SPECIAL ALERT: The February episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, Sheraz Mian, David Bartosiak and Daniel Laboe discuss the investment landscape from several angles.
Don’t miss your chance to hear:
▪ Sheraz and David Agree to Disagree on Reddit Wall Street bets and whether they’re good or bad for the market
▪ Kevin answers questions ranging from where he expects to see the market by end of year to his odds of a correction, plus discusses the tutorial on how to use Zacks.com, in Zacks Mailbag
▪ David and Daniel choose one portfolio to give feedback for improvement
▪ And much more
Simply log on to Zacks.com and view the February episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com.
The S&P and Dow had their first negative sessions of February on Tuesday, but the good old NASDAQ managed to keep advancing and setting new records.
The tech-heavy index, which has soared approximately 7% so far this month, rose 0.14% (or about 20 points) to 14,007.70. That advance may not be impressive, but it did help the NASDAQ close above 14,000 for the first time ever and extend its record-setting winning streak to four sessions.
Unfortunately, not all winning streaks were safe today. The other two major indices saw their six-day runs come to an end with slight losses in a choppy, low volume session.
The S&P slipped 0.11% to 3911.23, while the Dow was off 0.03% (or less than 10 points) to 31,375.83. These indices reached new highs yesterday along with the NASDAQ.
The market has been in an amazing mood for a while now. The upcoming stimulus is, of course, the main reason for this optimism along with hopes for a smooth vaccine rollout. However, the better-than-expected earnings season is also a big help.
But we all knew stocks weren’t going to keep rising and setting records throughout February. It was about time we took a break from all the excitement stemming from the recent short squeezes and big tech’s quarterly reports.
There’s no break from earnings season, though. Tomorrow’s reports include some big names like Coca-Cola (NYSE:KO), Uber (NYSE:UBER), General Motors (NYSE:GM) and CME Group (NASDAQ:CME), along with dozens of others.
Today's Portfolio Highlights:
Stocks Under $10: Gamblers will be returning to the casinos amid this vaccine rollout, which means investors are returning to the gaming space. Brian is putting some money down on Full House Resorts (NASDAQ:FLL), a developer and manager of gaming facilities. The editor was impressed with its most recent quarterly report, which included earnings of 28 cents compared to expectations for a 2-cent loss. “That is a huge surprise and probably what we can expect in the coming quarters as lockdowns are relaxed and vaccines allow people to hit the casino again,” said Brian. Rising earnings estimates have made FLL a Zacks Rank #2 (Buy) and its valuation looks good. Get more specifics on this new buy in the full write-up.
Surprise Trader: Will it be four straight quarters of earnings beats for Sonoco Products (NYSE:SON)? We’ll find out when it reports before the bell on Thursday, but Dave thinks there’s a good chance that the streak continues. The company has a positive Earnings ESP for the release. SON is a leading provider of consumer packaging, industrial products, protective packaging and packaging supply chain services. The editor added SON on Monday with a 12.5% allocation, while also selling Meridian Bioscience (NASDAQ:VIVO) for a solid 19.9% return in just a little over a week. Read the full write-up for more on today’s moves.
Counterstrike: With its earnings report scheduled for later this month, Jeremy decided to sell half of his remaining position in e-commerce company Overstock.com (NASDAQ:OSTK) for a more than 61% return. The editor took a 28.7% profit out of this name in late January, but held onto half just in case the stock rallied past $100. That was a good move since it’s currently more than $103. So to recap, OSTK has brought two double-digit gains of late and the editor is still holding shares as the stock nears its short-term targets of $109. In other news, the market is far too strong for the service to hold ProShares UltraPro Short QQQ (SQQQ) any longer, so Jeremy sold this hedge on Monday for a loss.
Marijuana Innovators: This portfolio had a great Tuesday session with three of the top five movers among all ZU names. And each of them were double-digit winners! These noteworthy performances came from Aphria (NASDAQ:APHA, +24.9%), Artelo Biosciences (NASDAQ:ARTL, +14.1%) and Canopy Growth (NASDAQ:CGC, +12%).
Zacks Short Sell List: The portfolio swapped out four positions in this week's adjustment. The stocks that were short-covered included:
• NeoGenomics (NASDAQ:NEO)
• Alteryx (NYSE:AYX)
• TAL Education Group (NYSE:TAL)
• GoodRX Holdings (GDRX)
The new buys that replaced these names were:
• Aramark (ARMK)
• Intuit (NASDAQ:INTU)
• Marriott Int'l (NASDAQ:MAR)
• Penn National Gaming (NASDAQ:PENN)
Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.
Have a Great Evening,
Jim Giaquinto
Recommendations from Zacks' Private Portfolios:
Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>
Zacks Investment Research