There are some stocks making powerful moves to all-time highs right now.
You need to know which ones make sense to own.
All-time highs on Tuesday:
-- Facebook (own): The company is now valued higher than Wal-Mart (WMT). The stock has moved nicely higher on news of a facial-recognition capability tool for photos. Personally, I believe investors have rotated into Facebook (FB) from Twitter (TWTR). I don't suspect that trade will unwind until Twitter delivers an iota of good news financially -- the announcement of a new CEO is unlikely to sustainably jolt the stock. (Facebook and Twitter are part of TheStreet's Action Alerts PLUS portfolio.)
-- JPMorgan (JPM) and Wells Fargo (pick one and own): Both are very similar at this point -- borderline utilities. I think the major banks are poised to benefit from a couple of factors into the end of the year. The first is a rate increase before the year is out from the Fed. The stocks will obviously trade up in advance of that (which could be unfolding now). Second, new-home and existing-home sales are likely to stay strong for the next 12 months. The upcoming rate hiking cycle could push many to jump off the fence and buy a home, at even more inflated prices than we are seeing in several major markets (California) across the country. My gut is to go with Wells Fargo (WFC) if forced to choose, given its strong position in loan originations.
-- Macy's (don't own): I love the company's ongoing desire to open shops from top vendors in its stores, from Nike (NKE) to Under Armour (UA) to, recently, tuxedo shops with Men's Wearhouse (MW). But I remain concerned that certain parts of the apparel department are not selling well, while the watch counters are getting attacked by the Apple (AAPL) Watch. Further, I believe Macy's (M) stock has motored higher on speculation of a REIT formation -- I would be surprised if the company does this, it's a very complicated thing to pull off and it doesn't make a ton of sense for the very long-term health of the company. (Under Armour is part of TheStreet's Growth Seekers portfolio.)
-- Target (own): I have been pounding the table on the retailer's stock since late last year. I would own Target (TGT) with an eye on holding it into the holiday season. Target is likely working on several more deals before the holidays to bring in new brands or fundamentally alter the company going into 2016. The stock could get a boost from those headlines.
-- Hasbro (own): I mentioned this name a couple of weeks ago as well. Hasbro (HAS) could announce some explosive quarters this year because it holds the toy license for Disney (DIS) movies. Disney continues to kill it on the movie front, and has one huge title ripe for Hasbro to exploit in Star Wars. The only thing that could derail Hasbro shares is an underwhelming second-quarter earnings report (would likely be temporary, summer is not toy-buying season) or multiple movie flops this summer.
-- Darden (don't own): The stock has been a recent winner for financial engineering factors rather than consumers flocking to the restaurants to try the revamped menu at Olive Garden. I believe the best-in-class operators in full-service dining are DineEquity (DIN) and Brinker International (EAT). Each of those companies is simply outperforming Darden (DRI) in terms of numbers and wow factor on their menus.
-- Dollar General (own): Remember, Wal-Mart is adjusting to what Dollar General (DG) and other dollar stores are doing (in addition to efforts by online foes). Says a good deal about the health of Dollar General, which will open a massive number of new stores (again) this year. For the stock to be derailed, I think we would have to receive a hurricane-driven spike in gas prices or indications a combined Dollar Tree (DLTR)/Family Dollar (FDO) could wrestle share from Dollar General in 2016.
-- Planet Fitness: Inquire with your financial adviser about the ability to get involved in this IPO. I have followed the company literally from inception, sat down with the CEO and CFO. The business model is strong. The franchisee base is energized. And it's a great "aging of the baby boomer" investment -- Planet Fitness not only attracts broke teens, but also penny-scrimping boomers who can't see shelling out $50 to belong to a gym.