Are we running out of new stocks to buy? When I look at the biggest gainers today I am struck by how so many of them have been laggards and are now catching bids.
Let me give you seven stocks, seven true laggards that were on the move on a percentage basis, to show you what I mean.
First, Stanley Black & Decker (SWK) . This stock is flying for one simple reason: It is onshoring. Today the company announced it is bringing back the manufacturing of Craftsman wrenches to the U.S., opening a new plant in Fort Worth to do so. As I have been saying, companies that wean themselves from China will get a higher price to earnings multiple. Until today every time tariff news dominates, this stock has gone down because so much of their product line is made in China. That's changing so the stock's on fire.
Second is Centene CNC: Here's a total favorite of mine because CEO Michael Neidorff is offering quality health care at a reasonable price for everyone from Medicaid users to participants in the Affordable Care exchanges. The company's stock sells at 12 times earnings and at $55 is 19 points off its high. Still makes sense to buy.
Third is Under Armour (UAA) : Why? I think that Steph Curry is the most compelling figure in basketball right now. Under Armour's Steph Curry. I think this company's stock does not represent the momentum that Kevin Plank and Patrik Frisk, the chief operating officer, are developing. The stock's up 24% but is still more than cut in half from its all-time high.
Fourth, there's Allergan (AGN) . Talk about a laggard. This is another stock that has been more than cut in half. Here's some irony: this stock has been crushed in part because of a rival to Botox is being launched now by Evolus (EOLS) , which was on Mad Money not that long ago. I think investors have been waiting for the launch to invest, betting the stock has finally bottomed.
To me, it's a better bet to snare some Merck (MRK) or some Abbott (ABT) , a pharmaceutical and a med tech both of which have declined from their highs yet blew away the numbers.
Five? Mosaic (MOS) . Wow, now investors are reaching as this crop nutrients company's stock has fallen from $89 during the heyday of China trade with the U.S. to $23. Mosaic's telling a story about how it's become a technological fertilizer company. I think you should wait to hear what Deere (DE) says tomorrow; I don't like the ag stocks because they keep being linked with China which doesn't make sense down here. A total laggard.
Six: I have been waiting for the defense stocks to catch a bid simply because they are so far behind the market. Today buyers came in to Northrop Grumman (NOC) which is well off its highs. Again, this is totally a function of trying to find stocks well off their highs yet beat and raised numbers. At 13 times earnings with a good balance sheet and a just raised dividend - the stock fits the bill of someone who has missed out on the rally entirely.
Finally, number seven: I have been waiting for the stock of Schwab (SCHW) to erupt given that it has become an incredibly strong asset gatherer in a market where Goldman Sachs (GS) just this morning announced it paid $750 million for a company few have heard of: United Capital Financial, an investment adviser with $25 billion in assets and 220 advisors serving 22,000 clients. Oh my, is that ever different from the Goldman I worked at many moons ago. I think you could call it downscale at least versus the rest of the company. Given that Schwab has $3.36 trillion under management maybe that's a better bet. I think the stock is ridiculously undervalued versus the rest of the group given its phenomenal asset pull, $624 million every day, according to the Wall Street Journal.
Seven stocks well behind. Seven stocks getting their due. In this newfound rejuvenated market, its time to reach and this list, these kinds of stocks are what goes up when there's so little left that hasn't moved that can still be worth buying.
(Abbott Labs and Goldman Sachs are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells ABT or GS? Learn more now.)
