Issues
This stock has a good, solid story and a stock that appears to finally be kicking into gear after 16 months of post-IPO meandering.
There’s an old saying that a bull market climbs a wall of worry, and today is a perfect example, with many of our stocks hitting new highs despite the widespread fears of coronavirus. Thus I continue to recommend that you be heavily invested.
However, not all our stocks are strong, and this week three in particular have turned too weak to hold any longer. So out they go.
As for the new recommendation, it’s an insurance company (investment company) that pays a dividend but has great prospects for capital gains. Full details in the issue.
However, not all our stocks are strong, and this week three in particular have turned too weak to hold any longer. So out they go.
As for the new recommendation, it’s an insurance company (investment company) that pays a dividend but has great prospects for capital gains. Full details in the issue.
Current Market OutlookNothing much changed with the market’s evidence last week: The trends of the major indexes and most leading stocks remain strongly up, and there’s been very little in the way of intermediate-term abnormal selling action out there. On the other hand, many indexes have yet to hit new post-virus highs, fewer stocks are hitting new highs and the leading big-cap indexes are extended to the upside. As always, we put most of our emphasis on the primary evidence, which is why we remain mostly bullish; in fact, we’re nudging our Market Monitor up to a level 7 this week. But, while we still favor holding your strong, resilient performers, we also think it’s best to be choosy on the buy side, looking for names that have shown some recent power on earnings or have been running for a few months but have dipped to support.
Happily, this week’s list features many of names that have one of those two chart characteristics. Our Top Pick is Redfin (RDFN), which has been mostly a bust since coming public two years ago but showed overwhelming buying after earnings last week. As with most names, try to enter on some weakness.
| Stock Name | Price | ||
|---|---|---|---|
| Acceleron Pharma (XLRN) | 75.11 | ||
| Alteryx (AYX) | 132.78 | ||
| Amazon.com (AMZN) | 2.00 | ||
| Appian (APPN) | 46.48 | ||
| Envestnet (ENV) | 77.12 | ||
| Invitae (NVTA) | 32.06 | ||
| iRhythm Technologies (IRTC) | 51.15 | ||
| Redfin (RDFN) | 40.40 | ||
| Sunrun (RUN) | 38.40 | ||
| Survey Monkey (SVMK) | 19.97 |
The overall market remains in an uptrend, as do most leading stocks, and that’s why we remain mostly bullish. But while we’re positive, we’re not pounding the table, partly because of some secondary measures (most broader indexes haven’t hit new highs in a month) but mostly because individual stocks aren’t offering up many great entry points. Tonight, then, we’re again standing pat, happy to ride our winners but monitoring earnings season closely, both for stocks we own and for those we want to buy.
In tonight’s issue, we go over a few new ideas, including a couple of IPOs from last year that were nailed but are now coming back from the dead; they could be morphing into leaders. And as usual we go over all of our current holdings and our updated watch list.
In tonight’s issue, we go over a few new ideas, including a couple of IPOs from last year that were nailed but are now coming back from the dead; they could be morphing into leaders. And as usual we go over all of our current holdings and our updated watch list.
The rollout of the new 5G technology is an evolution that is thrusting the world into a digital age that will change the world. This new technology will have a huge effect on the market in 2020 and beyond.
Companies that benefit from 5G have a powerful catalyst for growth that will push stock prices to a new level. But finding stocks in the area that are still cheap and defensive in a pricey and uncertain market is a challenge.
In this issue I identify a company that is defensive and high dividend-paying. But, unlike most stocks in that area, it is still reasonably priced. At the same time, the company has massive exposure to 5G and a huge catalyst for growth. With this company you can play offense and defense at the same time.
Companies that benefit from 5G have a powerful catalyst for growth that will push stock prices to a new level. But finding stocks in the area that are still cheap and defensive in a pricey and uncertain market is a challenge.
In this issue I identify a company that is defensive and high dividend-paying. But, unlike most stocks in that area, it is still reasonably priced. At the same time, the company has massive exposure to 5G and a huge catalyst for growth. With this company you can play offense and defense at the same time.
In the field of speech recognition software, this stock is a pioneer with plenty of room to grow. The company is known for its Dragon Naturally Speaking software package, which makes dictation faster and nearly as accurate as typing. It also allows users to control computer programs and send emails by voice command.
The market has snapped back in a surprisingly strong fashion, but breadth has narrowed, so I’m still suspicious of this rebound. However, there are still plenty of great charts as well as stories to go along with them, and today’s recommendation is one of them. In fact, you may even be a user of the company’s products!
As for the current portfolio, there are no changes today.
Details in the issue.
