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This record-breaking Dow stock could just be getting started, traders say

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As S&P 500 approaches records, these stocks are leading the way

Stocks are putting a rough August in the rearview mirror with a broad market rally pushing the S&P 500 to within 2% of its record high.

But, a handful of stocks are already there. Walmart, Mastercard, Lockheed Martin, P&G and Hershey hit all-time highs this week.

Strategic Wealth Partners' Mark Tepper says one Dow stock is just getting started: Walmart. He told CNBC's "Trading Nation" on Thursday that the company can thrive regardless of the economic backdrop and also because it's taking initiatives to drive volume.

"Our favorite staple is Walmart. A huge portion of their business is groceries and people need to eat regardless of the direction of the economy. And in a low-margin business like groceries it's all about volume and they're doing everything they can to boost value — rolling out delivery, curbside pickup, all that stuff is helping to boost volume. So I think there's more upside with Walmart," he said.

Shares of the big-box retailer hit an all-time high Thursday, bringing the stock's total gain in the past three months to 11%. That's more than double the gain on the S&P 500.

Like Tepper, Miller Tabak's Matt Maley is a believer in Walmart. After looking at the stock chart, he argues that it's poised for more gains ahead.

"What I love about this stock is that even when the stock got hit with the rest of the market at the end of last year, in the fourth quarter when we saw the deep correction, it didn't make a lower low. A lot of stocks did, especially a lot of big-cap names, and this one did not," Maley said on the same show.

Shares of Walmart have rallied more than 35% since sinking to a 52-week low on Christmas Eve. Maley said it's technically attractive, and from a fundamental standpoint it's "one of the few brick-and-mortar retailers that has solved the internet retailing issue."

Another defensive play he's watching is Lockheed Martin. After falling 18% in 2018, the aerospace giant has soared this year, gaining nearly 50% and hitting a record high Thursday.

"This year it's bounced back strongly, bounced out of that downside trend channel that it had been in and it made a higher high and not just that, a significant higher high."

He did add that after the move higher it looked "a little overbought" so he wouldn't "chase it aggressively here" but look instead to "buy on any kind of dip."

When it comes to safety trades, Tepper believes these stocks will continue to work for the foreseeable future since "a lot has to go right" before investors begin to "rotate out of defensives and back into cyclicals."

"Number one, you need a trade deal. Number two, the Fed needs to cut a few more times, and number three, you need to see some more stimulus coming out of China and Europe to mitigate all that slowing global growth. The rally is really contingent on a lot of things, so I would say keeping a defensive posture is the best course of action right now, and that trade is going to continue to work," he said.

Disclosure: Strategic Wealth Partners owns shares of Walmart.

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