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Stocks Back in the Green to Start February

Published 02/01/2021, 09:15 PM
Updated 07/09/2023, 06:31 AM

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We got a nice start to February on Monday with each of the major indices moving solidly higher after a disappointing end to January.

The NASDAQ led the way once again by jumping 2.55% (or about 333 points) to 13,403.39, while the S&P rose 1.61% to 3773.86. The Dow advanced 0.76% (or nearly 230 points) to 30,211.91.

Last week, the indices each lost more than 3%, which also dragged the Dow and S&P into negative territory for January after staying positive through the first three weeks. Of course, the NASDAQ found a way to outperform its counterparts and gain over 1% for the month despite the late challenges.

Speaking of those challenges, “SqueezeMania” appeared to cool off a bit on Monday after raising the heart rates of investors in recent sessions. GameStop (NYSE:GME), which became the epicenter of the speculative buying craze, dropped 30.1% today. And AMC Entertainment (NYSE:AMC) only managed a 0.3% advance.

The squeezin’ may not be over. However, the weekend’s rest and today’s calm seems to have soothed fears that a top was forming, which would end the market’s record-setting pace of the past several weeks.

Now perhaps we can focus on what’s likely to be the big news of the market week: the final two reports from the FAANGs. After the bell tomorrow, Alphabet (NASDAQ:GOOGL) (GOOG) and Amazon (NASDAQ:AMZN) go to the plate. There’ll be hundreds of other reports as well in the next few days.

You probably wouldn’t realize it from the market action of late, but earnings season has been pretty good so far. Stocks are beating expectations and some are even offering positive forecasts, but Wall Street is just not rewarding them with a drift higher afterwards. Everyone knew this earnings season would show improvement, so strong results were already baked into the market.

With that being said though, Netflix (NASDAQ:NFLX), the first FAANG to report, soared about 17% after going to the plate last month and remains well above its pre-release price. So let’s just remember that anything can happen during earnings season...

Today's Portfolio Highlights:

Commodity Innovators: With grain prices on the rise, Jeremy offered two ways for investors to take advantage. Farmland Partners (NYSE:FPI) owns more than 156,000 acres in 16 states, which produce 26 major commercial crops. A recent pullback gave this portfolio a great entry point, while the editor appreciates its REIT aspect and its 2% dividend. The other buy today is fertilizer giant Mosaic (MOS), a Zacks Rank #2 (Buy) that’s seeing demand for its products rise as farmers look to increase their yields in a more advantageous environment. In addition to these two buys, Jeremy also decided to sell the underperforming Kirkland Lake Gold (NYSE:KL) position. Read the full write-up for more.

Surprise Trader: For the past 15 quarters, Meridian Bioscience (NASDAQ:VIVO) has beaten the Zacks Consensus Estimate. Dave expects that streak to continue when the company reports again before the bell on Friday, February 5. In fact, VIVO has a positive Earnings ESP of 3.94% for the upcoming release. This Zacks Rank #2 (Buy) is a fully integrated life sciences company that makes a broad range of diagnostic test kits, purified reagents and biopharma-enabling technologies. The editor added VIVO on Monday with a 12.5% allocation, while also selling MarineMax (HZO) since the market isn’t rewarding the company’s good numbers. See the full write-up for more specifics on today’s action.

Counterstrike: After getting dumped with several inches of snow over the weekend, folks here in the Midwest might be able to use a snowmobile right about now. Polaris (NYSE:PII) has got them covered. The company started about 65 years ago with snowmobiles, but today is a manufacturer of all types of off-road and on-road vehicles. PII is also a Zacks Rank #1 (Strong Buy) that beat the Zacks Consensus Estimate by 17% last week. The stock has fallen from its post-earnings bump, so Jeremy added a 5% allocation on Monday with the intention to add more if it falls to lower support levels. He also likes the 2% dividend. Learn more about this new addition in the complete commentary.

Technology Innovators: All those people moving out of congested cities won’t be able to fully rely on public transportation anymore. They’re going to need a car, and CarGurus (NASDAQ:CARG) can be a big help. The company is an online automotive marketplace connecting buyers and sellers of new and used cars. It has beaten the Zacks Consensus Estimates in each of the last four quarters... and those beats have been BIG. The average surprise over the past four quarters is 517%! Brian is most interested in the margins with this name, which have moved to nearly 13% from 8.8% of late. Such upward movement should eventually send estimates higher for CARG. The editor added this stock on Monday, while also cutting the underperforming Thermon Group (THR) position. Read the complete commentary for more on today’s moves, including a discussion on the portfolio’s short interest.

Insider Trader: During its time in the portfolio, Coeur Mining (NYSE:CDE) has been up, down and now it’s up again. Tracey isn’t going to play around with this name anymore, since its gains have proven to be fleeting in the past. She sold half of this silver and gold producer on Monday for a 33.7% return in a little over five months. The portfolio will hang onto half since it could have further upside with the reddit traders now holding silver miners. By the way, CDE was also one of the top performers on Monday by climbing 23.1%.

Blockchain Innovators: Its been just under a year since Dave added iClick Interactive (ICLK) to the portfolio, and in that time this online marketing technology platform has surged approximately 415%. That’s the second best performer in the service behind the 440% jump for Advanced Micro Devices (NASDAQ:AMD). And today, ICLK was the best performer among all ZU names by climbing 27%. ICLK is also in the Top 5 over the past 30 days with a gain of 110.7%, while fellow portfolio position Exp World Holdings (EXPI) is just behind with a rise of 82.3% in 30 days.

Black Box Trader:
This week's adjustment changed six out of ten positions. The stocks that were sold today included:

• TEGNA (NYSE:TGNA, +8.7%)
• Navient (NASDAQ:NAVI, +1.1%)
• Mosaic (MOS, +0.2%)
• Tri Pointe Homes (NYSE:TPH)
• Graphic Packaging (NYSE:GPK)
• PulteGroup (NYSE:PHM)

The new buys that filled these open spots included:

• Alcoa (NYSE:AA)
• Huntsman (NYSE:HUN)
• Olin (NYSE:OLN)
• Omnicom Group (NYSE:OMC)
• Tronox (TROX)
• U.S. Steel (X)

Read the Black Box Trader’s Guide to learn more about this computer-driven service.

Until Tomorrow,
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 >>

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