Search

When market pundits toss about terms like “growth stocks” and “value stocks,” it seems as if they’re saying “companies that are growing” vs. “companies that are not growing,” so we sugar-coat these companies and pretend that they have ‘value.” That’s not really what “growth vs. value” means!

oday, we are moving shares of Lamb Weston Holdings (LW) from Buy to Sell.

Current Market Outlook


The market had another constructive week, and today, the S&P 500 actually nosed out to new highs, with the Nasdaq close behind. While small- and mid-cap indexes are still further behind, the tenor of the overall market continues to improve—it’s likely not up and away, but the odds continue to favor the next big move being up. Individual stocks remain far trickier, with rotation occurring daily, but our thoughts from last week haven’t changed much: Given the many solid setups out there, a positive earnings season could launch a bunch of new leaders we can hop on (we think we’ve already highlighted some of them), but it’s still up to the bulls to produce a bunch more powerful breakouts in the indexes and individual stocks.

This week’s list is a mix of recent earnings winners and others that are set up nicely ahead of reports this week. Our Top Pick is Vertex Pharmaceuticals (VRTX), which might finally be getting going after years of ups and downs. Earnings are due Wednesday evening so handle with care.

Stock Name	Price	Buy Range	Loss Limit
ACADIA Pharmaceuticals (ACAD)	47.84	40-42.5	35-36.5
Allegiant Travel (ALGT)	170.65	164-168	151-153
Fortune Brands Home & Security (FBHS)	81.02	58-60	53.5-54.5
Lam Research (LRCX)	268.47	260-270	240-245
Pinduoduo (PDD)	87.53	39.5-41.5	35-36
Reliance Steel & Aluminum Co. (RS)	117.45	114-118.5	103-105
Seattle Genetics (SGEN)	150.85	99-103	89-91
Teladoc, Inc. (TDOC)	127.95	69-72	62-63.5
Valero Energy (VLO)	97.40	95-98.5	86-88
Vertex Pharmaceuticals (VRTX)	230.36	191-196	178-180

Current Market Outlook


There has been a lot of dramatic headlines recently, and we’ve even seen some sharp market moves. But net-net, the market remains where it’s been for the past few weeks—generally stuck in a tight trading range, with some stocks doing well, some faltering and most just biding their time. Long-term, we’re still optimistic that the next major move will be up, based on the still-bullish major trend of the indexes, the lack of selling pressure on the broad market and numerous studies that point toward higher prices in the months ahead. Because of that, we’re all for holding your strong performers, and it’s fine to pick up shares of new leaders at good buy points. But it’s best to quickly get rid of losers and hold a little cash until the buyers flex their muscles.

This week’s list has a nice mix of growth stories and turnaround situations. Our Top Pick is FMC Corp. (FMC), an agricultural chemicals firm that soared last week after a game-changing acquisition that should significantly boost earnings.

Stock Name	Price	Buy Range	Loss Limit
Darden Restaurants (DRI)	106.63	81-83	76-77
FMC Corp. (FMC)	0.00	71-75	65-68
iRobot (IRBT)	103.17	64-66	59-61
Louisiana-Pacific (LPX)	0.00	24.5-26	23-23.5
Madison Square Garden (MSG)	298.38	196-202	186-189
Medidata Solutions (MDSO)	0.00	60.5-63	56-58
Melco Resorts (MLCO)	0.00	18.5-20	17-17.5
Micron Technology, Inc. (MU)	43.31	27-28.5	24.5-25
Qorvo (QRVO)	129.47	69-71.5	65-67
Wright Medical (WMGI)	0.00	29-31	26-27

I’m raising my rating on Cardinal Health (CAH) today to Strong Buy. CAH appears in the Growth & Income Portfolio.

Revolve (RVLV) announced Q3 revenue of $244.1 million, up 62% and ahead of the $228.6 million (+60%) analysts had expected. By segment, REVOLVE grew by 56% (to $204.2 million) while FORWARD grew 95% (to $39.9 million).

This health-care data stock reported after the close yesterday with results that beat lowered expectations.

One stock reports strong fourth quarter and moves from Strong Buy to Hold; a second falls on temporary problems.

There is earnings news on several of the stocks in the portfolio.

There should be a strong recovery and bull market on the other side of this election and pandemic. Any market spooking shenanigans in the meantime should present a buying opportunity.

McDonald’s isn’t the dominant growth story it was. But McDonald’s stock continues its steady performance - and a breakout may be coming.

Bigbear.ai (BBAI) is up more than 160% in the last month on U.S. government contracts and comparisons to Palantir (PLTR). Is it too late to buy this AI stock?

Election season is underway, and now both candidates are fully on the side of cannabis investors. Here are the four reforms that make cannabis a strong buy now.

Despite a barrage of negative headlines about private lending, insider buying of private credit stocks is a strong signal that the bad news is priced in.

Current Market Outlook


There are definitely some positives among the action out there—growth stocks, for instance, have continued their rally, with many “old” winners finally showing some power in both volume and price (including some names that have poked out to new highs). That said, the overall action in the market remains hectic: Cyclical stocks have cascaded for the most part while growth has ramped, with most major indexes we track now below key support. Moreover, on a daily basis rotation remains intense (like today), with stocks and sectors getting whipped around depending on what’s in favor on a given day. Again, it’s not bearish per se, but the environment is like Jell-O wobbling on a plate, making it tough to pinpoint entries and hold onto stuff. We’re OK with some buying, but until more investors row in the same direction, you should keep it smaller than normal and generally aim for dips.

This week’s list looks like 2020 all over again, with lots of technology and growth earnings spots. Our Top Pick is HubSpot (HUBS), which showed top-notch relative strength during the growth stock correction and has now started to power ahead.

Stock Name	Price	Buy Range	Loss Limit
10X Genomics (TXG)	198	189-198	172-175
Arrowhead Pharmaceuticals (ARWR)	90	86-90	74-76
Atlassian (TEAM)	267	256-263	235-239
Bill.com Holdings (BILL)	181	176-182	155-159
Biogen (BIIB)	381	370-385	325-335
Bonanza Creek Energy (BCEI)	48	45.5-47.5	40.5-41.5
HubSpot (HUBS)	575	560-580	505-515
Scientific Games (SGMS)	76	71-74	62-64
Sprout Social (SPT)	90	85-88	74-76
Zscaler (ZS)	216	207-214	186-190

The market continues to act just fine, with the major indexes generally trading in a tight range. Tight trading isn’t necessarily bullish; if it occurs after a multi-month run, it can be a clue to exhaustion in buying pressures. But coming so soon after an initial thrust out of a big trading range, it’s probably a sign that the sellers are out of ammunition.