It’s a good thing this was a short week because investors may have fallen asleep at their desks if they went through another day of this rather soft trading.
The major indices looked like they may end this week higher, but a late-day selloff left stocks pretty close to where they started the session.
For example, the Dow ended less than a point higher on Friday. That’s 0%! And it only gained 0.1% for a week that started with two days of record performances. The index finished at 31,494.32.
And then there’s the S&P, which closed in the red for a fourth straight day by slipping 0.19% today to 3906.71. However, despite this losing streak, it’s still only approximately 0.7% off its record high set last Friday. That’s also the amount it was down for this week.
The NASDAQ had the best performance on Friday by gaining a whopping 0.07% (or a little more than 9 points) to 13,874.46. This index saw the most movement over these four days by declining approximately 1.6% as investors took a break from technology.
It was a far cry from last week when each of the major indices jumped by 1% or more (the NASDAQ was up 1.7%).
Investors are still giddy about new stimulus and the vaccine rollout, but they’ve recently been growing more concerned about rising bond yields and inflation. Although the Fed has been resolute in its promise to stay accommodative for the foreseeable future, it is a reminder that these historic times will end sooner or later. Fortunately for skittish investors, it’ll probably be later.
Another positive for this market has been earnings season, which is on track to show 3% growth when a loss of 11% was expected pre-season. That’s quite an improvement and sooner than was previously forecasted. For all the specifics, make sure to read Director of Research Sheraz Mian’s hot-off-the-presses article titled: Earnings Start Growing Again.
Earnings season may be winding down, but there’s still hundreds of names going to the plate next week.
Today's Portfolio Highlights:
Insider Trader: There are lots of opportunities for this portfolio right now as insiders are diving into their own companies during this better-than-expected earnings season. On Friday, Tracey picked up global beauty company Nu Skin Enterprises (NUS) and biotech company BridgeBio Pharma (NASDAQ:BBIO). NUS reported a big fourth-quarter earnings beat as 90% of all sales are now done online, but shares have sold off about 20% on a conservative guidance. Two directors saw an opportunity and bought shares earlier this week. Meanwhile, BBIO only has one drug in the pipeline, but recently made an acquisition. Shares are down more than 6% this year, but the CFO and a director bought shares this week. The editor put 10% into each addition after making some room by selling boat maker MasterCraft (MCFT) for a 5.6% profit in just under two months. Read the full write-up for more specifics on all of today’s action. In other news, this portfolio had the top performer of the day among all ZU services as MannKind (NASDAQ:MNKD) rose 15.5%.
Surprise Trader: This portfolio hasn’t added many biopharmaceutical companies this earnings season, but that’s where Dave went for his last buy of the week. The editor picked up Travere Therapeutics (TVTX), a Zacks Rank #2 (Buy) that's enjoying a positive earnings trend since bottoming out in late 2019. The company beat by 25% last time and has a positive Earnings ESP of 18.61% for the quarter coming after the bell on Monday, March 1. Dave thinks TVTX could easily trade above $32 ahead of the report. He added the stock with an 11.5% allocation today, while also using the spike in Altra Industrial (AIMC) to get out of that motion control company with a slight profit in two weeks. Read the full write-up for more on today’s moves.
Value Investor: Sometimes you have to hold onto a stock for a while to really see the turnaround. That’s what Tracey is thinking with her addition today of Fiserv (NASDAQ:FISV), a large-cap financial services technology company with two e-commerce businesses that are really gaining steam: Carat and Clover. The editor thought about adding this name to her Insider Trader service after a director bought 9100 shares earlier this week, but she felt it was better suited for a longer-term portfolio. FISV trades with a forward P/E of 20.9, which is actually very cheap when compared to peers like PayPal and Square. The company also raised its 2021 revenue guidance. Read the complete commentary for all the value characteristics on FISV. By the way gold miners continue to have a weak start to 2021, so Tracey decided to limit her losses and sell B2Gold (NYSE:BTG). She may get back into the space if it returns to profitability. One more thing, this portfolio had a top mover on Friday as Atlas Air Worldwide (NASDAQ:AAWW) rose 9.1%.
Have a Great Weekend!
Jim Giaquinto
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