Remember, the latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Thursday, September 7th. Sheraz Mian, David Bartosiak, Tracey Ryniec, Neena Mishra, CFA, FRM, and Brian Bolan will cover the investment landscape from most every angle in this popular event.
Don't miss your chance to hear:
• David and Brian Agree to Disagree on whether investing in Chinese stocks is a good or bad idea
• Sheraz and Neena choose one portfolio to give feedback for improvement
• And much more
So be sure to mark your calendar then log on to Zacks.com and bookmark this page.
It took more saber-rattling from North Korea and another major hurricane to throw the market off its stride as we begin this shortened week. Heading into today's session, the NASDAQ had put together two straight days of all-time highs, while the S&P and Dow enjoyed winning streaks of 6 and 4 days, respectively. This market has been pretty good recently at shrugging off potential problems, but the recent H-bomb test combined with Irma following so closely to Harvey proved too much to ignore.
The Dow dropped by 1.07% (approximately 234 points) today to 21,753.3, while the NASDAQ was off 0.93% to 6375.6. The S&P fared better but was still down by 0.76% to 2457.9. While these are issues worthy of concern, this market has proven to be so resilient that savvy investors must be wondering if this is the next buying opportunity.
"The recent trend of the market moving lower immediately following a big move from North Korea has always been followed by a relief rally that was bigger than any pull back," said Brian Bolan in today's Stocks Under $10. "I hate to say it, but North Korea is responsible for the dips that we need to be buying."
In the portfolios on Tuesday, Counterstrike added a couple of names while Stocks Under $10 added one with more to come later this week. Black Box Trader replaced six names in this week's adjustment, which was pushed back a day due to Labor Day. One of the stocks sold was a double-digit winner. Short List only swapped out three names. The highlights section below has more on these moves, including the latest Zacks Confidential .
Today's Portfolio Highlights:
Counterstrike: It's not easy being a watchmaker these days…except for Movado Group (MOV). The company has really separated itself in the "accessible luxury" brands, as evidenced in its most recent quarterly report. The company had a positive earnings surprise of 72%, while also beating on revenue, raising its guidance and launching a stock buyback. HFTs pulled the stock lower after an initial spike, and now Jeremy wants to jump onboard for the rebound by taking a 7% position in MOV for the portfolio.
Meanwhile, CBIZ, Inc. (CBZ) has been stuck since late April, but the recent earnings report for this business services company suggests that it's about to start moving again. Last month, it reported a positive earnings surprise of 17%, along with record revenue growth and a raised guidance for the year. Like MOV, computer trader caused the stock to slump, but the editor sees a bullish Fibonacci setup that suggests it will move higher from here. He added it to the portfolio today with a 15% allocation. Learn a lot more about both these new buys in the complete commentary.
Zacks Confidential: The single most important tool of technical analysis is the moving average. However, you need to learn how to properly use this technique to put yourself in the best position to succeed. Dave Bartosiak is a technical analyst who can show you how it's done, so new editor Kevin Matras put him in charge of this week's Zacks Confidential . Read his detailed article and get three recommendations using this methodology: Making Sense of Moving Averages .
Black Box Trader: The portfolio got out of six positions in this week's adjustment, and three of them were positive. The stocks that were sold include:
• Kemet Corp (KEM, +21.7%)
• Vishay Intertechnology (VSH, +6%)
• Fiat Chrysler (FCAU, +4.6%)
• Dana Inc. (DAN)
• Terex Corp (TEX)
• Unum Group (UNM)
The six new stocks replacing these names are:
• Boeing Co (BA)
• Caterpillar Inc. (CAT)
• Coca-Cola European Partners (CCE)
• Centerpoint Energy (CNP)
• Extreme Networks (EXTR)
• NiSource Inc. (NI)
Read the Black Box Trader's Guide to learn more about this computer-driven service designed to take the emotion out of investing.
Stocks Under $10: Neos Therapeutics (NEOS) is a biotech that treats ADHD using extended-release drugs. It has one drug in the pipeline that should be getting an FDA response soon. Brian likes the potential here, especially since it has beaten twice and matched twice in the past four quarters. The stock is still losing money (as with many biotechs), but earnings estimates for this year and next are on the rise as evidenced by its Zacks Rank #1 (Strong Buy) status. The editor added NEOS to the portfolio today and plans to make another buy later this week.
Zacks Short List: Three positions were swapped out in this week's adjustment. The portfolio short-covered Inphi Corp. (IPHI), Mercadolibre Inc. (MELT) and Molina Healthcare (MOH). The new buys that replaced these names are Ctrip.com Int'l (CTRP), GoDaddy Inc. (GDDY) and ConocoPhillips (COP). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.
Options Trader:"With yet another nuclear test by North Korea over the weekend, a clear indication they have no interest (at the moment) in deescalating tension in the region, the market pulled back from Friday's jobs related rally. But the market is also wary of other challenges it will face this month, including budget talks, the debt ceiling vote, and even the Hurricane Harvey relief bill.
"Plenty of things to think about, that's for sure. But isn't there always?
"Fortunately, the market has been more focused on the strengthening economic numbers and impressive corporate sales and earnings. This explains the market's 5-month winning streak and push to new all-time highs during that time.
"So smart investors would be wise to view any pullback as transitory. Look at the stocks you wished you could have gotten into at a cheaper price and be prepared to act." - Kevin Matras
Have a Good Evening,
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