February 8, 2017
If you've been keeping up with this daily blog, you know that earnings season is well under way, and we've already had our fair share of winners and losers. Just today, shares of Gilead Sciences (GILD) were in freefall after the biotech company shocked investors with its weak 2017 forecast. Meanwhile, this season's winners include Apple Inc. (AAPL), General Dynamics (GD), Hasbro (HAS) and Southwest Airlines (LUV).
While earning season should present a good buying opportunity for savvy stock pickers, this also means that it's time to watch out for what I like to call "slippery slope" stocks. More on that in a moment.
The best way to prepare for hedge against volatility is by realigning your portfolio for maximum performance. If you want to avoid many of the headaches that come with an uncertain market, start by trimming the dead weight in your portfolio. Ensure smooth and steady returns by sticking with more conservative stocks.
And you can do this by checking your stocks in Portfolio Grader. When you run your holdings through this screening tool, take note of each stock's Quantitative Grade (the current level of institutional buying pressure) and each stock's Fundamental Grade (a weighted blend of eight financial metrics). Also check which of your stocks are rated as Conservative, Moderately Aggressive or Aggressive. Shoot to have 60% of your holdings in Conservative stocks, 30% in Moderately Aggressive and 10% in Aggressive.
I can't stress this last point enough because aggressive stocks are the first one to take a beating in a correction, so you'll want to limit your exposure to these "spicier" stocks. To get you started, here are 40 moderately aggressive and aggressive-rated stocks you'll want to steer clear of in the coming months.
|40 Slippery Slope Stocks||Symbol||Company Name||Quantitative
|ACHC||Acadia Healthcare Company Inc.||F||D||F|
|AEG||AEGON N.V. ADR||F||C||D|
|BMRN||BioMarin Pharmaceutical Inc.||D||C||D|
|CF||CF Industries Holdings Inc.||D||F||D|
|CS||Credit Suisse Group AG||F||C||D|
|DB||Deutsche Bank AG||D||C||D|
|DFBG||Differential Brands Group Inc.||F||D||F|
|ERIC||LM Ericsson Telefon AB||F||D||F|
|FLO||Flowers Foods Inc.||D||C||D|
|HTZ||Hertz Global Holdings Inc.||F||F||F|
|IDTI||Integrated Device Technology Inc.||D||C||D|
|JCP||J. C. Penney Company Inc.||F||D||D|
|JLL||Jones Lang LaSalle Incorporated||F||C||F|
|LM||Legg Mason Inc.||F||C||D|
|LYG||Lloyds Banking Group plc||F||D||D|
|OSIR||Osiris Therapeutics Inc.||F||C||D|
|PAY||VeriFone Systems Inc.||F||D||F|
|RBS||Royal Bank of Scotland Group plc||F||C||D|
|RHI||Robert Half International Inc.||D||C||D|
|SC||Santander Consumer USA Holdings Inc.||D||C||D|
|SIG||Signet Jewelers Limited||F||C||D|
|TI.A||Telecom Italia S.p.A.||D||C||D|
|VIPS||Vipshop Holdings Ltd||F||C||D|
|VOYA||Voya Financial Inc.||D||D||D|
|VRX||Valeant Pharmaceuticals International Inc.||F||F||F|
|WFT||Weatherford International plc||F||C||D|