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Value Investor
Wealth Building Opportunites for the Active Value Investor

Cabot Undervalued Stocks Advisor Special Bulletin

Two of our stocks report strong earnings.

Today’s news: GameStop (GME) moves from Hold to Sell. CIT Group (CIT) and Knight-Swift Transportation (KNX) report strong earnings beats. Apple (AAPL) reports earnings after the close.

GameStop (GME) announced today that the company is no longer for sale. Since I was holding the stock while awaiting M&A activity, there is now no particular reason to hold GME. My recommendation is that all shareholders sell GME in favor of stocks with growing profits. The GME dividend is not necessarily at risk, because the company is consistently profitable, but the company is searching for leadership and a clear corporate direction. It’s possible that a new CEO could decide to reduce the dividend payout in order to use the cash flow for other business purposes. Sell.

I will write more about CIT Group (CIT), Knight-Swift Transportation (KNX) and Apple (AAPL) tomorrow. (I was busy with previous projects and appointments today.) In the meantime:
CIT Group (CIT) reported a big fourth quarter earnings beat. The stock is on Hold as it approaches price resistance at 47. I intend to give CIT a Buy recommendation after the next pullback. Hold.
Knight-Swift Transportation (KNX) reported a fourth quarter earnings beat, as I outlined earlier this week. The stock will likely trade between 30 and 36 in the near term, and then continue rising thereafter. Buy.
Apple (AAPL) will report first quarter results after today’s market close. Buy.