GameStop (GME) reported poor Holiday same-store sales results, an increase in non-physical game sales, and reiterated its full-year earnings target. The stock is down 8% this morning. The price chart is not a disaster, but it’s not encouraging for the near-term, either.
Since the earnings outlook is one of growth, I will not remove the stock from the portfolio. I’m moving GME to Hold today.
On the buy side, I’m seeing lots of attractive stocks that can be bought here:
• Applied Materials (AMAT) has begun rising again, there’s no upside resistance, and stocks from the semiconductor industry have extremely attractive fundamentals. They’re landing on investors’ radars, and sure to generate additional buying activity.
• Mattel (MAT) has both a huge dividend and aggressive EPS growth prospects this year. MAT is low within its trading range. Nobody has missed their chance to earn outsized capital gains on MAT.
• We have lots of great energy stocks in the portfolios, and now they’re having a pullback. If you want more energy exposure, ExxonMobil (XOM) is the one I’d buy today. Similarly, Archer Daniels Midland (ADM) rose nicely upon joining the portfolio, and is now having a pullback. ADM is buyable here.
• Lastly, Vertex Pharmaceuticals (VRTX) began the year with a nice upward move, but there’s lots of room still for capital gains, and the chart remains bullish.