The market has opened higher today following yesterday’s nice upside reversal. Recent support combined with some positive action among some growth stocks is encouraging. We’re happy to hold our resilient stocks and we’re not advising an outright defensive stance, but with our Cabot Tides still negative, it’s best to remain cautious.
This morning’s message concerns our half position in Zillow (Z), which was acting fairly well until earnings last night. While the numbers were solid, management’s commentary after hours was not, and Z is plunging this morning below support.
There’s always the chance the stock finds support, but we have a loss of around 15% on our small position and, even if the buyers do show up later today, the stock is highly damaged; there will be better stocks to own during the next uptrend.
Long story short, we advise cutting the loss in Zillow (Z) today and holding the cash.
We’ll have our regular Cabot Growth Investor update after the close today with the usual batch of advice concerning the market and our other Model Portfolio stocks.