By the time you’re reading this, I’ve already released the very first group of stock recommendations for my brand-new stock trading advisory, Infinite Momentum Alert.
Every one of them rates extremely highly on Momentum, Quality and Value — the three factors of the Green Zone Power Ratings system that I recently showed you were the cornerstone of my new strategy.
But one stock among these is something special.
I’ve taken to calling it a “Momentum Aristocrat.”
You see, the Infinite Momentum strategy relies on a 10-stock portfolio of names set to trounce the market over the next four weeks.
At the end of those four weeks, we refresh the portfolio — booting out whichever positions no longer make the top 10, and replacing them with the stocks that do.
The strategy, naturally, sees a good amount of turnover. Most stocks don’t hold their top-10 position for very long.
But one stock has stayed near the top of the pack for five months now. Not only that, it’s scored in the top half of all stocks on the Quality factor for seven years straight … and in the top 25% for all but two quarters since 2020.
This makes it the reigning Momentum Aristocrat of the portfolio … and a standout must-buy among it.
I’ll tell you exactly why today … and show you how you can get the ticker symbol into your portfolio before it runs away. (If you’re already champing at the bit to get access to this portfolio in Infinite Momentum Alert, click here to learn how.)
What Makes a Momentum Aristocrat?
Let me level with you on something that’ll sound a bit counterintuitive at first.
Strong momentum alone is not enough to make a Momentum Aristocrat.
The reason why is momentum, as a stock market phenomenon, is more short-lived than many other factors. My research shows very few stocks hold onto market-beating momentum for more than 12 months … and the ones that do can be vulnerable to vicious post-bubble busts.
Most often, strong momentum doesn’t last much longer than two months. And stocks that only have strong Momentum scores within my system are largely driven by speculation and hype — not rock-solid business models.
That’s why my Infinite Momentum system insists on more than just strong momentum. Much more.
It screens and ranks on Quality and Value metrics as well. And doing so helps us find stocks with sustainable momentum … an incredibly important trait when constructing an effective market-beating portfolio.
Think of it like this…
A pure-momentum portfolio is like a ‘71 Ford Pinto with a rocket strapped to the roof. It’ll go fast … once. Oh, and one small issue: You probably won’t make it out alive.
But a portfolio with not just Momentum, but also strong Quality and Value? That’s like a brand-new, top-of-the-line Toyota Supra. You can run that baby for 200,000 miles and probably a lot more. And it’ll still fly past everything else on the road.
I know I’m not alone in wanting the latter rather than the former.
And it just makes sense. We can’t expect a stock without strong fundamentals — what the Quality and Value factors cover — to consistently beat the market. All the hype in the world isn’t enough to prop up a terrible, money-losing company.
Which is what makes one particular “Momentum Aristocrat” I’ve been referring to, a homebuilder, so special…
A Cut Above the Rest
I don’t want to give you the wrong idea. To use my Infinite Momentum system correctly, you need to own all the stocks I recommend each month. That’s the only way I’ve found to outperform the market by 300-to-1 over time.
But I want to highlight this stock today, as it’s a perfect example of what can happen when all these factors combine in a beautiful harmonious fashion.
Get this … the stock is up more than 100% this year! That handily beats the S&P 500, the Nasdaq, and most of the stocks that make them up.
But underneath the price momentum of this stock lies a glowing fundamental picture that tells me this stock will keep moving higher… earning it a spot in my inaugural Infinite Momentum Alert portfolio.
The company’s price-to-earnings ratio is just 4, among the lowest in its industry. And that’s after its 100% run-up this year.
And again, this stock is in the homebuilding sector, which has been particularly strong this year. So it has that sector-level tailwind behind it.
Despite its huge gain, the growth runway is long for this company. It’s still less than a $1 billion market cap, which puts it in small-cap territory with an even greater chance of beating the market.
Overall, the stock scores a “Strong Bullish” 97 out of 100 in my proprietary Green Zone Power Ratings system…
Now, I’d love to be able to tell you the name of this stock. But out of respect for my new Infinite Momentum Alert subscribers, I won’t do it here.
The size of this stock means directly sharing its ticker here could make it run too high too fast.
Of course, the easiest way to get the name of this stock (and nine others I recommend owning over the next four weeks) is to become a charter member of my new stock trading advisory, Infinite Momentum Alert.
You can find all the information you need to do that right here.
To good profits,
Chief Investment Strategist, Money & Markets
Joey From FRIENDS Makes $20 Million Per Year
(Doing Absolutely Nothing)
Remember Joey from the 1990s sitcom Friends?
Joey was a lovable idiot.
In a show about six not-so-young adults who could never quite seem to get their lives together, Joey always seemed to me to be the most lost.
At any rate, Matt LeBlanc, the actor who played Joey, is most certainly no idiot. He collects an estimated $20 million per year in residuals from Friends. A percentage of the revenues generated by the reruns go to the actors, and that’s his cut.
LeBlanc gets paid $20 million per year to do nothing. It’s passive income. He put in the labor nearly three decades ago, and he still reaps the rewards today.
You and I aren’t likely to get starring roles in one of the most popular TV shows in history. Seriously, we might have a better shot at winning the lottery.
But like Matt LeBlanc, we can absolutely put in the work today that will allow us to reap the rewards years or even decades from now while doing absolutely nothing.
For those of us without Hollywood royalties, there are dividends.
And to illustrate just how powerful dividend compounding can be, let me share with you a personal story. Between June and November of 2009, I made a series of purchases of Realty Income (NYSE: O), totaling exactly 238 shares for a total outlay of $5,532.35.
And what did I do after that?
I set the shares to automatically reinvest the monthly dividends and then moved on to other things. If I am to be honest, there were stretches of years at a time when I forgot I owned the shares.
By late 2020, 12 years later, my initial outlay had grown to 425 shares worth $31,175. In the three years since then, I proactively bought some additional shares, becoming a little less passive.
Today I have 644 shares, and the vast majority of them came from reinvested dividends. Every year, the number of shares I owned grew by another 3% to 5% as the cash from the dividend was swept into additional shares. And then the dividends thrown off by those new shares bought me even more, snowballing month after month.
Realty Income’s shares are down big this year and are currently about a third below their old highs.
Great! That means that my dividends buy more shares at a cheaper price each month, accelerating the compounding process.
Given that I have no plans to sell any time soon, I’d be thrilled if the shares stayed depressed for months or even years.
I mention Realty Income because I personally own it and can speak from experience. But I could just as easily pick any of dozens of other quality dividend payers.
I’m not saying you should always buy and hold. I certainly don’t. In fact, most of my personal portfolio is invested in shorter-term trading strategies.
But I’m also a big believer in keeping at least a piece of your portfolio in quality dividend payers and then letting dividend compounding work its magic.
Adam recently shared his top 10 hotlist of quality dividend-paying stocks — as ranked by his Green Zone Power Ratings system. It’s a data driven stock rating tool that could help you be even more successful in your investing journey.
If you want to learn more about Adam’s flagship trading system (and how to get his guidance), go here to get started.
Regards,Charles SizemoreChief Editor, The Banyan Edge