Helping Self-Directed Investors Succeed Blog - Some Stocks Show Strength In Downturn

Some Stocks Show Strength in Downturn as of October 26th, 2018

October 26th, 2018

The last few weeks have been brutal for US equities. Stocks across the board have tumbled taking the S&P 500 tracking ETF - SPY down -8.73% for the month. High flying sector spdr ETFS such as XBI - Biotech, XSW - Software having declined by 16.12% and 13.62% in October. Experienced self-directed investors will know this is neither unusual nor unexpected. What goes up must eventually come down and settle at some level.

The classic, time-tested principle of reverting to the mean plays out in the market over and over again with just one twist: Nobody knows when the mean reversion will actually happen.

While the market took many stocks to the cleaners - there indeed are a few that did not feel the brunt of the selling as much as others and self-directed investors may want to give these a closer look.

  • Starbucks Corp - SBUX
  • Walt Disney Corp - DIS
  • Automatic Data Processing Inc. - ADP

SBUX is scheduled to declare 4th quarter earnings this following Thursday. ADP is set to release earnings next Wednesday and DIS earnings are likely to be out November 8th for the 4th quarter.

Earnings for ADP and DIS are expected to grow in double digits for their respective quarters while SBUX is going through a transformation of sorts internally. If the markets indeed find a near term bottom in the coming days and if earnings from these bellwethers beat expectations, self directed investors may find some attractive names to work with.

Self-directed investors will want to perform more research on these stocks to see how appropriate this is for their own portfolios.

Good Luck and Happy Investing!

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