April 13, 2025
by Scott Martin | Apr 13, 2025 | Weekly Newsletter 7pm Sunday
The Bull Market Report
Probably the Best Financial Newsletter in the Country
Market Summary
After teasing a possible special edition of The Bull Market Report last week, we'd like to give you a little insight on what we've seen in the market and how investors can position themselves. So here we are. The mood remains extremely anxious, especially with Treasury bonds selling off contrary to the conventional wisdom where money flows into the safety of U.S. government debt when the economic outlook gets gloomy. While we aren't exactly shocked (correlations between stocks and bonds have gotten tighter in recent years than a lot of now-outdated textbooks taught), it can be harrowing to watch all major U.S. asset classes go over a cliff. Even the dollar is on the run, down 11% from its recent peak and circling lows last seen in the 2022 bear market.
But cut through the surface turmoil and the signs of resilience are clear. The volatility index or "VIX" is still extremely elevated, but dropped 23% last week as investors shook off the initial tariff shock. If the initial announcement had been as toxic as the market reaction suggests, the economy would already have collapsed and we would not be here talking about stocks. That's a lot better than a catastrophic worst-case scenario. Furthermore, developments in the past couple of days prove that trade policy isn't inflexible nor an ultimatum. Instead, there's a lot of room here for negotiation and compromise: timelines can be extended to give corporate leadership more time to react, some essential import categories can receive favorable treatment, and so on.
We've already seen tariffs on most countries delayed for 90 days, which gives purchasing managers until July to pivot their supply lines to the countries with the best odds of making a deal that works. And just over the weekend, we've seen tariffs on semiconductors and other computing components pulled back for adjustment, which takes the pressure off companies like Apple and Nvidia for the time being. Granted, the threat of additional trade barriers remains real. But the prospect for relief is real also. Right now, relief is winning. The trade war may be painful but at least it wasn't immediately fatal.
And stocks that were priced for the end of the world now look worth buying. Major benchmarks exploded on Wednesday when the 90-day pause was announced, with many of our stocks leading the way back. Our Early Stage recommendations, as small and theoretically vulnerable as they are, rebounded close to 30% in the last three trading days. On the other end of the market scale, giants like Apple, Amazon and Microsoft have recovered 8-10% from their lows while Nvidia bounced 15%. We could keep listing names (Meta, Broadcom, Reddit, Dell, Duolingo, Zscaler, Palo Alto Networks) but the deeper message is as simple as it gets: when 80-90% of all stocks move hard in the same direction, all that's required to get 80-90% of all stocks moving in the other direction is for the Wall Street tide to change.
That's what happened here. We are not exactly swimming in calm waters by any means, but the waves went our way this week. Money will likely keep flowing out of the bond market. Where will it go? We suspect a significant amount of capital will come back to stocks, which may be volatile but offer investors hope for better than a 3-5% return in the long run. Capital will also park in the ultimate safety of gold, where our SPDR Gold Shares (GLD) remains a real bulwark of our overall coverage universe. It's good to have a hedge when the world gets unsettled. Gold is the place.
Meanwhile, earnings season is underway, with the banks giving us pretty good numbers on Friday. JP Morgan and Citgroup don't see an immediate disaster unfolding. While we're early in the season, warnings and negative guidance revisions are NOT multiplying at too fast a speed yet. Executives might not like watching their supply chains and manufacturing costs get tangled, but they aren't surrendering either. They're fighting hard. And they think they have a handle on the situation. If they didn't, they'd warn us now and look like heroes in three months when they beat their own pessimistic forecasts.
The next few months will remain volatile, with bond yields back where they were two months ago and the VIX well above "normal" no matter where you draw the statistical boundaries. But at this stage, corporate earnings will probably come in 7% higher this quarter than they were a year ago and the growth trend still points up into 2026 and beyond. Remember, profit margins are relatively high by historical standards, so there's room for a shock or two without rocking the comparisons too much. And remember that interest rates have dropped significantly in the past year, with the Fed poised to cut again on any sign of economic damage more threatening than persistent inflation. Lower short-term rates are supportive. They're a net positive. And we don't recommend Treasury bonds here, so higher long-term rates are not our problem and should not be yours either.
What we're left with is an environment where 70% of the stocks in the S&P 500 are in correction territory and a full 40% are in the grip of a fresh bear market. Apple, Alphabet and Amazon are down 24% from their recent peaks. Nvidia and Meta are down 27%. And the list of great stocks at depressed levels goes on, both on the BMR buy lists and in the broader market. Walmart down 12%. ExxonMobil down 19%. Classic "defensive" names like Johnson & Johnson down 11%. This is classically an entry point, a chance to buy quality at a deep discount, provided that you aren't convinced that the world is about to end. Wall Street has faced every crisis that history could throw at it so far and gone back to breaking records. This time is no different.
