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The last few days have been pretty rough for the market, but it didn’t keep January from kicking off 2018 in style. The NASDAQ was up more than 7% this month, while the Dow gained nearly 6% and the S&P advanced more than 5.5%.
As for Wednesday, the major indices came well off their highs from earlier in the session, but still managed to barely break a two-day losing streak. The Dow was up 0.28% to 26,149.4 and the NASDAQ rose 0.12% to 7,411.5. The S&P increased 0.05% to 2823.8.
After today’s Fed meeting, it seems we’re all set for a new round of rate hikes in 2018 that are likely to start in March. This news was a big reason that the market slipped after a strong opening. Meanwhile, the ADP employment report blew past expectations with 234,000 jobs added in January.
The next few days will be the most important for earnings this week. By the time this summary is posted, Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) will have reported earnings. And then tomorrow we will see Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOGL) all announce after the bell.
The editors have been using the market's recent sluggishness to buy some quality companies at bargain prices. In the portfolios today, Healthcare Innovators added a “highly speculative” name, while Options Trader took a bullish position on an energy company. Brian Bolan was active in both of his portfolios. He banked a double-digit profit and bought a biotech in Home Run Investor, while picking up an AI play in Stocks Under $10. Learn all about these moves below:
Today's Portfolio Highlights:
Healthcare Innovators: Shares of Spark Therapeutics (ONCE) dropped on Wednesday and provided Kevin with a good opportunity to buy this gene therapy company. Recent news on the pricing of its eye drug Luxturna was positive, but expectations for revenue growth are all over the map right now. Therefore, the editor considers this a “highly speculative” name; in other words, it’s not for the jittery investor. Most investment banks are bullish with the average price target over $75, but one is especially bearish as it pertains to Spark's hemophilia candidates. However, Kevin sides more with the optimistic guidance for now, since the big buyout of BIVV for hemophilia and because Novartis will be paying ONCE royalties after taking over ex-US sales of Luxturna. Read the full write-up for more specifics on this new buy.
Home Run Investor: The portfolio didn’t have much exposure to the biotech space…until today. Brian Bolan added Collegium Pharma (COLL), a Zacks Rank #2 (Buy) specialty pharma company that develops prescription and over-the-counter drugs to treat central nervous system, respiratory and skin-related disorders. Like many biotech companies, COLL is losing money right now. However, it has beaten the Zacks Consensus Estimate in the last four reports and revenues have increased. Loss estimates are getting narrower and narrower. The full write-up has a lot more on this new addition. In other news, Control4 (CTRL) has slipped to a Zacks Rank #5 (Strong Sell), so the editor decided to sell this home automation company and collect a nice 38.3% profit.
Options Trader: Kevin has been looking to add a position in Devon (DVN) for a little while now, and a recent pullback in shares has provided the editor with a great opportunity to do so. On Wednesday, he added a bullish position in the independent energy company by buying two July 43.00 Calls. Learn more about this move in the complete commentary.
Stocks Under $10: A 17% drop in share price yesterday gave Brian Bolan the opportunity to add a company he’s been watching. This morning, the editor picked up ReMark Media (MARK). The company is an artificial intelligence play that is still running a loss…but the loss is shrinking. Plus revenues have been moving higher. See the full write-up for more on this new addition and all of today’s other moves.
Have a Good Evening,
Jim Giaquinto
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