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▪ Sheraz Mian and David Bartosiak Agree to Disagree on Reddit Wall Street bets and whether they’re good or bad for the market
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▪ David and Daniel Laboe choose one portfolio to give feedback for improvement
▪ Market conditions from both fundamental and technical views
▪ The full list of top-performing stocks over the past 30 days
▪ New stocks added to the Zacks Ultimate portfolio
▪ And much more
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The market momentarily reached intraday highs on Wednesday morning, but it didn’t last long as stocks finished with another ho-hum session by the close. Nevertheless, one of the indices still managed to reach a new record… but it wasn’t the NASDAQ.
The Dow was the only major index to reach a new high, which is something you don’t see every day. It rose 0.20% (or nearly 62 points) to 31,437.80. Meanwhile, the S&P slipped for a second consecutive session, declining by only 0.03% to 3909.88. Both of these indices saw their six-day winning streaks get snapped yesterday.
Speaking of snapping winning streaks, the NASDAQ’s four-day run of record highs is no more. It slipped 0.25% (or about 35 points) to 13,972.53. But don’t worry, the index is still up well over 6.5% this month.
Investors are taking a breather as volume remains low in the aftermath of the squeeze mania. Meanwhile, the market is in a very optimistic mood due to a better-than-expected earnings season and expectations for a big stimulus deal coming out of Washington.
And perhaps most importantly, the Fed has no plans to pull back on its historic support of this economy. In remarks today, Chair Jerome Powell said the Committee would be “patiently accommodative” with monetary policy until job and inflation goals have been achieved.
At the moment, we’re not even in the same ballpark as those goals. Mr. Powell said that employment is “a long way” from where it needs to be and that the real unemployment rate is probably closer to 10% than the 6.3% print we got last week. And as far as inflation is concerned, today’s flat CPI of 0.3% for January shows there’s no pressure on the economy. Core CPI was 0% compared to 0.2% expected.
Today's Portfolio Highlights:
Home Run Investor: You probably remember that Brian sold Perion Network (NASDAQ:PERI) this past Monday for a return of approximately 60%. Well, it was time to replace that name in Wednesday’s session. The editor picked up MaxLinear (MXL), which provides radio-frequency analog and mixed signal semiconductor SoC solutions. The company has beaten the Zacks Consensus Estimate for the past three quarters. Furthermore, rising earnings estimates have made MXL a Zacks Rank #1 (Strong Buy). Read more in the complete write-up.
Surprise Trader: There’s nothing unlucky about the number “13” for Sonic Automotive (NYSE:SAH). Not only did this automotive retailer eclipse the Zacks Consensus Estimate by more than 13% in its most recent report, but it has also beaten expectations for 13 consecutive quarters. Dave thinks that #14 is on the horizon. SAH has a positive Earnings ESP of 5.19% for the quarter coming before the bell on Wednesday, February 17. The editor added SAH on Wednesday with an 11.5% allocation, while also selling Vishay (VSH) for a breakeven result after one week as its quarterly report fell on “deaf ears”.
Technology Innovators: Two big profits were taken off the table on Wednesday as the portfolio sold Amazon (NASDAQ:AMZN) for 71.2% in about 11 months and Viasat (VSAT) for 67.6% in just under four months. Brian thinks the new CEO at AMZN may impact the stock for a little while, so this seems like a good time to take some profit. Meanwhile, VSAT is no longer a Zacks Rank #1 (Strong Buy), so the editor thought it was time to look elsewhere. Now the service has more space for a new move on Thursday. In other news, this portfolio had top performer on Wednesday as Criteo S.A. (CRTO) rose 17.7%.
Healthcare Innovators: The portfolio added two names on Wednesday: Invitae (NYSE:NVTA) and Intellia Therapeutics (NASDAQ:NTLA). NVTA is a provider of medical-grade genetic testing, which is a space that’s due to see a lot more interest with 23andMe going public and Softbank’s $900 million investment in Pacific Biosciences (NASDAQ:PACB). The new addition is richly-valued at 20X sales, but a bargain compared to PACB at 50X. NTLA is a smaller CRISPR player that has a big potential catalyst with mRNA, which convinced Kevin to give the stock another chance despite the higher valuation levels for its space. Recall he took a gain of 155% on NTLA in November. Learn a lot more about the editor’s reasons for buying these names in the complete commentary.
Marijuana Innovators: It was another strong day for the marijuana space, which means this portfolio again dominated the top performers list. It had four of the best five performances on Wednesday... and all of them were up in the double digits! Those winners were Artelo Biosciences (NASDAQ:ARTL, +26.4%), Aurora Cannabis (NYSE:ACB, +21.2%), Cronos Group (NASDAQ:CRON, +14.4%) and Aphria (NASDAQ:APHA, +10.7%).
All the Best,
Jim Giaquinto
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