We’ve seen a big improvement in the way many growth and early-stage stocks are acting over the last two weeks. Many of our stocks that sold off in March have been gaining some altitude back, and many of those that were acting well continue to do so.
That’s not to say none of our stocks have hit potholes. It’s perfectly normal and expected that we’ll have some strikes and/or that we’ll have a few dogs in the portfolio for some time, but in this environment I’m increasingly reluctant to give too many dogs the rope they may need to recover. That’s partially because there continues to be a lot of attractive opportunities out there for our capital. It’s also because we have a portfolio of 23 stocks, with another fresh batch in the oven for next week’s April Issue. We can afford to be selective.
With all that in mind, here are a few upgrades, downgrades and notes today.
ContextLogic (WISH) moves to SELL. I like the story here and this could very well be the “bottom” for WISH, but there’s no denying the chart is weak and there are numerous online retailers out there that look far better. Let’s move on. SELL
Virgin Galactic (SPCE) Moves to SELL A QUARTER. The performance of many SPACs has been lackluster lately and it hasn’t helped that Virgin has pushed back launch dates. This week’s news of insider selling has driven another leg down. We booked a partial gain of 159% in January and have a roughly 40% gain on our remaining stake today, so it’s not like we’ve felt a lot of pain. Selling another quarter around here feels about right. If SPCE sells off more we’ll be thankful. If it bounces and rallies, we’ll kick ourselves, but not too hard. SELL A QUARTER
DraftKings (DKNG) is a good story and the stock’s not busted, but I’ve been surprised by the lack of strength here. We’re not selling today, but I’m also not going to let the stock slide and turn into a meaningful loss. If we go much below support around 56.5 expect a sell alert. Moving to hold today. HOLD
Fisker (FSR) is another stock that came public via SPAC IPO and which looks like garbage right now. With only a half position we have a little more flexibility here. Keeping at hold. HOLD
Sprout Social (SPT) has looked solid after bouncing off support near 50 for a second time. I like the story and the chart looks encouraging. Moving back to buy. BUY
Upwork (UPWK) also looks good. It may be that the J&J vaccine pause has given an artificial lift to the work-from-home group. But among software Upwork is interesting because of the smallish size of the company and the overhaul to the business that has churned out much better performance since CEO Hayden Brown came in at the beginning of 2020. Upgrading to buy. BUY