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In a move that surprised practically no one, President Trump pulled the U.S. out of the Iran nuclear deal on Tuesday. Since the outcome was predictable, the big question was how the market would react to this administration’s latest controversial move.
It pretty much just shrugged its shoulders.
Stocks dipped after the announcement but spent the remainder of the session rallying into the close and leaving the major indices at breakeven.
The Dow now has a four-session winning streak, though that feels rather weird to say since it only advanced 0.01% (or 2.89 points) to 24,360.2. Nevertheless, a winning streak is a winning streak, and the index fought back from a nearly 160-point loss in the moments after the Iran deal news.
The NASDAQ also poked its head onto the positive side by the closing bell, increasing 0.02% (or 1.69 points) to 7266.9. The S&P couldn’t follow its counterparts and ended with a slight decline of 0.03% (or less than a point) to 2671.9.
“People are split on whether this was a good move for the US or a bad one. But stocks seemed to take it all in stride. Especially given the 90-day buffer before anything happens,” said Kevin in Options Trader.
It was a busy day for the portfolios on Tuesday. TAZR Trader, Counterstrike and Surprise Trader each added two names. Meanwhile, Stocks Under $10 and Technology Innovators each added once, while Short List swapped out two names this week. Finally, Home Run Investor sold a stock for double-digit return. Let’s get right to it…
Today's Portfolio Highlights:
Home Run Investor: Sometimes the best way to get more aggressive is to get rid of defensive plays. That’s what Brian Bolan did today when he sold Delek US Holdings (DK), a pipeline player that recently reported a huge earnings surprise. However, the stock didn’t take off as much as the editor would have liked and other pipeline plays have been getting hit. He thought this was a good time to cash in a more than 77% profit in less than 6 months. The portfolio also sold another defensive style name on Tuesday, saying goodbye to Hormel Foods (NYSE:HRL) and banking an approximately 5.3% profit in less than two months. Read the full write-up for more.
TAZR Trader: It’s time to diversify away from tech a bit with a couple of unique oversold opportunities in healthcare. First of all, Kevin added Exelixis (EXEL), a profitable mid-cap cancer fighter that just became a Zacks Rank #1 (Strong Buy) after a strong first quarter last week. It is projected to grow earnings and revenue by 68% and 58%, respectively, this year.
In the “highly-speculative” category, the editor also added Intellia Therapeutics (NTLA). He has absolutely no problem that this gene editing company is still losing money...since that’s what emerging biotechs do! Instead, Kevin is excited by its innovations and its two “big brothers” in Regeneron and Novartis, though warns that a negative court ruling could have a big impact on price. Both of these stocks were added with 7% allocations. Learn a lot more about these new picks in the complete commentary, including what the institutional buyers are saying.
Counterstrike: Remember how the market freaked out when Caterpillar (NYSE:CAT) made its “high water mark” statement during an otherwise strong quarter? Well, Jeremy didn’t flip out. He bought a small allocation last week and today added 6% more to bring it to a full position. As expected, shares had a “violent” bounce once the 200-day held. The editor expects it to grind up to $160.
On the same day last week, Jeremy also bought a small position in the “trucking broker” Echo Logistics (ECHO). As with CAT, shares of this Zacks Rank #1 (Strong Buy) were dragged lower by HFTs despite a strong quarter, but has since bounced back to the 50-day. The editor thinks it will continue to rise up to around $30, so he brought it to a full position by adding another 7%. Read the full write-up for more on these additions.
Stocks Under $10: Brian Bolan loves beat-and-raise quarters, but it is a somewhat rare occurrence for names priced below $10. Therefore, he really liked the recent report from electronics/chip play Camtek (CAMT), which surprised on both the top and bottom lines while raising its revenue guidance for next quarter. Rising earnings estimates have made the company a Zacks Rank #2 (Buy). The editor likes this space and believes the stock fits in with his newly aggressive stance, so he added CAMT to the portfolio on Tuesday. Learn a lot more about this new addition in the full commentary.
Surprise Trader: Earnings season may be nearing an end, but that doesn’t mean this portfolio will go into hibernation. In fact, Dave added two more names today. He picked up industrial name Rexnord (RXN), which has an Earnings ESP of 1.82% for the report coming out on Monday after the bell. The stock has beaten every quarter for the past five years, including a 37% surprise last time.
The other move is a higher risk trade, yet it also has a higher potential reward. Thomson Reuters (TRI) reports on Friday before the bell and has a very impressive Earnings ESP of 23%. The company hasn’t missed a quarter since early 2015, though this will be the first report for TRI since it sold its Financial and Risk division. Learn more about these additions in the full commentary.
Technology Innovators: Software names have been heating up recently, so Brian Bolan thought it was a great time to pick up RealPage (RP). The company focuses on property management for large real estate concerns. The editor likes this name for both the short and longer terms. RP reported a beat-and-raise quarter last week, while its consistent solid growth is a good sign for the future. Read the full commentary for more.
Zacks Short List: The portfolio switched two names in this week’s adjustment. It short-covered Ionis Pharma (IONS, +5.6%) and Schlumberger (SLB). These positions were replaced by the additions of MGM Resorts (MGM) and Williams Partners (WPZ). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Have a Good Evening,
Jim Giaquinto
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