Key Market Indicators
Good Investing,
Todd Shaver, Founder and CEO
The Bull Market Report
Since 1998
February 2, 2024
by Todd Shaver | Feb 2, 2024 | Instant News Flash
Consumer tech giant Apple (AAPL: $182) released its first quarter results last night, posting $120 billion in revenue, up 2% YoY, compared to $117 billion a year ago. The company posted a profit of $34 billion, or $2.18 per share, against $30 billion, or $1.88, beating consensus estimates on the top and bottom lines. The YoY growth during the quarter marks an end to four consecutive quarters of declining sales for the company, and it produced a beat on sales estimates across most of its product lines.
Apple’s strong showing during the quarter was driven by its flagship iPhone, with $70 billion in sales, up 6% YoY, compared to $66 billion a year ago. This was followed by the Services segment at $23 billion, up 11% YoY, compared to $21 billion, and iPad, Mac, and other product revenues at $7.0 billion, $7.8 billion, and $12.0 billion, down by 25%, 1%, and 11%, on a YoY-basis, respectively. This is largely the result of the company not having launched any new products across these categories in recent months, further aggravated by the fact that it had just 13 weeks of business during this quarter, compared to 14 last year. Apart from this, products such as the Apple Watch were removed from store shelves for a few days owing to a patent dispute with medical devices company, Masimo.
It was bound to get tough extracting more growth, and continually innovating with its long-running range of products. Fortunately, Apple has found another winner in its Vision Pro headset, with the $3,500 spatial computing device already hitting 200,000 units in presales, weeks before it was set to arrive in stores, giving rise to another major product line with a multi-billion dollar sales potential. We are a little bit skeptical about how successful this product will be. One of our favorite podcasters, Scott Galloway, a brilliant mind, believes it will never sell.
Apple’s eye-popping $2.9 trillion valuation might seem excessive to some, but the company still trades at just 7 times sales and 28 times earnings. While it seeks newer avenues to monetize its brand and drive growth, investors are well taken care of with $24 billion being returned in the form of buybacks and dividends, made possible by its massive $62 billion in cash reserves, $124 billion in debt, and $110 billion in cash flow. The debt is quite high in our opinion, but most of it is at sub-5% interest rate levels.
Our Target is $225 and our Sell Price is that we would not sell Apple. We’re a little concerned about the stock, though. Not the company, but the stock. It is SO BIG, that for it to get back to 10-15% growth levels, is not easy. To add 10% to revenues it would have to produce $28 billion in new business, an astounding number. The company could conceivably do it with major acquisitions, which it is not prone to do, or by moving into new areas, like the Apple Car. But these things are a long way off and meanwhile, revenues stagnate. Wall Street doesn’t like stagnation. The stock hasn’t participated in the strong market this year, peaking on December 14th at $200, and is off 10% in the last six weeks – losing $300 billion in market cap. It’s lost its leadership as Microsoft has passed it by in the market cap race.
So what to do? As always, it’s a tough call. We are big believers in letting the market tell us what to do. It’s down $6 (3%) after earnings early Friday morning as we write this, and the market looks strong starting out today. We would suggest setting a stop and if the market goes there, taking your cash and looking for other places for it. There are certainly a lot of great choices out there. We are going to lower our Target to $200 and are setting a Sell Price of $174. We added the stock at $24 in $2016, so we are happy for all of you who did the same. Perhaps the growth game is over now for Apple for a while. Will the company go away? Of course not. But it may stagnate here in the $170-$200 range for the next year or so…. and "stagnation" is a word Wall Street doesn’t like.
July 31, 2019
by Scott Martin | Jul 31, 2019 | 7am News Flash
Netflix (NFLX: $362, down 3% earlier this week) disappointed last night and the stock's precipitous overnight decline provides us with a different kind of wake-up call. Whether you're in Netflix or not, you're going to want to read this flash.
On the surface, Netflix delivered a quarter almost entirely in line with what investors told themselves they wanted to see. Revenue of $4.92 billion was only 0.1% below guidance and reflects healthy 26% year-over-year improvement. Even quarter-to-quarter, the company squeezed 9% more cash out of its subscribers than it did three months ago.
Furthermore, despite profit being a lower priority while management invests vast amounts in original content, it was nice to see that Netflix carried $0.60 per share across the bottom line, $0.04 better than we expected.
