One way to reduce risk is to have less stock exposure; another way to reduce risk is to own more stocks that are defensive in nature, suggests Steve Reitmeister, a trading specialist with 40 years of market experience — and editor of Reitmeister Total Return.
That is why we are going for Albertsons Companies (ACI) as part of our core large cap, conservative positions. Yes, buying this large grocery store chain is a tad conservative...as in a little bit boring.
But we need a good dash of that in our portfolio as a form of protection against our more aggressive positions during trying times like we have now.
However, to say that Albertsons is without its merits would be a grave mistake. Let's take it from the top by noting they are in the #2 ranked industry out of 124. And in that industry, they are the #1 ranked stock according to the POWR Ratings.
This is what got the stock on both the Top 10 Large Caps and Top 10 Value stocks screens inside our coveted POWR Screens 10 product.
Our POWR Ratings — which include a review of 118 different factors of a company’s health absolutely — positively improves the odds of being in stocks that will report superior earnings and rise in the wake of that news.
Every time? Heck no; nothing works that magically. But indeed the POWR Ratings firmly puts the odds in our favor to be in stocks that impress with outperformance as our reward.
Also we no longer have earnings season risk with the stock, as the company reported about two weeks ago with another steady as you go "beat and raise" report. Since then analysts have raised their earnings outlook for this year and next. Along with it came raised price target prices.
Just for good measure ACI and all their peers got their clocks cleaned last week. So this gives us a good "buy the dip" opportunity for these shares that will provide us some shelter from any coming storm — but also have attractive upside potential thanks to all the goodness showing up in their impressive POWR Ratings.