Featured Stocks In February’s Most Attractive/Most Dangerous Model Portfolios

Recap from January’s Picks

Our Most Attractive Stocks (-5.0%) underperformed the S&P 500 (-3.4%) last month. Most Attractive Large Cap stock Herbalife (HLF) gained 14%. Most Attractive Small Cap stock Cambium Learning Corp (ABCD) was up 12%. Overall, 17 out of the 40 Most Attractive stocks outperformed the S&P 500 in January.

Our Most Dangerous Stocks (-5.5%) outperformed the S&P 500 (-3.4%) as a short portfolio last month. Most Dangerous Large Cap stock NuVasive (NUVA) fell by 21% and Most Dangerous Small Cap Stock Barnes & Noble (BKS) fell by 20%. Overall, 22 out of the 40 Most Dangerous stocks outperformed the S&P 500 as a short portfolio in January, and 34 had negative returns.

The successes of these model portfolios highlight the value of our machine learning and AI Robo-Analyst technology, which helps clients fulfill the fiduciary duty of care and make smarter investments[1].

17 new stocks make our Most Attractive list this month and 12 new stocks fall onto the Most Dangerous list this month. February’s Most Attractive and Most Dangerous stocks were made available to members on February 7, 2018.

Our Most Attractive stocks have high and rising returns on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied by their market valuations.

Most Attractive Stocks Feature for February: Plexus Corporation (PLXS: $57/share)

Plexus Corporation (PLXS), a small cap electronic services manufacturing provider, is the featured stock from February’s Most Attractive Stocks Model Portfolio.  PLXS was also a featured addition to our Exec Comp Aligned with ROIC Model Portfolio in February 2017.

Since 2012, PLXS has grown revenue 2% compounded annually and after-tax profit (NOPAT) 10% compounded annually. This profit growth is a byproduct of PLXS’ NOPAT margin improving from 3% in 2012 to 5% over the last twelve months (TTM). The company has also improved its ROIC from 8% in 2012 to 11% TTM.

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Disclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, style, or theme.

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