Quick Picks - September 15th 2020

Hi Seekers,

It is time for our weekly Quick Picks segment.

We started the week off with a bang, so let’s see if we can ride that momentum higher as we approach another fed meeting. I had some REITs that traded higher in a strong way, so maybe the undervalued sector is beginning to see some momentum.

In this segment, my goal is to give you a look into some trades I am looking at during the week. As you are already aware, I am a long-term investor, meaning the majority of my positions are buy and hold type positions.

Last week I looked at Lowe’s (LOW) which is up over 7% since I mentioned it. Cisco was another name, but up only about 1% since last week.

#1 CVS Health Corporation (CVS)

I will begin with CVS again because it is a GREAT valuation, and anything lower I will look into adding more.

The company reported solid earnings results in their most recent quarterly report, but they have not been getting the credit because investors believe it is due merely to COVID.

As the company incorporates Aetna, I see great synergies moving forward.

In terms of valuation, the company trades at a Forward P/E multiple of 7.1x compared to a 5-year average P/E multiple of 13.8x. This is EXTREMELY low for CVS. The company pays a 3.45% dividend, which is well above the 5-year avg yield of 2.46%.

In terms of the chart, CVS trades at an RSI of 28.7 and trading right at $57/$59 support level. I believe we could see further downside if it falls below this support level, but the current levels seem like a great entry point for L/T investors.

#2 Federal Realty Trust (FRT)

Some REITs are under pressure for a reason, but there are also some high-quality REITs that will withstand this pandemic and Federal Realty Trust is one of them.

FRT is one of only 3 REITs on the Dividend Aristorcrat list for their 25+ years of consecutive dividend increases, something I do not see changing.

FRT currently trades at a P/FFO multiple of 12.8x compared to their 5-year avg P/FFO of 24.2x. In terms of the chart, the stock current has an RSI of 51, which is respectable, but they bounced off their $77 support yesterday and moved higher. Resistance currently is around $85.60.

 Thank you for Reading!

These are two names I will be watching closely this week. If you have any questions at all on the information above, please do not hesitate to email me.

Have a great week!