The major indices chalked up another session of all-time highs on Friday as the market continues to coast on the president’s recent statement that “phenomenal” tax measures are on the way. The S&P continued to climb above 2300 with an advance of 0.36% to 2316.1. Meanwhile, the Dow increased 0.48% to 20269.4 and the NASDAQ rose 0.33% to 5734.1.
The last two days really turned things around for the week, which had a very timid start as investors wondered when The Donald would get around to his pro-growth promises. But as Friday’s closing bell rang, the simple statement from POTUS helped the S&P to rise 0.8% for the week, while the Dow and NASDAQ climbed by 1% and 1.2%, respectively. Stocks may have been given enough “oomph” to keep moving higher into the new week, but will be expecting to see some specifics from the White House sooner rather than later.
The portfolios were busy to end the week. Options Trader cashed in a spread for a solid double-digit return, while Zacks Counterstrike shorted one name that’s gotten a bit ahead of itself and bought another that was unnecessarily sold off despite a solid quarter. Insider Trader and Game Changers also bought during the session. Read more about these moves below:
Today's Portfolio Highlights:
Options Trader: Applied Materials (NASDAQ:AMAT) has responded perfectly since Kevin added the company back in November. However, its earnings report is only 64 days away now, and there isn’t a big enough cushion over the spread to weather a possible poor response to the results. So the editor decided to play it safe and just pull the profits from the spread by selling to close the April 30.00 Call AND buying to close the April 35.00 Call. The spread brought a profit of 65% to the portfolio.
Zacks Counterstrike: Shares of Deckers Outdoor (DECK) have soared past $52 on rumors that the company may eventually be up for sale. But Jeremy is skeptical that this Zacks Rank #5 will find a buyer at valuation level, especially after DECK missed fourth-quarter expectations and guided lower. That means the stock is WAAAY too high right now and is bound to come down, so the editor shorted it in the portfolio with an 11% allocation.
Counterstrike also bought a 12% allocation in software developer Aspen Technology (AZPN). It’s a classic case of the HFTs dragging down a company after a solid quarterly report. The Zacks Rank #1 dipped right into a 50% Fibonacci long, which is one of Jeremy’s favorite buying signals. He thinks AZPN is heading back to all-time highs. Read more about both of these moves in the complete commentary.
Insider Trader: Analysts are feeling a bit better about the acquisition of Rite-Aid by Walgreens Boots Alliance (NASDAQ:WBA), after the drug and beauty giant announced that it would extend its offer, divest more stores and pay less for the shares. In the aftermath of this modified deal, the Chief Operating Officer and a director both bought shares earlier this month. Tracey also liked this amended deal and decided to sell BSM to make room for an approximately 9% position in WBA. Get a lot more specifics on this new addition in the complete commentary, and be ready for more buys next week.
Game Changers: Lincoln Electric (LECO) recently moved its quarterly report up by two weeks. Sometimes such a move means nothing at all, but other times it is a signal that there’s good news coming. Brian is in the latter camp, and so he brought the portfolio up to 100% invested by buying this welding, cutting and brazing products company. This Zacks Rank #2 is a “Trump stock through and through”, and it posted a solid beat in its previous quarterly announcement. The editor is expecting more of the same when LECO reports again on February 14. Read the complete commentary for more on this new addition.
Have a Great Weekend,
Jim Giaquinto
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