Search

Legg Mason and Total exceeded all analysts’ earnings per share (EPS) estimates and Invesco reached the highest analyst estimate. Boise Cascade fell short of the consensus estimate, although the stock broke out on the upside today.

Today we have five buy ideas including two ratings changes.

Sellers have come out of the woodwork during the past couple of days, especially when it comes to the Nasdaq and leading growth stocks. The action isn’t overly concerning when you look at the general market, but when you look at individual stocks, the situation is a bit trickier.

The market has finally declared itself, with the major indexes moving out to new highs during the week. It looks like a real breakout from the choppy, range-bound action of the past weeks, and it’s a good reason to put more money to work.

On average, our portfolio rose by 3.2% this week. That pleases me because it was twice as much as the small cap index. Across our 11 positions, we have an average gain of 32%, which is 22.7% better than you’d have done if you just bought the Russell 2000 every time I recommended one of our current stocks.

Updates on three of our stocks, including one rating change. Also, three excellent stocks to buy now.

Amid all the debate around health care, and despite the on-again-off-again repeal-and-replace effort, small-cap healthcare is still the number-one performing sector this year. Our two medical device stocks are rated Buy, and both are trading at or near 52-week highs.

We seem to be experiencing a more active stock market than that of a typical summer. The adage “sell in May and go away” hasn’t seemed to fit in 2017. There’s been lots of price action among oil refiners and marketers, food retailers, steel, technology and investment companies.

Two of our stocks report second-quarter earnings beats, one stock moves from Buy to Hold, and a good buying opportunity.

The overall market is in good shape, with all three of our market timing indicators still bullish, though individual growth stocks still have a bit more to prove as we move through the heart of earnings season. We have no changes today (the Model Portfolio is 20% in cash), but are ready to move to a fully invested stance should earnings season go well.

In the wake of surprisingly successful second-quarter results among large-cap banks, all eyes are turning to regulatory reform as the next catalyst to rising earnings estimates among bank stocks.

The iShares EM Fund has been trading sideways since July 19, but is holding well above its rising moving averages, so our Buy signal is in good shape. We have one portfolio move tonight.

Crista comments on Goldman Sachs’ and Bank of America’s strong second quarter earnings beats this morning, plus provides an earnings report calendar for our stocks through July.

The iShares EM Fund has bolted higher since July 10, giving us a robust and unambiguous Buy signal. We have two portfolio moves tonight.

One of our stocks reported a second-quarter earnings beat, there’s strength in steel stocks today, and one stock moves from Buy to Hold.

The iShares EM Fund (EEM) has been in a downtrend since September 22, turning the Cabot Emerging Markets Timer neutral. We will continue to manage our stocks individually, but will curtail new buying and keep stocks on a shorter leash until momentum improves.

Over the past week, small caps looked particularly good as most sectors outperformed their large-cap peers. Our asset class is now up 4% year-to-date, a vast improvement after being flat a week and a half ago.

The Dow and S&P 500 both closed at all-time highs yesterday, as the Dow notched its eighth straight day of gains. Financials were the week’s best-performing sector, as interest rates suddenly reversed direction to post big gains.

As always, we advise going with the flow. You should remain mostly bullish, but be sure not to put things on autopilot. Honor your stops and loss limits with your existing stocks, and for new buys, continue to look for names that have pushed to new highs and have shown excellent recent buying volume.

Stocks pushed higher again this week, enough so that our intermediate-term trend following indicator turned positive. Following three constructive weeks, this week’s move continued to push the arrow toward the bullish side.