I'm Playing These 3 Stocks, Even If They're Getting Too Hot to Handle
Certain market sectors are boiling over now, and here's what I'll do if these energy, biopharma and retail names get a bit too frothy...
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
The latest China tariff threats were completely forgotten overnight, and the market is on another rampage higher. Breadth is very strong, with about 75% of names in positive territory and 220 12-month highs.
Once again, small caps and secondary stocks are leading the charge. The Russell 2000 is up 1.56% to an all-time high, but what is most impressive is the number of stocks that have jumped up more than 10%.
I mentioned early this week that this is the first time I’ve seen any action that I would consider to be bubble-like, and that is continuing today. The big movers are mostly stocks with very aggressive valuations. For example, Eos Energy Enterprises (EOSE) has more than doubled since breaking out a month ago and is up an additional 4% today. Stifel raised its target price on the stock to $22 from $10 this morning.
Currently, EOSE is expected to lose $1.25 per share this year and $0.37 next year. Although it is not valued based on those numbers at this time, it serves as a good example of the desire for exposure to sectors that supply energy in the form of batteries.
I am staying with the stocks with strong momentum for the most part, but have taken some profits. I expect there will eventually be some abrupt pullbacks soon, but I’ll try to pad profits now and then worry about making some quick sales when things start to cool off.
I’m inclined to put money to work in some lagging names. One name I’ve followed for a while that has been acting very poorly is ADMA Biologics (ADMA). The stock has been struggling after failing to beat last quarter at the same pace as previously. It has an earnings per share estimate of $0.9 for 2026, and Raymond James put a $32 target on the stock on Aug. 18. That is a hefty target for a stock currently trading at $15. The stock has finally turned up, and I have increased my position substantially.
I mentioned Dutch Bros (BROS) as a bottom fish earlier this week, and that has turned up nicely as well. I took a small initial position and am looking for an opportunity to add more.
There are still some good buys out there, but this is very frothy and bubbly action in quite a few stocks in certain sectors.
At the time of publication, DePorre was long EOSE, ADMA, BROS.
