Dow Didn’t Need a Break

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For the most part, stocks took a break from their torrid pace on Thursday. However, if the session had been just a few minutes longer, the major indices may have been able to finish in positive territory again thanks to a late-day rally. In the end though, only the Dow managed to come all the way back and keep its streak alive. The index was up 0.04% to 20,619.8. Meanwhile, the S&P was off 0.09% to 2347.2 while the NASDAQ slipped 0.08% to 5814.9. As mentioned in the highlights section below, Steve thinks this is a case of “false hope” amid a “classical” bull market.

Speaking of the highlights section, it is filled with portfolio moves today. Zacks Counterstrike and Insider Trader each sold a name for a double-digit profit and also added positions. Dave sold a stock for a solid return as well in Momentum Trader, while picking up a “diamond in the rough” in Home Run Investor. Learn about all these moves below, along with some other analysis from RTA.

Today's Portfolio Highlights:

Zacks Counterstrike: The editor feels that Noble Midstream Partners (NBLX) is close enough to its $50 targets, so he sold the E&P company on Thursday for a 36.2% return in just about a month and a half. But that was only part of the day’s moves.

Jeremy has been talking about shorting some names for a while now, and today he got his opportunity with the online travel agency Expedia (EXPE). This Zacks Rank #5 had a weak earnings report recently that missed expectations by more than 12%. Earnings estimates have moved lower in the past week, and the editor doesn’t feel the stock’s support at its 50-day moving average will hold. He shorted EXPE with a 13% allocation.

On the other side of the coin, shares of j2 Global (JCOM) soared to nearly $91 after a strong quarterly report that included better-than-expected EPS and revenue along with a raised guidance. However, HFTs got their hands on the stock in short order and drove it down to the low $80s. Jeremy thinks it will make a run to $100, so he added it to ZC on Thursday. JCOM is a Zacks Rank #1 cloud-based communications company that enjoys some solid Zacks Style Scores. Learn more about all of today’s moves in the complete commentary.

Insider Trader: Crude oil is stuck in a narrow range right now, which means a small E&P company like Synergy Resources (SYRG) will be stuck as well. Tracey remains bullish on this company for the long term, but for right now she decided to sell the remaining shares for a nice profit of more than 30% to “make room for some new blood”. She sold the first half of the SYRG position back in December for a nearly 45% return.

The “new blood” turned out to be UK-based drug company Mallinckrodt (MNK), which beat the Zacks Consensus Estimate by 10 cents in its most recent quarter. Analysts believe the company’s valuation is attractive right now, and apparently so do a couple of the insiders. Recently, an Executive VP & Chief Science Officer and the President/CEO bought shares of their own company. Tracey warns that MNK has some risk given its sector, but really appreciated the commitment shown by these two insiders who already have large holdings. Read the full write-up for more specifics on today’s moves.

Momentum Trader: When Dave bought SodaStream (SODA) back in December, he didn’t want people to accuse him of falling in love with “stocks of yesteryear”. But he saw a turnaround story in the name…and it looks like he was right. The editor felt it was time to “get out of Dodge” with the stock moving lower today, but it brought a more than 22% return during its time in the portfolio. Get ready for a replacement pick tomorrow.

Home Run Investor: Dave thinks he’s found a “diamond in the rough” with Model N (MODN), which provides revenue management services for the life sciences and tech industries. This Zacks Rank #2 took it on the chin earlier this year after losing some big clients, but it has turned things around recently. Once people realize that MODN’s revenue recovery is for real, the editor feels that this name will rebound sharply. Learn more about this new addition in the full write-up.

Reitmeister Trading Alert: "The problem is that many investors who have missed the train keep hoping for stocks to retreat. Some glorious pullback that allows them to get on board at lower prices…and soothes their bruised egos about all the missed opportunity of late.

"Thursday gave those investors more false hope. That came in the form of an intraday drop that evaporated as stocks rebounded into the close.

"That is classical bull market behavior where all dips are shallow and short lived. My prescription is to take a steady dose of top Zacks Ranked stocks and enjoy the gains that unfurl. We certainly have done that in RTA this year and are enjoying a healthy year of stock gains. That is because we are up +7.4% on the year and +14.2% since the election." — Steve Reitmeister

Until Tomorrow,
Jim Giaquinto
 

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