We had another low volume session on Wednesday as investors amble their way toward the Memorial Day weekend, but at least this time we managed to have slight gains rather than slight losses. Interestingly, the NASDAQ has now outperformed its counterparts for three consecutive days.
The tech-heavy index rose 0.59% (or about 80 points) to 13,738. The NASDAQ finally broke a four-week losing streak last Friday and is now up nearly 2% as we pass the halfway mark of this week. Of course, its still down by more than 1.5% for the month with two sessions left.
The S&P was up 0.19% today to 4195.99, while the Dow barely stayed positive with a rise of 0.03% (or around 10 points) to 34,323.05.
“Very slow trading day with low volumes and a tight range. This market has seldom been boring, but today it was very boring due to lack of movement,” said Jeremy Mullin in Counterstrike.
The major indices were all down slightly yesterday amid light trading and some moderately disappointing results for consumer confidence and new home sales.
One of the last major reports of this earnings season came after the bell today when graphics chip pioneer NVIDIA (NASDAQ:NVDA) announced better-than-expected fiscal first quarter results. Specifically, it beat the Zacks Consensus Estimate by 11.6% while sales soared 84% from last year.
Furthermore, gaming revenue jumped 106% while data center revenue increased 79%, which were both records for a company that makes chips used in gaming and cryptocurrency mining.
Shares of NVDA are down slightly afterhours, as of this writing, which isn’t too bad for an earnings season that rarely rewarded strong reports.
Of course, the final days of earnings season are all about the retailers, and we saw some pretty good performances despite the market’s stubborn nature. For example, Dick’s Sporting Goods (DKS) soared by 16.9% today after a strong report before the market opened!
Abercrombie & Fitch (ANF, +7.8%) reported at the same time, while Williams-Sonoma (NYSE:WSM) went to the plate after the close today and is actually up afterhours. And Urban Outfitters (NASDAQ:URBN) jumped approximately 10% in its first session after last night’s report.
The big release tomorrow will be salesforce.com (CRM) after the close, as well as retailers like Costco (NASDAQ:COST), Dollar General (NYSE:DG) and Best Buy (BBY), among others.
Today's Portfolio Highlights:
Income Investor: It’s going to be difficult for a consumer foods giant like General Mills (NYSE:GIS) to match last year’s pandemic-related surge, so Maddy sold the name on Wednesday for a more than 41% return. The move freed up space for two new additions. First of all, Procter & Gamble (PG) should be able to hold up pretty well post-Covid due to its market share, cash flow and growth potential. The maker of Tide laundry detergent, Bounty paper towels and Luvs diapers reported strong third-quarter results. It also enjoys surging cash and is considered a “Dividend King” that just hiked its payout by 10%. The other buy is swanky furniture company Ethan Allen Interiors (NYSE:ETH), which has bounced back nicely from the shutdown and is now benefiting from a hot housing market. The editor considers it a “real bargain right now” and appreciates its strong cash flow and dividend yield of 3.6%. Read the full write-up for a lot more on all of today’s moves.
Home Run Investor: Good growth is hard to find these days, but Brian thinks that Smith & Wesson Brands (SWBI) has it. This firearms company had topline growth of 54% in its most recent quarter with analysts expecting even more moving forward. In fact, they expect growth of 392% this year! SWBI has topped the Zacks Consensus Estimate in each of the past four quarters with an average beat of 48% in that time. Rising earnings estimates have made SWBI a Zacks Rank #1 (Strong Buy). The editor made some room for this new addition by selling the underperforming Hillenbrand (NYSE:HI) position for a slight loss. Learn more about all of today’s moves in the complete commentary.
Insider Trader: Consumers are still focused on the home, which was exemplified when The Container Store (TCS) recently reported fiscal fourth-quarter sales that soared 30% year over year. Nevertheless, shares are down 11% in the past month. The move lower prompted the company’s new CEO to buy more than 20,000 shares last week. Tracey knows a “confidence buy” when she sees one. The insider is sending a signal that he “still believes”, despite the recent pullback. Well, so does our editor, who sold half of Chipotle (NYSE:CMG) on Wednesday to make room for TCS. She added the stock with a 4.5% allocation, which is smaller than a normal position because there isn’t much cash left in the portfolio. Read the full write-up for more on today’s action.
Surprise Trader: For the past four quarters, NetApp (NASDAQ:NTAP) has beaten the Zacks Consensus Estimate and amassed an average surprise of approximately 38%. The company will be going for five-in-a-row after the bell on Wednesday, June 2. This Zacks Rank #2 (Buy) provides enterprise storage as well as data management software and hardware products and services. NTAP has a positive Earnings ESP of 2.77% for the upcoming report. Dave added the stock on Wednesday with a 12.5% allocation, while also selling Nautilus Group (NYSE:NLS) for a more than 4% return in three weeks. Read the complete commentary for more on today’s moves. By the way, the portfolio's Guess (NYSE:GES) position was one of the big movers today with an advance of 7.7%.
Marijuana Innovators: Shares of Hydrofarm Holdings Group (HYFM) soared after going public in December 2020. Dave didn’t think it was a good value at the time, but his opinion has changed after a recent pullback and some savvy deal-making. The editor added this distributor and manufacturer of hydroponics equipment and supplies on Wednesday. Read the full write-up for a lot more on this new buy. In other news, this portfolio had a top performer today with Tilray (NASDAQ:TLRY) rising 7.8%.
Value Investor: The portfolio wants more exposure to the consumer and needs something from the auto manufacturing space. Tracey accomplished both goals on Wednesday by added General Motors (NYSE:GM), an auto giant that “has really turned around during the pandemic”. It has all the classic valuation characteristics, while earnings are expected to rise 8% this year and 24% next year. With the consumer feeling good about the economy and the GDP expected to soar in the second half, the editor is confident that auto sales will be solid this year and into next. Shares of GM are down 39% year to date, which means it has plenty of ground to recover and then some. Get more specifics on this new addition in the full write up.
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 >>
Zacks Investment Research