SPECIAL NOTE: The technology industry
is abuzz with a breakthrough tech that could lead to more than $12
trillion dollars of upgradesâ5G. It has quickly progressed from
something thatâs âcoming soonâ to âjust about here,â and could be
big business for different types of companies. Thatâs why in our
newest Special Report, Top Stocks for the $12 Trillion 5G Data
Revolution, we examine the technology behind mobile networks and
what it means for a connection to meet 3G, 4G and 5G standards. We
also explore the investment opportunities that are present with the
impending rollout of 5G networks and how you can profit from this
budding new technology. Log on to Zacks.com to read it
now.
A lot of traders decided to extend the Presidentâs Day weekend, as
Tuesdayâs session was pretty quiet. The major indices started the
day on the negative side, but managed slight gains by the closing
bell despite slipping in the final hour.
The NASDAQ was up 0.19% to 7486.77, while the S&P advanced
0.15% to 2779.76. The Dow held onto the plus side by its
fingernails with an increase of only 0.03% to 25,891.32.
Trade issues promise to be another big factor this week. President
Trump reiterated that the March 1 deadline could be extended if the
U.S. and China keep making progress. The meetings last week in
Beijing provided some positive headlines, which hopefully will
continue as the talks pick up again this week in Washington.
Of course, the most positive headline would be an actual trade
deal!
Last week, the Dow and NASDAQ easily completed an 8th straight week
in the green, while the S&P finished its third straight week
higher and its 7th in the past 8. The market expects some sort of
trade deal⦠and soon. The good vibes last week and the continuation
of talks this week is keeping sentiment positive for
now.
âThe market is pricing this (trade) deal in, so make no mistake
that if talks break down the market will too. So, as we get closer
to a deal over the next week or month, we will likely remain stuck
between 2750 and 2800 in the S&P until we receive more
clarity,â said Jeremy in Counterstrike.
Meanwhile, retail colossus Walmart had an amazing holiday quarter
with earnings and revenue that beat expectations. Also, e-commerce
sales surged more than 40%. Shares were up 2.2% today.
The companyâs report was newsworthy in its own right of course, but
it was all the more interesting coming after last Thursdayâs
bizarre retail sales report that saw a decline of 1.2% in December.
So far, the market seems to consider that result to be a glitch,
though weâll know more when additional data is
released.
Today's Portfolio Highlights:
Stocks Under $10: Shares of Veeco Instruments
(VECO) went on quite a ride today, dropping sharply in the morning
before rebounding to a slight gain by the closing bell. Brian Bolan
has been looking to lessen the portfolioâs exposure to chips
because he believes a China trade deal is already priced into the
space. Therefore, this roller-coaster session provided all the
excuse needed to sell VECO and take a nice 39% return in just a
little over a month.
But the editor also bought today by adding Telenav (TNAV), a Zacks
Rank #1 (Strong Buy) provider of location-based services. More
specially, it offers voice-guided navigation on mobile phones. The
company has a great history of beating quarterly earnings
expectations of late, but Brian really liked that the positive
surprises have been improving over the past four quarters. In fact,
it has an average beat of 23.7% in that time. He believes that
profitability is on its way to TNAV, so he added it on Tuesday and
plans to buy again on Thursday. Read the full write-up for
more.
Counterstrike: The portfolio made a couple classic
Counterstrike moves to start the week. Canada Goose (GOOS) is a
Zacks Rank #1 (Strong Buy) outerwear retailer. It makes those
jackets with the distinctive patches that every other person seems
to be wearing this winter. Last week, the company reported a
positive surprise of 24% and raised its outlook for the full year.
However, shares saw an aggressive selloff on margin concerns.
Jeremy thinks the reaction is way overdone and that GOOS is set to
reverse course and move higher again. He added it on Tuesday with a
5% allocation.
Ditto for Qualys (QLYS), the Zacks Rank #1 (Strong Buy) provider of
cloud security and compliance software. The company beat by 27% in
its recent report with revenue growth of 21% and record margins.
However, the 2019 outlook wasnât as strong as expected, leading to
a sharp selloff. As with GOOS, the editor thought the pullback was
too severe for a company with long-term potential in a growing and
increasingly necessary space. He took advantage of the overreaction
by adding QLYS with a 5% allocation. Read the complete commentary
for a lot more on these moves.
Surprise Trader: This earnings season may be a bit
long in the tooth, but there are still plenty of companies yet to
report that could bring nice returns to the portfolio. Case in
point, The Mosaic Company (MOS) is one of the worldâs leading crop
nutrition names⦠and it doesnât report until after the bell next
Monday. This Zacks Rank #2 (Buy) has a positive Earnings ESP of
more than 2% for the quarter, while earnings estimates for 2018 and
2019 have been trending higher. Dave likes what he sees and added
MOS on Tuesday with a 12.5% allocation.
Zacks Short List: This weekâs adjustment included a couple
swaps, as the portfolio short-covered Weibo Corp (WB) and
ConocoPhillips (COP). It replaced these names by adding GrubHub
(GRUB) and Apache Corp (APA). Learn more about this emotion-free
portfolio that takes advantage of falling and volatile markets by
reading the Short List Trader Guide.
Black Box Trader: All four of the stocks that were sold in this weekâs adjustment were positive, including one that advanced by nearly 10%. The positions that left the portfolio today include:
⢠Boot Barn (BOOT, +8.9%)
⢠NRG Energy (NRG, +5.6%)
⢠Rent-A-Center (RCII, +1.6%)
⢠Aspen Insurance Holdings (AHL, +0.5%)
The new buys that replaced these names are:
⢠Foot Locker (FL)
⢠McKesson Corp. (MCK)
⢠SpiritAeroSystems Holdings (SPR)
⢠Robert Half International (RHI)
Read the Black Box Trader's
Guide to learn more about this computer-driven
service designed to take the emotion out of investing.
All the Best,
Jim Giaquinto
Recommendations from Zacks' Private
Portfolios:
Believe it or not, this article is not available on the Zacks.com
website. The commentary is a partial overview of the daily activity
from Zacks' private recommendation services. If you would like to
follow our Buy and Sell signals in real time, we've made a special
arrangement for readers of this website. Starting today you can see
all the recommendations from all of Zacks' portfolios absolutely
free for 7 days. Our services cover everything from value stocks
and momentum trades to insider buying and positive earnings
surprises (which we've predicted with an astonishing 80%+
accuracy). Click here to "test drive"
Zacks Ultimate for FREE >>
Zacks Investment Research