Brad Sorensen, CFA—Head of Research
Stock markets have continued to move largely higher and continue to operate near record territory and I have cautioned that a pullback could be in the offing and taking some profits and raising a bit of cash might not be a bad strategy. But you should also always be prepared to put money to work in the event of a pullback and a pullback is certainly not guaranteed—nothing is—so if you have extra cash to put to work or just want some stocks in your pocket in the event we get a pullback here’s a few names for you to consider:
Spout Social, Inc. (SPT)—this stock is in the heart of one of the more exciting, and at times controversial, parts of the market—social media. SPT provides companies with in-depth analysis of the social media surrounding their business and provides solutions to improve a company’s overall social media presence. The stock has had a good run and I believe it has further to go if you buy it here, but you also may want to wait for a bit of a pullback before jumping in—or split the difference and do a bit now and a bit more if you get a pullback. The momentum is strong and their business prospects look solid—exactly the kind of stock we like to invest in.
National Healthcare Group (NHC)—A totally different business but one that is equally, if not more so, at the front of many peoples’ minds—caring for the aging population of the US. NHC operates nursing homes and other care facilities and also has a real estate component by owning multiple properties. We all know that these facilities are becoming more in demand as the country ages and NHC, in our view, is positioned to continue to take advantage of the developing situation. The stock has done well but pulled back a bit recently, providing what we believe will be a good entry point for the name.
McAfee (MCFE)—Back to the tech world and a word that is becoming more and more prevalent in everyday conversation—cybersecurity. This subject is becoming more important as more of our daily lives are online and more bad actors are trying to hack into that information and use it for nefarious purposes. MCFE is deeply involved in the fight to protect people from those hackers and we believe their services are going to continue to see demand growth as consumers and businesses attempt to protect their online information. The stock has had a pullback and appears to us to be establishing a new uptrend so now looks like a good time to look to get in to MCFE.
You never want to just take some stock names you read about and invest—investing is a process and doing a bit of research on your own and seeing where these names may fit into your portfolio is what it takes to be a successful investor. Having said that, we believe these picks are a great place to start and could provide good additions to a portfolio.