Globus Medical: 3 Keys To Investing In Late-Cycle Markets

Dec. 11, 2019 3:21 PM ETGlobus Medical, Inc. (GMED)2 Likes
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Summary

  • Late-cycle markets are being driven by growth-starved millennials and boomers, says Louis Llanes, CFA, CMT, founder of Wealthnet Investments.
  • With low interest rates forcing most investors out of fixed income, investors are increasingly turning to equity markets, regardless of the risk of potential downturn.
  • Llanes says that to get defensive in this market, investors need a disciplined strategy that will be robust and durable during bear markets.

With low interest rates all but eliminating the potential for fixed income, boomers approaching retirement and ambitious millennials who want to retire early are turning to equity markets looking for growth, Wealthnet Investments founder Louis Llanes told Real Vision's Technical Trader.

But nobody knows when the bull market is going to end, so investors need to adopt a strategy that will be durable during bear markets.

Llanes said investors should focus on selection criteria, a catalyst being recognized by the market, and risk management.

"There's several things with risk management that we're looking at, at how you would adjust in this environment," he said.

"The first would be smaller position sizes. Second would be to shorten up your time frame. And [third], we want to take our profits sooner than we normally would. That's really, really important, because in this environment, you want to be able to take money off the table as you're going along."

The Trade

Louis likes a company called Globus Medical, ticker symbol (NYSE:GMED). He said to enter in at current levels at around $56 and buy all the way up to $59. Upside target range is between $68 and $71. Protective scale on our stops is between $54 and $52 to manage that risk.

The upside potential is about 26%, or about $15 a share. Risk is between 7% and 9% on this stock.

Source: Globus Medical

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