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Skip to main content Enable accessibility for visually impaired Open the accessibility menu MANWARD FINANCIAL * Stocks * Gold * Crypto * Manward Trading Academy MANWARD TRADING ACADEMY Learn to trade like a pro... for free! This premium archive of resources, videos and how-tos is available to all Manward Financial Digest subscribers. Learn More * About Us * Our Story * Our Contributors * Our Investment Philosophy * Returning you to your content in... 12 WHY THIS $2 "NEXT GEN CRYPTO" COULD BE BIGGER THAN BITCOIN The Wall Street Journal Calls It the "Latest Cryptocurrency to Surge." Here's Why It Could Be Bigger Than Bitcoin. STOCK OF THE WEEK: THIS FOOD PRODUCER IS CRAFTING A COMEBACK ALPESH PATEL|APRIL 29, 2022 With the cost of living going up… interest rates rising… and a recession looking more and more likely… It’s critical to look for stocks with low volatility. And I’ve got a household name for you this week that checks that box… and many more. Whether a recession comes or not… you’ll most likely be buying this company’s products. See why this food producer promises to be a strong player in the market in this week’s Stock of the Week. Click on the image below to watch it. 5:44 TRANSCRIPT So it’s Stock of the Week time again for you. As you know, I’m Alpesh Patel. I’m the person behind GVI Investor, where we take an in-depth look, thanks to my team at the hedge fund of which I am chief executive. What we also do is the Stock of the Week, just for those of you who aren’t necessarily on the program, just to give you a little bit of a tip-of-the-iceberg insight into the kinds of things we look for. And it’ll hopefully educate you on how professionals look at individual stocks and how they find them. Well, the Stock of the Week I’ve got this week is one that will be a household name. I wanted to go with a name that you might have heard of – but might not have thought of in terms of a quality stock. So let’s have a look at it. In light of our concerns about cost of living expenses, rising interest rates and a possible recession, the Stock of the Week is Kraft Heinz (KHC). Now, you’ll remember back in 2015, Kraft and Heinz merged. They became the third-largest food and beverage manufacturer in North America, behind Pepsi and Nestlé, and the fifth-largest in the world. Come recession or not, you will almost certainly be buying Kraft Heinz products. And that is unlikely to change. Of course, they distribute through pharmacies, bakeries, drug stores, value stores and a whole bunch of other institutions as well. So what was it that I liked about this stock? Now, again, you’ll know that when we pick stocks, the depth of research we do is based on every facet of that company, all 360 degrees of research. So we want to look at their valuation – that’s their profitability relative to their share price… their cash flow and cash flow growth – are they generating enough cash to keep going and growing? – their sales growth… the volatility of the share price. These are just some of the things we look at. Now, my growth-value-income indicator… so we look at dividend yields as income as well… that’s got an 8 out of 10. That’s good enough for me. As long as it’s 7, 8 or 9, then it meets the minimum criteria that I set. So I’m really looking for the best of the best. Valuation, revenue growth, dividend deals… We also look at CROCI, cash return on capital invested. Now, 5% is a little bit lower than what I normally like. It’s why it’s one of the Stocks of the Week and not within my GVI Investor, which really picks companies which are at the extreme end of good news. The CROCI is a ratio which is used by Deutsche Bank Wealth Management and Goldman Sachs Wealth Management for their richest clients – cash return on capital invested. What it’s saying is, how good is a company at making new cash from the capital that they’ve invested? So if they bought some machinery, if they can keep that machinery going and they can just produce cash, then they’ve got a cash-making machine. It’s what CROCI measures. And what those investment banks, Deutsche and Goldman Sachs, realized is companies with the highest CROCI tend to make the highest stock returns. Not guaranteed, but they tend to – there’s an increased probability. Now, this is a company which for several years was doing rubbish. And then, 2020, 2021 and 2022, it’s starting to get back into the rhythm of things. And that’s really what I’m expecting to continue going forward. Volatility… only 15%. I really want lower-volatility stocks like this – under 20% volatility – because in this market, the market’s providing enough volatility. I don’t need to go looking for it in my stocks. Alpha means it’s been outperforming the market as well. The Sortino is positive. In other words, the risk or volatility of the stock relative to the performance it’s giving, at least that’s positive. It’s good news. Again, when we’re looking at the ones for GVI Investor, we really want that Sortino to be high, we want that CROCI to be high. But this is the Stock of the Week because it’s been trending higher, and it’s one which is always in the news, just because of the brand names around it. What are some of the other things we look at? Well, you see the CROCI there… return on capital employed… return on equity… all of those are green lights. Not much gearing or debt. Basically, they’ve got ample resources on that. In terms of forecast priced-to-earnings ratios – so future valuations – I think that’s a little bit still on the low side for the company, which is where I think the share price growth could come. But at least it shouldn’t fall too far. Turnover is holding steady, borrowing has been decreasing, cash flow has being doing really well, which is good. Obviously, I’d always want to see profits being higher and higher and higher, but they’ve now managed to get the good steady stream of profitability into the company as well without increasing borrowing or without too much capital expenditure. So they’re managing to take the resources they’ve got and start making it more into a moneymaking machine. So I’m optimistic for this one. That’s my Stock of the Week. I hope to see you in GVI Investor. I’m Alpesh Patel. I hope you enjoyed that, and I hope if nothing else, you learned a little bit more about how professionals look at stocks and how they research, deep dive and do their due diligence. Thank you. TIRED OF MAINSTREAM MONEY NEWS? WANT FREE TRADING IDEAS THAT WORK? YOU NEED MORE MANWARD. SIGN UP FOR MANWARD FINANCIAL DIGEST TODAY! By submitting your email address, you will receive a free subscription to the Manward Financial Digest e-letter, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. Privacy Policy. -------------------------------------------------------------------------------- MORE VIDEOS STOCK OF THE WEEK: TURNING UP THE HEAT ON A SURGING ENERGY PLAY Energy providers are scrambling thanks to Russia’s war in Ukraine. That’s led to a surprising winner in the sector. Watch this week’s Stock of the Week for all the details. STOCK OF THE WEEK: SHINING A LIGHT ON THIS REBOUNDING ELECTRIC MANUFACTURER Even in this market, there are diamonds in the rough. Here’s one such opportunity for investors willing to dig deeper… STOCK OF THE WEEK: BREATHE EASY WITH THIS SURGING BIOTECH A surging biotech tackling rising asthma cases showed up on Alpesh’s radar. Find out what’s to like about the company in this week’s Stock of the Week. STOCK OF THE WEEK: DIVERSIFY WITH A COMPANY THAT’S OFF THE BEATEN PATH Alpesh says it’s time to look beyond the U.S. and broaden our exposure to growing markets in other parts of the world. See what he’s looking at in this week’s video. View Video Archive “I’VE BEEN ON BOARD FROM DAY ONE AND HAVE ENJOYED THE RIDE WITH YOU. KEEP UP YOUR MANWARD MESSAGE. IT’S A PURE WINNER!” SIGN UP FOR MANWARD FINANCIAL DIGEST TODAY. By submitting your email address, you will receive a free subscription to the Manward Financial Digest e-letter, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time. 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