Last week, the markets were hit with more market-crushing news: Credit Suisse was under pressure when its top backer Saudi National Bank told reporters that they could not offer additional investment to the bank due to potential regulatory issues.
This snowballed and led to Credit Suisse being acquired by UBS on Sunday, March 19, 2023. For the week ending March 17, the S&P 500 financials ended down -6.09%. And, the worst-performing area was the energy sector dropped -7.02%.
Q4 2022 hedge fund letters, conferences and more
Results By Sector: March 13 - 17, 2023.
| Index | Last | YTD | 1 Week Return |
| S&P 500 | 3916.64 | 2.01 | 1.43 |
| S&P 500 Energy | 584.64 | -13.04 | -7.02 |
| S&P 500 Materials | 474.00 | -3.18 | -3.51 |
| S&P 500 Industrials | 815.00 | -1.97 | -2.45 |
| S&P 500 Consumer Discretionary | 1097.67 | 9.17 | 2.35 |
| S&P 500 Consumer Statples | 750.63 | -3.66 | 1.28 |
| S&P 500 Health Care | 1462.81 | -7.74 | 1.31 |
| S&P 500 Financials | 513.02 | -9.96 | -6.09 |
| S&P 500 Information Tech | 2500.96 | 15.14 | 5.66 |
| S&P 500 Consumer Services | 182.56 | 14.55 | 6.94 |
| S&P 500 Utilities | 337.87 | -5.75 | 3.89 |
| S&P 500 Real Estate | 226.38 | -2.58 | 0.08 |
| S&P Dividend Aristocrats | 724.46 | -3.28 | -0.79 |
Market Moving News
UBS buys Credit Suisse for more than $3Bn - Switzerland's biggest bank UBS has agreed to buy its rival, Credit Suisse. This aimed to help relieve pressure on the ongoing financial market panic due to other US banks' failure earlier this month.
This rescue deal will consist of a payment of 3 billion Swiss francs ($3.25 billion), which is a whopping 60% less than the company was worth last Friday's close.
Week Ahead
The Fed is set to announce its interest rate decision on March 23 - Federal reserve is expected to raise its interest rates by 25 basis points despite the current state of the US financial sector.
Significant Developments
PhonePe Raises additional $200 million funding from Walmart - PhonePe’s fund has raised additional funds based on a pre-money valuation of $12 Billion on its $1 billion funding round.
Becton Dickinson gets FDA 510(k) Clearance - BD announced last Thursday their 510(k) clearance from the US FDA for their high - throughput to detect vaginitis.
Washington Water Service Finalizes Acquisition -California Water Service Group has acquired Bethel Greenacres Water Association. This includes 200 residential customer connections in Graham, Wash.
Bottom Picking The Top 10 Dividend Elites
Johnson & Johnson (JNJ)
Distance from 52-week low: 1.10%
Johnson & Johnson (NYSE:JNJ) is a multinational corporation based headquartered in New Jersey that manufactures and sells health-related products and services. It is also one of the world's most valuable corporations. The company has more than 140,000 active employees, operates in 60 countries, and sells its goods through its 250 subsidiary companies.
JNJ's operations are segmented into three groups:
- Consumer Health provides products that are based on science and approved by medical experts to help people improve their personal health.
- MedTech’s diverse healthcare expertise and purposeful, innovative technology help save lives and aim to create a future where healthcare solutions are smarter, less intrusive, and more personalized in surgery, orthopedics, and interventional solutions.
- Pharmaceutical products are distributed through the Janssen Pharmaceutical Companies. Janssen envisions a future in which disease prevention, early detection, treatment, and cure will change thanks to its cutting-edge biologics and other medical components.
Why Bottom Pick?
Johnson & Johnson recently hit its 52-week low at $150.71. Its RSI flashes oversold and shows signs of bullish divergence based on its price and RSI. After hitting its 52-week low, JNJ bounced a bit but is still in bearish territory. You might want to wait for signs of establishing the low as the bottom before stepping in to minimize risk.
That said, dividend growth investors will appreciate Johnson & Johnson's rare 2.97% dividend yield.
Sysco Corporation (SYY)
Distance from 52 week low: 3.29%
Sysco Corporation (NYSE:SYY) is a company that is involved in the sale, marketing, and distribution of food products to restaurants, healthcare and educational facilities, and lodging establishments, among others, that prepare meals away from home clients. The company operates through three reportable segments:
- The U.S. Foodservice Operations segment - includes the company's US Broadline operations that offers a comprehensive range of food products, including seafood, custom-cut meat, produce, specialty Italian, specialty imports, and a wide selection of non-food products.
- The International Foodservice Operations segment - operates in Canada, Bahamas, Mexico, Costa Rica, and Panama for various non-food products and a complete range of food products offered outside the United States.
- The SYGMA segment - offers customized distribution operations in the United States, serving quick-service chain restaurant customer locations.
Why Bottom Pick?
