't want to hurt the subscribers by saying it now, but the bottom line is I have multiple energy transport companies. The other thing is you have a chart you're showing of where the earnings are forecasted to be in the second quarter, and believe it or not energy is the strongest, followed by information technology, and then followed by materials. So, those three groups are where all the earnings growth is, and then all the other sectors have slower earnings growth in the S&P 500. So, we still have to be relatively concentrated on information tech, materials, and of course energy, which will have spectacular earnings. >> And what about LNG? >> I do like that. That's Dorian. LPG is a symbol. Obviously, we're supplying Europe predominantly with their natural gas. They had a big drawdown, so they have to replenish that. Because of booming LNG exports, the price for natural gas still oscillates with the weather, and the demand goes up in hot miserable summers for air conditioning demand, and then of course in the winter for heating. But because of the booming LNG exports, the what we call the floor of natural gas has risen. and of course LNG is is wonderful. Like Qatar got damaged uh during the Iran war, and it takes a while to repair those facilities. So, the US is in the catbird seat now as far as LNG is concerned, and Dorian LPG is my favorite. >> So, while everyone's focused on oil prices, you're looking at the companies moving that energy around the world. >> That's right. And and the transportation or what we call the day rates is longer than ever because uh you know, the insurance companies don't want the ships to go through certain passages. So, the ships are just out there longer than ever before. And of course, Russia's been cut off. We'll we'll see what they say at the NATO meeting about all this cuz President Zelenskyy from Ukraine will be there, but because Ukraine's attacking all these Russian energy facilities in St. Petersburg, Crimea, and of course around Moscow, there's a gas shortage in Russia right now. >> While we're talking about some of these stocks, Samsung recently tumbled. Can you explain to everyone what was the catalyst of that? >> Yeah, Samsung announced its third quarter record earnings. The earnings were up 19-fold, you know, so outstanding, and the stock got hit. So, Korean investors are a little manic, okay? The day before, they were celebrating the IPO of SK Hynix, a $20 IPO in America trading in the form of an ADR, American Depository Receipt. And and I guess the fear is is that as everybody ramps up, memory prices will eventually go down. But, based on the analysts' estimates and the experts, that's not happening till maybe 15 months from now. So, I think that's very premature, and the the memory stocks do have in general a low P ratio, especially Micron. It's 6 and 1/2 times forecast earnings. So, the memory stocks remain on this roller coaster, and Korea is the tail that's wagging the dog. And uh I think all these memory stocks, especially Micron, Seagate, SanDisk, are screaming buys on any dip. >> Before we get into subscriber questions, let's finish with this week's economic data. The ISM Services report came in better than expected. Does it change where you're seeing opportunity? >> Well, I was pleased to see that it's price component fell significantly. So, we've had the ISM manufacturing report and services report show sharp price declines. So, that means inflation is cooling fast. And hopefully that shows up in the numbers. You can already go to, you know, Switzerland or Germany. You can see that inflation is running 2.4 2.7. So, that's good. Now, the reason Europe's had lower inflation than us is they haven't had the real estate inflation. The thing we call owner's equivalent rent shelter costs. See, Europe is a shrinking society. They're losing households. Same thing in Japan and throughout Asia. So, uh our key my inflation is for these prices to keep coming down and also for owner's equivalent rent to finally cool off. I'm not sure it's going to cool off in the summer months cuz that's kind of when everyone's out looking at homes and moving and all that stuff. But, I would add that, you know, the dollar is very strong. Okay, we're four-decade high against the Japanese yen. And the dollar is very strong against a bunch of other currencies. So, everything we import is getting cheaper. So, that's actually deflationary. So, under your Fed Chairman Powell, I think things are kind of quiet and I think we still have that 2% inflation goal, but he might change it or he might redefine it. But, the inflation news is phenomenal. And that's just one of the reasons bond yields are meandering slightly lower. >> So, despite all the recession headlines, the economy still looks pretty resilient. >> Our economy is phenomenal. We're not in a recession. Europe's in a recession. Um actually, I should be clear. Yardeni had a good report that uh Britain's really in trouble, but Spain's the strongest economy in Europe right now. Of course, they have a lot more people moving to Spain and Portugal. But, once we throw out Spain and Portugal, Europe by and large is in a stagnant economy. Germany's in a recession, Britain's in a recession, and France is struggling with shrinking households. The bond vigilantes are really preying on these countries. France's bond yields are up, Britain's bond yields are up, and in fact the new British Prime Minister, we'll see how he gets along with the bond vigilantes. You know, a while ago Liz Truss was the British Prime Minister briefly, and she wanted to spend a lot of money to stimulate the economy, and the bond vigilantes wouldn't let her do so. So, she had to resign. So, it's getting to be very interesting out there how these countries cope. The central banks are going to have to be doing a lot of quantitative easing. But in America, as we've said repeatedly, we're demographically superior, we're younger, we assimilate our immigrants, we have 50 states competing with each other, we're just more entrepreneurial. In fact, uh you have a chart you're showing of the the biggest companies in the world and their revenue, and you can see how America is overpowering other countries. And uh I think that chart says it all. >> Let's get into some subscriber questions. UI recently had a dip. Is this now a time to buy? >> Yes, it is, but it's not my strongest stock. It is not. Optical networking company. Their forecast sales and earnings are fine. So, let's let their earnings come out, and see what they do, and see if it gets going again. >> And lastly, is Ciena still a screaming buy? >> Yeah, Ciena's a great optical company. There's this theory that, you know, they'll be transmitting data from space via lasers, and just ignore all that. All our data centers are going to be terrestrial, and Ciena's going to be wiring all those data centers. So, it's a great stock. >> Markets will always give investors reasons to worry, but they also create opportunities if you know where to look. If you enjoyed today's breakdown, give this video a like, and subscribe to our channel. We post new videos every Wednesday and Sunday. And if you have a question for Louie, please leave them in the comments, and we'll get to it in next episode. Thank you all so much for watching, and we'll see you in our next video.