What's A Retailer To Do?

The retailers did their best to keep yesterday’s strong rally going, but it wasn’t enough. Retail sales in July were better than expected and Home Depot (NYSE:HD) reported a solid quarter. Nevertheless, consumer-related stocks were among the biggest losers today, including a surprising dip of more than 2.5% for HD.

“It wasn’t a bad day by any stretch of the imagination, but the momentum has stalled out a bit,” said Dave in Momentum Trader.

The market was unable to follow through, but it did keep most of Monday's gains. In fact, the Dow managed to squeak higher for a third positive day with an advance of 0.02% to 21,999. The S&P was only down 0.05% to 2464.6 and the NASDAQ slipped 0.11% to 6333.

Surprise Trader wasn't scared by the retail slump today as Eric added the only retailer that’s giving Amazon (NASDAQ:AMZN) a run for its money. Momentum Trader and Stocks Under $10 were both going for diversification with their buys of a drug stock and a fertilizer company, respectively. And Short List swapped out five names. Read all about it below:

Today's Portfolio Highlights:

Surprise Trader: The only major retailer that has proven to be a formidable foe to Amazon is Wal-Mart (NYSE:WMT), which is expanding its online presence and enjoys a strong earnings history with only one miss since mid-2014. And now, it has a positive Earnings ESP for the quarter being reported on Thursday. Eric expects this trend to continue, so he added this Zacks Rank #2 (Buy) on Tuesday with a 12.5% allocation. The portfolio is now close to fully-invested again. Read the complete commentary for more.

Momentum Trader: The portfolio took a break from tech on Tuesday and added the drug stock Corcept Therapeutics (CORT), which focuses on disorders associated with the steroid hormone called cortisol. Its lead product treats major depression. Rising earnings estimates made CORT a Zacks Rank #2 (Buy) stock, but shares have pulled back a bit. The editor sees opportunity in this name and put the portfolio’s remaining cash into a CORT position, which came to an allocation of about 7.72%. The full write-up has more on this new addition, including a look at its chart.

Zacks Short List: The portfolio short-covered five names this week, and three of them had positive returns. The stocks that left the service are:

• Oneok Inc. (OKE, +3.6%)
• Teradata Corp (NYSE:TDC, +2.2%)
• Vulcan Materials (VMC, +2.1%)
• Cavium Inc. (CAVM)
• Occidental Petroleum (NYSE:OXY)

The new additions that replaced these names are:

• Charter Communications (NASDAQ:CHTR)
• Inphi Corp (IPHI)
• Mercadolibre Inc. (MELI)
• Molina Healthcare (MOH)
• National Oilwell (NOV)

Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Stocks Under $10: In a move to get more diversification on the portfolio’s trip back to 20 names, Brian Bolan picked up Intrepid Potash (IPI) on Tuesday. This Zacks Rank #2 (Buy) is the largest producer of potash in the U.S. Earlier this month, IPI reported a quarterly loss per share that halved the expected loss, accounting for a positive surprise of 50%. But the editor was most impressed that revenues of $43.9 million easily surpassed the consensus of $37.8 million. The full write-up has a lot more info on this new addition. In other news, Stocks Under $10 also had the top two performers among all the portfolios today, as Extreme Networks (EXTR) climbed 11.5% and ImmunoGen (IMGN) advanced 9.8%.

Have a Good Evening,
Jim Giaquinto

Before You Go . . .

The newest ZU Special Report was released yesterday. “Cybersecurity: An Investor’s Guide to Locking Down Profits” will show you how to make well-informed investment decisions in this hot space.

While you’re there, check out some of our other recent offerings, including:

• 7 Best Stocks for the Next 30 Days
• Ultimate Four, and
• Conducting the Future of Technology