Scary Markets
Ron Struthers of Struthers Resource Stock Report explains why he believes we are in a scary market and shares some stocks he believes are Sells.
To me, this market is very scary. It has gone straight up since April, only pausing for a week or so a handful of times on the way.
There have been no minor corrections or consolidations. Remember, in gold, we saw a 4-month consolidation period.
That is a healthy bull market.
The economy continues to show signs of more weakness and recession signals, but the market is ignoring that. Yesterday, it was reported that the Empire State Manufacturing index plummeted 21 points to -8.7 in September. Consensus expected a reading of 5.0. It is the sixth time in nine months the index has contracted. The new orders index fell off a cliff, dropping 35 points to -19.6.
Last week, initial jobless claims surged to 263,000, the highest level since 2021. Texas flooding gets some of the blame, but that only accounted for about 1/2 the jump from the last report.
Yesterday, the news was good that Retail Sales rose 0.6% last month. However, as I have been pointing out, a lot of this is inflation. Same amount of goods purchased but at higher prices. Retail Sales are expected to weaken, and a survey from the New York Fed on Monday showed household spending, unadjusted for inflation, slipped in August to the lowest level in nearly four and a half years on a year-over-year basis.
It is only a matter of time before the market caves and starts pricing in lower expectations on earnings, with a recession looming. The market is expensive with the S&P 500 p/e ratio now higher than it was before the 2020 Covid crash and the 2008 financial crisis. The ratio always spikes after a correction because the stock prices fall faster than earnings.
I have commented numerous times to raise cash levels, and to aid with this, I am selling a handful of stocks on our tech list.
When we get a market correction that I expect, we can determine whether to buy some of them back at a lower price.
Huntington Ingalls
Recent Price - $273.90
Entry Price - $195
Opinion - Sell
Huntington Ingalls Industries Inc. (HII:NYSE) is one on my list.
The company is doing well.
We are up +40% in about four months, and it looks like the stock is struggling on the chart to go higher.
Gilat Satellites
Recent Price - $11.40
Entry Price - $8.16
Opinion - Sell
Gilat Satellite Networks (GILT:NASDAQ) popped higher yesterday on AI news, and we are now up 85% on the year. They announced the AI transformation of its Network Management System (NMS), integrating Model Context Protocol (MCP). The new AI capabilities are available immediately.
This integration introduces a new NMS-MCP, which acts as a gateway between the NMS and AI agents. The NMS-MCP supports authentication, licensing, and secure communication, ensuring compliance and operational integrity. AI Models of GPT Series 4, 5, and 5 mini, as well as o3, o4, o4 mini, and Claude Sonnet 4 are available for interfacing to the Total-NMS.
Examples of AI Use Cases Enabled:
NOC AI Agent: An AI-driven Network Operations Center (NOC) agent can continuously monitor system health, detect anomalies, and take proactive measures. For example, in case of performance degradation or resource bottlenecks, the agent can automatically trigger corrective actions such as restarting services, reallocating resources, or escalating issues to human operators when necessary.SDS AI Agent: For Software-Defined Satellite (SDS) environments, an AI agent can dynamically adjust network configurations based on business priorities, traffic patterns, and service-level. This ensures optimal resource utilization and improved Quality of Service (QoS) for end-users.These days, a company just mentions something about AI and the stock goes up. The stock has made a big move up in September, it is due for a pull back anyway.
American Aires
Recent Price - $0.10
Entry Price - $5.00
Opinion - Sell, took part profits at $1.03, average sell price $0.56
We have been in American Aires Inc.'s (WIFI:CSE) stock for a long time, and I like their technology.
A 10-for-1 roll back gave us the high entry price.
Sales have really been picking up.
They reported Q2 revenue of $6 million.
However, their cost of sales and advertising is high, so I question if they can become profitable soon.
We took profits around $1.03 on the price spike last year and around $0.10 Friday, I will take the average and list as sold at $0.56.
AirTest
Last Price - $0.02
Entry Price - $0.35
Opinion - Take the tax loss
AirTest Technologies Inc. (AAT:TSX.V; AATGF:OTC) has not traded in a long time.
Since we have a lot of gains this year in many other areas, we might as well dust it off.
We can use the tax loss.
Gatekeeper
Recent Price - $1.80
Entry Price - $0.85
Opinion - Sell
Gatekeeper Systems (GSI:TSXV; GKPRF:OTCMKTS) has had a strong year and they have announced numerous new sales contracts. The latest was on September 3, Gatekeeper announced contracts valued at approximately $19.55-million (U.S.) (approximately $27-million (Canadian)) with Long Island Rail Road, the commuter rail division of the New York Metropolitan Transportation Authority, for the LIRR audiovisual recording monitoring system upgrade.
The project relates to the replacement of LIRR's audiovisual recording monitoring system on its railcar fleet in compliance with the Federal Railroad Administration mandate. The FRA mandate requires that all passenger train lead locomotives providing scheduled intercity rail passenger or commuter service be equipped with crash worthy memory modules and image recording devices prior to October 12, 2027.
I like the company and it is doing great, but the stock has tripled in less than four months, so I think it is vulnerable for a correction.
I focused on selling our tech stocks. In a market correction, I expect gold and gold stocks will go higher as alternative investments and they often move in contrary to general market direction.
The energy stocks are pretty depressed and offer great value, so not much sense selling these.
Our Millennium stocks, we basically hold and collect dividends. The index is having a stellar year. The 20 stocks in the index have an average gain this year of +27%, far out doing the markets and the average yield is 6% so a total return as of now at +33%. Sure they will suffer some in a correction but we keep on collecting the dividends every month or quarter.
On a positive note, in the U.S. there is a record amount of cash in money market funds, roughly $7.6 trillion, according to Crane Data. Bulls will tell you that this cash will come into the market with interest rate cuts. However, it is there because there are good returns risk-free. I think it will take more than a 25 or 50 point cut to get this cash moving. That said, if bond yields stay high despite the cuts, then the cash will certainly remain there. Those investors would be way better off in the Millennium index, but they don't know about it.
B2Gold
September $4.50 Call Option
Recent Price - $1.40
Entry Price - $0.30
Opinion - Sell
Lastly, I will talk about B2Gold Corp. (BTG:NYSE; BTO:TSX; B2G:NSX).
These options expire this week.
I missed the top in the stock.
It pulled back some on news the new Goose Mine ramp up is a little slower than expected.
However, we can't complain with 360% profits.
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Important Disclosures:
Ron Struthers: I, or members of my immediate household or family, own securities of: B2Gold and AirTest. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
Struthers Resource Stock Report Disclosures
All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.