3 Stocks 2 BUY, 2 to Take Profits On | Investor's Weekly Playbook

Welcome back to another edition of the Investor's Weekly Playbook. Every week we answer three simple questions. What's happening in the market? What economic data should investors be watching? And where are the best opportunities to put money to work right now? However, this week we're going to add something in addition to all of that. Instead of just focusing on stocks I'm looking to buy, I'm also going to be discussing two stocks I think investors should consider taking some profits off the table. Because investing isn't just about buying great companies, it's also about portfolio management. Knowing when to add positions, knowing when to become more aggressive, and knowing when a stock may have just gotten ahead of itself. So today I'll be sharing three stocks I believe look attractive right now, and two companies that I still like long-term, but where I think investors should very heavily consider locking in some gains. And before we dive in, all I ask is that you smash that like button down below to show your appreciation, and let me know in the comment section what was the latest stock that you bought in your portfolio. And with that being said, let's jump into the markets. Let's begin by taking a look at our weekly dashboard, where we can see the S&P 500 was up 0.4% on the week, and year-to-date up 13.7%. The Nasdaq was up slightly at 0.1% and up 15% on the year, and the Dow Jones was actually in the red this week by 0.6% year-to-date still up nearly 12%. However, it's the Russell 2000 that led the charge up 1.1% this week, and up over 23% on the year. The small caps continue to be the major story on the year, and something that's just not getting enough credit in my opinion. And as for my portfolio, well it's sitting at an all-time high just shy of 540,000 at the time of this recording. And in the last 4 months alone, the portfolio has increased by nearly 115,000, which is awesome to see, and the folks inside my investing community are raking in the money. And if you're You're yet part of my investing community, then make sure you get signed up, especially in the options group, where we are easily having our best month and best year ever. Folks are joining and paying for their annual subscriptions after just a few trades. Check out the link in the pin comment below and join my private investing community today, which comes with access to my Discord where I post all of my trade alerts. All right, so with that being said, here's what we're focusing on in today's video. I'm going to update you on the economy as a whole because without a healthy economy, a lot of stocks can falter. So, take a quick look at inflation, jobs, and just overall sentiment. What to watch in the week ahead, and then we're going to jump into three stocks I believe are great buys right now, but we won't stop there. I'm also going to discuss some profit-taking opportunities with two stocks. So, let's begin with some economic data we got this week, beginning with existing home sales. And for any of you that follow the housing market, it's been a disaster for some time now, and higher interest rates certainly aren't helping the case. Existing home sales came in at a seasonally adjusted rate of 4.06 million, just slightly above economist estimates. Though the month-over-month decline was -1.7%, which came in well below estimates. Economists were looking for a slight decrease of 0.7%. So, at 4.06 million, sales have now fallen from 4.13 million the prior month, making the lowest reading since April of this year. While the monthly pace of decline, that -1.7%, is the steepest drop since May. A sign that the sales slowdown is deepening even as the headline barely missed consensus. Why is the housing industry so important, you might ask? Because it creates a chain reaction across a number of different industries. Not only is a large purchase something that's going to help a financial market, but then folks that buy homes, if you've ever bought a home, that leads to further construction remodeling furnishing just more consumer spending in general. And when it comes to existing home sales, it can be a gauge on how confident consumers are. It measures things like affordability, credit availability, interest rate sensitivity, and just overall household financial health. And what we are seeing right now, I'm going to give the housing sector and this particular report a grade of a D. Just not much to like here. And the fact that the economy is holding up as well as it is without much input from the housing industry is a strong testament to the economy as a whole. Another big economic report we got this week was that of CPI, giving us another update on inflation, which CPI is the Consumer Price Index. Inflation remains one of the most important variables in the market. The latest CPI report showed annual inflation is easing down to 3.4%, a slight tick lower from prior month and in line with expectations. From a core perspective, that came down also by one tick down to 2.5%, also in line with expectations. For core CPI, that reading we just got, that was the lowest reading since February. And before that, it's the lowest since early 2021. A sign that the threat of inflation is slowly coming down. However, we're still well above the Fed's long-term target. So, for CPI, I'm going to give the grade a B. A solid report and things are trending in the right direction. This week we also got another piece of inflation data by way of PPI, or the Producer Price Index. PPI is a leading inflation indicator because this is the pricing changes that we get before it reaches the consumer. Producer inflation came in flat month-over-month in the latest reading with year-over-year increasing by 4.7% headline and 4.2% from a core perspective, both well below prior months' readings. This is clearly showing a trend that pricing pressures at the wholesale level may be beginning to stabilize. The prior month headline number was 5.5%, to which we are drastically below that at 4.7%. Meanwhile, the core reading was at 4.7% prior and now sits at 4.2%. Still both higher than the Fed would like to see, but the direction is definitely encouraging for both businesses and consumers