[TradeSmith Daily]( 3 Red-Blooded American Trades
As a teenager during the summer, I raked up 40 hours of work each week between Friday and Sunday at a catering company. It paid off because, by the time I went to college, I had over $20,000 in my bank account. Iâve always believed in having a strong work ethic, and from reading your email responses and hearing your stories over the years, I know just how many of our Tradesmith members share that same ethic. But I also know that I can have a hard time finding the âoff switch.â Even when thereâs downtime, my mind can drift to projects and things I want to work on. I bring that up because the markets will be closed this coming Monday (July 4). I hope that you have the opportunity to hit your âoff switchâ for a few days and have a long, safe, and enjoyable weekend. Before you head out, in honor of Independence Day, I want to share three American companies that hit my radar. RECOMMENDED LINK [Bezos, Zuckerberg, Cuban, and Gates are in, are you?](
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Opportunity No. 1: Phillips 66 (PSX)
Back in 1917, brothers L.E. Phillips and Frank Phillips founded the Phillips Petroleum Company.
Phillips66.com
The brothers started with $3 million in assets, 27 employees, and operated throughout Kansas and Oklahoma. Eventually, the name Phillips 66 came from a combination of events: the specific gravity of the gasoline was close to 66, the car testing the fuel did 66 miles per hour, and the fuel test took place on US Route 66. Today, Phillips 66 is a spinoff from the previously integrated ConocoPhillips (COP). Phillips 66 purchases, refines, markets, and transports crude oil and petroleum across the United States. Itâs involved in a little bit of everything, which creates a well-integrated portfolio of assets and revenue streams. From a technical standpoint, the stock looks fantastic.
At the far-right corner of the chart above, youâll see that the stock is now in the Green Zone. This is also an established company, so you arenât buying a new player on the block in hopes that it will eventually make you money. This is what my friend and colleague Senior Analyst Mike Burnick calls a “Pay Me Now Stock.” The company currently has a 4.37% dividend yield, which is a healthy payout. Now, letâs step away from the energy sector and look at a company in one of Warren Buffettâs favorite industries — insurance.
Opportunity No. 2: Elevance Health Inc. (ELV)
Buffett loves insurance companies because they operate a simple model, which is to pay out less than they take in. Elevance (formerly Anthem) does this in the health insurance industry. Like other insurers, it collects premiums from customers. It then invests that money into low-risk securities like U.S. Treasuries and investment-grade debt. From that, Elevance subtracts the claims paid out. Medical catastrophes arenât common, but when they occur, they can bankrupt an individual. With that information, insurance companies price their premiums to ensure that they can take in more money than they will have to pay out by spreading costs over hundreds of thousands of people who all pay premiums. As complex as it sounds, it creates a fairly stable and reliable business model. Looking at the chart below, youâll also see a fairly steady price trend.
Even during the worst parts of the 2020 collapse, the share price didnât drop that much. Today, the company sits in the Green Zone. While the dividend yield on ELV isnât that high, only generating a yield of 1.08%, the volatility in the stock price is fairly low, making it a great choice for those looking for a more restful sleep at night. Owning ELV wonât make you feel like youâre on a roller coaster. To round off the picks, Iâve got another Warren Buffett favorite to share. RECOMMENDED LINK [Something VERY strange is happening in this zone of the market](
It sounds super strange, but luckily we caught it on camera... These [47 seconds]( will change everything you think you know about the market. (They certainly did for me.) My friend Hailey couldnât wrap her head around the idea, either. But just 47 seconds after I showed her how it works... She grabbed nearly one thousand dollars out of thin air. [Click here to watch Hailey make $920 in less than a minute](. Opportunity No. 3: The Hershey Co. (HSY)
The road to success was a winding one for Milton S. Hersey, as he was involved with several failed businesses before building his empire in Hershey, Pennsylvania. Today, the company is worldwide in over 60 countries and generates $9.34 billion in annual sales. Beyond the famous Hersheyâs Kisses, the company makes Resseâs Peanut Butter Cups, Twizzlers, Jolly Ranchers, and a host of other treats. While most consumer food products companies are lucky to grow sales by 1% to 2% per year, Hersheyâs achieved 10.08% in sales growth last year. On top of that, the companyâs free cash flow growth (cash after capital expenditures), reached $1.58 billion in 2021, which is a 26.15% increase from 2020. The HSY stock price has also appreciated considerably since the 2020 pandemic.
Like the other two picks, the candy maker is in the Green Zone. This is just a sample of the dozens of opportunities you can find with our tools, including plenty of other companies operating in America. Wishing you all the best, [Keith Kaplan]Keith Kaplan
CEO, TradeSmith P.S. While you're pressing pause this weekend, take time out to watch Hailey, a complete investing novice, pocket $920 in just 47 seconds. [Click here]( to watch this live demonstration of the incredible “infinite income loop.” Best of TradeSmith
The chart below represents the best-performing open positions over the last two years, as recommended by our software.
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