Stocks in September: Have your shopping list ready, strategist says
With more inflation data coming and a Federal Reserve meeting on tap, September is shaping up to be a busy one for investors. Tematica Research Chief Investment Officer Chris Versace explains why, as we head into the month, you should “have your shopping list” ready. Some of the stocks on Versace's shopping list include, Qualcomm (QCOM), Universal Display (OLED), and CIBR ETF (CIBR).
One area Versace is watching is cybersecurity, saying “we have broad-based exposure to that in the CIBR ETF… so we’re not relying on any one particular cybersecurity company.”
Versace also notes that there are some signs the smartphone market is showing recovery. “We do like Apple (AAPL), but we’re becoming increasingly positive on Qualcomm. We also like a company called Universal Display that is seeing and benefiting from the adoption of organic light-emitting diode displays,” Versace explains.
Video Transcript
RACHELLE AKUFFO: So in this environment, let's start off with some of your top stock picks that you're looking at at the moment.
CHRIS VERSACE: So, you know, when we try to capitalize on the evolving landscape, take really laying-- layering into thematics as we do that. But one of the pervasive areas that we tend to see just gaining traction is going to be the area of cybersecurity . Over at the Action Alerts Plus portfolio that I manage for the Street, we have broad-based exposure to that in the CIBR, C-I-B-R, ETF. And you know, we like that because it not only gives us broad-based exposure like I said. So we're not relying on any one particular cybersecurity company. We like that because, again, of the evolving nature of cybersecurity threats, whether it's increasingly in IoT or some other attack vector.
The way we think about it is, as we continue to move deeper into the digital world, hackers become increasingly creative forcing companies to once again re-up, re-protect if you will, their crown jewels. So we like that, but we're also seeing other signs that are emerging that, kind of, point to an improving smartphone market, particularly outside the Android ecosystem in that environment. Yes, we do like Apple, but we're becoming increasingly positive on Qualcomm. We also like a company called Universal Display that is seeing and benefiting from the adoption of organic light-emitting diode displays not just in smartphones, but increasingly in tablets-- tablets, excuse me, and in other markets.
BRAD SMITH: Chris, and the type of environment that we are in and, kind of, naming some of the economic data that's come out that the Fed sure at their next meeting might consider. But at the same time, a lot of people not really expecting them to really make a decision one way or the other firmly until November meeting and so, kind of, waiting and seeing. In this wait-and-see period, where should investors be most apt to, kind of, pick out a few names where you've, kind of, got the Fed on the sidelines at least at this upcoming meeting?
CHRIS VERSACE: Well, Brad, I think you used the right word, which is pick. And I say that because it's very difficult to go kind of like, you know, all in or all out because we're just not really sure what the data is going to bring. And as Rachelle had mentioned, we saw some nice, favorable data that says, yes, the Fed's efforts are bearing fruit. The ADP report showed slower job growth month over month and also, if you dig into it showed better wage gains, and by that I mean slower wage gains year over year in August compared to not only July, but earlier this year as well, the JOLTS report you referenced.
But let's just understand, we have a lot more data that we're going to get not only before the September meeting, but before the November meeting. My thinking here is at least in the very near term, we've got the July PCE that will drop or be reported, I should say. Tomorrow on Thursday, we've got the employment report. We've got data from S&P Global both for manufacturing and services. And we still have the July data for-- sorry, August data coming for CPI/PPI, again, all before the Fed's September meeting.
And my thinking on this is the market is going to be very volatile, kind of, trading, right, on the most recent data point that it gets because we're trying to assemble all these puzzle pieces together to figure out what is the Fed likely to do. So my advice against that backdrop as you, kind of, alluded to, Brad, is have your shopping list. I rattled off some of the things that we own over at Action Alerts Plus, some of the ones that we're looking at as well. And we're just going to slowly build our positions using pullbacks hopefully to improve our cost basis.