But the market found fault as Netflix missed its subscriber growth target, losing 126,000 paid U.S. accounts and only adding 2.83 million new viewers overseas. Management told us to expect the audience to grow by an even 5 million accounts, so it's a clear disappointment.
There are some compensating factors like the way revenue hit guidance. Netflix raised prices in many markets and this is apparently where the pain point is. We know that now. Furthermore, management has doubled down on its aggressive growth forecasts and now expects subscriber adds to accelerate again in the current quarter.
We've had it with Netflix. We've warned throughout that it's going to be a volatile ride. The stock is now down 20% since we started covering it this time around, after making 65% back in 2016-17. We're worried about competitors like Disney and Apple starting to crowd into the space. With a negative $3.5 billion of free cash flow this year and next, we'd rather be invested in a company that actually makes money. We hereby remove Netflix from our High Tech portfolio. We added them on July 16th last year. We're gone now on July 18th, 2019.
However, even for a volatile stock, the reaction to so-so numbers was so extreme that we now suspect that the market as a whole is getting overheated. It's not Netflix. It's Wall Street. And an overheated market can lurch lower as fast as it soars. Even counting the stocks that fizzled and left our list under a cloud, the BMR universe is up a dramatic 33% YTD. This is a great time to lock in some of that profit before a moody market can take it away.
Is It Time to Take Some Profits?
Why are we asking this question?We can’t predict the future. You may think we can, but we can’t. And we want YOU to think about where YOU are and where you are going with your investments. We have made some amazing stock picks and we’ve made you a lot of money in many of these. (We’ve had a few losers too.) Roku is now a triple since we added it last year. Shopify is up 350% in two years. Square is another quadruple play. PayPal, Twilio, Paycom, Microsoft, Apple, Visa: all strong performers.
Is it time to take some of that off the table? There are a lot of things to worry about in the world today: Trump, Chinese tariffs, Iran, immigrants, global slowdown, flat earnings for the past quarter and next; negative interest rates in Europe and Japan . . . can they happen here? If so, will the Fed run out of ammunition if short rates go to zero? What about the attacks on Big Tech by Congress and the European Union? Can Facebook, Amazon and Google survive this onslaught? Of course they will, but why sit around with someone hitting you on the head with a hammer. Maybe it’s better to step a little away from the scene.
Lots of questions. No solid answers. Irrational exuberance was proclaimed by Alan Greenspan on December 5, 1996 after an amazing bull run in the preceding few years. But the bull market continued to skyrocket until the Spring of 2000. That’s almost 3½ years after Greenspan’s call. So is it too early to start taking profits now?
Again, we don’t know, but we do know that there are things you can do. You can sell some calls against your stocks. This brings in cash and cushions you on the downside a bit. But if Roku, which was at $32 at the start of the year goes from $110 now to $90 or even lower, it’s not going to cushion you much with $5 of call option income. So perhaps you can take some profits off the table. Maybe you should put some stops in place. Sell some at $104. Sell some shares if it hits $96. Sell some more if it hits $90. Then if it goes to $70, which is a distinct possibility in a nasty bear market, you’ve protected your profits and have cash in the bank.
And don't forget, we’ve got 17 stocks in our High Yield and REIT portfolios that are paying from 3% to 11% dividends. (Be wary of Annaly and New Residential, though.) These stocks are just waiting for you to place some cash in them so that you can sleep better at night.
This content is for our beloved subscribers and anything you see on this page is just an excerpt!
Please note BullMarket.com access is available to paid subscribers only. Our Members Areas include archives of past Newsletters, News Flashes, our eight portfolios including STOCKS FOR SUCCESS, Healthcare, High Yield, High Technology, Aggressive, Real Estate Investment Trusts, Long Term Growth, and Special Opportunities. Also, all of our in-depth research is available, and more.
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July 30, 2019
by Scott Martin | Jul 30, 2019 | 7am News Flash
Netflix (NFLX: $362, down 3% earlier this week) disappointed last night and the stock's precipitous overnight decline provides us with a different kind of wake-up call. Whether you're in Netflix or not, you're going to want to read this flash.
On the surface, Netflix delivered a quarter almost entirely in line with what investors told themselves they wanted to see. Revenue of $4.92 billion was only 0.1% below guidance and reflects healthy 26% year-over-year improvement. Even quarter-to-quarter, the company squeezed 9% more cash out of its subscribers than it did three months ago.
Furthermore, despite profit being a lower priority while management invests vast amounts in original content, it was nice to see that Netflix carried $0.60 per share across the bottom line, $0.04 better than we expected.
