Earnings releases are starting to tick up again. We’ve seen about 10 per day for the last two weeks… but nothing has tripped my radar just yet.
Don’t worry, in the throes of earnings season there are hundreds of reports a day and we’ll be sure to find some good trades. In fact, you may want to buy shares of Starbucks – at the height of earnings season my coffee consumption alone could move the stock. (Note: For the sake of clarity, I am not actually recommending buying shares of Starbucks.)
It’s been a pretty stagnant market for the last month or so, but we’ve seen drift on our holdings.
Our newest pick, Perrigo (Nasdaq: PRGO), is the sole loser, and it’s down about 3%. I’m not particularly surprised by this – investors are a tad shaky about healthcare stocks. But out of all of our picks, it’s the one I’m most confident in. In fact, I wouldn’t be surprised if we hold this through to the next quarter. (Shares are still available under our prescribed price of $40. And mind your sell stop at $33.)
While our other three stocks are all up, I’m not going to brag about MSC Industrial (NYSE: MSM). It’s only posted a gain of 1.55%. Again, we’re still letting things play out: The company’s reliance on industrial spending means any good economic news will boost shares. And recent data has been positive. So keep holding. Our sell stop is $37.50.
Cytec Industries (Nasdaq: CYT) is up a good 5%. We were fortunate on scooping a great entry price of $33.50 and the stock has since exhibited the perfect “drift” formation we look for. I’m raising the sell stop on Cytec to $30.
And finally our best performer, Power Integration Inc (Nasdaq: POWI), has gained 8.42% in under a month. The drift pattern is a classic, and the company is exciting. I’m raising the sell stop here to $27.
I realize that these returns don’t look like much, but keep a few things in mind.
First, earning about 6% a month is a very good return. If you do that consistently, you will be able to retire soon.
More importantly, we expect to do better in future quarters. We got a late jump on this earnings season by starting The FastCap Strategist at the beginning of November. Doing so cut out two-thirds of our potential winners, since they had already reported.
On top of that, we’ve experienced a waffling market. With a bit more of a recovery and a full earnings season, I’m getting excited for January.
But don’t take my word for it; you’ll see it yourself shortly.
In the meantime, mind your sell stops and I’ll be putting together our quarterly preview for the January issue.
Ahead of the tape,
Matthew Weinschenk