Categories: Alpha Algorithm HotlinesStock Market News

Yet Another Blue Chip

Blue-chip stocks seem to be recent favorites in the Alpha Algorithm. This week, Altria Group, Inc. (MO) emerged in seven of the strategies I track.

Founded in 1919 as part of Philip Morris & Co., Ltd., and headquartered in Richmond, Virginia, Altria Group, Inc., manufactures and sells cigarettes, smokeless products and wine in the United States. It also provides finance leasing services primarily in the aircraft, railcar, electric power, real estate and manufacturing industries.

Altria Group, Inc. (MO) vs. the S&P 500 YTD

Seven Top Investment Strategies Betting on Altria Group, Inc. (MO)

1. Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

2. Momentum Factor

The stock also is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of the companies’ risk and return

3. Large-Cap Alpha

The stock is selected as part of a strategy that aims to outperform the S&P 500 by classifying securities as either growth, value, or both, discarding the lowest-scoring 25%, then weighting the strategy toward the top-ranked stocks.

4. Dividend Dog

One of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.

5. High Quality Stock

The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

6. Insider Buying

Corporate officers, directors and shareholders own more than 5% of each company’s stock and are accumulating it.

7. Float Shrink

The company has reduced its shares outstanding over the prior 120 days while meeting criteria for shareholder friendliness, profitability measured by free cash flow and leverage ratio.

Recommendation

Buy Altria Group, Inc. (MO) at market today. Place your initial stop at $60.

Options

With the stock technically overbought on the short term, I am holding off on recommending options this week.

Portfolio Update

With American International Group, Inc. (AIG) bouncing from oversold levels, I recommend you buy the AIG Aug 2016 $55.00 call options (AIG160819C00055000), which last traded at $2.93 and expire on Aug. 19.

Sincerely,

Nicholas A. Vardy

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.