But the market found fault as Netflix missed its subscriber growth target, losing 126,000 paid U.S. accounts and only adding 2.83 million new viewers overseas. Management told us to expect the audience to grow by an even 5 million accounts, so it's a clear disappointment.
There are some compensating factors like the way revenue hit guidance. Netflix raised prices in many markets and this is apparently where the pain point is. We know that now. Furthermore, management has doubled down on its aggressive growth forecasts and now expects subscriber adds to accelerate again in the current quarter.
We've had it with Netflix. We've warned throughout that it's going to be a volatile ride. The stock is now down 20% since we started covering it this time around, after making 65% back in 2016-17. We're worried about competitors like Disney and Apple starting to crowd into the space. With a negative $3.5 billion of free cash flow this year and next, we'd rather be invested in a company that actually makes money. We hereby remove Netflix from our High Tech portfolio. We added them on July 16th last year. We're gone now on July 18th, 2019.
However, even for a volatile stock, the reaction to so-so numbers was so extreme that we now suspect that the market as a whole is getting overheated. It's not Netflix. It's Wall Street. And an overheated market can lurch lower as fast as it soars. Even counting the stocks that fizzled and left our list under a cloud, the BMR universe is up a dramatic 33% YTD. This is a great time to lock in some of that profit before a moody market can take it away.
Is It Time to Take Some Profits?
Why are we asking this question?We can’t predict the future. You may think we can, but we can’t. And we want YOU to think about where YOU are and where you are going with your investments. We have made some amazing stock picks and we’ve made you a lot of money in many of these. (We’ve had a few losers too.) Roku is now a triple since we added it last year. Shopify is up 350% in two years. Square is another quadruple play. PayPal, Twilio, Paycom, Microsoft, Apple, Visa: all strong performers.
Is it time to take some of that off the table? There are a lot of things to worry about in the world today: Trump, Chinese tariffs, Iran, immigrants, global slowdown, flat earnings for the past quarter and next; negative interest rates in Europe and Japan . . . can they happen here? If so, will the Fed run out of ammunition if short rates go to zero? What about the attacks on Big Tech by Congress and the European Union? Can Facebook, Amazon and Google survive this onslaught? Of course they will, but why sit around with someone hitting you on the head with a hammer. Maybe it’s better to step a little away from the scene.
Lots of questions. No solid answers. Irrational exuberance was proclaimed by Alan Greenspan on December 5, 1996 after an amazing bull run in the preceding few years. But the bull market continued to skyrocket until the Spring of 2000. That’s almost 3½ years after Greenspan’s call. So is it too early to start taking profits now?
Again, we don’t know, but we do know that there are things you can do. You can sell some calls against your stocks. This brings in cash and cushions you on the downside a bit. But if Roku, which was at $32 at the start of the year goes from $110 now to $90 or even lower, it’s not going to cushion you much with $5 of call option income. So perhaps you can take some profits off the table. Maybe you should put some stops in place. Sell some at $104. Sell some shares if it hits $96. Sell some more if it hits $90. Then if it goes to $70, which is a distinct possibility in a nasty bear market, you’ve protected your profits and have cash in the bank.
And don't forget, we’ve got 17 stocks in our High Yield and REIT portfolios that are paying from 3% to 11% dividends. (Be wary of Annaly and New Residential, though.) These stocks are just waiting for you to place some cash in them so that you can sleep better at night.
This content is for our beloved subscribers and anything you see on this page is just an excerpt!
Please note BullMarket.com access is available to paid subscribers only. Our Members Areas include archives of past Newsletters, News Flashes, our eight portfolios including STOCKS FOR SUCCESS, Healthcare, High Yield, High Technology, Aggressive, Real Estate Investment Trusts, Long Term Growth, and Special Opportunities. Also, all of our in-depth research is available, and more.
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June 17, 2016
by wilsondigital | Jun 17, 2016 | Research Report, Stocks for Success
Is Apple a growth stock or a value stock? Let’s take a look at the values. Cash and Investments equal about $40 per share, about 44% of the current market value of the company. Take out that cash and it leaves a value of only 6 times earnings...
This content is for our beloved subscribers and anything you see on this page is just an excerpt!
Please note BullMarket.com access is available to paid subscribers only. Our Members Areas include archives of past Newsletters, News Flashes, our eight portfolios including STOCKS FOR SUCCESS, Healthcare, High Yield, High Technology, Aggressive, Real Estate Investment Trusts, Long Term Growth, and Special Opportunities. Also, all of our in-depth research is available, and more.
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