SYY has been in a bearish trajectory since its last November peak and is continuing down to potentially retest its 52-week low at $70.61. RSI has been hovering in the bearish territory since December. Investors should wait for a clearer sense of a bond or recovery before buying. That said, long-term stockholders will appreciate the companies’ 2.69% dividend yield.
Stephan Company (SCL)
Distance from 52-week low: 3.64%
Stepan Company (NYSE:SCL) is a specialty chemical manufacturing company based in the United States. It is one of the leading manufacturers of surfactants and polyester polyols. The company was founded in 1932 by Alfred C. Stepan, Jr. It is headquartered in Northfield, Illinois, United States, and has over 2,200 employees worldwide.
The company has 20 manufacturing facilities in 11 countries worldwide. SCL has three business units:
- The Surfactants Segment produces and sells various surfactant chemicals used in shampoos, agricultural insecticides, etc.
- The Polymer Segment manufactures polyester and specialty polyols used in insulation.
- The Specialty Products Segment manufactures and sells proprietary oils for the culinary, nutrition, and drug industries.
Why Bottom Pick?
Stepan Co has been in a continuous downtrend since early February. It is poised to retest its 52-week low at 91.64. Its RSI is currently hovering in the oversold territory, which can signify that it may be due for a bounce. Investors should always err to the side of caution before adding stocks into their portfolio as it poses a higher risk due to supplies potentially continuing downward.
Abbott Laboratories(ABT)
Distance from 52-week low: 3.88%
Abbott Laboratories (NYSE:ABT) is a diversified healthcare company that provides various products and services to the healthcare industry, including pharmaceuticals, medical devices, and nutrition products, with operations in more than 160 countries. It was founded in 1888 and has been a dividend aristocrat since 1972.
Abbott is a company that has a long-term vision. They have a diversified business model with several businesses that should continue to grow over time. Employing more than 115,000, Abbott has a significant global reach.
Why Bottom Pick?
Abbott Laboratories is also experiencing bearish sentiment in its price with the company heading to retest its 52-week low at $93.25. Its RSI is currently starting to exhibit signs of divergence as prices are continuously falling yet RSI numbers are starting to diverge. Investors should wait for additional signals of confirmation on a potential reversal to minimize risk.
Nordson Corporation (NDSN)
Distance from 52-week low: 4.48%
Nordson Corporation (NASDAQ:NDSN) develops, produces, and markets systems and products for worldwide dispensing, applying, and regulating biomaterials, coatings, polymers, sealants, adhesives, and other fluids. It also produces tools for inspecting and testing electronic parts and technology-based systems.
The company was founded in 1935 and had headquarters in Westlake, Ohio. Currently, it has over 7,000 employees worldwide. Nordson’s operations are divided into two sectors:
- Industrial Precision Solutions offers automated adhesive dispensing systems for the packaged goods sector, applications for converting paper and paperboard, and assembling plastic, metal, and wooden products. In addition, it creates and markets components and systems for the thermoplastic melt stream.
- Advanced Technology Solutions provides bond testing and mechanized optical, acoustic, and x-ray systems to inspect and analyze semiconductors and printed circuit boards.
Why Bottom Pick?
While the company is already on its way to its 52-week high, investors should still wait on how the price behaves in this area as it missed its previous eps and revenue numbers. RSI is now in oversold territory and can potentially continue. Investors should wait for signs like volume accumulation, divergence, and so on., to provide a clearer signal when they buy into NDSN to minimize risk.
Middlesex Water Company (MSEX)
Distance from 52-week low: 4.68%
Middlesex Water Company (NASDAQ:MSEX) is primarily a utility firm that manages wastewater and regulated water utility systems in New Jersey and Delaware. The business contracts to supply water and wastewater systems to municipal and private clients in the area. It is divided into two segments:
- Regulated - this segment collects, treats, and distributes water to clients in certain regions of New Jersey, Delaware, and Pennsylvania who use it for fire protection, business use, and residential use.
- Non-Regulated - this segment largely provides contract services for the upkeep and operation of municipal and private water and wastewater facilities. Tidewater Utilities, Inc., Shores Water Company, LLC, and White Marsh Environmental Solutions, Inc. are just a few of the company's subsidiaries.
Why Bottom Pick
Middlesex Water recently hit a 52-week low at $72.64, and investors scooped up some shares, and the price bounced back to now to $76.21 area. This may be a sign of a short-term bottom, and investors should probably keep an eye on how prices behave as the pocket of opportunities may appear for a better bargain on MSEX.
General Dynamics(GD)
Distance from 52-week low: 4.92
General Dynamics Corporation (NYSE:GD) is a global aerospace and defense company based in the United States. The company was founded in 1899 by John Philip Holland. Currently, the company is headquartered in Reston, Virginia, the United States, and has over 100,000 employees worldwide.
The company has operations in more than 45 countries. Its operations are divided into four segments:
- The Aerospace Segment manufactures premium business aircraft. This segment is also an industry leader in aircraft repair, maintenance, and overhaul services.
