Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, February 6. Kevin Matras, Sheraz Mian, David Bartosiak, Neena Mishra, CFA, FRM, and Kevin Cook will cover the investment landscape from several angles in this informative event.
Don’t miss your chance to hear:
• Sheraz and Kevin Cook Agree to Disagree on what will be the single most important metric investors should watch in the first half of this year
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and Neena choose one portfolio to give feedback for improvement
• And much more
So be sure to mark your calendar then log on to Zacks.com and bookmark this page.
The market is feeling pretty good these days, so why not rally ahead of the final earnings report for a FAANG name this season? While waiting for Alphabet’s announcement after the bell, the major indices all started the week solidly on the plus side.
Technology led stocks higher on Monday, sending the NASDAQ up by 1.15% (or more than 83 points) to 7347.54. The Dow advanced 0.70% (or about 175 points) to 25,239.37. These indices are both enjoying six-week winning streaks.
The S&P was up 0.68% to 2724.87.
Alphabet beat on both the top and bottom lines after the close today, but shares are down more than 2% afterhours as of this writing. However, the stock was up during the session, as were all the other FAANGs led by a more than 3% jump for Netflix (NASDAQ:NFLX).
It’s another busy week of earnings, but the market is likely to pay even closer attention this time. There are no major Fed events scheduled in the coming days and the all-important jobs report is now in the past.
We probably won't get any encouraging trade headlines either since the meetings with China’s Vice Premier Liu He are now over. Plus, tomorrow is Chinese New Year, so don't expect any trade breakthroughs during the festivities.
That just leaves us with earnings, which have been growing slower than previous quarters, as was expected, but are still solid. If the market is going to continue this impressive rebound that started on Christmas Eve, we need some good reports to keep the positive sentiment going. The initial response to Alphabet (NASDAQ:GOOGL) was a bit negative, though it continued this earnings season’s “much-better-than-feared” track record.
It will be interesting to see how the market responds to the report during tomorrow’s trading session. In the days ahead, we’ll also see releases from the likes of Walt Disney (NYSE:DIS) (tomorrow), General Motors (NYSE:GM) (Wednesday) and Twitter (Thursday), among dozens of others. Buckle up for another crazy week!
Today's Portfolio Highlights:
Surprise Trader: It’s another busy week of earnings, so Dave again plans to add a stock each day. First up is social media giant Twitter (TWTR), which is a Zacks Rank #1 (Strong Buy) in a space that’s in the top 11% of the Zacks Industry Rank. But perhaps most impressive is its positive Earnings ESP of more than 13% for the quarter coming before the bell on Thursday. TWTR was added today with a 12.5% allocation. Read the complete commentary for more and get ready for another buy tomorrow…and the next day, etc.
Value Investor: The portfolio already has big entertainment names like Disney and Sony, but Tracey thinks there’s room for one more. On Monday, the editor bought Discovery, Inc. (DISCA), an entertainment network with brands like Discovery Channel, Animal Planet, Food Network and HGTV. Along with all the usual value characteristics, DISCA’s PEG Ratio of just 0.3 suggests it has the rare combination of both Growth AND Value that this portfolio loves to see. It will report again on February 26.
But Tracey promised TWO buys today! The other pick up comes from the manufacturing/industrial space, which is one of her favorite areas right now. Colfax (CFX) is a diversified global industrial company that does Air and Gas handling, along with Fabrication Technology. This Zacks Rank #2 (Buy) also has a low PEG of just 0.7%, along with a great track record of beating quarterly earnings expectations. It reports again on Feb 13. Read the full write-up for more on these new picks, and be prepared for more buys over the next few weeks.
Blockchain Innovators: It’s time to get back into CBOE Global Markets (CBOE). This stock was one of the portfolio’s inaugural picks last year, but Dave sold it in late May after analysts turned sour on it. Today, earnings estimates for this holding company of the Chicago Board of Options Exchange are moving higher as the stock has found support. The first-ever bitcoin futures contract was traded on this exchange, so the editor feels it is fitting to give CBOE another chance in the portfolio. Read the full write-up for more.
TAZR Trader: Last time Cloudera (CLDR) reported earnings in December, the enterprise software solutions company beat by 73% as revenue grew 25%. Rising earnings estimates turned this stock into a Zacks Rank #1 (Strong Buy), and its still rather affordable after buying fellow Hadoop and Big Data company Hortonworks last month. Kevin plans to add CLDR with a 7% allocation. Learn a lot more about this new buy in the complete commentary.
Black Box Trader: The portfolio sold four positions in this week’s adjustment and all of them were positive! Here are the names that left the service today:
• HCA Healthcare (NYSE:HCA)
• HD Supply Holdings (HDS)
• Spirit Airlines (SAVE)
• Graphic Packaging (GPK)
The new buys that replaced these names are:
• Rent-A-Center (RCII)
• Dollar Tree (NASDAQ:DLTR)
• Meritor, Inc. (MTOR)
• American Airlines Group (AAL)
Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Zacks Confidential: The market has staged an impressive bounce back from the correction that plagued the final three months of 2018. However, there are still a number of uncertainties out there that promise to make 2019 a very challenging year. Our ETF strategist Neena Mishra believes that focusing on high quality and low-volatility ETFs will give you a great opportunity to prosper in this year. Read here commentary by clicking: Best ETF Strategies for 2019.
Until Tomorrow,
Jim Giaquinto
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