ITPM Flash is a video series from the Institute of Trading and Portfolio Management (ITPM), founded by Anton Kreil, that provides market insights from the Institute’s senior trading mentors.

Disclaimer

This blog post is for informational purpose only and no investment advice. Always do your own research! Read the disclaimer here >>>

ITPM Flash Ep37 – Summary

In this episode of ITPM flash Edward Shek talks about value stocks that have a genuine chance of a re-rating.

When there is a rotation in the market e.g. out of tech stocks into value stocks, the letter get re-rated and find new buyers. Right now there are pretty clear signs that the market rally is broadening out. It is not only focused on NVDA, AMZN, MSFT and so on but a lot of small and midcaps are performing well too. Ed Shek presents two stocks which he thinks might present a good opportunity of re-ratings. As ITPM traders we know and got taught in the PTM 2.0 that we always have to do our own fundamental analysis before trading a stock!

HPQ

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HPQ Chart from ITPM’s Youtube Video

HPQ provides hardware, storage and peripherals. 60% of their earnings are from printing, 38% commercial and personal computer systems. HPQ hasn’t participated in the latest tech rally, last earnings were in line and the stock has a PE of 9. According to Ed it is “unloved”, their PC market in US increased 3% in their last quarter and commercial declined. In the flash it is outlined that PC market is expected to grow 7% to 10% in 2024 and 2025, which Ed thinks is too low as AI will spark a hardware upgrade cycle. If this happens, stocks like HPQ could see a re-rating and a stock price increase!

BBY

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BBY Chart from ITPM’s Youtube Video

Best Buy increased a lot in the beginning of COVID, as everyone was at home and upgraded their personal electronics, TVs etc. There revenue is 20% lower than the peak and it is trading at a PE of 12. Ed lines out that they have other problems as well, like low cash flow and high debt. A potential risk could be BBY cutting their dividend. Edward Sheks re-rating thesis is, that a AI hardware upgrade cycle, improving fundamentals and a management that sounds more optimistic could spark a re-rating of the stock.

ITPM Flash Ep37 – Conclusion

Turnaround stories like this can be great additions to a portfolio. Timing is not that essential and the trades can be further out as the usually 1-3 month time horizon and a half position size should be enough, as probability to play out might be smaller than usual. As stated above before, always do your own work and due dilligence, never trade the ideas of other blindly! If you don’t know how to do it, check out the ITPM Education!

About me

The Institute of Trading and Portfolio Management (ITPM), founded by ex-Goldman Sachs trader Anton Kreil, helped me on my journey to become a profitable retail trader

Review of ITPM Courses

The courses of the Institute of Trading and Portfolio Management helped me massively to become a profitable retail trader. I genuinely believe that ITPM provides the best trading education on the market – but not everything is perfect. Find out more in my reviews

Results of my Mentoring with Anton Kreil

In September 2022 Anton Kreil asked me and another one of his former mentees, if we want to do a webinar with him. After the Thailand class in April 2022 and the following mentoring with Anton from Mai to July 2022 I thought it was great opportunity to show what I have learned and how I have progressed

ITPM Thailand Mentoring

After completing my first ITPM Course, the PTM 1.0 (the predecessor of the PTM 2.0), I knew I want to do a mentoring. After a thorough analysis I decided to attended the April 2022 Thailand mentoring class

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