U.S. stocks ticked higher this week to end February,
which saw the best monthly performance for several
broader market averages in over three years. We used a
21% advance in Cott (COT) this week to take profits on
Thursday and sell 250 shares for the model portfolio. We
also lowered our rating on the company from One to Two.
Cott has been the best performer in the model portfolio,
gaining 41% year-to-date (YTD). The portfolio as a whole
has gained nearly 8% in the first two months of year, as
other winners include: Pacific Sunwear (PSUN, +28% YTD),
ON Semiconductor (ONNN, +26% YTD), Standard Pacific (SPF,
+20% YTD), Unilife (UNIS, +18% YTD) and TherapeuticsMD
(TXMD, +15% YTD). On the other hand, Vantage Drilling
(VTG) has lost 21% YTD.
As the calendar turns over to March next week, we still
have three earnings reports in the model portfolio
scheduled. In addition, it will be busy on the economic
front, with several tertiary reports to be issued ahead
of Friday's February jobs data. Economists are looking
for the addition of 230,000 nonfarm payrolls in the
month, in addition to a decline in the unemployment rate
Here is a list of companies in the model portfolio that
have already confirmed reporting dates:
March 2 -- McDermott (MDR)
March 5 -- Martha Stewart Living Omnimedia (MSO)
March 6 -- Vantage Drilling (VTG)
March 10 -- TherapeuticsMD (TXMD)
As a reminder:
-- A Game Breaker is going to change the landscape of an
industry, as Intel (INTC), Microsoft (MSFT) and Wal-Mart
(WMT) did in their respective sectors. Investors can make
big money in these stocks by getting in before the crowd.
-- Inflection-Point stocks have a broken business model
that's on the mend but have yet to be recognized by the
market. Investors who recognize a turnaround early can
pocket strong returns."
-- Stealth Stocks are often names unknown to the general
public but can be hugely profitable investments --
especially when they have catalysts to boost their share
Also, Ones are stocks that we would buy at their current
quotes. Twos are stocks that we would buy on a pullback
and Threes are names that we would sell into strength.
Active Power (ACPW; $1.95; 3,050 shares; 3.37% of
the model portfolio; Game Breaker; $4.75 price target):
Active Power's flywheel energy technology keeps its
customers' mission-critical processes up and running. Its
hardware uses half as much space as existing technologies
do, but it generates twice as much power. The stock
bounced back more than 6% this week, as management posted
better-than-expected quarterly results on Tuesday. We
believe management can continue to move the company back
toward profitability in the coming quarters.
Atmel (ATML; $8.34; 1,000 shares; 4.73%,
Inflection Point; $10 price target): The company makes
microcontrollers used in electronics. The shares ticked
lower this week, along with the broader market. We
believe management can continue to expand margins in the
Ballantyne Strong (BTN; $4.41; 2,500 shares;
6.25%; Stealth Stock; $6.25 price target): Ballantyne
distributes digital movie projectors and manufactures
screens and lighting equipment for theaters. The stock
rebounded 6% this week on little news. We continue to
find value in the company, which we believe can trade up
toward $6 by the end of the year.
Builders FirstSource (BLDR; $6.03; 1,400 shares;
4.78%; Inflection Point; $10.50 price target): The
company distributes materials to homebuilders in the
southern U.S. The shares pulled back 7% this week. That
said, we'd consider adding to our position below $6, as
we believe that Builders FirstSource can continue to gain
market share in 2015.
Extreme Networks (EXTR; $3.56; 1,700 shares;
3.43%; Inflection Point; $8.75 price target): This maker
of Ethernet switches recently doubled its size with the
acquisition of Enterasys Networks. It was a quiet week
for the stock, which moved nearly 3% higher. We maintain
that management can improve productivity in the coming
McDermott (MDR; $2.50; 1,525 shares; 2.16%;
Inflection Point; $11.50 price target): This engineering-
and-construction firm focuses on building and designing
offshore oil and natural gas facilities. The shares
dropped 5% this week, ahead of the upcoming quarterly
report on March 2. We will provide a full preview ahead
of the results and believe that management can continue
to turn the business around in the coming quarters.
Sonus Networks (SONS; $17.06; 310 shares; 3%;
Inflection Point; $26.25 price target): The company makes
communications equipment, including session border
controllers and diameter signal controllers. The stock
bounced back fractionally this week. We maintain new
products can drive growth in the coming quarters.
Standard Pacific (SPF; $8.74; 750 shares; 3.71%;
Inflection Point; $11 price target): This homebuilder
generates the majority of its revenue in California. The
shares added more than 2% to recent gains this week. The
company has strong pricing power and we maintain the
stock can trade up toward the double digits in the coming
Synovus Financial (SNV; $27.99; 264 shares; 4.19%;
Inflection Point; $33.25 price target): This Georgia-
based bank operates branches throughout the Southeast.
The stock was hit with some profit-taking this week and
fell fractionally. That said, we believe the company can
continue to deliver above-average growth in 2015.