- The Marine Systems Segment is the leading manufacturer of the U.S. Navy's surface combatants and auxiliary ships' construction and design. Additionally, it is the world's top developer of nuclear-powered submarines.
- The Combat Systems Segment is the top producer of various combat vehicles and weapons. This segment is divided into three business units, European Land Systems, Land Systems, and Ordnance and Tactical Systems.
- The Technologies Segment offers a broad range of services, IT solutions, technologies, and products to numerous federal civilian, military, and intelligence customers.
Why Bottom Pick?
General Dynamic’s stock prices are still in a strong bearish trend. However, it is now nearing its 52-week low at $207.47. RSI is registering as oversold as well. Investors can wait for bullish signs once GD tests its 52-week low territory for a potential bargain.
Gorman-Rupp Company (GRC)
Distance from 52-week low: 5.19%
The Gorman-Rupp Company (NYSE:GRC) is a company that is involved in the design, production, and sale of pump systems for various applications, including but not limited to water, wastewater, construction, industrial, petroleum, agriculture, fire protection, heating, ventilating, and air conditioning that is driven by a wide range of power sources, from 1/35 horsepower electric motors to larger electric motors or internal combustion engines that can generate several thousand horsepower.
With a presence in roughly 130 countries across the globe, the company offers a wide range of pump models in different sizes and capacities, ranging from under one gallon per minute to almost a million gallons per minute. The company's pump types include:
- Self-priming centrifugal
- Standard centrifugal
- Magnetic drive centrifugal
- Axial and mixed flow
- Vertical turbine line shaft
- Submersible
- High-pressure booster
- Rotary gear
- Rotary vein
- Diaphragm
- Bellows
- Oscillating
Why Bottom Pick?
Gorman-Rupp Company broke its immediate support and is nearly testing its 52-week low at $22.67. RSI is on the oversold side. GRC is starting to print a short-term bottom due to the volume received from last week's trading. Investors who want to take a position in GRC can wait for additional confirmation of this immediate bottom resistance may be retested first (pink line) before it can establish its strong support.
Archer-Daniels-Midland Company (ADM)
Distance from 52-week low: 5.71%
Archer-Daniels-Midland Company (NYSE:ADM) is a global food processing and commodities trading organization. It was founded in 1902 by George A. Archer and John W. Daniels. The company's name came about after it bought the Midland Linseed Products Company. It is currently headquartered in Chicago, Illinois.
ADM has 62 innovation centers, 182 processing plants, and 520 procurement centers across six continents. In 2021, the company had 42,001 active employees.
The company is mainly divided into three segments:
- The Ag Services and Oilseeds segment: includes the production, marketing, crushing, and extra processing of oilseed crops, such as soybeans and soft seeds, into vegetable oils and protein meals.
- The Carbohydrate Solutions segment: also known as the Corn Processing segment, makes sweeteners and starches out of corn.
- The Nutrition segment: provides proteins, dietary fiber, organic nutritional and health products, including probiotics, prebiotics, enzymes, and herbal extracts, as well as specialized foods like edible beans, formula feeds, and health and nutrition commodities for animals.
The company also has two minor segments:
- Agricultural Services segment- provides storage, cleaning, and transportation services for agricultural products.
- ADM Investor Services, Inc.- provides institutional and individual clients with brokerage services.
Why Bottom Pick?
With prices of Archer-Daniels-Midland Company being on a continued slump, its RSI number is hovering on the bearish-oversold territory near the 30 mark. This is potentially a sign of the weakness of the trend. Its price is closing in on its 52-week low at $70.02, giving investors a chance to pick this up at a bargain.
Federal Realty Investment Trust (FRT)
Distance from 52-week low: 5.93%
Federal Realty Investment Trust (NYSE:FRT) is a real estate investment trust (REIT) based in the United States. It is one of the oldest REITs in the U.S. The company was founded in 1962 by Samuel J. Gorlitz. The company is headquartered in Rockville, Maryland, U.S. Additionally, the company had about 315 employees in 2021.
FRT provides leasable properties in Arizona, California, Connecticut, Florida, and Illinois. The company offers three kinds of properties:
- The company now has about 2.2 million square feet of office space and plans to acquire more.
- The company's residential spaces complement its commercial settings, resulting in integrated, engaging communities where living, work, and play seamlessly intersect.
- With the help of FRT's specialty leasing spaces, clients can experiment with new concepts, develop original brand experiences, introduce new products, and more.
Why Bottom Pick?
Federal Realty Investment Trust prices have been going down fast this past month. FRT is on its way to testing its 52-week low at $86.43, and its RSI is already registering oversold numbers. Investors keen on adding FRT into their portfolio should wait for signs of divergence and additional buy signals based on how fast prices have fallen to minimize the potential risk of buying early. Early buyers tend to be the ones who take the brunt of whipsaws.
Final Thoughts
With the eyes of the market focused on the turmoil in the financial sector, investors should be wary of the Federal Reserve's decision to raise interest rates. This will guide where the markets might go, and pockets of opportunities may arise.
