This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jim Cramer's Action Alerts PLUS

4 Stocks Feel Effects From Outside Market

By Jim Cramer and the AAP Team | 2017-08-21 16:21:34.0
Stocks in Focus: SBUX, LUV, NWL, MMP

The markets remained mixed today as a late rally in the Dow Jones Industrial Average and the S&P 500 sent the two indexes higher for the day, while the Nasdaq did not find the same support and ended slightly lower. While last week's decline was largely due to investor pessimism on tax reform and internal conflicts within the White House, today's muted reactions indicate there are little news driving investors to react on either side of their positions. 

Below, we highlight a few names in our portfolio that traded based on news and information outside the general market. 

Shares of Starbucks (SBUX) found some relief today due to a favorable Barron's article highlighting the company's technology investment achievements in mobile pay and its membership program. The message of the article is that Starbucks' commitment to technology will keep it ahead of other businesses in the industry, and will also prevent the company from falling victim to the same pitfalls faced by others in retail. While the article states that the stock price could jump an additional 20% from current levels, we are keeping a more conservative approach as we want to see improved sequential membership increases leading to same-store growth before changing our rating in the stock. In other words, although we view this article as a great description of what enticed us to the stock from the beginning, the company still must show signs of membership progress through its technology investments before we change our sentiment.

Shares of Southwest Airlines (LUV) traded higher today due to positive analyst outlooks, each viewing the stock as undervalued. As members can recall, last Friday we purchased shares of LUV following an analyst upgrade. While the stock ended flat that day, momentum in the stock price slightly picked up today due to a separate analyst indicating that LUV shares are undervalued to the point that the airlines could be taken private. While we never invest based on this type of speculation, we must acknowledge that the report suggests the company's current share price is undervalued. While the stock is still trading above our basis, we could add to this position if it came closer to our levels. 

Newell Brands (NWL) moved lower today following an analyst price-target cut. In the report, the analyst notes that much of the core sales growth that the company reported during last quarter's earnings were driven by positive cyclicality in the company's Elmer's Glue business. We believe this report plus retail's negative outlook are compounding pressure in the price of the stock. That being said, we note that we cut our position in half and downgraded the stock to Three last week (read here) as we are looking to scale out of our position when the stock can find some strength. 

Energy stocks continue to weigh on the market as crude prices fell to about $47.44 a barrel, which represents about a 2.2% decline from Friday. The commodity's drop today follows Friday's rally, and with little news driving trading on either day, we are attributing this vacillation to traders entering and closing their future positions in the commodity. We expect oil to continue to be range-bound until a true catalyst event occurs in the market, sending the price per barrel either lower or higher. That being said, we remind members that we are holders in our oil positions for now, but we must note that the yield on Magellan Midstream Partners (MMP) sitting at 5.56% keeps the name very attractive for additional purchases due to its safe dividend.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long SBUX, MMP, LUV and NWL.

Activision Blizzard and the Lure of E-Sports
Stocks in Focus: ATVI

ATVI is a highly successful gaming name that we expect to get bigger.

08/21/17 - 12:46 PM EDT
Last Week's Portfolio Changes
Stocks in Focus: NVDA, WFC, NWL

We initiated a tech position and sold off a bank.

08/21/17 - 08:37 AM EDT
Weekly Roundup
Stocks in Focus: TJX, NVDA, ITW, LLY, NUE, WFC, ABT, ATVI, AGN, AVGO, XEC, CMCSA, DHR, DXC, EZU, FB, GE, GOOGL, KEY, MMP, SLB, AAPL, ARNC, C, DOW, LUV, NXPI, PEP, APA, NWL, SBUX

Political turmoil, terror attack and sharp pullback mark this week's action.

08/18/17 - 05:45 PM EDT

Markets

Chart of I:DJI
DOW 21,703.75 +29.24 0.13%
S&P 500 2,428.37 +2.82 0.12%
NASDAQ 6,213.1273 -3.3995 -0.05%

Action Alerts PLUS Holdings

Holdings 1

Stocks we would buy right now

Symbol % Portfolio
Weighting
Industry
ABT 0.009151324546576488 Health Services
AGN 0.045918942667045326 Drugs
ATVI 0.03238610321941463 Computer Software & Services
AVGO 0.023366956150945407 Electronics
CMCSA 0.030554340548307753 Media
DHR 0.03491357624271215 Health Services
DXC 0.031179656096293952 Computer Software & Services
EZU 0.015520556565286229
FB 0.06282361834797885 Internet
GE 0.021549609437082517 Industrial
GOOGL 0.05172164628808853 Internet
ITW 0.025387062367343942 Industrial
KEY 0.013038016395736225 Banking
MMP 0.03358131712909844 Energy
NVDA 0.011918439456527399 Electronics
SLB 0.03302564750442088 Energy
TJX 0.050839277372621776 Retail
XEC 0.03295824822379961 Energy
Holdings 2

Stocks we would buy on a pullback

Symbol % Portfolio
Weighting
Industry
AAPL 0.04120604796960323 Consumer Durables
ARNC 0.020165864761883118 Industrial
C 0.030867934423420593 Banking
DOW 0.032878679628621725 Chemicals
NXPI 0.023137611376609152 Electronics
PEP 0.02656879642090349 Food & Beverage
Holdings 3

Stocks we would sell on strength

Symbol % Portfolio
Weighting
Industry
APA 0.033295244626905945 Energy
NWL 0.010889477105709387 Consumer Durables
SBUX 0.02388181176680231 Leisure