alike. So, for PPI, I'm going to give this report a grade of a B+. A solid report trending in the right direction. Next, we're going to move to jobs and take a look at jobless claims, which is data we get updated on a weekly basis. Weekly jobless claims remain one of the quickest ways to monitor the health of the labor market. Initial jobless claims last week came in at 209,000 for the week, above the 202 estimate. Meanwhile, continuing claims, which is far more important figure to me, fell to 1.77 million, slightly below the 1.8 million economists were estimating. Continuing claims have now dropped from 1.8 million to 1.77 million, even as new claims on the weekly basis tick higher. It's a sign that workers who do file for unemployment are finding their way back to employment relatively quickly. And that's a good sign for the jobs market as a whole. If claims begin moving materially higher, investors may start to worry about the slowing economy. I'm going to give this grade a B minus. Jobs are so important for this economy because again, we are a consumer-led economy. And when consumers have jobs here in the US, they love to consume. And a consumer-based data point came across this past week by way of monthly retail sales. And this was probably the most interesting report of the week. Retail sales unexpectedly fell by 0.6% in the month of July, the first decline in 9 months. We weren't expecting much this month as a whole, just a tenth of a tick higher, but to get a reading of six tenths lower, that was surprising. It was the lowest reading since May of 2025. That immediately raises an important question. Is the consumer finally beginning to slow down? Now, as always, do not let one report help make any portfolio changes cause you to make any portfolio changes, but it's certainly something to take note of and chalk up on your watch list moving forward. So, for this report and for a grade in surrounding retail sales, it has to be bad. So, I'm going to give it a D. Definitely not a great report, but we're not going to make any wholesome changes based on one single report. All right. Now for the final report we're going to look at today, which is the University of Michigan Consumer Sentiment. Consumer Sentiment also declined in the most recent report coming in at a score of 51, well below the estimate of 54.5, and all three components of that report sit at their lowest readings since June. This is yet another sign that consumers are becoming increasingly cautious. So, for this we're also going to give it a bad grade with a D. But again, be reminded that this is soft data, meaning it's more of a survey. And all of those reports we looked at are important, I'm already looking ahead to next week because next week's big story will likely be PMI data. PMI gives us one of the clearest early looks into economic activity, manufacturing, and business conditions. If the economy is truly beginning to slow, PMI data could confirm that. So, with that being said, now let's move on to three stocks I rate a buy right now, beginning with stock number one, which is going to be SoFi Technologies, stock ticker SoFi. This is a stock I continue to discuss on this channel and I continue believing is one of the most interesting long-term growth stories in the financial tech space. What I like about SoFi is that management just continues executing. This is clearly a company that is going in one direction, yet the stock price is not keeping up. In fact, it's going in the opposite direction, but that's where opportunity comes in for us shareholders. On the year shares of SoFi are down more than 30%. So, when you see something like that, at first you might think, well, there might be categoric major issues with the company, but that's just simply not the case. Looking here, you can see that membership growth remains strong. As you can see, the memberships are at an all-time high, as are the number of products, which is quite positive. Cross-selling continues improving, and the company is becoming a one-stop financial shop. Today, SoFi offers banking, investing, credit cards, loans, retirement accounts, and a growing technology platform. The more products customers adopt, the more valuable those relationships become. From a valuation perspective, shares of SoFi are expected to grow earnings by 53% this year and 37% next year, yet trades at a forward PE multiple of just 22 times, giving the stock a PEG ratio well below one. I still think many investors underestimate what SoFi could become over the next 5 years, and this is a stock that I believe will surpass $25 per share over the next 12 months. And again, that's just my estimate. And that brings us to stock number two, which is going to be Freeport-McMoRan, stock ticker FCX. Now, Freeport is a stock I covered in my top stocks for May video a couple months back. And since then, shares have climbed nearly 20%. But so are company earnings, keeping valuation still intriguing. If you missed it the first time, you have another opportunity. I continue believing that copper remains one of the most compelling long-term investment themes in the market. Why, you might ask? Because nearly every major secular trend requires more copper. AI, data centers, EVs, power, grid monetization, copper sits at the center of all of it, and yet the supply picture remains incredibly challenging. Looking here, you can see copper prices are up 16% on the year and currently sit at all-time highs. And those prices alone are the single biggest driver of FCX earnings. Let's say that copper prices increase from $6 to $6.50. They increase by $0.50 a pound, and FCX produces 4 billion pounds of copper. That is an additional 2 billion in revenue for the company. And most of Freeport's cost are fixed for the most part. New mines take years to develop. Permitting remains difficult, and global demand continues increasing. From a valuation perspective, shares trade at a forward PE of just 16.2 times, well below the company's 5-year average of 21 times. Analysts, they also rate the stock a strong buy with an average 12-month price target of $75 per share, implying nearly 15% upside from current levels. Freeport gives investors direct exposure to one of the world's most important commodities. This