Here’s my take on these 3 stocks
Why does nobody love Ford stock?
Whenever you look at Ford stock’s fundamentals, the first thing that gets your attention is a mouthwatering dividend yield of 7%. The big question is why no one is rushing to buy the stock. Nobody leaves easy money on the table. Well, people buy when they see a promising future. Ford has been struggling for years now as it tries to pivot towards EV and it shows in the stock performance.
Ford stock early this year tried to rally from 200 dma (blue line), and it did from $12 to $14.5 – a cool 20% move but, then things started to crumble in July, especially post earnings. The stock sold off below 200 dma, and within less than a month, the stock was down from $14.5 to $9.5. Since early August, the stock has staged a comeback multiple times only to stall at $11.5.
The Big Picture: The stock is trading below 200 dma/$11.5 and one is better off avoiding the stock as long as the stock trades below it
The immediate worry: President-elect Donald Trump has announced plans to impose tariffs on imports from Canada, Mexico, and China on his first day in office, citing concerns over drug trafficking and illegal immigration. The proposed tariffs would hurt American and European automakers. Stellantis and VW import about 40% of the vehicles they sell in the US, while GM imports roughly 30% and Ford 25%. The fear is that average new-car prices would rise by about $3,000. This does impact affordability. Nobody knows how this would impact auto sales. And when there is uncertainty, no one rushes to buy that stock.
The Winner is AT&T when it comes to Value stock
When it comes to Value stocks, they deliver big returns over time by making slow, steady, and labored move. AT&T stock has done just that in 2024. It took support at 200 dma in April, around $16, and now 8 months later, the stock is at 23. It’s up 42%+. I am not even adding a 4.5% dividend yield. The stock, on its way up, took support at 50 dma.
It’s funny when the stock does well; it gets upgraded by analysts as they become more confident about the company’s execution skills. Morgan Stanley names AT&T as a top pick in the telecom space with a price target of $28.
Fundamentally, AT&T has moved out of the media space and now clearly wants to focus on wireless and broadband business. It generates lots of cash flow and rewards shareholders with dividends and buybacks, which means higher dividends in the future. AT&T is a strong buy on deep declines (200 dma) and it looks like a great stock for investors with a long-term horizon. It will not give flashy returns but stable returns.
Will Micron make a big move post-earnings?
The most difficult stock to invest in stock where everything looks good except stock performance. Micron’s business (memory chip) is cyclical in nature, but never knew that the stock performance would also become so cyclical that the gains would not even stick for a few months.
Micron MU Stock performance has been an absolute disaster in 2024.
Micron Stock made a gap move post earnings in March [Point 1] and formed a base at 110. The stock consolidated at the base and, in 2.5 months, rallied 36%, but before you could enjoy the gains, the next quarter’s earnings derailed the growth story. After taking support at 50 dma, the stock broke down below it (Point 4) – sell signal and before you could know it, the stock was at $88 by early August. What a fall from $150 levels. The stock then stabilized – took support at $88 and rallied to $114. Since October, it has been trying to move past $114. [Point 7]
Will the next earnings report change the trajectory of the stock? The answer is Yes, if the stock breaks out above $115, then it can rally back to $150.
The Good news is that the stock is getting +ve comments from analysts. Citi analyst Christopher Danely has reiterated a ‘Buy’ rating on Micron Technology with a $150 price target, citing anticipated DRAM recovery and favorable supply/demand dynamics for 2025. The company is set to report financial results for the fiscal first quarter today.
Chart Source: Finviz.com
Please do your own due diligence before trading. Nothing here or in the newsletters constitutes financial advice. These are just my views based on my experience.
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