The major indexes closed in the green today, with the Dow gaining 118 points and the Nasdaq advancing 27 points.
All of our key market timing indicators remain bullish, and we’re encouraged that more and more growth stocks are acting well. That said, individual stocks are still providing some potholes, so our goal is to ditch our laggards and replace them with stronger positions.
Earlier today on a special mid-day hotline, we advised selling Freeport-McMoRan, which succumbed to uncertainty surrounding its Indonesian mine and fell below our buy price. We sold at a small loss.
In its place tonight, we’re going to buy Texas Capital Bancshares (TCBI), a growth-oriented firm that offers a range of lending services in Texas and elsewhere. The company’s sales and earnings growth are accelerating and we think the stock can do well in a bull market.
As a note, Texas Capital’s stock can trade thinly at times, so try to avoid placing overnight orders.
The combination of the sale of Freeport and the new purchase of Texas Capital leaves the Model Portfolio with eight stocks and a cash position of around 18%. All eight of our stocks are rated BUY—they are Charles Schwab, Facebook, Lumentum, Netflix, ProShares Ultra S&P 500 Fund, Shopify, Texas Capital Bancshares and XPO Logistics.