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Nicole Benjamin: Hey everybody. It's Nicole Benjamin, your host here at Seeking Alpha to bring to you another episode of The Weekly Grade with Steven Cress, where we’re bringing to you market insights in minutes. Now, just a quick housekeeping before we get started.

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Steven Cress: That is a mouthful.

NB: We did it. We did it. Alright. Now, Steven Cress, everybody, VP of Quantitative Strategy here at Seeking Alpha. He is in charge of a lot of the amazing products you've probably seen on the site, Alpha Picks, PRO Quant Portfolio. So, if any of those might be something of interest to you, go ahead, take a look, and, yeah, get started.

Now, Steve, for my first question for you today, I want to jump right in. Everyone's focused on NVIDIA. You've identified Micron as the number one Quant-ranked stock in the entire market. So, how has Micron shifted from a cyclical memory supplier to a must own piece of critical AI infrastructure?

SC: It certainly has. Well, I'll tell you, it's all in the data. When we took a look at, especially at the beginning of the year, at Micron, we noticed it had a great valuation framework, and it had fantastic growth. And the stock has done incredible. Year-to-date, it's up 151%. NVIDIA, which most people focus on is up only 20% year-to-date. And the valuation for a company like NVIDIA is really expensive. So, if you look at a conventional P/E metric or an EV-to-EBITDA metric for NVIDIA, it's very expensive. When you look at our platform, it actually has an F grade for valuation because it's so expensive on those metrics.

For Micron, the P/E is only 11.69x. That's not only cheap compared to the S&P 500, it's amazingly cheap compared to the IT sector as well. But more importantly, when we look at growth, we give it an A+ because the growth for the company is so far superior versus the rest of the sector. Its revenue growth rate is at 90%, compared to the sector at 11.5%. Its EPS growth rate year-over-year was 412%. The forward growth rate is 329%, and that's compared to the sector at about 16%. So, really quite easy for us to figure out from a quantitative and data driven perspective. It had amazing growth and an amazing valuation framework and amazing profitability. So, it was an easy pick.

NB: Alright. Well, for my next question for you, I'm looking at the chart here, and we see triple-digit returns from things like SanDisk and MaxLinear. So, in such a volatile market, how does your analysis help investors find that high conviction winner before they skyrocket?

SC: Yeah. So, really, all these stocks had a Quant Strong Buy, and they've done incredibly well. As I mentioned, NVIDIA, which we had a Hold on in the beginning of the year, is only up about 20%. The common thread with almost all of these stocks is that they have a superior growth rate, better valuation, and really from a Quant perspective, when we look at stocks, we look for companies that are collectively strong on five investment characteristics. That would be growth, value, profitability, momentum, and EPS revisions.

So, if they're collectively strong on all those investment characteristics, they tend to get a Strong Buy. And what we found with NVIDIA, despite like the amazing growth that that company has had, the valuation framework is just incredibly expensive. So, it makes it a little bit riskier. For these, it was an easier pick. You have great valuation framework plus growth. So, they came out with a Strong Buy directional recommendation.

NB: Alright. Now, a big fear for many investors is buying at the top. And specifically with Micron, it's up over 600% in just the last year. So, on your scorecard for Micron, with its nearly perfect factor grades across the board, I guess, how does the analysis determine that a stock at an all-time high is still considered a bargain?

SC: Valuation. So, a stock could be up 10%, 100%, 600%, if the valuation is still attractive relative to the sector the stock is a Buy. People should not be concerned. You could look at almost any stock that's done incredibly well over time. The decision when to buy it should come down to a combination of growth and value and of the valuation. And as you could see, if you look at the factor grade card here, six months ago, it had a grade of B-, and now it has a valuation grade of B. So, the valuation is actually more attractive now than it was six months ago, despite the meteoric rise in the stock price.

NB: Well, that sounds good for me. Now, I see here that the Alpha Picks portfolio is currently outperforming the S&P 500 by nearly 400% since its inception. So, when we see global uncertainty and market swings, what specific data point are triggering these Strong Buys that gives those investor’s confidence to just stay the course?

SC: So, with Alpha Picks in particular, what we do is, twice a month we provide individuals with our favorite Quant Strong Buy. And as I mentioned before, those five investment characteristics are core to all of these stocks. So, basically, every two weeks we're focusing on companies that look really strong on those investment characteristics. And as you could see, the payoff has been tremendous. Since its inception in July of 2022, it's up almost 400%, compared to the S&P up about a 100%.

And with the S&P 500, you're getting stocks that have poor fundamentals or good fundamentals or mediocre fundamentals. With Alpha Picks, we're focusing on the companies that have the best fundamentals, and that's why the performance has been so superior.

NB: Well, we'll leave it right there. Thank you so much, Steve, for joining us today. And for everybody that's listening in, go ahead, click the article link, follow Steve on Seeking Alpha, and see if Alpha Picks might be right for you. See if PRO Quant Portfolio might be right for you, and maybe Micron as well. And we'll catch you here next time on another episode of The Weekly Grade. Thank you.

Read Steven Cress' Article on Seeking Alpha

Explore Alpha Picks Today!

Join the Waitlist for the launch of the Quant Income Growth Portfolio!