Near Breakeven for the Week After Third Day of Gains

Remember earnings season?

The market certainly forgot all about it during this trade drama. But it’s still happening! The season is winding down now, but that means its retail’s turn at the plate.

And the country’s #1 retailer didn’t disappoint on Thursday, as Walmart announced a better-than-expected first quarter report. The stock was up 1.4%.

But more importantly, the results provide investors some solace after a weak retail sales number for April and overall concern that the trade conflict will impact the economy.

The lack of new tariffs or trade headlines, combined with strong reports from the likes of WMT and Cisco, allowed the market to rise for a third consecutive session as it attempts to fill the hole left from Monday’s selloff.

The NASDAQ again led the way on a percentage basis by climbing 0.97% (or nearly 76%) to 7898.05. If you round that up, this index gained 1% or more in each of the last three days.  

A big reason for today’s positive performance was networking giant Cisco, which advanced 6.7% after a strong report.

The S&P advanced 0.89% to 2876.32, while the Dow increased 0.84% to 25,862.68. The latter index advanced approximately 214 points, marking its third straight session with a triple-digit gain.

Interestingly, the three major indices again weakened into the close.  

The S&P and NASDAQ had momentarily recovered from Monday’s sharp selloff, but couldn’t hold on to the end. So Friday is going to be very interesting. After these three days of gains, all of the major indices are just below breaking even for the week.

For example, the Dow is about 80 points away from completely offsetting the 617-point loss to start the week. If stocks can push this rally to four days, then we may actually be able to finish this week on the positive side.

Today's Portfolio Highlights:

Counterstrike: A third day of gains has convinced a cautious and skeptical Jeremy to dip his toe back into the market. On Thursday, he picked up Zebra Technologies (ZBRA), which provides AIDC products and was due for a pullback after going on an epic run. However, the plunge of 20% was quite a bit too much, especially since it still beat by 2% in its most recent quarter. The editor sees a bounce back coming and so he added ZBRA on Thursday with an 11% allocation. Read the full write-up for more.

Stocks Under $10: It looks like the market has forgotten about Liquidity Services (LQDT). However, Brian Bolan remembers pulling big profits out of this company in another portfolio a few years ago, so he thinks it’s time for a re-introduction. This Zacks Rank #1 (Strong Buy) provider of e-commerce marketplace solutions has beaten the Zacks Consensus Estimate in three of the last four quarters. More importantly, the editor noticed that losses per share for this fiscal year and next have narrowed significantly in recent months. He thinks this stock is on the pathway to profitability, so LQDT was added on Thursday. By the way, the portfolio also sold three names today. One of them was Telenav (TNAV), which brought a 29.4% return in less than three months. See the complete commentary for more on all of today’s moves.

Insider Trader: The portfolio is now fully invested after Tracey added four names on Thursday. The editor put allocations of 6% into each of these names: 

• Wayfair (W): the online home furnishings company saw a director buy 3,000 shares on May 14.

• Camping World (CWH): the RV retailer saw its CEO buy 100,000 shares on May 13 and a 10% owner pick up 500,000 shares on May 9. 

• Hartford Financial Services (HIG): the property & casualty insurer saw a director buy 10,000 shares on May 9. 

• 2U (TWOU): the cloud-based software company saw a director buy more than 12,000 shares on May 14.  

This is a really exciting time for the portfolio as Tracey is seeing some interesting insider buys right now. She plans to sell a few positions in the days ahead to make room for more picks. Read the full write-up for specifics on each of today’s buys and more on the editor’s plans moving forward.

Surprise Trader: We’re in the midst of the retail part of earnings season, so Dave is sticking where the action is by adding Buckle (BKE). This Zacks Rank #1 (Strong Buy) retailer of medium to better-priced casual apparel has not missed earnings expectations since March 2017, which bodes well for its next report on Friday, May 24th before the bell. Last time, BKE beat by 5%. The editor added the stock with a 12.5% allocation. Meanwhile, he also sold Upland Software (UPLD) on Thursday for a nice gain of 10% in less than a month. Read the complete commentary for more on today’s moves.

Technology Innovators: Now that the market has calmed down a bit since the recent trade flare up, Brian Bolan wants to add more to the portfolio. Therefore, he bought today and will probably buy again tomorrow. On Thursday, he picked up Blucora (BCOR), a technology-enabled financial solutions provider that owns TaxAct software and HD Vest Financial Services. Shares of the company slipped despite beating the Zacks Consensus Estimate in the most recent quarter. The editor thinks this stock is poised to bounce back. Read the full write-up for more on this addition. 

All the Best,
Jim Giaquinto

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