As for the current portfolio, there are no changes today.
Details in the issue.
Current Market OutlookThere’s nothing bad to say about the market’s quick rebound two weeks ago and its ability to hold those gains—at the very least, such action from the big-cap indexes and many leading stocks is a good longer-term sign. But it’s also important to look at all of the evidence, and on that front, things are mixed—broader indexes are still hanging around their 50-day lines (acceptable, but not overly powerful) and the number of names hitting new highs has dried up. That doesn’t necessarily portend doom, but it does describe an environment that’s a bit more hit-and-miss, especially with a ton of earnings reports set to be released. Overall, you should remain bullish, but be a bit discerning on the buy side, looking for names that have shown excellent recent strength and volume.
This week’s list has many stocks that meet that criteria, including a few that have popped after earnings. Our Top Pick is Lumentum (LITE), which recently came out of a very long launching pad and, after a four-week rest, has taken off after earnings.
| Stock Name | Price | ||
|---|---|---|---|
| AAXN (AAXN) | 87.11 | ||
| Bilibili (BILI) | 28.71 | ||
| Bill.com Holdings (BILL) | 88.76 | ||
| DocuSign (DOCU) | 107.98 | ||
| GDS Holdings Limited (GDS) | 80.15 | ||
| Insmed Inc. (INSM) | 30.64 | ||
| Lumentum (LITE) | 87.00 | ||
| Nuance Communications, Inc. (NUAN) | 25.35 | ||
| Old Dominion Freight Line Inc. (ODFL) | 221.91 | ||
| Scotts Miracle-Gro (SMG) | 155.72 |
Updates
There’s a lot more to “buying low” than just identifying falling prices.
2015 is almost over, thank the Lord! The stock market lacked momentum, trading sideways virtually the entire year.
How do you know if you own a “good” stock that will bring you capital gains?
I have two rating changes in the portfolios today: Intuit (INTU) in the Buy Low Opportunities Portfolio moves from Hold to Buy, due to the capital gain opportunity presented by the price pullback, and Priceline (PCLN) in the Growth Portfolio moves from Hold to Buy, due to the capital gain opportunity presented by the price pullback.
There’s been lots of news on our portfolio stocks in recent days: upside earnings surprises, downside earnings surprises, share buybacks, dividend increases and M&A activity.
There are two major reasons that we saw a 3.6%+ drop in U.S. stock markets last week.
We’re nearing the end of third-quarter earnings season, and so far, 75% of companies reported results that beat Wall Street’s expectations!
We’ve had a huge stock market rebound in October, with the NASDAQ up 9%, and the Dow and S&P 500 each up about 8% month-to-date. Investors are going to breathe a great sigh of relief when they see their October 31 account values.
Good news! Last week, the S&P 500 broke out of a sideways trading pattern, where it had been resting since the late-August U.S. stock market correction. The S&P could easily rise to 2,120 this fall—a 5% move—barring unforeseen bad news.
Alerts
This gold royalty company is adding to its coffers with small acquisitions and a strong pipeline.
Our article today begins with why investing in stocks is the best way to increase your wealth.
This owner of financial exchanges beat earnings estimates by $0.03 last quarter, and four analysts have increased their EPS forecasts for the company in the past 30 days.
This online travel service company beat Wall Street’s earnings estimates by $1.30 per share last quarter
The markets remained under heavy selling pressure today, with stiff losses in both the Golden Dragon ETF (PGJ) that tracks Chinese ADRs and the iShares MSCI EM ETF (EEM) that represents the broader emerging markets. As a result, we are selling one of our stocks tonight.
One of our stocks has lackluster performance and pattern of lower lows and lower highs, it’s time for us to move on and sell. Our capital will be better invested in the new pick, and I have several viable candidates on my watch list!
This low-priced stock has had its ups and downs, but takeover possibilities are attractive.
Both of these stocks had excellent quarters; the first remains a Buy
The major indexes were mixed on Friday, with the Dow rising 119 points and the Nasdaq falling 20 points, though many growth stocks took it on the chin as money rotated toward beaten-down names. As a result, we have one sale and two rating changes.
The markets came under heavy selling pressure today, as investors finally began to grapple with the possible effects of genuine trade war, one that included not just China, but many U.S. allies as well. As a result, we are selling two positions and moving two positions to hold.
The major indexes were mixed on Friday, with the Dow rising 119 points and the Nasdaq falling 20 points, though many growth stocks took it on the chin as money rotated toward beaten-down names. As a result, we have one sale and two rating changes.
Portfolios
Strategy
A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.
A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.
Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.
Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.
Our Cabot Momentum Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Momentum Trader features.