isn't just a mining company. It's one of the most attractive ways to invest in the electrification and AI infrastructure themes simultaneously. Now for the third stock, which might surprise a lot of you, and that's going to be Alibaba, stock ticker BABA. I know many investors have completely written off Chinese equities, but that's exactly why I'm paying attention. Alibaba continues generating enormous amounts of cash. The company still dominates e-commerce across China. Its cloud business, though, remains strategically important, and artificial intelligence is becoming a much larger part of the investment story. China's economy isn't growing the way it used to. Real estate and consumer spending remain weak, but manufacturing, exports, cloud computing, AI, and advanced technology continue expanding at a very healthy pace, and investors need to start paying attention. That's one of the reasons I continue paying attention to Alibaba. If China's economy stabilizes and domestic consumption improves, companies like Baba could become major beneficiaries, especially with the growth in AI and Baba's cloud business in particular. Looking here, you can see continued revenue growth for Alibaba as a whole, but one of their fastest growing segments is cloud, which is still not a massive piece of the overall pie, but the business is definitely growing to become a larger piece. Again, like I said with SoFi, one thing I always look for is a disconnect between company fundamentals and its valuation. And in the case of Alibaba, I think that disconnect remains significant. Is there risk? Absolutely. Geopolitical risk. It's an easy one right there, not going away. But when I compare Alibaba's valuation to many US tech companies, I think the stock still deserves a closer look. Shares currently traded a forward PE of just 18.8 times on 66% expected earnings growth next year, giving the stock a PEG ratio below 0.5. And analysts rate the stock a strong buy with an average 12-month price target of $185 per share, implying nearly 50% upside from current levels. Plenty of risk, but the valuation is obviously baking that in. Now, let's shift gears and instead of talking any more about stocks to buy, let's consider a few names to take some profits on. And the first stock where I would consider taking some profits is going to be CrowdStrike, stock ticker CRWD. And I want to be very clear, this is not a bearish call in any shape or form. I still believe CrowdStrike is one of the highest quality cybersecurity businesses in the world. The problem isn't the company, the problem is expectations and valuation. When expectations become extremely high, great companies can still experience significant pullbacks. We've seen it with CrowdStrike. Cyber remains one of the strongest long-term themes in technology. So, don't get me wrong, I love the business, I love the recurring revenue model, I love the platform. But after such a strong run, I think investors should at least consider whether it makes sense to rebalance and look to lock in some gains. Year-to-date shares of CrowdStrike are up over 90% since the end of February, when shares bottomed, they're up nearly 150%. Those are massive gains in such a short period of time. And looking at valuation, buying the stock at a forward PE of 166 times or an EV to EBITDA of 114 times, that's just not intriguing to me whatsoever, as much as I like the company. And again, this is a company that's expected to grow earnings by 30% next year. Paying 166 times for 30% is just not feasible whatsoever. And let's say that earnings growth is even faster. They would have to be three times those numbers just to make it more intriguing. Remember, taking profits doesn't mean you're abandoning a company. Doesn't mean you don't like the company. It simply means you're managing risk. And the second stock I'd like to take a look at to consider taking some profits on, and it's another one inside my portfolio. Again, both of these are in fact, and it's one I recently sold, which is going to be RTX, formerly Raytheon Technologies. And as a reminder, being part of my investing community is how you get these trade alerts for both stocks and options. Check out the pin comment and become a member today. And once again, this isn't because I suddenly dislike the business or don't believe it in any further. Defense spending remains incredibly strong. Geopolitical uncertainty continues supporting the demand for RTX. And the company remains one of the most important aerospace and defense companies in the world. But after a very strong move higher, I think investors should ask themselves an important question. Has the investment thesis improved? Everyone knows the stockpiles are low after the war and during the war. And defense spending remains large. That is all priced into the stock and even more. So to me, this is simply a stock that has run ahead of the fundamentals. Sometimes the smartest thing that investors can do is trim a position after a significant rally and redeploy that capital into new opportunities, or even buy the stock back at a better entry point down the line. And for me, that's exactly what I would be considering right now with RTX. We are talking about a company growing earnings less than 10% next year. Yet we are paying near a 30X multiple. RTX is more expensive than Nvidia, almost double, and more expensive than the likes of Alphabet. I would much rather own both of those companies at current valuations than RTX. So, with that, those are my five stocks we're going to discuss in this week's Investor Weekly Playbook. Three to consider buying, two to consider taking profits on. Stocks to look to buy, Freeport, SoFi, Alibaba. Stocks to consider taking profits on, CrowdStrike and RTX. Now, I'd love to hear from you. Which stock would you buy right now? And which stock in your portfolio are you considering trimming or taking profits on? Let me know in the comments section down below. Also, make sure you join my private investing community using the link down in the pinned comment below. And if you enjoyed today's Weekly Playbook, don't forget to hit that like button down below, subscribe to the channel. Thanks for watching, and we'll see you in the next [music] one. Take care. >> [music]