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Stocks Can't Follow Through

We've just released this quarter's Ultimate Four report which includes four stocks our team believes have the greatest upside potential over the upcoming quarter. This latest report features favorite stocks from Kevin Cook, David Bartosiak, Neena Mishra and Eric Dutram. See these stocks today.

We were all hoping that yesterday’s rally was the first step of an uptrend for stocks. Unfortunately, that wasn’t the case. Impacted by disappointing reports from the likes of Goldman Sachs and Johnson and Johnson (among others), stocks spent the whole session in the red on Tuesday. But they were able to come well off session lows by the closing bell.

The S&P finished lower by 0.29% to 2342.2 while the Dow declined 0.55% to 20,523.3. The NASDAQ dropped only 0.12% to 5849.5.

Despite today’s rough session, it’s important to remember that this is expected to be a solid earnings season. Such optimism has not been lost on the editors as we saw several portfolios add on Tuesday. Surprise Trader was at it again with a stock that should be reporting solid results soon. Meanwhile, Momentum Trader and Stocks Under $10 each added a stock from industries that are on the move. Read about all these additions and more in the highlights section below:

Today's Portfolio Highlights:

Surprise Trader: The homebuilders are looking quite promising this earnings season, so Eric added a 12.5% allocation in D.R. Horton (DHI) on Tuesday for his fifth move in the last two days. The company is scheduled to report before the bell on Thursday and has beaten the Zacks Consensus Estimate in three out of the last four quarters. Furthermore, this Zacks Rank #2 is part of a space in the top 20% of the Zacks Industry Rank. Read a lot more about this new addition in the complete commentary.

TAZR Trader: Not every report today was a disappointment. After the bell, Lam Research (LRCX) did just about everything you want a company to do at earnings season. The semiconductor stock beat on both the top and bottom lines while raising its guidance. As of this writing, the stock is up approximately 5% after hours on strong volume. Don’t be surprised if this TAZR stock is one of the top movers on Wednesday. Kevin has a lot more on this strong report in his complete commentary.

Momentum Trader: Seasonal demand should be picking up for the dry bulk shippers, so Dave saw an opportunity to add a 12.5% allocation in Golden Ocean Group (GOGL). This Zacks Rank #2 replaces Ferrari (RACE), which was sold today for a gain of 6.7%. Read the full write-up for more on the new addition, including a breakdown of its chart.

Stocks Under $10: Transportation stocks have seen a big move lately, and Brian plans to take advantage with a position in Commercial Vehicle Group (CVGI). This Zacks Rank #2 supplies interior systems for trucks and other heavy duty vehicles. It has straight As in Zacks Style Scores and is part of a space in the top 16% of the Zacks Industry Rank. The editor believes CVGI could move past its 52-week high of $7.57 by as much as $1 by this time next quarter. Read the full write-up for this stock’s earnings history, earnings estimates, valuation and the limit to use.

Zacks Short List: The portfolio only had one swap this week. It short-covered Terex (TEX) for a profit of 3.1%, and replaced it with the addition of Vertex Pharma (VRTX). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short List Trader Guide.

Remember to read this quarter's Ultimate Four report.

All the Best,
Jim Giaquinto

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