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Beaten Up and Bought

This was a pretty quiet session for what is otherwise a very busy week. Things will pick up as soon as tomorrow, when the ADP Employment and ISM non-manufacturing reports are scheduled for release. And, of course, Friday will see the big Government Employment Situation data. But for Tuesday, the most we can say is that stocks finished in the green after a down morning…which is actually great news amid this seemingly directionless market.

The S&P managed to gain 0.06% to 2360.2 today, while the Dow increased 0.19% to 20,689.2 and the NASDAQ advanced 0.07% to 5898.6.

Three portfolios (Reitmeister Trading Alert, TAZR Trader and Large-Cap Trader) saw opportunities in this somber session to pick up quality stocks that had been beaten up of late. Along with three swaps in Short List, Tuesday’s trading session actually had a lot happening. Let's get right to it:

Today's Portfolio Highlights:

Reitmeister Trading Alert: Steve isn’t in a volatile mood right now, so he sold three such names from the portfolio on Tuesday and then added a different type of financial company. Evercore Partners (EVR) focuses on investment management and investment banking, which means its part of a space in the top 12% of the Zacks Industry Rank. At about $76, shares of EVR have come down too much, especially since the editor believes it’s at least a $90 stock with potential for more. This Zacks Rank #2 has a Zacks VGM Score of A and a dividend yield of 1.8%. It was added with a 7.2% allocation.

But that’s not all. Steve also added more Lear Corp (LEA) in the wake of yesterday’s auto sales report, which has really done a number on the auto group as a whole. Lower fleet sales should rebound in future months and the outlook for the group is still strong. As far as the editor is concerned, this is another example of overreaction that is screaming to be bought on the dip. So he brought LEA’s total allocation in the portfolio up to 7.5%. Read more about both of these moves in the complete commentary.

TAZR Trader: When you miss the boat on a stock’s epic rise, you can either admit your mistake or double down and hope that you will eventually be proven right. Kevin knows of an analyst who has taken the latter course on NVIDIA (NVDA) of all stocks. The analyst recently cut his rating, but the TAZR editor doesn’t think this stock is done. So he used the downgrade as a reason to add a 3.5% allocation to the NVDA position. Read a lot more about this move in the complete commentary.

Large-Cap Trader: Shares of Tyson Foods (TSN) have been knocked down in recent months, but John thinks the company has some good news in store for its May 8th report. And why shouldn’t he? The stock beat by 25% in its previous announcement, and has amassed an average beat of 6.8% over the past 4 quarters. Plus, it’s a Zacks Rank #2 with Zacks Style Scores of A for Value and Growth. Therefore, the editor decided to get out of BCS and add a position in TSN at a good price. Learn more about this new addition in the complete commentary.

Zacks Short List: This week’s realignment had three swaps, including the short coverings of DGI, IPHI and PTC. The new additions replacing these names are Level 3 Communications (LVLT), Baidu (BIDU) and Wynn Resorts (WYNN). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

All the Best,
Jim Giaquinto

Before You Go...

Remember, we need your input to make next Tuesday's second Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate:

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