TherapeuticsMD (TXMD; $5.07; 2,225 shares; 6.39%;
Game Breaker; $9.50 price target): The company develops
hormone-replacement medicines for women. The shares
ticked lower this week. TherapeuticsMD has an attractive
clinical pipeline with multiple potential catalysts.
Yamana Gold (AUY; $4.27; 1,350 shares; 3.27%;
Inflection Point; $12.50 price target): This gold-and-
copper exploration company operates seven mines and
several ongoing development projects in Brazil, Argentina
and Chile. The stock bounced back nearly 9% this week.
The underlying price of gold has stabilized and we
believe management can improve margins in the coming
Cott (COT; $9.68; 950 shares; 5.21%; Stealth
Stock; $10 price target): Cott produces and distributes
soft drinks, noncarbonated beverages and bottled water,
primarily focusing on private-label items for major
retailers. We sold 250 shares on Thursday, as the stock
added 21% to recent gains this week. We also lowered our
rating on the company from One to Two. Management
delivered a surprise quarterly profit earlier in the
week, but we didn't want to be greedy with our gains, as
Cott has already moved 40% higher year-to-date.
Huntington Bancshares (HBAN; $10.94; 600 shares;
3.72%; Inflection Point; $11 price target): This Ohio-
based bank operates more than 600 branches across six
states. The stock added 2% to recent gains this week. The
company acquired $900 million of commercial lease assets
on Tuesday, for an undisclosed amount. Management expects
the deal to be accretive to earnings in the first year.
Martha Stewart Living Omnimedia (MSO; $4.73; 1,350
shares; 3.62%; Inflection Point; $5.75 price target): The
company operates in the home-goods segment, publishing
magazines, producing broadcasts and licensing products to
retailers. The shares moved fractionally lower this week,
ahead of the quarterly report on March 5. We believe
management can continue to unlock value from Martha
Stewart's core brands in the coming quarters.
ON Semiconductor (ONNN; $12.75; 500 shares; 3.61%;
Stealth Stock; $13.50 price target): The company makes
analog, standard logic and discrete semiconductors for
use in data and power management. The stock added 6% to
recent gains this week, as management offered upbeat
guidance at an analyst meeting on Thursday. Even so, ON
Semiconductor is up a quick 27% year-to-date and we'd
consider taking some profits off the table into the next
Pacific Sunwear (PSUN; $2.79; 3,000 shares; 4.74%;
Inflection Point; $4 price target): This specialty
retailer operates more than 500 stores in the U.S.,
selling surf- and skating-style apparel to teens and
young adults. It was a quiet week for the shares, which
moved fractionally lower. The company has a lot of sales
momentum and we maintain the stock can move up toward $4
by the end of the year.
SandRidge Energy (SD; $1.77; 1,600 shares; 1.60%;
Inflection Point; $8 price target): The company explores
for natural gas and oil in the U.S., primarily onshore.
The stock fell 23% this week, as oil prices continued to
decline. That said, management posted quarterly results
on Thursday that showed prudent expense management.
SandRidge is projecting 6% production growth in 2015,
while cutting capital spending by 56%. We maintain that
shares can recover, along with underlying energy prices,
in the coming months.
Unilife (UNIS; $3.95; 1,850 shares; 4.14%; Game
Beaker; $6.50 price target): This manufacturer of
retractable and prefilled syringes offers products with
convenience, safety and comfort advantages. The shares
ticked lower this week. We believe the company will ramp
production and continue to sign new pharmaceutical
partnerships in 2015.
Vantage Drilling (VTG; $0.37; 6,000 shares; 1.26%;
Inflection Point; $2.25 price target): This offshore
driller contracts its rigs for the exploration of oil and
natural gas. The stock lost 6% this week, ahead of the
quarterly report on March 6. The company's fleet is fully
booked through 2015 and management is paying down debt.
Whiting Petroleum (WLL; $33.83; 123 shares; 2.36%;
Inflection Point; $51 price target): Whiting explores for
oil and gas in the Permian Basin, Williston Basin and
Green River Basin. The shares fell 11% this week, as
management announced quarterly results on Wednesday that
fell short of expectations. That said, the company has
stable finances and is guiding toward 6% production
growth in 2015, while cutting capital spending by 50%.
Zix (ZIXI; $4.00; 2,250 shares; 5.10%; Stealth
Stock; $5.75 price target): Zix is a leading producer of
email-encryption software that enables doctors to
automatically send information to pharmacies. The stock
added 5% to recent gains this week, as management
announced a contract renewal on Tuesday. The company is
carrying a lot of sales momentum into 2015 and we believe
shares can trade up toward the mid-single digits.
David Peltier & the TheStreet Research Team
Shares fall after missing top- and bottom-line estimates.
The stock has gained 38% year to date.
Sticking with oil company ahead of earnings.
We cashed in on a top performer while the market had a strong month.
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
Want more than one service? Sign up to one of our packaged services and take advantage of amazing savings!