Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

Two recent inflation reports indicated that overall pricing pressures continue their downward trek. But both also confirmed that inflation remains above the Fed's target of 2.0%. Let's first take a deeper dive into the Consumer Price Index. There were some positive results here. According to the latest CPI report, the overall inflation rate in August of 2.5% was lower than the prior month's 2.9%. That good news was supported by a low reading in the monthly core CPI rate. The core CPI excludes the impact of food and energy and rose 0.3% from July to August, consistent with subdued readings for the past six months. What's still propping up core CPI? Transportation Services (+7.9% YOY) and Shelter (+5.2%). These elements of the index tend to have stickier prices. In contrast, prices for Gasoline and New and Used Cars are lower year over year. The other inflation report was the Producer Price Index. The PPI measures pricing trends farther up the supply chain, at the manufacturing level. Here, we also saw a decline in the rate of inflation. For example, the PPI final demand annual rate through August was 1.7%, compared to 2.1% in July. We expect pricing pressures to continue to ease as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. The Fed lifted the feds fund rate from 0.0% to above 5.25% over the past 24 months, and the hikes evidently have done their part in reducing inflationary pressures. We now look for the U.S. central bank to be lowering rates in 2H24 and 1H25 as their concern shifts toward economic growth. The cuts should start next week.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are United Therapeutics Corp (UTHR); Broadcom Inc (AVGO); Palo Alto Networks Inc (PANW); Costco Wholesale Corp (COST) and the Focus List deletions are Walmart Inc (WMT); Itron Inc. (ITRI); Micron Technology Inc. (MU); Intuitive Surgical Inc (ISRG).

Palo Alto provides integrated internet security solutions for enterprise customers. The company's solutions are based on its 'next-generation' firewall and security platform, and also include software applications for various enterprise security needs. The company's founders include current Chief Technology Officer Nir Zuk, formerly of Checkpoint Software. The company shipped its first products in 2009 and completed its IPO in July 2012 at an initial share price of $42. Palo Alto executed a 3-for-1 stock split on September 13, 2022 through a two-share stock dividend. About 35% of the company's revenue is generated outside the U.S.