SPECIAL ALERT: The December episode of the Zacks Ultimate Strategy Session is now available for viewing! Tune in to this “must-see” event when Kevin Matras, Sheraz Mian, Jeremy Mullin, Tracey Ryniec and Madeleine Johnson discuss the investment landscape from several angles.
Don’t miss your chance to hear:
▪ Tracey and Madeleine Agree to Disagree on whether Black Friday, when consumers rush to stores to get deals the day after Thanksgiving, is over in 2020 as online shopping takes precedence
▪ Kevin covers his position on stop-loss orders in Zacks Mailbag
▪ Sheraz and Jeremy choose one portfolio to give feedback for improvement
▪ And much more
Simply log on to Zacks.com and view the December episode here. And please let us know what you think of this format. Email all feedback to mailbag@zacks.com.
More records and more milestones were reached on Tuesday as the market cheered news that the U.K. began administering the Pfizer (NYSE:PFE)/BioNTech coronavirus vaccine.
The S&P closed above 3,700 for the first time ever today, which is exactly two weeks after the Dow made history with its first close above 30K.
The index rose 0.28% to a new record of 3702.25. Meanwhile, the NASDAQ advanced 0.50% (or about 62 points) to 12,582.77, marking its fourth straight day with a record closing high.
The Dow jumped 0.35% (or around 104 points) to 30,173.88. Its just about 45 points away from its own all-time high and remained above 30K for a third consecutive session.
The U.K. ordered enough vaccine for 20 million people and started putting it to use today. It’s a big development in the fight against the coronavirus, as was the FDA’s finding here in the U.S. that the vaccine is safe and effective.
The news helped the market rebound from a soft open, but the advance wasn’t very dramatic since positive vaccine developments are priced in.
It’s been a month now since we first heard about the efficacy of the Pfizer/BioNTech vaccine back on November 9, which sent the Dow higher by more than 800 points.
Since then, we’ve enjoyed positive data from a few other companies, leaving investors feeling pretty good that the virus’ days are numbered.
But you know what would have a dramatic impact on the market? A stimulus deal!
And it feels like Washington may finally be serious about getting something done, following the sharp rise in coronavirus cases and the weak jobs report from last Friday.
Senate Majority Leader McConnell and Speaker Pelosi have both talked about the need for a deal before Congress goes home.
It would certainly be a nice gift for investors heading into the holidays.
Today's Portfolio Highlights:
Stocks Under $10: Two double-digit winners were cashed in today, as Avid Bioservices (NASDAQ:CDMO) was sold for a 42.6% return in just over a month and Interface (NASDAQ:TILE) was let go for a 47.3% profit in about five weeks. Both of these names slipped to a Zacks Rank #4 (Sell) and Brian wanted to hang onto those solid gains. The plan now is to replace one name today and the other name next week. The addition on Tuesday was business process services company Conduent (NASDAQ:CNDT) (CDNT). In other words, this is another outsourcing play. It has easily beaten the Zacks Consensus Estimate in the last two quarters, while rising earnings estimates have made the stock a Zacks Rank #2 (Buy). The editor was especially impressed with its “great valuation”, which includes 7x forward earnings and a price-to-book below 1x. Read the full write-up for more specifics on these moves.
By the way, this portfolio easily had the best performer of the day among all ZU names as Liquidity Services (NASDAQ:LQDT) soared 41.5%. The auction site reported a strong fiscal fourth quarter, which included beats on the top and bottom lines along with an encouraging outlook. The stock is now up more than 72% in the portfolio since being added on October 6. Meanwhile, Eton Pharmaceuticals (NASDAQ:ETON) also made the top movers list today with an advance of 5.6%.
Options Trader: Whenever a portfolio position doubles its premium, Kevin likes to reposition into a new option with the original investment amount. The editor did it TWICE on Tuesday. He sold to close the March 145.00 Call in Lear (NYSE:LEA) for a 182.8% return and then immediately re-invested by buying to open a March 170.00 Call. Likewise, the March 120.00 Call in Visteon (NASDAQ:VC) was sold to close for a 131.9% profit and replaced by buying to open a March 145.00 Call. Kevin considers such moves to be “free trades”, since they won’t be giving back any principal on a decline.
The portfolio also bought to open a February 310.00 Put in S&P Global (SPGI), a provider of ratings, benchmarks, analytics and data to the capital and commodity markets. Kevin noticed “a sloppy bearish head and shoulders pattern in its chart”. And while it could still go higher, he wants to invest on the downside because the stock failed to hold any meaningful gains after its recent positive EPS surprise. Get more specifics about all of today’s action in the full write-up.
Zacks Short Sell List: This week's adjustment included only one change. The portfolio short-covered Incyte (NASDAQ:INCY) and replaced it by adding Shift4 Payments (FOUR). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide.
Insider Trader: "The bulls found some extra energy in the second half of today's session on positive headlines about the vaccine, including the news out of the "vaccine" summit at the White House.
"But it was pictures of the first "civilian" in the UK getting the vaccine, a 90-year old woman who turns 91 next week, which brought the "hope" trade back to life on Wall Street.
"In the United States, the FDA approved Pfizer's vaccine so it's rollout to essential medical workers will begin shortly.
"The world is on the cusp of getting this virus under control but we still have to get through the next few months." -- Tracey Ryniec, which had a top performer today as Arlo Technologies (NYSE:ARLO) continues to advance with a 14.5% jump.
All the Best,
Jim Giaquinto
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