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And Then There Were Three at New Highs

The latest episode of the Zacks Ultimate Strategy Session will be available for viewing no later than this Wednesday, November 6. Kevin Matras, Kevin Cook, Ben Rains, Madeleine Johnson and Sheraz Mian will cover the investment landscape from several angles in this informative event.

Don’t miss your chance to hear:

• Ben and Madeleine Agree to Disagree on the Streaming Wars and whether Netflix will be affected by new competition from Apple TV+, Disney+ and more
• Kevin Matras answers your questions in Zacks Mailbag
• Sheraz and Kevin Cook choose one portfolio to give feedback for improvement
• And much more

So be sure to mark your calendar then log on to and bookmark this page.

The positive sentiment that ended last week carried over to Monday and helped the Dow join its counterparts in record territory.

That’s right… all three of the major indices finished the session at new highs for the first time since mid-July.

The Dow is a laggard no more, as the index finally reached its own bit of history by advancing 0.42% (or nearly 115 points) today to 27,462.11.

That’s a little more than 100 points better than the previous record set back on July 15.

It probably would have gotten to this point a lot quicker if Boeing hadn’t of been such a problem.

The other two major indices completed a second consecutive session at new highs.

The NASDAQ increased 0.56% (or nearly 47 points) to 8433.20 and the S&P rose 0.37% to 3078.27 for its fourth record in the past six days.

Why shouldn’t investors feel pretty good right now? Earnings season continues to be better than feared and it appears that Phase 1 of the trade deal is moving right along (or at least nothing has derailed it).

The past few days also included a solid jobs report for October in which 128,000 jobs were added instead of just 75,000. In addition, results for September and August were revised upwards.

And last Wednesday we enjoyed this year’s third rate cut. While this may be the last reduction for a while, investors probably won’t have to worry about a hike for the time being as inflation remains well below 2%.

All of the indices gained by more than 1% last week, while the NASDAQ and S&P came into Monday with winning streaks of 5 weeks and 4 weeks, respectively. The Dow now has two weeks of positive performances.

The indices took a first step toward even more success on Monday, but let’s not forget that there’s still plenty of earnings and economic data coming out in the next few days (including ISM non-manufacturing tomorrow).

Today's Portfolio Highlights: 

Home Run Investor: Security software names have been getting more attention lately, so Brian decided this was a good time to buy Onespan (OSPN). The company beat the Zacks Consensus Estimate by 157% in its last report, though it should be noted that it has a “feast or famine” history with two big beats and two big misses in the past four quarters. It still has an average surprise of nearly 10% over the past four quarters. Perhaps most importantly, rising earnings estimates for this year has made OSPN a Zacks Rank #2 (Buy). Read the editor’s complete commentary on this new pick.

Options Trader: Shares of SEI Investments (SEIC) are breaking out of a bullish basing pattern… and Kevin expects this momentum to continue. On Monday, he bought to open two March 60.00 Calls in SEIC. The editor really likes the fundamentals of this asset management solutions provider, including its above average ROE and net margin. Read the full write-up for more info on this move and the rest of the portfolio. 

Surprise Trader: The latest edition of the Diablo franchise is likely to be the next blockbuster for Activision Blizzard (ATVI), which has a portfolio of winning brands that includes Call of Duty, World of Warcraft and Candy Crush. This video game developer beat the Zacks Consensus Estimate by more than 46% in its most recent quarter and topped by 24% before that. Dave thinks the company will continue outperforming when it reports again after the bell on Thursday, November 7. It has an impressive positive Earnings ESP of 24.3%. The editor added ATVI on Monday with a 12.5% allocation. Read the full write-up for more. 

Stocks Under $10: This portfolio had the top two performers of the day among all ZU portfolios. The biggest winner was Maxar Technologies (MAXR), which soared 11.1% after a solid quarterly report. And not too far behind was Realogy (RLGY) with a 10% gain. Both stocks have performed well in the short amount of time they’ve been in the portfolio. MAXR is now up more than 33% since being added on October 1, while RLGY has jumped around 27% since joining the service on October 14.

Black Box Trader:
All of the five stocks that were sold in this week’s adjustment were positive. The profitable picks that left the portfolio today were:

• Crocs (CROX, +4.4%)
• KB Home (KBH, +1.4%)
• AECOM (ACM, +0.8%)
• Frontline (FRO, +0.3%)
• US Foods Holding (USFD, +0.2%)

The new buys that replaced these names are:

• Brinker Int’l (EAT)
• Foot Locker (FL)
• Hewlett Packard Enterprise Co. (HPE)
• Mattel (MAT)
• Xerox (XRX)

Read the Black Box Trader’s Guide to learn more about this computer-driven service designed to take the emotion out of investing.

All the Best,
Jim Giaquinto

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