Stocks started the week with a third straight day of gains, as it continues to climb out of last Wednesday’s selloff. The major indices are not there yet, but a couple more days on the plus side should do it and put to rest one of the most hysterical plunges we’ve seen in a while.
For now, President Trump’s overseas trip has progressed without controversy and today the Chicago Fed National Activity Index reached its highest level in more than 2 years. In the absence of any obstacles, the market was able to move higher on Monday. The S&P climbed 0.52% to 2394, the Dow advanced 0.43% to 20,894.8 and the NASDAQ increased 0.82% to 6133.62.
The portfolios had several double-digit winners on Monday, led by a more than 50% profit for a position in Zacks Counterstrike. Momentum Trader, Black Box Trader and Insider Trader also sold stocks for strong returns. There were seven buys among the editors as well. Learn about it all below:
Today's Portfolio Highlights:
Zacks Counterstrike: The portfolio has already pulled double-digit profits out of Applied Optoelectronics (AAOI) twice in recent weeks, and today Jeremy decided to close out the position as it nears the $70 price target. This stock has been really good to the portfolio, but it has moved so high and seems due for one of its vicious pullbacks. The editor would be willing to get back in at a lower price down the road. For now though, he’ll just enjoy the 52.5% return.
Momentum Trader: For the second time in the past six months, the portfolio is getting a 20%+ winner out of Advanced Energy Industries (AEIS). The first time was back in December for a nearly 21.5% profit. Today, Dave wants to take a little risk off the table, so he sold half of this semiconductor manufacturing technology company for a 24.4% gain. But he’s holding onto the other half in case it continues to run higher.
Black Box Trader: The portfolio had a couple nice winners in this week’s adjustment, which included four swaps in all. The sold stocks were:
• Weight Watchers (WTW, +15.9%)
• KB Home (KBH, +8.5%)
• Cigna Corp. (NYSE:CI)
• Pilgrim's Pride (PPC)
The two new additions that replaced these names are:
• The Carlyle Group (NASDAQ:CG)
• Platform Specialty (PAH)
• Performance Food Group (PFGC)
• Ultra Clean Holdings (UCTT)
Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Insider Trader: Who knew avocados could be so profitable? Tracey did, which is why she bought Calavo Growers (CVGW) a little more than two months ago. The stock is up approximately 13% for the portfolio, and the editor thought it was time to bank that return on such a volatile stock ahead of its June 5th report. Remember, last time CVGW missed expectations and the shares got hammered. Plus, she wanted to make some room for a new buy...
The portfolio is moving from a fruit (yes, an avocado is a fruit) to fast food with its new addition of Yum China (YUMC), the Yum! Brands (NYSE:YUM) spin-off that operates more than 7000 KFC and Pizza Huts in China. Shares are hitting new highs after a solid first-quarter report amid an improving Chinese economy, but that didn’t stop the Chief Legal Officer and a Director from buying shares on May 17. Tracey likes to see insiders buying at new highs because it means that they are especially bullish that the good times will continue. She added it with an approximately 8% allocation.
Healthcare Innovators: Shares of Johnson & Johnson (NYSE:JNJ) are consolidating after moving higher in the wake of its Invokana update. Kevin saw this as a perfect time to add this well-known healthcare staple to the portfolio, especially after it announced a 5-year plan to release 10 “blockbuster” launches. The market has been pretty slow to react to such a bold plan, but the editor won’t make that mistake. Read the complete commentary for a lot more on this new addition.
Home Run Investor: Shares of HubSpot (HUBS) have gotten a bit oversold as it drifts below $70, leaving Dave with a great opportunity to add this inbound marketing software platform to the portfolio. The editor was most impressed with the company’s revenue growth, which came to 57% in 2015, 48.9% in 2016 and 32.16% this year. Read more in the full write-up and get ready for another buy on Wednesday morning.
Zacks Confidential: “If a picture is worth a thousand words, then the right stock chart can be worth thousands of dollars (or more)!” So says Kevin Matras, who incorporates the Zacks Rank in his methodology to find the “right” chart. He’s been very successful in this regard, so Steve gave him the Zacks Confidential this week to show how it’s done. Learn how to use chart patterns and get three stocks that look ready to breakout: Finding Breakout Stocks: Seeing is Believing.
Have a Good Evening,
Jim Giaquinto
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