Today's Daily Stock Report will feature a model update, highlighting the SIA US 5-stock hypothetical research model. As of yesterday's close, the model's yearly performance has exceeded 100%, a remarkable achievement that reflects the efforts of SIA's team and the effectiveness of the system itself. Two key factors drive this impressive performance: concentration in high-performing stocks and a commitment to holding only those stocks that rank highest on the SIA Relative Strength Matrix. One significant contributor to the performance of the 5-stock portfolio is Netflix (NFLX). Netflix is an American subscription video-on-demand service that distributes original and acquired films and television shows across various genres, available internationally in multiple languages. Shares of NFLX have been highly ranked since October 30, 2023, and were added to the 5-stock US research model earlier this year. Currently positioned at #12 on the SIA S&P 100 Index Report, Netflix has shown solid performance, with shares up 58.58% this year, including a gain of 10.13% in the past month. This strong performance has propelled its relative strength ranking up by five spots in the last 30 days. In a market that continues to favor US equities, this $327 billion giant remains a favorite among investors, solidifying its status as the 27th most valuable company by market cap. Looking ahead, the Point and Figure chart scaled at 2% provides insight into NFLX's performance relative to the SIA matrix. A breakout in relative strength around the $425 level marked the beginning of a measured move. In the last report on Netflix dated January 25, 2024, resistance levels were identified at $587 and $701. These levels have now transformed into supportive zones, highlighted in light green, with specific lines drawn at $688.13 and $635.73. Resistance above current levels can be projected based on previous consolidation zones at $855.60 and $944.66. Notably, NFLX has achieved a perfect SMAX score of 10 out of 10, indicating strong relative strength compared to other asset classes.
In the second segment, the focus will return to the 5-stock model, with Netflix as one of its key pillars, alongside four other high-performing stocks. This concentrated portfolio, consisting solely of high relative strength names, has produced a one-year performance of 110.54%, translating to a compound annual growth rate (CAGR) of 14.71% gross of fees, compared to the S&P 500 Index benchmark of 8.20%. Year-to-date, this research strategy has gained 85.28%, while the index benchmark has risen 22.73%. Common concerns regarding this concentrated strategy often revolve around its practicality. However, SIA practitioners effectively utilize this model as part of a broader mandate, integrating it with other SIA research models as detailed in the attachment. These models also demonstrate strong performance with minimal overlap to the 5-stock US model. By combining the Canadian 5-stock model, the NASDAQ 5-stock model, and various ETF models, advisors can build a winning portfolio that is both balanced and characterized by high relative strength, which often leads to strong performance. For more information on how elite advisors leverage these research models in their practices, please contact SIA's account managers. Assistance is readily available.
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