Your first Alpha Algorithm recommendation of 2017 is the well-known telecom giant Verizon Communications Inc. (VZ).
Verizon was formed by the merger of Bell Atlantic and GTE back in the year 2000. Today, the company is one of the world’s leading providers of high-growth communications services. Verizon companies are the largest providers of wired and wireless communications in the United States. Verizon is also the world’s largest provider of print and online directory information.
Verizon Communications Inc. (VZ) versus the S&P 500 over three months
Eight Top Investment Strategies Betting on Verizon Communications Inc. (VZ)
- Large-Cap Momentum
The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total returns over the prior 12 months, excluding the last month.
- Exponential Technologies
The stock is part of a strategy that invests in nine different fields deemed to be vast growth “exponential technologies”: big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.
- Goldman Sachs’ Active Beta
The stock is selected according to four factors — value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.
- Small-Cap/Value Tilt
Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.
- Insider Sentiment
One of 100 equally weighted U.S.-listed large- and mid-cap stocks chosen based on trading in company stock by corporate insiders, price momentum and trailing 12-month volatility. Specifically, this indicator looks at the increases in insider holdings.
- Fundamental Strength
This is a top U.S. stock based on fundamentals measured by book value, cash flow, sales and dividends.
- Dividend Dog
It is one of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.
- Deep Value
The stock is one of 20 undervalued stocks selected from the S&P 500 using proprietary quality screens — positive earnings, dividends, etc. — and valuation metrics like enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA).
Buy Verizon Communications Inc. (VZ) at market today and place your stop at $50.50.
If you want to play the options, I recommend the April $52.50 calls (VZ170421C00052500), which last traded at $2.76 and expire on April 21.
Sell your positions in both Qualcomm Inc. (QCOM) and Wal-Mart Stores Inc. (WMT) at a slight loss as these two stocks are now included in only five Alpha Algorithm strategies.
Raise your stop in NVIDIA Corporation (NVDA) to $101.50 to lock in a double-digit-percentage gain.
Nicholas A. Vardy